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Olcott v. Bynum/Opinion of the Court

ERROR to the Circuit Court for the District of North Carolina; the case being thus:

In the year 1854, the High Shoals Manufacturing Company owning 14,873 acres of land in the counties of Lincoln, Gaston, and Cleveland, in North Carolina, having upon it two water-powers, abounding in iron ore and other minerals, and having erected thereon two iron-works, forges, furnaces, machinery, and other fixtures for the manufacture of iron, sold the same, in a body, to one Groot, who paid $75,000 therefor; $25,000 in cash and a mortgage of $50,000 to two persons, Bynum and Grier, trustees for the High Shoals Company. This mortgage not being paid, Bynum and Grier, on the 1st of January, 1859, foreclosed it by a public sale of the property in a body; one Hovey presenting himself as the purchaser. As a matter of fact, however, Hovey was only 'a man of straw,' the real purchasers being one Olcott and a certain Stephenson. There had been an agreement previous to this sale that the purchase-money (which proved to be $48,500) should be paid:

Money down,......................... $8,

Balance, mortgage,.................. 40,

$8,

A deed was accordingly made to Hovey January 1st, 1859, and on the same day Hovey gave a deed of trust with power of sale, or deed in the nature of a mortgage, for the balance. which was to be paid:

All with interest from January 1st, 1859.

The deed of trust which was accompanied by a penal bond, provided,

'That if default shall be made in the payment of the said sum of money, or the interest that may grow due thereon, or of any part thereof, that then, and upon failure of the grantor to pay the first or any subsequent instalment, as hereinbefore specified, it shall be lawful for the trustee to enter upon all and singular the premises hereby granted, and to sell and dispose of the same, and all benefit and equity of redemption, &c., and to make and deliver to the purchaser or purchasers thereof a good and sufficient deed for the same, in fee simple, and out of the money arising from such sale to retain the principal and interest which shall then be due on the said bond or obligation, together with the costs and charges of advertising and sale of the same premises, rendering the overplus of the purchase-money, if any there shall be, unto the said Hovey, &c.; which sale so to be made shall forever be a perpetual bar, both in law and equity, against the said Hovey, his heirs and assigns, and all other persons claiming the premises, or any part thereof, by, from, or under him, them, or either of them.'A few days after the conclusion of these arrangements, that is to say on the 8th of January, 1859, Hovey, as he testified in a deposition found in the record, and as Olcott himself also testified, conveyed the premises to Olcott and Stephenson, by deed in due form. But no such deed was now to be found nor any registry of it. It was proved to have been lost, and a certified copy from the proper office was produced of a copy which had been registered there.

On the 18th of December, 1867, Stephenson released all his interest to Olcott, by deed in due form, of whose existence there was no question. Default in the first payment secured by the mortgage being made, the mortgagees, on the 31st of January, advertised the property for sale on the 8th day of March, 1860. Upon hearing of the advertisement of sale, Stephenson and Olcott wrote to Bynum, the acting trustee, as follows:

'NEW YORK, February 25th, 1860.

'DEAR SIR: You will recollect that when the High Shoal property hanged hands in January, 1859, we stated to you that our aim would be to pay off the entire amount of the mortgage before the expiration of the year. To bring about a result so desirable to all parties interested, we have taken the position with our friends, in organizing a new company, that a less sum than the whole amount required to satisfy the mortgage would not answer our purpose. This, we have felt assured, was the true policy for us to pursue, and the only ground we could take and do justice to them, and realize what we had encouraged you to expect. We are now, we think, on the eve of accomplishing our aim, having already a large part of the required sum offered to us, but as we may not be prepared with the whole amount on the day fixed by you in the advertisement, we beg to ask the postponement of the day of the sale for a short time, under the conviction that we shall be able to meet your wishes and our own at a very early day, and much in advance of the average time named in the mortgage. We should like to have the time of payment put off to the 1st May, but if that is longer than you think ought to be granted, we must be satisfied with a shorter date.

'Although, by the strict letter of the contract, you have the right to require us to fulfil its conditions punctually, yet, in view of the large amount already paid to the stockholders of the company which you represent, and the still larger sum expended upon the property, we hope it will not be deemed necessary to compel us to sacrifice these large disbursements at a time when the delay of a few weeks will enable us to protect them, and cannot jeopard or in any way prejudice the rights of those you represent.

'Recollecting and appreciating the good feeling evinced towards us by the stockholders of the old company during our long struggle with outside claimants, we dare venture to hope for the continuance of their indulgence for the brief period asked for to enable us to bring this our determined effort to cancel the entire debt to a successful issue.

'Believing that your good wishes are with us, and that you will, as far as you can consistently with your obligations to others, grant our request,

'We are, very respectfully, yours, &c.,

'E. S. STEPHENSON,

'T. OLCOTT.

'TO W. P. BYNUM, ESQ., &c.'

The sale was accordingly postponed; and on the 19th of March, 1860, the property was again advertised as about to be publicly sold 'at the High Shoals, Gaston County, N. C.,' on the 28th of April; it being announced that 'the sale will be positive and for cash.'

