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Clearwater v. Meredith/Opinion of the Court

'The question is, Whether two railroad companies, by consent of the legislature, granted subsequently to the subscriptions of stock, but without the consent of the stockholders, can consolidate their separate existences into one? It is admitted that they can do it with such consent. This court has held that they cannot without. A stockholder, not consenting, may withdraw from the corporation. Such consolidation does not necessarily DISSOLVE the corporation, it seems, but releases non-consenting stockholders?'

The act of February 23d, 1853, does not specify the manner in which two companies may consent to their consolidation,-whether by a vote of the directors only, or of the stockholders as well as of the directors. The plea does not allege that Clearwater voted for the consolidation: and construing it, according to the rule of pleading, against the party pleading it, we may assume that his alleged 'consent' consisted in the fact that he did not withdraw and renounce the character of a stockholder.

4. But there is another answer. The act of February 23, 1853, was in force when Clearwater made his agreement with the defendants. He was not, therefore, a stockholder entitled to the privilege of withdrawing in the event of consolidation: he had subscribed in view of the possibility of such an event, and that possibility was one of the elements of his contract. This view, supported by English authorities and authorities elsewhere than in Indiana, receives support in Indiana itself. Perkins, J., in the already cited case of Booe v. Junction Railroad Co., raises the question which we have already stated, to wit: 'Whether two railroad companies, by consent of the legislature, granted subsequently to the subscriptions of stock, but without the consent of the stockholders, can consolidate their separate existences into one?' He makes the question in view of a previous Indiana case, which decides that one who subscribes after the enactment of a law authorizing the company to consolidate, is bound by his subscription, although such consolidation be without his consent or even his knowledge. And are not the principles lately declared by this court, in Sherman v. Smith, conclusive; especially when we consider that the Short Line Railway Company was formed under the general act of May 11th, 1852, relating to railroads,-an act subject to modification by the legislatures at any time?

Yet more: The plea does not allege that the consolidation of the Short Line Railway Company with the second or with the third company, was an act done without the consent, or even contrary to the wishes, of the defendants. The defendants do not allege that the plaintiff discharged them intentionally, or even directly, from their agreement; but only that in consequence of an act to which he assented,-not foreseeing or imagining the result, performance of their stipulation was prevented. Now, if they assented to the same act, and, a fortiori, if they induced him to assent, with what justice or by what principle of law could they so excuse themselves?

[The counsel further brought before the court the two replications filed previously to that one which was the subject of the preceding discussion before this tribunal; which previous ones, demurred to below by the other side, had been there in fact supplied by the one now considered. He also contended, that even if his last replication was bad, he was still entitled to judgment because the first and fourth pleas were yet undisposed of.]

Mr. Hendricks, contra: There are in fact three causes of demurrer to the replication:

1st. The plea sets up the traversable facts of the consolidation of the stock of the Short Line Railroad Company with the stocks of other railway companies, which are the only traversable facts in the plea which are neither admitted nor denied by a replication.

2d. The plea sets up the consolidations of the stocks therein described, with the consent of the plaintiff, either of which, if correct, is an issuable fact, and the replication is a denial of both, and is therefore double.

3d. The replication is informal, inasmuch as it does not deny some one of the 'issuable facts set up in the plea.'

If the replication puts in issue only the question whether the stock was destroyed and rendered worthless, then it presents an issue that cannot decide the controversy; 'an immaterial issue;' for if the stock was merged with the stock of other companies, and thereby made to represent another interest and a different property, which the defendants had not agreed to guaranty, and that by the consent of the plaintiff, then the defendants were discharged from their contract, although the stock may not have been impaired in its value. By the two consolidations and mergers, the $10,000 of stock in the Short Line Railroad Company came to be 200 shares in the company finally formed; and was evidence of an interest and property in that road of the nominal value of $10,000,-a different corporation or company. The stock of such a company the defendants had not agreed to guaranty; it was not within their contract; and they were as well discharged whether the stock was still of the same market value at Cincinnati, or became of no value at all. The defence rests upon the consolidation and plaintiff's consent, thereby changing and merging the thing guarantied.

The plaintiff claims that his replication is a more general traverse; and puts in issue, first, the consolidation of the companies and the stock; second, the consent of the plaintiff; and third, that the stock was thereby rendered of no value. Thus understanding the replication, it is double; and for that reason the demurrer was properly sustained.

It is not claimed that the traverse must be of a single fact, but that the traverse must be confined to a single point. The difficulty in practice is to determine what is a single point, as contradistinguished from a single fact. Gould says:

'The meaning of the rule is, that when the pleading, on one side, consists of several distinct and material points, all of which are necessary to its legal sufficiency, the adverse party is allowed to traverse only one of them. For in every such case, a denial of one of them is in law a sufficient answer to the whole; and he may traverse which of them he pleases;' and to illustrate, he says: 'If therefore, in trespass for false imprisonment, the defendant justifies under a capias directed to the sheriff, and a warrant from the sheriff directed to himself, the plaintiff may traverse either the capias or the warrant, but should not traverse both. For the denial of either of them is a sufficient answer to the plea; since the capias, without the warrant, or the warrant, without the capias, would be no justification; and the traverse of both would, in effect, tender two issues instead of one, upon one and the same plea.'

The case given by Stephen, and cited by Mr. Pugh, is considered by Gould. He says:

'Of this case it may be observed, that the defence to which the traverse applied consisted of three distinct points.

'1. The existence of a prescriptive right of common.

'2. The defendant's title to share in that right, as tenant of a manor or lordship.

'3. That the particular beasts in question were entitled to common.

'The replication applied to the last point only, viz., that the beasts were entitled to common. But to entitle them to common, in the defendant's right, they must have been, as alleged in the plea, his own cattle-and also levant and couchant on his tenement and commonable cattle.

'These last three facts, therefore, the plaintiff precisely traversed, and the court held that the traverse was not double, inasmuch as it embraced only the simple point that the cattle were entitled to common.'But the facts stated in the plea here do not go to make but one point; they make two material points. 1st, the consolidation of the stock; and 2d, the plaintiff's consent thereto-but both points necessary to 'the legal sufficiency of the plea'-both points constituting but one defence. Aptly illustrative is the analogous case, 'if the defendant pleads title in a stranger, and justifies as servant to the latter, and by his command, the plaintiff may traverse the title, or the command, but should not traverse both.' The court, in the instance cited, allowed a traverse either of the title in the stranger, or his command to his servant, but not both; and so in this case, the traverse was allowed of the consolidation of the stock, or of the plaintiff's authority or consent, but not both.

In one New York case, it was held 'that a plea that the promise declared on was made by defendants and a third person jointly, and that plaintiff had released the third party, a reply denying the joint promise and the release was bad for duplicity.' In another case in that State, that 'where to a plea of the statute of limitations the plaintiff replied the suing out of process, and a promise within six years previous to such process, a rejoinder denying both the suing out the process and the alleged promise, was bad for duplicity.'

3. But it is said that the fifth plea is itself bad; offering no defence.

What, then, is the defence made by it? It is that after the contract was made and before the time limited for its execution, the plaintiff consented to a consolidation of the company with other companies, and the consolidation of the stock of the different companies. How is it material whether, under the laws of Indiana, a new 'corporation,' or a 'jointstock company,' was the result of the consolidation? The stock was merged in either event: it became mingled; and the identity and separate existence of the plaintiff's 200 shares became lost: the shares represented a new interest, and different property. Whether worth more or less in its new form and position is not material, nor whether the new organization increased or diminished the means for the enterprise. Nor is it material, although discussed by plaintiff, whether the new organization is reponsible for the debts of the old companies. But it is material that the plaintiff did consent to a change of the subject of the contract, so that it is no longer identified, nor the same property which was guaranteed.

McMahan v. Morrison et al. settles this question; for the decision is upon the effect of the consolidations now before this court; it is by the Supreme Court of Indiana, and upon the statutes of that State. The court then held that, by the consolidation of the Short Line Railroad Company with the different roads referred to in the fifth plea, pursuant to the act of the legislature, the three corporations were dissolved, and passed out of existence, and a new corporation came into existence, and that the new corporation came into existence 'with property, liabilities, and stockholders, derived from' the corporations that then passed out of existence.

The plaintiff claims, moreover, that the plea is defective, because it lacks the averment that the consolidation of the railroads was an act done without the consent of the defendants. But how does that help him? Suppose the consolidation had been with the consent of both plaintiff and defendant, the effect would have been to rescind the contract, for the reason that the contract was no longer applicable to the new stock, and it would require a new contract to bind the defendants.

But were this not so, and were it held that if the defendants consented to the consolidation, they would still be liable on the contract; the fact of such consent is not a matter to be negatived by defendants, but the plaintiffs should reply that fact. It is a general rule of pleading that matter which should come more properly from the other side, need not be stated. Each party makes out his own case. Neither is bound to anticipate, and therefore neither is compelled to notice and remove, every possible exception, answer, or objection which may exist.

It is insisted, however, inasmuch as the statute law of Indiana authorized railroads to be consolidated, that therefore the defendants contracted with a view to a possible consolidation, and are bound by it. The authorities cited do not go so far; they establish only the position that where the legislature has reserved the right to amend the charter, the subscribing stockholders, by the act of subscription under such a charter, agree to such increased liabilities as the legislature may impose. It does not follow, however, that whoever, that whoever contracts with a railroad company, or with a third party in relation to railroad property or stock, is subject to have his liabilities varied by any and all acts, which, according to law, the company may do. Nor does such a principle exist.