This, and the further history of the matter, was thus given in the testimony of Bynum himself:

'I postoponed the sale to the 28th of April, in compliance with the request of Messrs. Stephenson and T Olcott, having business elsewhere on the 1st May. Mr. Olcott was informed of this postponement, both by letter from myself and from Thomas Darling, the agent upon the premises, and I was informed by the said agent that the arrangement was satisfactory to all the parties. On the 28th April, the property was duly exposed to public sale by me and Grier, as mortgagees, when and where (on the premises at the High Shoals), William Sloan, as the agent of the High Shoals Manufacturing Company, being the creditors, became the highest bidder and purchaser, at the sum of $43,200 the estimated debt and interest due on the mortgage. I am not aware that there was any opposition bid, or that he made more than one bid. At the time of the sale, the creditor company were anxious to realize that debt without purchasing in the property. I and others accordingly made every reasonable effort, both before and at the sale, to induce the mortgagees to pay, or third parties to buy the property; and in fact, I did induce several capitalists from Charlotte to attend the sale, with the view of buying. But on surveying the property, they concluded to run the same to $35,000 and no more. At the time of sale, and during the entire bidding, both Hovey, the mortgagor, and Darling, the agent of the New York company, were personally present and assenting thereto, well knowing that Sloan was bidding in behalf of the creditors, the old High Shoals Company. I expressly deny that Sloan was the agent of the mortgagees, or employed by them to bid off the property, but known that he was directed by the High Shoals Company to bid for them to the amount of their debt, and no more. I was, before said sale, informed, both by Hovey and Darling, that the purchasers had failed, and were unable to meet the payments, and they acknowledged the necessity of the sale and acquiesced in it, as representing the New York company. After the sale, the same day, or shortly thereafter, the penal bond of Hovey for $80,000 was credited with amount of said bid by Sloan, and the bond itself was cancelled in satisfaction of said debt.

'Mr. Olcott came to North Carolina and visited this property in the year 1860, and after said sale, and in repeated conversations with me, and with a full knowledge of said sale and all the circumstances connected with it, acknowledged the validity of the sale and the full and complete title of the purchasers at it. In the summer of 1860, he, on two occasions, visited me with the view of procuring a lease on a portion of said property, for gold-mining purposes, and the further view of purchasing the entire property, if his mining project proved successful. In fact he did procure from me a mining lease (to himself and one Muir), on a part of the property, which was in writing, and for the period of six months from that time, subject to be revoked at any time on the sale of the property. And I am informed that he did make explorations, &c., but finally abandoned his lease and left the State in April, 1861, or thereabouts. In March, 1862, by the direction of the High Shoals Manufacturing Company, I contracted to sell the property to R. R. & J. L. Bridgers, for the sum of $65,000; $30,000 of said sum was to be paid in North Carolina bank bills, and the said sum was accordingly paid in miscellaneous bills of the various banks of the State, then considerably depreciated. The balance, being $35,000, was to be paid in specie or equivalent, in three and four years, with interest. The interest for two years has been paid on said debt and the balance is still due and unpaid. When the Messrs. Bridgers bought in March, 1862, they immediately took possession, and worked the property until their sale to Admiral Wilkes, in 1865, when the said Wilkes entered into possession, and has ever since occupied and worked the same.'

After the sale of April 28th, 1860, no deed was ever executed by Bynum and Grier to Sloan until June 12th, 1860.

In this state of things Olcott, on the 22d of April, 1868, filed a bill in the court below, against Bynum and Grier (the trustees), Sloan, Bridgers, and Wilkes, setting out—

The purchase by Hovey for him, Olcott, and the Stephenson already mentioned; an express trust:

That the sale was not an execution of the powers of the mortgage deed, but an attempt irregularly to foreclose the mortgage by a mere agreement between Bynum and Grier, and Sloan, without any regard to the interest of the plaintiff and Stephenson, and was void against them:

That the exposure to sale of said property in solido, at public auction, for cash, on the premises, in a remote and unfrequented neighborhood, when there was due not more than $14,500 of the mortgage debt, was highly injurious to the mortgagors, and gave an assurance to the mortgagees of a foreclosure at an amount not greater than their debt:

That the property was easily susceptible of division, and that a fraction thereof would have brought the amount due at the time of sale, such amount being within the compass of the means of bidders; that the property was situated far in the interior of the country, where capital did not abound, where there were divers iron manufactories on a small scale, embracing investments of from $2000 to $10,000, but that there was no ground for expecting a purchaser of the whole property at a cash sale, unless it were the mortgagees or their trustees, and that the result was a sacrifice of the property at such price as they chose to bid; that but a single bid was made, and that by the defendant, Sloan; that upon this the property was knocked down; but no money was paid and no deed executed; and soon thereafter the said trustees, the vendors, took possession in their character as such:

That the effect of this course of proceeding, unless relieved against by this court, would be to deprive the plaintiff of a property which had already been sold for $75,000, and was then worth more than that sum, to satisfy a balance of $40,000, of which only one-third was then due:

That on account of the threatening aspect of affairs in the Southern country, resulting in war, neither the plaintiff nor Stephenson visited North Carolina again until since the close of the war, after the announcement by the Chief Justice of this court that the Federal courts were again in the exercise of their full jurisdiction in that State:

That the purchasers, Messrs. Bridgers, in the first instance, and Charles Wilkes in the second, had notice of the equities of the plaintiff in the premises.

Answers having been put in, testimony was taken.

Bynum testified that he had an interest as a stockholder in the old High Shoals Company of $1200; that the property in question was the most valuable property in that vicinity; 'that in the section of country where this property is situated he had never known property of the value of $40,000 or upwards set up at auction sale, in the lump for cash, but this.'