The remaining points are feeble. The 1st and 2d replications were withdrawn below and cannot be reinstated here. Neither is there any use of disposing of the 1st and 4th pleas: since judgment in favor of the 5th, which is in bar to the action, ends the case.

Mr. Justice DAVIS, after stating the case, delivered the opinion of the court:

In order to arrive at a correct solution of this question, it is important to consider whether the plea is a good one, for a demurrer, whenever interposed, reaches back through the whole record, and 'seizes hold of the first defective pleading.' The plea in controversy confesses the original cause of action, but sets up matter, which has arisen subsequent to it, to avoid the obligation to perform it. It acknowledges that the guaranty was given as claimed, but insists that the consolidation of the interests and stock of the three railroad companies necessarily destroyed and rendered worthless and of no value the guaranteed stock, and that Clearwater having consented to the transfer, is in no position to claim redress from Meredith and his co-defendants.

If Clearwater was a consenting party to a proceeding which, of itself, put it out of the power of the defendants to perform their contract, he cannot recover, for 'promisors will be discharged from all liability when the non-performance of their obligation is caused by the act or the fault of the other contracting party.'

The Cincinnati, Cambridge and Chicago Short Line Railway Company, whose stock was guaranteed, was, as stated in the pleadings, organized under a general act of the State of Indiana, providing for the incorporation of railroad companies. This act was passed May 11, 1852, and contained no provision permitting railroad corporations to consolidate their stock. It can readily be seen that the interests of the public, as well as the perfection of the railway system, called for the exercise of a power by which different lines of road could be united. Accordingly, on the 23d February, 1853, the General Assembly of Indiana passed an act allowing any railway company that had been organized, to intersect and unite their road with any other road constructed or in progress of construction, and to merge and consolidate their stock, and on the 4th of March, 1853, the privileges of the act were extended to railroad companies that should afterwards be organized.

The power of the legislature to confer such authority cannot be questioned, and without the authority, railroad corporations organized separately, could not merge and consolidate their interests. But in conferring the authority, the legislature never intended to compel a dissenting stockholder to transfer his interest, because a majority of the stockholders consented to the consolidation. Even if the legislature had manifested an obvious purpose to do so, the act would have been illegal, for it would have impaired the obligation of a contract. There was no reservation of power in the act under which the Cincinnati, Cambridge & Chicago Short Line Railway was organized, which gave authority to make material changes in the purposes for which the corporation was created, and without such a reservation, in no event could a dissenting stockholder be bound.

When any person takes stock in a railroad corporation, he has entered into a contract with the company, that his interests shall be subject to the direction and control of the proper authorities of the corporation to accomplish the object for which the company was organized. He does not agree that the improvement to which he subscribed should be changed in its purposes and character, at the will and pleasure of a majority of the stockholders, so that new responsibilities, and it may be, new hazards, are added to the original undertaking. He may be very willing to embark in one enterprise, and unwilling to engage in another; to assist in building a short line railway, and averse to risking his money in one having a longer line of transit.

But it is not every unimportant change which would work a dissolution of the contract. It must be such a change that a new and different business is superadded to the original undertaking. The act of the legislature of Indiana allowing railroad corporations to merge and consolidate their stock, was an enabling act-was permissive, not mandatory. It simply gave the consent of the legislature to whatever could lawfully be done, and which without that consent could not be done at all. By virtue of this act, the consolidations in the plea stated were made. Clearwater, before the consolidation, was a stockholder in one corporation, created for a given purpose; after it he was a stockholder in another and different corporation, with other privileges, powers, franchises, and stockholders. The effect of the consolidation 'was a dissolution of the three corporations, and at the same instant, the creation of a new corporation, with property, liabilities, and stockholders, derived from those passing out of existence;' McMahan v. Morrison. And the act of consolidation was not void because the State assented to it, but a non-consenting stockholder was discharged. Clearwater could have prevented this consolidation had be chosen to do so; instead of that he gave his assent to it and merged his own stock in the new adventure. If a majority of the stockholders of the corporation of which he was a member had undertaken to transfer his interest against his wish, they would have been enjoined. There was no power to force him to join the new corporation, and to receive stock in it on the surrender of his stock in the old company. By his own act he has destroyed the stock to which the guaranty attached, and made it impossible for the defendants to perform their agreement. After the act of consolidation the stock could not have any separate, distinct market value. There was, in fact, no longer any stock of the Cincinnati, Cambridge & Chicago Short Line Railway.

Meredith and his co-defendants undertook that the stock should be at par in Cincinnati, if it maintained the same separate and independent existence that it had when they gave their guaranty. Their undertaking did not extend to another stock, created afterwards, with which they had no concern, and which might be better or worse than the one guaranteed. It is not material whether the new stock was worth more or less than the old. It is sufficient that it is another stock, and represented other interests.

But it is said that the plea is defective because it does not aver that the consolidation was an act done without the consent of the defendants. The pleadings do not aver that the defendants were stockholders in any of the roads whose interests were merged, and if they were not, it is not easy to see what right they had to interpose objections to consolidation, nor how their consent was necessary to carry out the object contemplated. If the plaintiff consented because they did, and it is meant to be argued on that account, they would still be liable on their contract; the answer is, that this is not a matter to be negatived by the defendants, but the plaintiff should reply the fact.

It follows that the fifth plea presented a complete defence in bar of the action.

In this plea there were two points, and two only, which the plaintiff had the right to traverse. He could deny either the act of consolidation, or that he gave his consent to it. He could not deny both, for that would make his replication double. And if either fact was untrue, the defence was destroyed. The truth of both was essential to perfect the defence. But traverse can only be taken on matter of fact, and it is always inadmissible to tender an issue on mere matter of law.

The last replication does traverse a conclusion of law. Whether the stock of the Cincinnati, Cambridge & Chicago Short Line Railway Company was destroyed and rendered worthless and of no value, was not a question for a jury to try. If the roads were consolidated, with the consent of the plaintiff, then it followed, as a conclusion of law, that the stock was destroyed and of no value. The stock passed out of existence the very instant the new corporation was created. The issue, therefore, tendered by the plaintiff in his last replication, was an immaterial one, and the court did not err in sustaining a demurrer to it.

But the plaintiff claims the right to have the decision of the court below on the sufficiency of his previous replications reviewed here. This he cannot do. Each replication in this cause is complete in itself; does not refer to, and is not a part of what precedes it, and is new pleading. When the plaintiff replied de novo, after a demurrer was sustained to his original replication, he waived any right he might have had, to question the correctness of the decision of the court on the demurrer. In like manner he abandoned his second replication, when he availed himself of the leave of the court, and filed a third and last one.

But the plaintiff insists that even if his replication was bad, that still upon the whole record he was entitled to judgment, because the first and fourth pleas were undisposed of. If an issue in fact had been joined on the fifth plea, and found for the defendants, judgment was inevitable for them, because the plea was in bar of the action, and the other pleas would then have presented immaterial issues. If the plea was true, being a complete defence, it would have been useless to have tried other issues, for no matter how they might terminate, judgment must still be for the defendants. The state of pleading leaves the fifth plea, precisely as if traverse had been taken on a matter of fact in it, and determined against the plaintiff. 'On demurrer to any of the pleadings which go to the action, the judgment for either party is the same as it would have been on an issue in fact, joined upon the same pleading and found in favor of the same party.' (Gould's Pleading, ch. ix, § 42.) 'And when the defendants' plea goes to bar the action, if the plaintiff demur to it and the demurrer is determined in favor of the plea, judgment of nil capiat should be entered, notwithstanding there may be also one or more issues in fact; because, upon the whole, it appears that the plaintiff had no cause of action.' (Tidd's Practice, 4th American Edition, 741-2.)

There is no error in the record.

JUDGMENT AFFIRMED WITH COSTS.


text: Talk:Clearwater v. Meredith/Opinion of the Court

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text:
Commander-in-Chief

68 U.S. 43

17 L.Ed. 609

1 Wall. 43

COMMANDER-IN-CHIEF.

December Term, 1863

APPEAL from a decree of the Circuit Court of the United States for the Southern District of New York in a cause of collision, the case being thus:

La Tourette & Butler, appellees in the case, were owners of the schooner William Clark, and filed their libel in the District Court of the United States for that district, alleging, among other things, that on the 26th of January, 1860, the schooner of the claimants, called the Commander-in-chief, while their schooner lay safely at anchor to the north and east of Little Egg Harbor, and about a half a mile from the New Jersey shore, came down, under full sail, and ran into her, cutting her through, abreast of the main chains. The allegation was, that the William Clark sank within fifteen minutes after the collision, and the claim was for a total loss both of the vessel and the cargo. The collision occurred about ten o'clock in the evening. The libellants alleged that it was a clear, moonlight night; that their schooner was properly anchored, and had a competent watch on deck, and a bright light set in the rigging, and that the collision occurred in consequence of the negligence, mismanagement and unseamanlike conduct of those in charge of the vessel of the respondents, and without any fault on the part of those in charge of their own vessel.

The answer of the claimants, in general terms, denied the material matters alleged in the libel. A separate denial of each article was interposed, and the substance of the defence was, that the collision, if it occurred at the time and place alleged in the libel, was occasioned through the fault of the officers and crew of the vessel of the libellants; the respondents alleging, in the general terms quoted, that the vessel of the libellants 'lay in an improper manner and in an improper place, without a light or other necessary precautions, and that the collision, so far as their vessel was concerned, was unavoidable.'

Testimony was taken by both parties. It showed that the schooner of the libellants, bound from Indian River, in Delaware, to the city of New York, anchored a mile or two to the northward of Little Egg Harbor light (a place where vessels frequently sail), in consequence of the severity of the cold, and because it was blowing so heavily that those in charge of her did not deem it safe to proceed on the voyage. It was proved, however, that the anchorage was not an improper one, and that a number of vessels were anchored still further in the general track, towards the south. The master of the Commander-in-chief swore it was a moonlight night-very cold. 'There was a vapor on the water. Anything above the vapor you could see a good way; but a vessel's hull you could not see beyond a short distance. You could see a light half a mile.' He then proceeded to state some facts from which the conclusion was inferrible that there was no light: but the proofs of the other side were full that there was a light, and that it was suspended in the rigging of the injured vessel, some twelve feet above the deck; and moreover, that the mate was on deck as a lookout.

After a full hearing, an interlocutory decree was entered in favor of the libellants and the cause referred to a commissioner to ascertain and compute the amount due to the libellants for the actual damages to the vessel and cargo occasioned by the collision. The commissioner having made and returned his report, by which he gave a specific sum as the value of the vessel, and an additional specific sum as the value of the cargo, the respondents filed nine exceptions to the report, as follows:

1. 'That the commissioner allowed improper and immaterial evidence to be put in by libellant;' the exception, however, not stating what the evidence was.

2. 'That he had no evidence to justify his report;' the exception not setting forth what evidence he did have.

3. 'That he reported more than the evidence warranted;' the exception stating nothing further.

4. That he had 'failed to report the principle of the decree.'

5. That he 'admitted evidence of witnesses as to the value of the vessel on the part of the libellant, who were not competent as to that fact, and whose evidence should have been rejected;' no names of witnesses being given, nor any specification of the reasons why they were incompetent; nor what they swore to; nor why their evidence should have been rejected.

6. That he 'reported the value of the cargo as part of the damage,' when the libellant is not entitled to recover therefor.

7. That the evidence showed the vessel to be of far less value than the report made it.

8. That the loss of the vessel was not the necessary or actual results of the injury to the vessel.

9. That the loss is shown to have been incurred by the fault of the libellant or his agents.

The court, after full argument, overruled these exceptions, including the sixth, and entered a final decree in favor of the libellants for the amounts reported. Appeal was then taken by the respondents to the Circuit Court, where the parties were again fully heard, and the decree of the District Court affirmed; whereupon the respondents appealed to this court, and now sought to reverse the last-named decree.

Mr. Haskett for the libellants: The answer is in some respects too indefinite. It does not specify as it ought to have done wherein the ship was lying improperly at anchor, if she was lying so at all. The exceptions, also, to the commissioner's report are for the most part far too indefinite. Certainly this is true as respects the first, second, third, fourth, and fifth exceptions. They would impose upon the judges of this court the labor of hunting in the most minute way, throughout the record, to see wherein the alleged error of the commissioner consisted; leaving them in the end to guess at it only. This is irregular. The sixth exception is without foundation in law. The evidence shows that the collision was through the fault of the respondents alone. If this is so, the libellants are entitled to damages for her cargo. The collision was the cause of the loss, and the owners of the vessel as common carriers are liable to the owners of the cargo. The Propeller Commerce, decided lately, in this court, is in point.

Mr. Gillet, contra: The injured vessel was anchored, of a very cold night, in a great thoroughfare of navigation. Her light, if any light was on her, was in the rigging. There was a mist on the water, and the light was obscured. The case is one of misfortune at worst; for which the respondents are not liable.

The answer and first five exceptions are in sufficient form. The court has the whole record, in a printed shape, before them. Learned in law, and instructed by the evidence in the facts, they can readily see wherein the point of each exception lies.

The sixth exception is well founded. The libellants are not entitled to recover for the value of the cargo. They have neither averred or proved that it belonged to them, nor that they were carriers. The inference is fair that it was taken as freight for third persons. They do not even show that the claim for the loss of the cargo was assigned to them, nor that they became the insurers of it; nor that under the circumstances claimed by libellants in this case, they would be liable over to the shipper. It does not appear whether the libellants or shippers insured, or not; or if insured, whether they have abandoned to the underwriters, so that the claim, if valid, belongs to the latter. It is no answer to say that the libellants are liable to the shippers for it. This may, or may not be so, and depends more upon what is not, than what is to be found in the record. The libellants have no right to impose upon the claimants the chances of double payment for the same thing. They had it in their power to have placed this matter upon proper footing by filing the libel in behalf of themselves and for the benefit of the shippers, or in some other way made the shippers parties, so that a recovery would have enured to their advantage and concluded them, and would have left the proceeds, when collected, in the registry, for them. It is clear, if the libellants could not do this, and thus bind the shippers, they cannot bind them when not named or referred to in the libel; and if they could not thus bind them, they cannot recover for the value of the shippers' property. The case of the Propeller Commerce, cited on the other side, does not determine this question. That was a case of common carriers, and this is not. Whether the owners of the cargo were protected by the form of the proceedings, or concurred therein, is not stated. Ordinary shipments, like the present, are upon special agreement, and the freighter is not a common carrier. But even in case of common carriers, the owner of property retains his ownership and right to control and to sue for injury to it.

Mr. Justice CLIFFORD, after stating the case, delivered the opinion of the court:

title: Commander-in-Chief


text: Talk:Commander-in-Chief

title: Talk:Commander-in-Chief


text:
Commander-in-Chief/Opinion of the Court

1. Persons appearing as claimants, or for the purpose of making defence in causes civil and maritime, are required, under all circumstances, to answer on oath or solemn affirmation, and the authorities are unanimous that the answer should be full, explicit, and distinct, to each separate article and allegation of the libel. Claimants merely allege, in this case, that the vessel of the libellants lay in an improper manner, and in an improper place; but the answer does not set forth, or in any form point out, in what manner she lay, or in what respect the manner was improper, nor is there any definite description of the place where she lay, or any reasons assigned why it was an improper anchorage. Explanations in that behalf are entirely wanting; nor is it possible to determine from the allegations of the answer whether the respondents intended to set up that the place selected as an anchorage was an usual one, and that those in charge of their vessel were thereby misled, or whether that part of the answer was intended as an averment that she lay too near to or too far distant from the shore, and more or less in the pathway of navigation than was customary or necessary. Such indefinite allegations are hardly sufficient to constitute a valid defence; but as no exception was entered to the answer in the District Court, and inasmuch as this point was not made here in argument, perhaps it is but right that the decision of the case should true upon the merits of the controversy.

2. Evidence shows that the schooner of the libellants was bound on a voyage from Indian River, in the State of Delaware, to the port of New York; that she anchored a mile or two to the northward of Little Egg Harbor light, in consequence of the severity of the cold, and because it was blowing so heavily that those in charge of her did not deem it safe to attempt to proceed on the voyage. Proofs also show that the anchorage was a proper one, and that a number of vessels were anchored still farther to the south. She had a good light suspended in the rigging, and the mate was on deck as a lookout. Suggestion is made that there was some mist or vapor on the water; but if it were conceded that the testimony establishes that fact, still it could not benefit the respondents as a defence, because the proofs are full to the point that it was a clear, moonlight night, and that the light suspended in the rigging of the schooner was some twelve feet above the deck of the vessel. Witnesses for the respondents, or some of them, testify that they did not see the light until just before the collision occurred, and the inference is attempted to be drawn from that fact, that the light was in an improper place; but the weight of the evidence satisfies the court that it might easily have been seen if there had been proper vigilance on the part of those in charge of the respondents' vessel. Both the courts below held that the respondents were in fault, and we entirely concur in that opinion.