Sloan testified 'that the question whether the property could best be sold in separate parcels, with advantage to any of the parties concerned, was fully discussed by the stockholders of the original company before the sale, and it was deemed by them totally impracticable, as they could not, by such a course, obtain money enough to pay off the debt.' He added, 'If the sale had been on credit it might have been more advantageous to have offered the property in parcels; but that selling for cash, it was better to sell in bulk.' He testified further that he was bidding only for the High Shoals Company, not for Bynum and Grier; and that after the sale of the 28th of April, 1860, Olcott proposed to him to join in a new purchase of the property.

White, who had been acquainted with the property for thirty years, testified that in his opinion 'the property could not be divided without destroying its value as an iron property.'

It was further testified, by Bynum, that during the six years in which the property was held by Groot, and by Olcott and Stephenson, several thousand dollars' worth of timber was destroyed, and several thousand dollars' worth of ore was dug, and that the mills, machinery, dwellings, buildings, and fences were suffered to go to decay, to the great loss of the property. 'That before the sale to Groot the company was leasing the property for $5000 per annum; but when they took possession again, under the sale of the 28th of April, 1860, the property was so injured and out of repair that he was unable to lease the manufacturing and valuable part of the same, and was able to rent only the tillable lands for a very small sum, to wit, about $500.

Witnesses of the other side, however, testified that much money had been laid out by Hovey and Stephenson on the property.

The court below dismissed the bill, holding that under the statutes of North Carolina, the copy of the copy of the unregistered deed from Hovey to Olcott and Stephenson, was not evidence, and therefore that Olcott had failed to show any connection with the property in question.

It may be well here to state that a statute of North Carolina enacts that—

'No conveyance for land shall be good and available in law, unless the same shall be proved and registered in the county where the lands lie.'

And that an act of 1846 allows to be read in evidence 'the registry or duly certified copy of the record of any deed' duly registered.

And finally, that the seventh section of the Statute of Frauds is not in force in the State named. The section thus enacts:

'All declarations or creations of trusts or confidences of any lands, tenements or hereditaments, shall be manifested and proved by some writing signed by the party who is by law enabled to declare such trust. . . or else they shall be utterly void and of none effect.'

I. As to the lost deed from Hovey. The question here is, 'Is a party to lose an estate granted by means of the loss of the deed before registration?' By the statute of North Carolina, conveyances of lease are required to be 'acknowledged by the grantor or proved on oath by one or more witnesses' and registered. In a case like the present, where there can be no literal compliance, on account of the loss of the original deed, which was a part of the primary evidence, we must resort to secondary evidence according to the rules of the common law. This can be done in a court of probate, in proceedings ex parte, as well as in courts of contestation. Here a copy is alleged to have been preserved, and copies are set out in the record.

The law of evidence requires in the circumstances of this case-1st, that the loss of the original shall be proved by the evidence of the plaintiff, the bargainer, in whose custody it was last seen; 2d, that the alleged copy is a true copy, and that the original was executed and delivered according to its import. Upon such proof the deed was properly ordered to be, and was, registered.

But if this deed were rejected there is abundant proof by parol that Stephenson and Olcott were entitled to the beneficial interest in the property, by their purchase in the name of Hovey, and their payment of part of and securing of the balance of the consideration. The well-known doctrine of equity applies, 'that if one purchase an estate for another with the money of the latter, a trust results to the latter.' And, as to Stephenson's share, the plaintiff produces the deed of Stephenson, releasing all his right in the premises to himself.

II. Passing then to the merits. The next question is the validity of the alleged sale of the 28th of April, 1860. And it is to be remarked that Bynum, the trustee, who transacted the entire business, had an interest adverse to the plaintiff, being both a stockholder in the High Shoals Company and president. It is, then, the case of a mortgagee with a power of sale, and the manner of its execution is liable to the strictest scrutiny. Will it stand any scrutiny? We think not.

1st. The sale was made for cash in toto. The trustees had no power to sell for cash in this way at the time when they did so sell. Only one-third of $40,000, with interest on that third from January 1st, 1859, was then due and demandable. The plain duty of the trustees was either to wait till the whole fell due, 1st January, 1861, after which they could have sold for cash; or, if resolved to sell at once, to have set up the property for cash as to one-third, credit on another third till the 1st of July, 1860, and on the balance till 1st of January, 1861. The mortgage does not contain the word 'cash;' it was a mere requirement of the trustees, without authority, which chilled the sale and depressed the price by thousands of dollars.

If a sale for cash in toto was not wholly ultra vires, the only footing on which it could be maintained, even upon the allegations of the defendants, would have been to credit the one-third of the debt then due upon the mortgage, require Sloan to pay down the residue of $26,666.66, and pass this over to the complainant. The alleged purchaser had no right both to the property and the money. A trustee has no right to receive money before it is due, much less to raise it by sale. It is further apparent from the continued action of Bynum and Grier, as trustees, with no other evidence of title except the deed of January 1st, 1859, that they were the purchasers at that sale. Had Sloan purchased for the company, he or they should have been invested with title, and the trustees denuded. This was never attempted to be done till June 12th, 1868; after the filing of the bill in this suit. If our assumption of fact here be true, the old doctrine applies, that a trustee cannot purchase from himself.

2d. But if the company be assumed to have been the purchaser, the sale was made in such disregard of the interests of the plaintiff that equity will not permit it to stand. Before a trustee can assert that he has foreclosed the rights of the mortgagor by a sale in pais, he should be able to show that it was such a sale as would have been ordered by a chancellor if application had been made to a court.