3. None of the exceptions to the report of the commissioner are entitled to any consideration except the sixth. First exception was, that the commissioner allowed improper and immaterial evidence to be introduced by the libellants; but the exception is not accompanied by any report of the evidence objected to, and of course there is no means of determining whether it was proper or improper. Second exception was, that the commissioner had no evidence to justify his finding, which, without a report of the facts, is quite too indefinite to be available for any purpose, and the same remark applies to the third and fourth exceptions, which need not be reproduced. Fifth exception was to the effect that witnesses were admitted to testify as to the value of the vessel who were not competent, and whose evidence should have been rejected; but the names of the witnesses are not given, nor is it stated why they were incompetent, nor what their testimony was, nor on what ground it is claimed that the testimony should have been rejected. Suffice it to say, that in the judgment of this court these several exceptions are without merit, and were properly overruled. Sixth exception is to the effect that the commissioner improperly reported the value of the cargo as part of the damage, when, in point of fact, the libellants were not entitled to recover therefor. Report of commissioner shows that he estimated the actual damage to the cargo as well as the actual damage to the vessel, and the decree states that the report, as made, was confirmed by the court. Taken together, therefore, the report and decree affirm the principle that the libellants, under the circumstances of this case, were entitled to recover both for the damage to the vessel and cargo. Appellants insist that the action of the court in confirming the report was erroneous, and that the decree on that account should be reversed. Common carriers, however, it is conceded, are liable for the safe custody, due transport, and right delivery of goods and merchandise intrusted to them to be conveyed from one port or place to another; and where the owners of the ship or vessel damaged by a collision sustain that relation to the cargo, it is admitted that they may recover for its loss or injury in the suit for the collision, if the libel is properly framed and the proofs sustain the charge. Admission to that effect could hardly have been withheld, as it was so decided by this court in the recent case of the Propeller Commerce, to which reference was very properly made. But it is contended that the decision in that case was placed exclusively upon the ground that the lake boat Isabella was a common carrier in the strict technical sense, and the argument is that the schooner of the libellants was not such a carrier, and, therefore, that the rule adopted in that case cannot be applied in the case under consideration. Whether all ships and vessels employed in transporting goods or merchandise from port to port are, strictly speaking, common carriers or not, it is not necessary to determine in this case. Suffice it to say, that they are carriers, and as such are liable for the safe custody, due transport, and right delivery of the goods or merchandise which they receive and undertake to transport, and nothing can discharge them from the obligation of the undertaking, as specified in the bill of lading, but the excepted perils, or the act of God, or the public enemy. Liability, therefore, of the schooner of the libellants as a carrier, was precisely the same as that of the lake boat Isabella, in the case referred to, so that the rule adopted in that case is fully applicable to the case at bar. Undoubtedly, all persons interested in a cause of collision may be joined in the libel for the prosecution of their own claims and the protection of their own interests. Owners of the vessel and the shippers of the cargo, for example, and all other persons affected by the injury, may be made parties to the suit, or it may be prosecuted by the master as the agent of all concerned. Where it appears that the party or parties named as libellants are competent to prosecute the suit, the nonjoinder of others having an interest in the controversy must be shown by exception, and, if not made to appear in the court below, cannot be made available as an original objection in the appellate tribunal. Objections to parties, or for the want of proper parties, should be made in the court below, where amendments may be granted in the discretion of the court. Parties improperly joined may, on motion, be stricken out, and new parties may be added by a supplemental libel or petition. Service of regular process is a warning to all parties who have any interest in the cause to come in and protect their interest; and unless they do so, if due notice was given, they are bound by the decree. Amendments are readily granted in the Admiralty Court, as carrying out the maxim that all the world are parties to the proceeding; and if due notice be given, and any one interested fails to appear, he cannot thereafter have any ground of complaint. Collision suits are frequently prosecuted by the owners of the injured vessel for damages to the cargo as well as to the vessel, and it does not appear that any serious embarrassment has grown out of the practice. Manifestly, where the prosecution is instituted by one or more parties for themselves and others not named, it would be more regular that it should be so averred in the libel; but as there can be only one prosecution for the same collision, it is not perceived that the omission of that averment can operate to the prejudice of the claimant. Persons appearing as claimants may object to the want of proper parties, and it may be that, if the exception is seasonably and properly taken, the proceeding cannot be sustained. On that point, however, we express no decided opinion, but leave the question to be determined when it shall arise. Suit in this case was commenced by the owners of the vessel, and no exception was taken to the nonjoinder of the shippers of the cargo, either in the pleadings or in any stage of the proceedings, prior to the appeal. Under these circumstances, we are all of the opinion that the objection must be overruled. No inconvenience will result from this rule to the claimants of the other vessel, and there will still be sufficient power in the court to afford protection to the rights of the shipper of the cargo, provided proper measures are taken by him to assert his rights before the controversy is completely ended. Where the suit is commenced by the owners of the injured vessel, it is undoubtedly competent for the owners of the cargo to petition to intervene for the protection of their interests at any time before the fund is actually distributed and paid out of the registry of the court. Our conclusion is, that the suit was well brought, and that it was well and properly prosecuted in the name of the libellants. Case does not show that the libellants are not the owners of the cargo; but if not, the real owners thereof may still intervene.

The decree of the Circuit Court is therefore affirmed with costs.

DECREE ACCORDINGLY.

title: Commander-in-Chief/Opinion of the Court


text: Talk:Commander-in-Chief/Opinion of the Court


text:
Hutchins v. King

THIS was a writ of error to the Circuit Court for New Hampshire; the case being thus:

In September, 1853, Dunn and his partner having bought timber land in New Hampshire, of Goodall, mortgaged it back to him, as security for the payment of the purchasemoney; the purchasers having given their notes for the money; and the mortgage being intended to secure their payment. One of the notes was payable September 1st, 1854; another, September 1st, 1855; and a third, September 1st, 1856: all of them with interest from an anterior date, to wit, from June, 1853. The first note was paid at maturity, but the second was not paid until five months after maturity; while neither on it nor on the third note, was any interest paid until two years after it became due. It was then collected by process of law.

The mortgage contained a stipulation that the mortgagors might enter and cut timber to the value of ten hundred dollars, and afterwards as fast as they made the several payments designated in the mortgage, but if they failed to make any one of the payments designated, they were 'to cease cutting, and to yield possession' until the amount was paid; we to cut timber-was the language of one part of the mortgage-'as fast as we pay the notes, and no faster.' During the time that the mortgagors were thus in default by non-payment of the second note, and of interest on both it and the third, they entered and cut timber, and in June, 1856, sold it to one King. In September, 1856, two persons, named Hutchins and Woods, who had succeeded by assignment to the rights of Goodall, the mortgagee, took possession of the timber thus cut, sold it, and appropriated to themselves the proceeds; the sale of the timber by them being, as it appeared, after the unpaid interest had been collected.

In 1859, King, who had purchased from the mortgagors, brought an action on the case against Hutchins and Woods, to recover the value of the timber which they had thus taken possession of and sold. And among several questions raised on the trial was this-the only one considered by this court-whether the assignees of the mortgage, Hutchins and Woods, were liable to King, the vendee of the mortgagors, for the value of the timber which they had sold after they had received the principal and interest due to them.

The court below ruled that they were not; and the correctness of this ruling was the chief point now in issue here.

The record had no proper bill of exceptions. The bill, so called, gave the rulings of the court, but did not show that exceptions to these rulings were taken by either party. No objection was, however, made to the record on this ground by counsel on the argument; and the associate justice of this court who presided at the circuit where the cause was tried, informed the court that an exception to the ruling on the material point considered, had been in truth taken, and that the omission of the bill to state the fact was a clerical error.

Messrs. Hutchins and Carpenter for the plaintiff in error:

1. It will be admitted that a mortgagor has no right in general to cut timber from mortgaged premises; and if he does so he is liable to the mortgagee in trespass or trover. If he sells the timber so cut, his vendee is liable to the mortgagee in like manner. The mortgagee's rights in this respect are not affected by the fact that there has been no breach of the condition of the mortgage; for the mortgagee, as against the mortgagor, is the owner of the land, and indeed if there is no stipulation, either express or implied, to the contrary, he is entitled to the possession, and may sue for and recover it immediately upon the execution of the mortgage.

2. But this case has special strength. The stipulation contained in the mortgage gave the mortgagors a right to cut timber from the premises only as they paid the mortgage debt 'and no faster;' that is to say, until such time as they might fail to pay an instalment of principal or interest when due and payable, and no longer. Upon the happening of that event, i.e., a failure to pay, they were, by the terms of the deed, to 'cease cutting, and yield possession,' &c., until payment of another note.

The conclusion is unavoidable that the mortgagors had no right to cut timber from the mortgaged premises while in default either for principal or interest.

Moreover, when the timber was severed it became the personal property of the assignees of the mortgagee, as it was before their real property. It could no longer pass with the land, and was no longer covered by the mortgage. By a recovery of the land in a suit on the mortgage, the assignees would not have recovered the severed timber, nor could the mortgagors recover it or gain title to it by redemption of the mortgage and recovery of the land.

3. The reception by the mortgagees of the money due on the mortgage debt could not operate as a waiver of any right which had accrued to them through the default of the mortgagors. They were bound by law to receive, or suffer the loss of interest. Their right to collect and receive payment of the debt secured, was independent of their rights to the timber under the mortgage and had no connection with them.

Mr. Wells for the defendant in error.

Mr. Justice FIELD delivered the opinion of the court:

title: Hutchins v. King


text: Talk:Hutchins v. King

title: Talk:Hutchins v. King


text:
Hutchins v. King/Opinion of the Court

The stipulations in the mortgage to Goodall provided, as we construe them, that the mortgagors should have the right to enter upon the mortgaged premises and cut timber, at first to the value of ten hundred dollars, and subsequently as they made the several payments designated, to the value of the sums paid; but that in case they failed to make any one of the payments designated, they were to cease cutting and to surrender possession until the amount due was paid. The timber, for the conversion of which the present action is brought, was cut after the interest on some of the notes secured had become due, and whilst it remained unpaid, and the greater portion of it was cut after the principal of one of the notes had matured and was also unpaid.

In June, 1856, after the note which had matured was paid but whilst a suit for the interest on the other notes was pending, the mortgagors sold the timber cut to King, the plaintiff below, the defendant in error in this court. The defendants below, Hutchins and Woods, who had succeeded by assignment of the notes and delivery of the mortgage, to the rights of the mortgagee, in September, 1856, took possession of the timber cut, and subsequently disposed of it, and appropriated the proceeds. In November following, the interest due on the unpaid notes was collected. It does not appear from the record at what precise period the defendants disposed of the timber, but we assume from the argument of counsel that this was done after their collection of the interest. In 1859, the present action was brought to recover the value of the timber alleged to have been thus converted.

The defence rested mainly upon a claim of ownership in the property by the defendants. The position taken by their counsel in the court below, and urged in this court, was substantially this: that between the parties to the mortgage, the mortgagee was the owner of the land, and as such was clothed with all the rights and privileges of ownership; that the license to cut timber contained in the stipulations of the mortgage ceased upon the first failure to meet one of the payments designated; and that after default the defendants succeeding to the interests of the mortgagee had the absolute right to all the timber cut from the land, without liability to account to any one. We do not state the position of the defendants in the precise language of their counsel, but we state it substantially.

A mortgage is in form a conveyance, vesting in the mortgagee upon its execution a conditional estate, which becomes absolute upon breach of the condition. At law it was originally held to carry with it all the rights and incidents of ownership. The right of the mortgagee to be treated as owner of the mortgaged premises could only be defeated upon the performance of the conditions annexed by the day designated. Subsequent performance only gave a right to the mortgagor to resort to a court of equity for relief from the forfeiture arising upon breach of the conditions. Such is the law at this day in some of the States of the Union. But in a majority of the States the law in this respect has been greatly modified by considerations drawn from the object and intention of the parties in executing and receiving instruments of this character. The doctrine established by courts of equity, looking through the form to the real character of the transaction, that a mortgage is a mere security for a debt, and creates only a lien or incumbrance, and that the equity of redemption is the real and beneficial estate in the land, and may be sold and conveyed in any of the ordinary modes of transfer, subject only to the lien of the mortgage, has to a great extent, 'by a gradual and almost insensible progress,' as Kent observes, been adopted by the courts of law. To such a degree has this equitable view prevailed that the interest of the mortgagee is now generally treated by the courts of law as real estate, only so far as it may be necessary for the protection of the mortgagee and to give him the full benefit of his security. Although, in the absence of stipulations as to the possession, he may enter upon the premises, his interest is widely different from that of owner. He cannot by conveyance transfer any interest in the premises without a transfer of the debt secured; his interest is not subject to attachment or seizure on execution; he cannot remove the buildings on the premises, nor the fixtures attached; nor can he subject the premises to any uses but such as may furnish the means for the payment of the debt secured without impairing the value of the estate.

In few States is the equitable doctrine respecting mortgages more clearly asserted than in New Hampshire, where the mortgage was executed upon which the rights of the parties to the present action arise. Thus, in Southerin v. Mendum, the Supreme Court of that State, in considering the nature of the interest which a mortgagee possesses, said: 'In order to give him the full benefit of the security, and appropriate remedies for any violation of his rights, he is treated as the owner of the land. But for other purposes the law looks beyond the mere form of the conveyance to the real nature of his interest, and treats his estate in the land as a thing widely different from an estate in fee simple.' In that case it was held that the interest of the mortgagee in the land was a mere chattel, and passed by a simple delivery of the note secured as an incident of the debt. And in Ellison v. Daniels, the same court said: 'The right of the mortgagee to have his interest treated as real estate extends to and ceases at the point where it ceases to be necessary to enable him to avail himself of his just rights, intended to be secured to him by the mortgage.' In that case the demandant in a writ of entry was mortgagor, and the tenant claimed under the mortgagee through various mesne conveyances executed after the law day, and it was held that nothing passed to the tenant, the court observing that to enable the mortgagee to sell and convey his estate was not one of the purposes for which his interest is to be thus treated; that there was no necessity that it should be so treated, as the sale could be equally well effected by the transfer of the note secured by the mortgage.

With these views of the nature of the interest of the mortgagee, under the law of New Hampshire, the question presented in the case at bar becomes one of easy solution. The timber growing upon the land mortgaged constituted a portion of the realty. It was embraced in the pledge of the land as security. As the assignees of the mortgage held the land, so they held the timber upon it both before and after it was cut, as a portion of their security. They could not sell it, any more than they could pass, by their conveyance, the fee of the land.

The mortgagors had, it is true, no right to cut the timber after default made in any of the payments designated in the mortgage. They could do nothing to diminish the value of the estate. The right to cut the timber rested upon the license contained in the stipulations of the mortgage. Their cutting, except in pursuance of such license, might have been restrained, upon proper application, by a court of equity. The sale by them, after it was cut, did not divest the lien of the assignees of the mortgage; the purchaser took the timber subject to their paramount rights. The assignees could follow it and take possession of it, and hold it until the designated amounts due at the time were paid. When these were paid, their rights over it ceased, and the vendee of the mortgagors became invested with a complete title. The subsequent detention of the timber by the assignees was wrongful, and the sale of it a conversion, for which they were liable to the purchaser.

Some other positions were pressed by the plaintiffs in error upon the attention of the court on the argument, but we do not notice them; because what is termed in the transcript 'a bill of exceptions,' does not show that any exception was taken to the rulings of the court. The bill simply shows that certain positions were urged by the parties, and that certain rulings were made. We have, however, considered the material question argued, because no objection was taken to the record on the argument, and because the associate justice of this court, who presided at the circuit where the cause was tried, informs us that an exception was in truth taken, and that the omission of the bill to state the fact is a mere clerical error. We do not intend, however, to allow this case to be drawn into a precedent. To authorize any objection to the admission or exclusion of evidence, or to the giving or refusal of any instructions to the jury, to be heard in this court, the record must disclose not merely the fact that the objection was taken in the court below, but that the parties excepted at the time to the action of the court thereon.

JUDGMENT AFFIRMED.

title: Hutchins v. King/Opinion of the Court


text: Talk:Hutchins v. King/Opinion of the Court


text:
Dermott v. Wallach (68 U.S. 61)

MRS. DERMOTT leased to Dexter a hotel, for three years from 1st October, 1855, to be extended to five, at the option of the tenant. The rent was $3000 a year, payable in monthly sums of $250. It was expressly stipulated between the parties, and made a condition, that if the tenant should assign or underlet the premises without the written consent of the landlord, or should remove or attempt to remove any of his goods or chattels (except the same be replaced of equal value) from the premises without a like consent, then, and in either case and event, at the sole option and election of the landlord, the term should cease, and the landlord might immediately re-enter upon the premises and expel the tenant, AND MOREOVER, in either of said cases, or the happening of the events, 'one whole year's rent, to wit, the rent of $3000 over and above all such rents (that is to say, all such of the rents hereinbefore reserved to be paid on the first day of each month during the said term . . . as shall have then already accrued) shall be and by these presents is reserved to be paid by the said Dexter to the said Dermott, and shall immediately thereupon accrue and become due and owing from him to her, and shall and may be levied by distress and sale of all such goods and chattels as may be found on the premises.'

Dexter the tenant took possession, and afterwards executed two deeds of trust of the goods and chattels in the hotel to the defendant, Wallach, to secure certain promissory notes. One of the notes not being paid at maturity, Wallach advertised the goods and chattels for sale, and was proceeding with the sale when Mrs. Dermott levied a distress upon them for $3000. This was on the 18th of May, 1857, ''about a year and five months before the lease would expire. The ordinary rent had been all punctually paid to the 1st of May, the month in which the distress was made;'' so that no rent of the ordinary kind was due at the time of the distress. Wallach having replevied the goods seized, the defendant avowed; setting up, by way of justification for the taking, the attempt to remove them from the premises, and alleging that by such removal one year's rent had accrued. There were two pleas to the avowry. I. No rent in arrear. II. No demand for the rent.

The substantial question was whether this $3000 was 'rent,' or was a penalty, that is to say, whether the clause meant that in the event of a removal, or attempted removal, Mrs. Dermott might get a year's rent in advance, or whether it meant that she should have a sum of money equivalent to a year's rent 'over and above' all rents, by way of penalty.

The Circuit Court for the District of Columbia, in which the case arose, gave judgment for the plaintiff. On error here, the question was the same as below and as already stated.

Messrs. Carlisle and Cox for the trustee, the defendant in error:

1. The authorities show that whenever it is doubtful what the intent of the parties was, or where there may be breaches of the agreement of different degrees of importance, and a gross sum is payable for any breach, however unimportant, or where the damage is capable of being certainly known, the sum will be treated as a penalty, whatever the parties may have called it. Calling the thing rent will not make it so. On the other hand, where it is impossible to estimate the damage, or a rate of forfeiture proportioned to the damage is reserved, it is considered liquidated damages, or, sometimes, an increased rent, or penal rent.

The present comes within the first class of cases. The removal of the most trifling articles of furniture, and that but a week before the expiration of the lease, would, according to the terms of the instrument, entail upon the tenant the forfeiture of the whole sum of $3000, as well as of his lease, equally with the removal of the whole contents of the house at the commencement of the term. The removal may be repeated a dozen times, and the right of Mrs. Dermott accrues as often as the removal takes place. It is apparent, too, in this case, that the utmost damage which the plaintiff in error could have suffered was the loss of about two months' rent, for which she claims a whole year's.