Now, no chancellor would have ordered a sale of this vast property for cash when only an instalment of $13,000 was due. Sloan admits that the property would have sold better on a credit, and in that case might have been enhanced in price by dividing it into lots.

So a sale of the property in solido in that state of the mortgage debt was a great wrong to the plaintiff. It may well be questioned whether a sale by a sheriff, under similar circumstances, would not have been void. If the property can be separated, and exceeds the debt, no more ought to be sold than will pay the debt. The presumption is, when the estate is very large and at all capable of division, that a sale in parcels will be most advantageous.

The opinion of the defendants' witnesses, that a sale in lots would not have been more advantageous, is entitled to little weight, when they themselves prove that no single estate of such magnitude exists, and none equal to it has ever been exposed at auction sale in that section of country, and it is obvious that by reducing the parts within the ability of bidders much more competition might have been expected.

3d. As to the place of sale, any neighboring town would obviously have been more eligible than this place, a remote and unfrequented one.

There is nothing in the letter from New York, February 25th, 1860, consenting to a sale for cash in toto, or agreeing to anything variant from the terms of the mortgage; it asks only that the trustees will not be too rigorous, and allow some six or eight weeks longer for an endeavor to raise money.

Mr. W. H. Battle, contra.

Mr. Justice SWAYNE delivered the opinion of the court.

The object and prayer of the bill in this case are to redeem certain premises therein described, consisting of upwards of 14,000 acres of land, sold by the defendants Bynum and Grier to the defendant Sloan, under a mortgage containing a power of sale. The mortgage was executed by the defendant Hovey, and bears date the 1st day of January, 1859. Bynum and Grier, as trustees for the High Shoals Manufacturing Company, were the mortgagees. The mortgage recites that Hovey had executed to Bynum and Grier a penal bond in the sum of $80,000 to secure the payment of $40,000 in three instalments of $13,333.33 each, the first payable on the 1st day of January, 1860, the second on the 1st of July, 1860, and the third on the 1st of January, 1861, all with interest from the 1st of January, 1859. It was conditioned that, in default of payment of either of the instalments or the interest thereon, or of any part of either when due, it should be lawful for the mortgagees to sell at public auction all the mortgaged premises, and to make and deliver to the purchaser a deed in fee simple, and out of the moneys arising from the sale to retain the amount of the principal and interest which should then be due on the bond, together with the costs and charges of advertising and selling, rendering the overplus, if any, to the mortgagor, his heirs, or assigns; 'which sale so to be made,' it was provided, 'shall forever be a perpetual bar, both in law and equity, against the mortgagor, his heirs and assigns, and all other persons claiming or to claim the premises, or any part thereof, by, from, or under him, them, or either of them.' Default having been made in the payment of the first instalment, due January 1st, 1860, the mortgagees advertised the premises to be sold on the ensuing 28th of April, and then sold them for the sum of $43,500 to Sloan, to be held by him in trust for the High Shoals Manufacturing Company, the cestui que trust of the mortgagees.

At the time of the sale and conveyance to Hovey a down payment was made consisting of $6157 in cash, and a receipt to Bynum by Eben S. Stephenson for certain dividends to which Stephenson was entitled, which, added to the cash, made an aggregate of $7853.33. The bond and mortgage were given to secure the residue of the purchase-money. The bill charges that this payment was made by Olcott and Stephenson jointly; that Hovey was a man of no means, and that he bought and took the title as the agent of the complainant and Stephenson, wholly in trust for them, and that on the 8th day of January, 1860, eight days after the title was conveyed to him, he conveyed to them all his interest in the property, and that on the 18th day of December, 1867, Stephenson conveyed all his interest to the complainant. These allegations, so far as they relate to the agency of Hovey, are clearly proved by the testimony of Hovey himself and of the complainant, and there is nothing in the record which tends in any degree to contradict them. Sufficient evidence was produced in the court below of the execution of the deed from Stephenson to the complainant. The evidence offered as to the deed from Hovey to the complainant and Stephenson consisted of proof of the loss of the original and a certified copy from the proper register's office in North Carolina of a copy which had been registered there.

It was held by the court below that this evidence was incompetent to establish the existence of the lost deed, and that the complainant had therefore failed to show any connection with the property in question. Upon the ground of this objection the bill was dismissed.

Whether this ruling was correct is an inquiry which meets us at the threshold of our examination of the case. It is one to be determined by the lex loci rei sitoe. It is to be considered solely in the light of the statutes and adjudications of North Carolina. This court must hold and administer the law upon the subject as if it were sitting as a local court of that State. In the revised code of 1854 we find the following language. It is a re-enactment of the provision of the act of 1715 on the same subject: 'No conveyance for land shall be good and available in law unless the same shall be acknowledged by the grantor, or proved on oath by one or more witnesses in the manner hereinafter directed, and registered in the county where the land shall be, within two years after the date of said deed, and all deeds so executed and registered shall be valid and pass estates in land without livery of seizin, attornment, or other ceremony whatever.' Sections three, four, and five of chapter 37, and section two of chapter 21, provide for the execution in other States of deeds for lands in North Carolina and their registration in the proper county; but we have found no provision authorizing the registration of a copy. In Patton and Erwin's Lessee v. Reily, in the Supreme Court of Tennessee, an original unregistered deed was offered in evidence. It was objected to upon the ground of the want of registration. The court said: 'Registration was intended to stand in the place of livery of seizin. By the common law no estate could pass without livery of seizin, and the same may be said of its substitute. Lands as conveyed by this deed, would not pass the estate at common law, and if it will pass, it must be by act of assembly. The act of 1715 requires the deed to be registered before a legal estate is vested in the grantee. To create a title under this act of assembly, the party claiming the benefit of it must have complied with its requisitions. One of them is that the deed shall be registered. This deed cannot be read in evidence.' The plaintiffs were nonsuited. Patton and Erwin's Lessee v. Brown is to the same effect. Such is the settled law of North Carolina upon the subject. The original deed from Hovey to Olcott and Stephenson never having been registered, and the registration of the copy being unauthorized, it follows that the certified copy of the registered copy was a nullity, and could give no legal right to the grantees which the Circuit Court could recognize. We hold, therefore, that the ruling upon this subject was correct. Obviously, a proceeding in equity had specially for that purpose, and bringing the proper parties before court, is the appropriate remedy for the complainant to establish the lost deed and give it efficacy, and in no other way can this be done.