2. If this was a case of penalty, the plaintiff in error had no right to distrain for it.

Before the statute 8 and 9 William III, a party might obtain judgment at common law, for the whole amount of the penalty of a bond. But even then the distinction between penalties and liquidated damages was known; and in the former case, courts of equity would restrain proceedings at law, and direct an issue of quantum indemnificatus. And now, in the common law courts, a judgment can only be had for the actual damage.

If a party cannot obtain judgment for a penalty, a fortiori, he cannot distrain for it. The right of distress, which is a right to take the law into one's own hands, is exceptional, and not to be favored. It is of the essence of this right that the rent or service distrained for should be certain in amount and time of payment, and therefore distress was never allowed where the services due were uncertain, in either respect. Nor can agreement of the parties make any difference in this respect. No case can be found in which a distress for a penalty has been sustained.

3. By the common law, where a nomine poenae is given for non-payment of rent, the lessor must demand the rent before he can be entitled to the penalty; and where a right of distress is given by agreement, a demand is necessary to entitle a party to distrain. This is ancient law. Grobham v. Thornborough, in Hobart's Reports, is in point. Grobham there brought debt of 100 against Thornborough, on a lease, 60 being for rent, and  40 'a nomine poenae of 8 shillings a day for non-payment,' for a hundred days. Judgment was given for him for the 60 rent. 'But,' says Lord Hobart, 'for the 40 pain, it was adjudged against the plaintiff, because he laid no actual demand, without which a pain is not forfeited.'

By parity of reasoning, even if a right of distress existed in this case, there must have been a previous demand, either to replace the goods alleged to be removed, or to pay the $3000. The tenant was entitled to a reasonable time to replace the goods. Until such time elapsed without their being replaced, and until demand made, no right accrued.

Mr. Brent, contra.

Mr. Justice NELSON delivered the opinion of the court:

title: Dermott v. Wallach (68 U.S. 61)


text: Talk:Dermott v. Wallach (68 U.S. 61)

title: Talk:Dermott v. Wallach (68 U.S. 61)


text:
Dermott v. Wallach (68 U.S. 61)/Opinion of the Court

The case turns mainly upon the question whether the $3000 mentioned in the lease, accruing on the happening of this event, is rent or a penalty.

The argument on behalf of the tenant is, that by the true construction of the lease, the landlord, on the happening of the event, may at his option consider the term as ended, and re-enter, and in addition distrain for the $3000, and hence the term having ended, or it being in the power of the landlord to end it, the sum reserved cannot be regarded as rent, but as a penalty, as the relation of landlord and tenant has ceased.

We do not agree to this construction. Although the wording of the clause occasions some obscurity and hesitation, yet, regarding the sense and substance of it, there can be little doubt about its meaning. It will be observed, that if the tenant assigns or underlets, the term ceases at the option of the landlord. So in the event of the removal or attempt to remove the goods. Now the words, 'at the sole option and election' of the landlord, are superfluous, if intended to be limited to this breach of the covenant. All that was necessary was the inhibition to assign, underlet, or remove the goods, and the right of re-entry in case of breach. Without giving the option or election, the landlord had the right to waive the forfeiture. Receiving rent with knowledge of the breach is a waiver. So, levying a distress for the rent, or in any other way consenting to a continuance of the term. These words, we are of opinion, are entitled to an influence in the construction of this part of the lease beyond these covenants of forfeiture, and may aid in the construction and meaning of the clause which provides for the payment of the year's rent in advance. And the true meaning we think is, that the landlord may at his option consider the term at an end, and re-enter in the events mentioned, or may at his option (understood), have the year's rent in advance.

We do not think the word 'moreover,' in the connection found, necessarily means the rent in advance, in addition to the previous remedies mentioned, but rather an alternative remedy.

These covenants are inserted in a lease for the better security of the rent. The one in question simply makes the rent payable in advance, instead of by instalments, on the happening of the event stated. It would have been not only strange but unreasonable to have made this stipulation as contended for on the part of the plaintiff, to take effect at the moment the term ceased, or might be put an end to by the landlord. The words should be very clear and controlling to lead to such an interpretation.

It is argued that the reservation of this $3000 rent in advance should be regarded as a penalty, for the reason that the event would happen on the removal of a single article of goods, and that the remedy is out of reasonable proportion to the injury. But the answer is, the covenant against removal necessarily embraced all the goods on the premises that furnished security for the rent, and it is not for the tenant to set up as a defence to its enforcement, that the breach is not as great as it might have been. The removal of a single article is a wrong which he is not permitted to take advantage of, and besides, there is no hardship in the case, for if he desired to remove any particular article, the covenant permits it on replacing goods of equal value.

The removal of the goods took place on the 18th of May, 1857, some year and five months before the expiration of the lease, so that practically the reservation of the rent in advance, on the event in the lease happening, works but simple justice to all parties. It became the substitute for the rent reserved payable monthly. If the tenant had brought about the event by the removal of the goods within a year of the termination of the lease, whether or not he might have had a remedy to abate the excess, we need not discuss.

JUDGMENT REVERSED, and cause remanded for a venire de novo.


text: Talk:Dermott v. Wallach (68 U.S. 61)/Opinion of the Court


text:
Ryan v. Bindley

THE Judiciary Act provides that final judgments and decrees in civil actions and suits in equity in a Circuit Court, when the matter in dispute exceeds the sum or value of two thousand dollars, exclusive of costs, may by re-examined and reversed or approved in the Supreme Court. With this law in force, Bindley had sued Ryan in assumpsit in the Circuit Court for the Southern District of Ohio, and laid his damages at one thousand dollars. Ryan, however, put in a plea, insisting that Ryan owed him four thousand dollars, which sum he claimed a right to set off against Bindley's demand, and to have judgment against Bindley for the excess: a sort of defence and judgment allowed by the laws of Ohio and the practice of the Circuit Court of the United States for its districts, which herein by rule of court had adopted the practice of the State tribunals. The verdict found $575.85 for the plaintiff.

In the course of the trial the defendant offered himself as a witness; not being competent of course by the general laws of evidence which prevail in the Federal courts, and indeed being, by rule of the Circuit Court where the case was tried, made, as a party, specifically incompetent, but claiming to be competent by virtue of the Ohio code of civil procedure; one section of which declares that 'No person shall be disqualified as a witness in any civil action or proceeding by reason of his interest in the event of the same, as a party or otherwise.'

The Circuit Court, holding to its own rule, rejected the witness; and on error here two questions were raised.

1. Did the sum involved exceed $2000 in such a sense as that the Supreme Court had jurisdiction?

2. Was the defendant in this suit rightly rejected as a witness?

Messrs. Lee and Fisher for the plaintiff in error.

Mr. Justice DAVIS delivered the opinion of the court:

title: Ryan v. Bindley


text: Talk:Ryan v. Bindley

title: Talk:Ryan v. Bindley


text:
Ryan v. Bindley/Opinion of the Court

1. The allegation in the declaration must be taken, generally, as fixing the amount or value for the purposes of jurisdiction. But the subsequent pleadings may so change the original character of the suit as to involve an amount or value in excess of two thousand dollars, and when this is done, the judgments and decrees of the court below are subject to be reviewed here.

In this case Ryan interposed a notice of set-off, and insisted that Bindley owed him four thousand dollars, for goods sold and money lent, which he claimed the right to set off against Bindley's demand, and to recover against Bindley a judgment for the excess. By the laws of Ohio such a defence is permitted, and if the defendant succeeds in proving his set-off, and it is larger than the plaintiff's claim, he is entitled to a judgment for the excess. The parties are concluded by the judgment, and cannot against litigate the same subject-matter, unless the judgment should be reversed, on appeal or writ of error to the Supreme Court. This law of set-off, or counter claim, and the practice under it, has been adopted as a rule of court, by the Circuit Court of the United States for the districts of Ohio. The plea in this case was therefore proper, and after it was interposed the matter in dispute rightfully exceeded the sum of two thousand dollars, exclusive of costs, and as the plaintiff had judgment, it is plain that the defendant had the right to sue out his writ of error.

2. A reversal of the judgment is claimed, because the Circuit Court refused to permit the defendant to testify as a witness. In Ohio a party to the suit is a competent witness on his own behalf. The rules of evidence prescribed by the laws of a State are rules of decision for the United States courts, while sitting within the limits of such State, under the 34th section of the Judiciary Act. The court having rejected the witness, when he was competent, the judgment below must be reversed, and a venire de novo awarded.

JUDGMENT ACCORDINGLY.

title: Ryan v. Bindley/Opinion of the Court


text: Talk:Ryan v. Bindley/Opinion of the Court


text:
United States Code/Title 11/Chapter 5/Section 541

§ 541. Property of the estate

 * (a) The commencement of a case under section 301, 302, or 303 of this title creates an estate. Such estate is comprised of all the following property, wherever located and by whomever held:
 * (1) Except as provided in subsections (b) and (c)(2) of this section, all legal or equitable interests of the debtor in property as of the commencement of the case.
 * (2) All interests of the debtor and the debtor’s spouse in community property as of the commencement of the case that is—
 * (A) under the sole, equal, or joint management and control of the debtor; or
 * (B) liable for an allowable claim against the debtor, or for both an allowable claim against the debtor and an allowable claim against the debtor’s spouse, to the extent that such interest is so liable.
 * (3) Any interest in property that the trustee recovers under section 329 (b), 363 (n), 543, 550, 553, or 723 of this title.
 * (4) Any interest in property preserved for the benefit of or ordered transferred to the estate under section 510 (c) or 551 of this title.
 * (5) Any interest in property that would have been property of the estate if such interest had been an interest of the debtor on the date of the filing of the petition, and that the debtor acquires or becomes entitled to acquire within 180 days after such date—
 * (A) by bequest, devise, or inheritance;
 * (B) as a result of a property settlement agreement with the debtor’s spouse, or of an interlocutory or final divorce decree; or
 * (C) as a beneficiary of a life insurance policy or of a death benefit plan.
 * (6) Proceeds, product, offspring, rents, or profits of or from property of the estate, except such as are earnings from services performed by an individual debtor after the commencement of the case.
 * (7) Any interest in property that the estate acquires after the commencement of the case.

 * (b) Property of the estate does not include—
 * (1) any power that the debtor may exercise solely for the benefit of an entity other than the debtor;
 * (2) any interest of the debtor as a lessee under a lease of nonresidential real property that has terminated at the expiration of the stated term of such lease before the commencement of the case under this title, and ceases to include any interest of the debtor as a lessee under a lease of nonresidential real property that has terminated at the expiration of the stated term of such lease during the case;
 * (3) any eligibility of the debtor to participate in programs authorized under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.; 42 U.S.C. 2751 et seq.), or any accreditation status or State licensure of the debtor as an educational institution;
 * (4) any interest of the debtor in liquid or gaseous hydrocarbons to the extent that—
 * (A)
 * (i) the debtor has transferred or has agreed to transfer such interest pursuant to a farmout agreement or any written agreement directly related to a farmout agreement; and
 * (ii) but for the operation of this paragraph, the estate could include the interest referred to in clause (i) only by virtue of section 365 or 544 (a)(3) of this title; or
 * (B)
 * (i) the debtor has transferred such interest pursuant to a written conveyance of a production payment to an entity that does not participate in the operation of the property from which such production payment is transferred; and
 * (ii) but for the operation of this paragraph, the estate could include the interest referred to in clause (i) only by virtue of section 365 or 542 of this title;
 * (5) funds placed in an education individual retirement account (as defined in section 530(b)(1) of the Internal Revenue Code of 1986) not later than 365 days before the date of the filing of the petition in a case under this title, but—
 * (A) only if the designated beneficiary of such account was a child, stepchild, grandchild, or stepgrandchild of the debtor for the taxable year for which funds were placed in such account;
 * (B) only to the extent that such funds—
 * (i) are not pledged or promised to any entity in connection with any extension of credit; and
 * (ii) are not excess contributions (as described in section 4973(e) of the Internal Revenue Code of 1986); and
 * (C) in the case of funds placed in all such accounts having the same designated beneficiary not earlier than 720 days nor later than 365 days before such date, only so much of such funds as does not exceed $5,000;
 * (6) funds used to purchase a tuition credit or certificate or contributed to an account in accordance with section 529(b)(1)(A) of the Internal Revenue Code of 1986 under a qualified State tuition program (as defined in section 529(b)(1) of such Code) not later than 365 days before the date of the filing of the petition in a case under this title, but—
 * (A) only if the designated beneficiary of the amounts paid or contributed to such tuition program was a child, stepchild, grandchild, or stepgrandchild of the debtor for the taxable year for which funds were paid or contributed;
 * (B) with respect to the aggregate amount paid or contributed to such program having the same designated beneficiary, only so much of such amount as does not exceed the total contributions permitted under section 529(b)(7) of such Code with respect to such beneficiary, as adjusted beginning on the date of the filing of the petition in a case under this title by the annual increase or decrease (rounded to the nearest tenth of 1 percent) in the education expenditure category of the Consumer Price Index prepared by the Department of Labor; and
 * (C) in the case of funds paid or contributed to such program having the same designated beneficiary not earlier than 720 days nor later than 365 days before such date, only so much of such funds as does not exceed $5,000;
 * (7) any amount—
 * (A) withheld by an employer from the wages of employees for payment as contributions—
 * (i) to—
 * (I) an employee benefit plan that is subject to title I of the Employee Retirement Income Security Act of 1974 or under an employee benefit plan which is a governmental plan under section 414(d) of the Internal Revenue Code of 1986;
 * (II) a deferred compensation plan under section 457 of the Internal Revenue Code of 1986; or
 * (III) a tax-deferred annuity under section 403(b) of the Internal Revenue Code of 1986;
 * except that such amount under this subparagraph shall not constitute disposable income as defined in section 1325 (b)(2); or
 * (ii) to a health insurance plan regulated by State law whether or not subject to such title; or
 * (B) received by an employer from employees for payment as contributions—
 * (i) to—
 * (I) an employee benefit plan that is subject to title I of the Employee Retirement Income Security Act of 1974 or under an employee benefit plan which is a governmental plan under section 414(d) of the Internal Revenue Code of 1986;
 * (II) a deferred compensation plan under section 457 of the Internal Revenue Code of 1986; or
 * (III) a tax-deferred annuity under section 403(b) of the Internal Revenue Code of 1986;
 * except that such amount under this subparagraph shall not constitute disposable income, as defined in section 1325 (b)(2); or
 * (ii) to a health insurance plan regulated by State law whether or not subject to such title;
 * (8) subject to subchapter III of chapter 5, any interest of the debtor in property where the debtor pledged or sold tangible personal property (other than securities or written or printed evidences of indebtedness or title) as collateral for a loan or advance of money given by a person licensed under law to make such loans or advances, where—
 * (A) the tangible personal property is in the possession of the pledgee or transferee;
 * (B) the debtor has no obligation to repay the money, redeem the collateral, or buy back the property at a stipulated price; and
 * (C) neither the debtor nor the trustee have exercised any right to redeem provided under the contract or State law, in a timely manner as provided under State law and section 108 (b); or
 * (9) any interest in cash or cash equivalents that constitute proceeds of a sale by the debtor of a money order that is made—
 * (A) on or after the date that is 14 days prior to the date on which the petition is filed; and
 * (B) under an agreement with a money order issuer that prohibits the commingling of such proceeds with property of the debtor (notwithstanding that, contrary to the agreement, the proceeds may have been commingled with property of the debtor),
 * unless the money order issuer had not taken action, prior to the filing of the petition, to require compliance with the prohibition.

Paragraph (4) shall not be construed to exclude from the estate any consideration the debtor retains, receives, or is entitled to receive for transferring an interest in liquid or gaseous hydrocarbons pursuant to a farmout agreement.

 * (c)
 * (1) Except as provided in paragraph (2) of this subsection, an interest of the debtor in property becomes property of the estate under subsection (a)(1), (a)(2), or (a)(5) of this section notwithstanding any provision in an agreement, transfer instrument, or applicable nonbankruptcy law—
 * (A) that restricts or conditions transfer of such interest by the debtor; or
 * (B) that is conditioned on the insolvency or financial condition of the debtor, on the commencement of a case under this title, or on the appointment of or taking possession by a trustee in a case under this title or a custodian before such commencement, and that effects or gives an option to effect a forfeiture, modification, or termination of the debtor’s interest in property.
 * (2) A restriction on the transfer of a beneficial interest of the debtor in a trust that is enforceable under applicable nonbankruptcy law is enforceable in a case under this title.

 * (d) Property in which the debtor holds, as of the commencement of the case, only legal title and not an equitable interest, such as a mortgage secured by real property, or an interest in such a mortgage, sold by the debtor but as to which the debtor retains legal title to service or supervise the servicing of such mortgage or interest, becomes property of the estate under subsection (a)(1) or (2) of this section only to the extent of the debtor’s legal title to such property, but not to the extent of any equitable interest in such property that the debtor does not hold.

 * (e) In determining whether any of the relationships specified in paragraph (5)(A) or (6)(A) of subsection (b) exists, a legally adopted child of an individual (and a child who is a member of an individual’s household, if placed with such individual by an authorized placement agency for legal adoption by such individual), or a foster child of an individual (if such child has as the child’s principal place of abode the home of the debtor and is a member of the debtor’s household) shall be treated as a child of such individual by blood.

 * (f) Notwithstanding any other provision of this title, property that is held by a debtor that is a corporation described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code may be transferred to an entity that is not such a corporation, but only under the same conditions as would apply if the debtor had not filed a case under this title.


text:
Ex parte Dubuque and Pacific Railroad

LITCHFIELD sued the Dubuque and Pacific Railroad Company, in the District Court of the United States for the District of Iowa, for a tract of land in that district. The cause of action was set forth by petition, according to the mode of proceedings prescribed by the code of Iowa. It alleged that the plaintiff had a title in fee, and the right of possession; which land was withheld from him by the defendant, who was in possession. The answer of the defendant denied that the plaintiff had any title to the premises sued for. On this issue the parties went to trial before the District Court, at October Term, 1859. The court found, and entered judgment, that the plaintiff had right to the land claimed, and the right of possession thereof. The facts had been agreed on in writing, and filed on stipulation, in the District Court, on which agreed statement the finding and judgment proceeded. On the facts thus presented to the court below, the cause was brought to this court by writ of error, was re-examined, and after an elaborate opinion, reported among the decisions of December Term, 1859, the judgment below was reversed; and it was ordered that the District Court enter judgment for the defendant below.