It has been insisted, in behalf of the complainant, that there was a resulting trust in favor of the complainant and Stephenson, arising from the circumstances of the transaction at the time of the conveyance to Hovey.

Where the purchase-money is all paid by one, and the property is conveyed to another, there is a resulting trust in favor of the party paying, unless there be something which takes the case out of the operation of the general rule. But where he furnishes only a part of the amount paid no trust arises unless his part is some definite portion of the whole, and is paid for some aliquot part of the property, as a fourth, a third, or a moiety. There must be no uncertainty as to the proportion of the property to which the trust extends. Here the amount paid was $7853.33, and it was paid without reference to any specific part of the property. Hence the principle in question does not apply. But if it did, it could do so only to the extent of the actual payment. It could certainly have no application in respect to the $40,000, for which Hovey gave his obligation, and for which Olcott and Stephenson assumed no liability to the grantors of the estate. Such a trust must arise, if at all, at the time the purchase is made. The funds must then be advanced and invested. It cannot be created by after-advances or funds subsequently furnished. It does not arise upon subsequent payments under a contract by another to purchase A trust to the extent of the payment made, if it existed, would not support the case made in the bill. The complainant claims to have owned the entire estate.

But the bill sets out clearly and fully a case of express trust, and if the seventh section of the Statute of Frauds applied, the trust would be sufficiently 'manifested and proved' by the deposition of Hovey, to give it effect. But there is no such statutory provision in North Carolina, and the case stands in this aspect as it would at the common law, before the enactment of the 29th Car. II, c. 3.

This brings us to the examination of the merits of the case. The objections taken by the complainant to the sale to Sloan may be thus stated and grouped together:

That the entire property was sold wholly for cash when only a part of the debt was due; that Bynum and Grier bought in the property for themselves; that it was a case of trustees buying for themselves;

And that the sale was made in gross disregard of the interests of the complainant in the following particulars:

Only enough of the property should have been sold to pay the instalment then due;

If the whole were sold it should have been for cash, only to the extent of the amount due, and with credits maturing respectively, so as to meet the instalments of the debt, underdue, at their maturity;

The place of sale was improper.

The business was conducted by the defendant Bynum. He appears well in the record. No imputation of bad faith has been cast upon him, and no ground for any is disclosed. He conducted himself with integrity and frankness, and mingled kindness with the administration of his trust, as far as his duty to his principals would permit. The first instalment matured on the 1st of January, 1860. He waited until February trying to get payment without a sale. Meeting with no success, and seeing no prospect of such a result, he advertised the property to be sold in March. Olcott and Stephenson, by their letter of the 25th of February, asked delay until the 1st of May, hoping to be able in the meantime to raise the funds necessary to discharge the amount due. Bynum's absence on the 1st of May being necessary, he gave them until the 28th of April. With this they were content, and asked no further indulgence. Failing to realize their expenctations, the property was exposed to sale upon the premises on the appointed day. Bynum procured several capitalists to attend, but none of them would bid more than $35,000, deeming that to be as much as the property was worth. A meeting of the stockholders of the High Shoals Company had been held, and decided not to allow the property to be sold for less than the amount of the debt due on the bond of Hovey, and appointed and instructed Sloan to bid accordingly. He did so bid, and the sale was made to him, as before stated. A deed was not executed until the 12th of June, 1868. It was operative by relation from the time of the sale. But the deed is an immaterial fact. If the sale were valid, it is conclusive without the deed. If it were invalid, the deed cannot help it. It cannot be doubted that Olcott and Stephenson, when their letter of the 25th of February, 1860, was written, knew the property was to be sold as they had bought it, en masse, and making no objection, they are concluded upon that point. The complainant visited North Carolina in the spring of 1861. While there he made no objection to the sale, either to Sloan or Bynum. On the contrary, in conversation with both, he expressly acquiesced and admitted its fairness and validity. He proposed to Sloan to join him in a new purchase of the property. He applied to Bynum for license for a year to himself and Muir, to enable them to search for mines. Bynum gave him one running from April to November, but subject to be revoked at any time upon the sale of the premises. It does not appear that the complainant set up any claim touching the property after the sale, until about the time of the filing of this bill, on the 22d of April, 1868. These are significant and important facts in the case.