A mandate went down, and was entered of record, and the District Court entered judgment that the plaintiff Litchfield had no title, and that he pay costs. This was done at October Term, 1861, and immediately thereafter (affidavits of ability to show new facts having been filed) a new trial was moved for on behalf of Litchfield, and granted by the court. To this step the railroad company excepted, and it now moved for a writ of mandamus commanding the court below to vacate the order granting the new trial.

Mr. Mason against the motion: The judgment having been entered in the court below, became its judgment, possessing the same qualities as if it had been originally entered there. One of these qualities or incidents was, that it was liable to be vacated, and a new trial granted, in a proper case, in the discretion of the court below; a discretion with which this court will not interfere, as it has declared in many cases, and notably in Eberly v. Moore.

1. This power and duty exists under the Judiciary Act of 1789. The court in the case just cited says: 'The jurisdiction has been conferred by acts of Congress upon the courts of the United States, so to supervise the various steps in a cause as to prevent hardship and injustice, and that the merits of a cause may be fairly tried. It has been uniformly held in this court that a Circuit Court could not be controlled in the exercise of the discretion thus conceded to it.'

2. It exists, also, under the statute of Iowa; which by the Judiciary Act of 1789 is the 'rule of decisions in trials at common law.' Courts in Iowa are compelled to grant new trials, on cause shown, on the application of a party, for any 'cause affecting materially the substantial rights of such party,' specified in the law; in which case, the 'former report, verdict, or decision, shall be vacated, and a new trial granted.' It is to be presumed that the court had grounds which justified it in granting as it did the new trial under the above provisions.

In actions for the recovery of real property in Iowa, under its code a new trial may be granted, without any cause being shown, in the discretion of the court, on application within two years after the determination of the former trial. And this may be after the first judgment has been executed; for the code authorizes a writ of restitution to restore the possession of the property to the party who shall succeed on the new trial.

Of course the court below cannot, directly or indirectly, question, or attempt to overthrow the law as settled by the judgment of this court. But the plaintiff submits that this court will not interfere with the allowance of a new trial, where he can prove facts upon which his rights depend, and where the affidavits show that, without fault on his part, the merits of the cause have not been fairly tried; which showing he assumes is proved, or must, from the fact of a new trial having been allowed, be here presumed.

Mr. Platt Smith contra: There are no new facts. Admitting that the plaintiff can prove all his affidavits, we assert that he does but make out the old case stated; and on which this court, after patient hearing, has ordered a judgment to be entered below.

When the case was brought by appeal to this court, the whole case was removed from the court below. When it was remanded, the court below could only take jurisdiction for the specific purpose of executing the judgment of this court, in accordance with the mandate and opinion. The 24th section of the Judiciary Act of 1789 enacts, that on reversals in this court, the court 'shall proceed to render such judgment or pass such decree as the District Court should have passed, except where the reversal is in favor of the plaintiff, or petitioner; and the damages to be assessed or matter to be decreed are uncertain; in which case they shall remand the cause for final decision.' The statute of Iowa, authorizing new trials, does not apply to cases that have been removed to this court by writ of error or appeal, and remanded to the court below for the mere purpose of execution. In Ex parte Sibbald this court says: 'When the Supreme Court have executed their power in a cause before them, and their final decree or judgment requires some further act to be done, it cannot issue an execution, but shall send a special mandate to the court below to award it. Whatever was before the court, and is disposed of, is considered as finally settled. The inferior court is bound by the decree as the law of the case; and must carry it into execution, according to the mandate. They cannot vary it, or examine it for any other purpose than execution; or give any other or further relief; or review it upon any matter decided on appeal for error apparent; or intermeddle with it, further than to settle to much as has been remanded. After a mandate, no rehearing will be granted. It is never done in the House of Lords; and on a subsequent appeal, nothing is brought up but the proceeding subsequent to the mandate. If the special mandate directed by the 24th section is not obeyed or executed, then the general power given to 'all the courts of the United States to issue any writs which are necessary for the exercise of their respective jurisdictions, and agreeable to the principles and usages of law,' by the 14th section of the Judiciary Act, fairly arises, and a mandamus or other appropriate writ will go.'

The court below treats the case as though it had never been removed. But the judgment of that court is reversed and held for nought. The District Court does not pretend to overturn its own original judgment; that was, in the opinion of that court, all right,-it was in favor of the plaintiff. This court overturned that judgment, and ordered the District Court to enter judgment for the defendant. The District Court reversed and set aside the judgment of this court, and seeks to re-establish its original judgment. If the facts of the case required another trial, this court would have issued an order for a trial de novo in the court below; a peremptory mandate to enter judgment for the defendant is quite another thing.

Mr. Justice CATRON, after stating the case, delivered the opinion of the court; Mr. Justice MILLER, who had been of counsel in the case, not sitting in it here.

title: Ex parte Dubuque and Pacific Railroad


text: Talk:Ex parte Dubuque and Pacific Railroad


text:
Ex parte Dubuque and Pacific Railroad/Opinion of the Court

In granting the new trial the District Court seems to have been governed by two reasons: First, because the statutes of Iowa prescribed that a second trial may be had of course in actions brought for the recovery of real estate; and Secondly, because the court below had the power, after the cause was presented there by a mandate from this court and the judgment f reversal entered, to hold that the cause stood on the same footing that it would have done, had the District Court entered the judgment for the defendant before the cause was brought up to this court. And in that case it is true the District Court could have granted a new trial at its discretion.

The 24th section of the Judiciary Act of 1789 governs the practice in cases brought up and reviewed in this court. It is bound to give such judgment as the court below ought to have given, and the law directs that a mandate shall be sent down to have the judgment entered as final in the lower courts, when it is for the defendant below, as here. The District Court had no power to set aside the judgment of the Supreme Court, its authority extending only to executing the mandate.

We order that a writ of mandamus do issue to the Circuit Court of the District of Iowa, commanding it to vacate and erase the order granting a new trial in the aforesaid cause; and that a judgment be entered in conformity to the mandate of this court.

ORDER ACCORDINGLY.


text: Talk:Ex parte Dubuque and Pacific Railroad/Opinion of the Court


text:
Orchard v. Hughes

THESE were, in form, two causes; though in fact, two branches of one case, which were heard and disposed of together; both of them coming here on appeal from the Supreme Court of the Territory of Nebraska, to which tribunal they had been taken by appeal from the District Court for the same Territory.

A suit had been brought by Hughes, the appellee in this court, against Orchard, the appellant, to foreclose a mortgage. Orchard set up by way of answer, that a part of the consideration of the mortgage consisted of the bills of the Bank of Tekama, of the Territory of Nebraska; that this bank, though chartered by the legislature of that Territory, had never been approved of by Congress, as was necessary that it should be, in order to be legally chartered; that the bank was never organized; that it was a device to deceive the public; that its notes were fraudulently issued and put in circulation without authority of law, and were of no validity or value whatever. But the answer showed that the bills were current and in circulation at the time they were received by him, and did not state in any sufficient way that they had proved worthless in Orchard's hands, or that they had ever been tendered back either to or by him. On the contrary, it set forth that many of them had been paid away to his creditors; some to a certain Davis, and that they had turned out to be worthless in his hands. To this answer there was a demurrer; upon which the District Court gave judgment for the complainant, so deciding that the defence set up was insufficient. A sale of the premises was accordingly decreed. After this decree Orchard gave bond for an appeal to the Supreme Court-the condition of the bond being that 'he shall diligently prosecute said appeal, and shall pay all costs and damages that may be awarded against him.' The sale went on under a master's direction, and on the coming in of his report, Orchard filed several exceptions to it. Most of these were on matters which were the subject of discretion with the court below, as that the sale had not taken place at the exact hour advertised, but an hour or more afterwards. The Supreme Court considered none of the exceptions of force, and confirmed the proceedings. Among the proceedings confirmed, was the master's report, which showed that the mortgaged premises sold for $519.23 less than the mortgage debt; and the decree of the District Court, which ordered that execution should issue for this amount and interest.

On appeals here the following other points were raised:

1. How far the illegal character of the bank, and the final worthlessness of its notes, were a defence to the bill of foreclosure.

2. Whether the sale was properly proceeded with in the District Court after Orchard had given a bond for appeal.

3. Whether an order for execution for for balance ($519.23) due on the mortgage was rightly made; and whether the fact that the Supreme Court of Nebraska Territory, which made it, was so organized under the organic law, by the legislature of the Territory, and not by the Judiciary Act of 1789, that a precedent binding courts established by the act, did not apply to one like the Supreme Court of the Territory aforesaid.

Messrs. Woolworth and Kernan for the appellant, Orchard; Messrs. Redick and Carlisle, contra.

Mr. Justice NELSON delivered the opinion of the court:

title: Orchard v. Hughes


text: Talk:Orchard v. Hughes

title: Talk:Orchard v. Hughes