The place of sale, like the time of advertising, is not prescribed in the mortgage. Both are left to the discretion of the mortgagees. There is no complaint as to the latter. We are satisfied there was no abuse as to the former. The testimony leaves no doubt in our minds that the property would not have brought more if offered elsewhere. Express authority is given to sell all the property upon the failure to pay either of the instalments at maturity. If enough of it to satisfy the amount due could be segregated and sold without injury to the residue, it would have been the duty of the mortgagees so to sell. The evidence convinces us that the sale of a parcel could not have been made without such injury. It was bought by Groot from the High Shoals Manufacturing Company entire. It was sold entire to Hovey under the mortgage of Groot. It was so sold to Sloan under the mortgage of Hovey. Subsequently it was so sold to Bridgers and others, and it was so sold by them to Commodore Wilkes. This shows the views upon the subject of those most conversant with the property and most interested in disposing of it to the best advantage. It has upon it water-power, timber, ores, mills, and furnaces; each part is necessary to every other. Dismemberment, instead of increasing, would have lessened the aggregate value. It could not have been sold in parcels without a sacrifice.

If a mortgage provide that upon default in the payment when due of a part of the amount secured the whole shall become due and may be collected, such a stipulation is valid and may be enforced.

So where a bond contains such a stipulation it may be enforced accordingly in an action at law. But the bond in this case as recited in the mortgage contained no such stipulation. On the contrary the mortgage, while it authorized a sale of the entire property in the event of any default, expressly provided that if there should be a sale, the amount 'then due,' with costs and charges, should be retained, and the overplus, if any, paid over 'unto the party of the first part, his heirs, administrators, or assigns.' Such a clause has not the effect to make the entire debt due and collectible upon the first default. But the property being incapable of division without injury, and having all been properly sold together, yielded a fund sufficient to pay the whole debt, as well the instalments underdue as the one overdue. Under these circumstances it was proper at once to pay the former as well as the latter, stop the interest, and extinguish the entire liability. The lien of the mortgage continued upon the fund as it subsisted upon the premises before they were sold. If a court of chancery had administered the fund it would have so applied it. Such is the settled rule in equity. Here the mortgagees, having applied the fund as a court of equity would have applied it in conformity to this principle, there is no ground for complaint on the part of Olcott. Where there is a power and discretion, such as existed in this case, touching the sale, a court of equity will interpose only on the ground of bad faith.

The bid of Sloan was a liberal one. The property could, doubtless, have been bought in for much less. That bid and the cancellation of the entire debt were in consistency with the fair dealing which characterized the conduct of the mortgagees in all their transactions with the other parties. There is no foundation for the imputation that Bynum and Grier were themselves the purchasers. They had no authority to give credit for any part of the purchase-money. It was their duty to sell wholly for cash. They were authorized to sell, without the intervention of a court of equity. The property when sold under the mortgage of Hovey was hastening to decay. When he bought, it rented for $5000 per year. When Sloan bought, its condition was such that it could be rented for only $500.

When this bill was filed nearly eight years had elapsed since the sale was made to Sloan. Making allowance for the difficulty of intercourse between the North and the South during the war, there was acquiescence, express and implied, for three years after the war ceased. This, if not conclusive, weighs heavily against the complainant. We see no reason to disturb the decree. This conclusion has rendered it unnecessary to consider so much of the record as relates to R. R. Bridgers and his associates and their vendee, Commodore Wilkes. We have given no thought to that part of the case.

DECREE AFFIRMED.

Justice MILLER, FIELD, and STRONG were absent.

title: Olcott v. Bynum/Opinion of the Court


text: Talk:Olcott v. Bynum/Opinion of the Court

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


text: Dictionary of National Biography, 1885-1900/Walcott, Mackenzie Edward Charles


text: Ex parte Warmouth

title: Ex parte Warmouth


text: Talk:Ex parte Warmouth

title: Talk:Ex parte Warmouth


text:
Ex parte Warmouth/Opinion of the Court

SUR application of H. C. Warmouth, for a prohibition to the circuit judge for the district of Louisiana.

The application now made was filed December 10th, 1872, based on a bill (and the proceedings under it) which had been filed November 16th, 1872, on the equity side of the Circuit Court for the district of Louisiana, wherein one Kellogg was complainant, and Warmouth, Wharton, Hatch, Da Pont e, McEnery, and the New Orleans Republican Printing Company, defendants; all the parties being averred to be citizens of Louisiana.

That bill averred that in November, 1872, an election was held for governor and lieutenant-governor, as well as for officers of the executive, judicial, and legislative departments; that the complainant and one McEnery were opposing candidates for governor; that at the election on one was enabled to vote who had not been registered; that Warmouth had appointed supervisors of registration with the fraudulent intent of preventing persons entitled to vote from being registered, and that in fact a large number, estimated at ten thousand, were on frivolous pretences prevented from being registered, and were thus prevented from voting for Kellogg, the complainant; that Warmouth, combining with the supervisors and assistants, had caused a false count to be made of the votes, and given untrue returns and certificates of election; that in counting the votes and issuing certificates he had not complied with the law of the State; that he had illegally appointed Wharton secretary of state, and with him elected Hatch and Da Pont e members of the returning board; that it was the intention of this board to make a pretended canvass of the votes, so as to exclude from the count the votes of persons of color prevented from being cast, and thus to deliver to the pretended secretary of state such certificate of result as to make it appear that the said McEnery was elected, which would embarrass and delay him in the prosecution of legal proceedings in the said Circuit Court; that he believed it to be the intention of Warmouth to mutilate the said certificates and returns, and that they should be preserved for proper action when the time for such action shall arrive.

The bill then prayed for an injunction, restraining the defendants from canvassing any return or certificate, or submitting the same to the pretended board, composed of Wharton, Hatch, and Da Pont e.

That an injunction issue to McEnery, prohibiting him from acting as governor, or setting up any claim to the office.

That an injunction also issue to the New Orleans Republican Printing Company, controlling the publication of the New Orleans Republican, restraining it from publishing any notice, statement, or document relating to said election, and emanating from said board.

The bill further prayed that Warmouth deposit with the clerk sworn copies of all the papers relating to the said election, in order than they may be beyond his power of destruction.

Further, that the writ of injunction might be granted in the first instance pendente lite, and after due proceedings be made perpetual.

On this bill restraining orders were issued as prayed for, November 17th, 1872, and subsequently, to wit, on 19th of November, 1872, process in contempt for disobeying such orders, and requiring the present petitioner to answer interrogatories as to what he had done as governor of Louisiana on the premises.

In presenting the application now made, it was shown to this court that since the filing of it the said circuit judge had issued the following order:

'In order to prevent the further obstruction of the proceedings in this cause, and further to prevent the violation of the orders of this court to the imminent danger of disturbing the public peace, it is hereby ordered, that the marshal of the United States, for the district of Louisiana, shall forthwith take possession of the building known as the Mechanics' Institute, and occupy the State House for the assembling of the legislature there in the city of New Orleans, and hold the same subject to further order of this court; and meanwhile prevent all unlawful assemblage therein under the guise or pretext of authority claimed by virtue of pretended canvass and returns made by said pretended returning officers in contempt and violation of said restraining order. But the marshal is directed to allow the ingress or egress to and from the public office in said building of persons entitled to the same.'

This proceeding by the circuit judge purported to be based on the act of Congress, 31st May, 1870, entitled 'An act to enforce the rights of citizens of the United States to vote in the several States of this Union and for other purposes.'

The 2d, 3d, 4th, 5th, 6th, 19th, and 20th sections of the act are intended to preserve the right of the voter. Each relates to a specific wrong against him, and constitutes it a misdemeanor, punishable by fine and imprisonment.

The 23d section gives a remedy to one deprived of his election to any office. The remedy is to consist in 'any appropriate suit or proceeding to recover possession of the office.'

''Messrs. P. Phillips and E. N. Ogden, in behalf of the petitioner; Messrs. Caleb Cushing and M. H. Carpenter, contra. Mr. T. J. Durant, whom the court declined to hear, for the State of Louisiana''.

We are all of opinion that when a final decree shall be rendered in the Circuit Court in this case, an appeal will lie to this court. We are also of opinion that this court has no jurisdiction in this case to issue a writ of prohibition until an appeal is taken.

title: Ex parte Warmouth/Opinion of the Court


text: Talk:Ex parte Warmouth/Opinion of the Court


text: Dictionary of National Biography, 1885-1900/Waldby, Robert


text:
Mason v. United States (84 U.S. 67)

APPEAL from the Court of Claims; the case being thus:

On the 7th January, 1862, the chief of ordnance, General Ripley, by direction of the Secretary of War, made in writing, on behalf of the government, this offer to one Mason, a manufacturer of arms at Taunton, Massachusetts:

'I offer you an order for 50,000 muskets, with appendages, of the Springfield pattern, on the following terms and conditions, viz.:' [Here followed a variety of minute specifications as to the character of the muskets, and the time when they were to be delivered.]

'It is further directed by the War Department that double the number of arms and appendages, viz., 100,000, will be received, if manufactured at your establishment in Taunton, and delivered within the times before specified for the delivery of the 50,000 arms and appendages. All the other terms and conditions of this order remaining unchanged for the additional 50,000.'

On the 20th January, 1862, Mason, in writing, accepted the foregoing order, and his acceptance thereof was received by the chief of ordnance.

Mason immediately proceeded to make changes of machinery in his machine works, and to do whatever was necessary to insure the full and complete performance of the agreement, and was able and willing to perform his agreement according to the terms of it. His expenditures for changing his machine works into an armory, as required by the agreement, amounted to $75,000, and the profits which he would have made upon the muskets ordered, if he had been allowed to perform, would have amounted to $5.25 per musket.

On the 13th March, 1862, the War Department ordered--

'That Joseph Holt and Robert Dale Owen be a special commission to audit and adjust all contracts, orders, and claims on the War Department in respect to arms; their decision to be final and conclusive as respects the department on all questions touching the validity, execution, and sums due or to become due upon such contracts, and upon all other questions arising between contractors and the government upon such contracts.

'That the commission should proceed forthwith to investigate all claims and contracts in respect to arms in the department, or pending settlement and final payment, and adjudicate the same.'

The order added:

'All persons interested in such contracts may appear in person, but not by attorney, before said commissioners, and be heard respecting their claims, at such time and place as the commissioners shall appoint. All claims that they may award in favor of shall be promptly paid. No application will be entertained by the department respecting any claim or contract which they shall adjudge to be invalid.'

On the 15th of May, 1862, the commission, without the consent and against the remonstrances of the claimant, decided and reported to the chief of ordnance:

'That the order to Mr. Mason be confirmed, subject to all its terms, to the extent of 30,000 muskets, upon condition that he shall, within fifteen days after notice of this decision, execute bond, with good and sufficient sureties, in the form and with the stipulations prescribed by law and the regulations, for the performance of the contract, as thus modified, resulting from said order and acceptance; and, upon his failure or refusal to execute such bond, then the said order shall be declared annulled and of no effect.'

On the 30th of May, 1862, the chief of ordnance transmitted a copy of this decision to Mason, and also the contract and bond contemplated by the commission in its decision, with the request that he would execute and file them within fifteen days after their receipt by him, if he should 'accept the order as confirmed by the commission.' Mason thereupon executed such written contract, on the 25th day of June, 1862, whereby he contracted and engaged to furnish to the defendants '30,000 muskets of the Springfield pattern.' This contract was performed by both the parties, and no other muskets were ever furnished by Mason to the government.

Upon these facts the Court of Claims, as a conclusion of law, decided:

That the original contract between the parties for the purchase and sale of 100,000 Springfield muskets was changed and modified by the voluntary act of the parties in the written contract, 25th of June, 1862, and that the petition of the claimant should be dismissed.

From that decree Mason took this appeal.

Mr. Thomas Wilson, for the appellant; Mr. G. H. Williams, Attorney-General, and Mr. C. H. Hill, contra.

Mr. Justice CLIFFORD delivered the opinion of the court.

title: Mason v. United States (84 U.S. 67)


text: Talk:Mason v. United States (84 U.S. 67)


text:
Mason v. United States (84 U.S. 67)/Opinion of the Court

Parties having claims against the United States for labor or service, or for personal property or materials furnished, which are disputed by the officers authorized to adjust the accounts, may compromise the claim and may accept a smaller sum than the contract price; and where the claimant voluntarily enters into a compromise and accepts a smaller sum and executes a discharge in full for the whole claim, he cannot subsequently recover in the Court of Claims for any part of the claim voluntarily relinquished in the compromise.

Mason contracted to manufacture and deliver 50,000 muskets with appendages, of the Springfield pattern. They were to be in all respects identical with the standard riflemusket made at the National armory, with the regular appendages,and were to be so constructed as to interchange with that pattern and with each other in all their parts, and they were to be subject to inspection in the same manner as the arms are which are manufactured at the National armory; and the stipulation was that none should be received except such as passed inspection and were approved by the regular inspectors. Deliveries were to be made at the times and in the quantities therein specified, and payments were to be made, in such funds as the Treasury Department should provide, on certificates of inspection and receipt by the inspectors, at the rate of $20 for each arm including appendages. Information was also communicated to the contractor by the War Department that double the number specified in the contract would be received, if manufactured at the contractor's establishment and delivered at the times specified for the delivery of the first 50,000 arms, upon the same terms and conditions as those specified in that contract.

On the 20th of January, 1862, the claimant accepted the offer to manufacture and deliver the second 50,000 muskets and appendages, as proposed in that offer, and duly notified the chief of ordnance of his acceptance of the same in writing. Pursuant to that arrangement the claimant proceeded to make changes in his machine works, and to do whatever was necessary to enable him to perform his agreement, and the Court of Claims finds that he was able and willing to perform the same, and that he expended $75,000 in changing his machine works into an armory for that purpose, and that if he had been allowed to fulfil the agreement his profits would have amounted to $5.25 per musket.

Complaint is made that the officers of the United States prevented the claimant from performing his contract, and it appears that the Secretary of War, on the 13th of March, 1862, by an order of that date, appointed a special commission, consisting of two members, to audit and adjust all orders and claims on the War Department in respect to ordnance arms and ammunition, providing in the same order that their decisions should be final and conclusive upon the department on all questions touching the validity and execution of the contracts, and the sums due or to become due upon the same, and upon all other questions arising out of the contracts between the contractors and the government. Whether the claimant ever appeared before the commission does not appear, but it does appear that the commissioners, on the 15th of May, in the same year, without the consent and against the remonstrance of the claimant, decided and reported to the chief of ordnance that the contract of the claimant be confirmed, subject to all its terms, to the extent of 30,000 muskets, upon the condition that he, the claimant, shall, within fifteen days after notice of the decision, execute a bond, with good and sufficient sureties, in the form and with the stipulations prescribed by law and the regulations in such cases, for the performance of the contract as thus modified, and that the contract shall be declared null and of no effect in case he fails or refuses to execute such a bond. Due notice was given of the decision to the claimant, and the chief of ordnance transmitted to him the draft of the contract and bond contemplated by the decision, with the request that he would execute and file the same within fifteen days from their receipt if he should accept the contract as confirmed by the commission, and the finding of the Court of Claims shows that he executed the written contract whereby he contracted and engaged to furnish to the United States 30,000 muskets of the Springfield pattern; and the Court of Claims also finds that the contract was performed by both parties, and that no other muskets were ever furnished to the United States by the claimant.

Much discussion of the case is certainly unnecessary, as it is as clear as any proposition of fact well can be, that the claimant voluntarily accepted the modification of the contract as suggested by the commissioners, and that he executed the new contract in its place, which he must have understood was intended to define the obligations of both parties. His counsel suggest that he accepted the new contract without relinquishing his claim for damages, arising from the refusal of the United States to allow him to furnish the whole 100,000 muskets, but the court is unable to adopt that theory, as it is quite clear that he could not have acted with any such motives consistent with good faith towards the War Department, as he must have known that the chief of ordnance supposed when he, the claimant, returned the written contract duly executed, that the whole matter in difference was adjusted to the satisfaction of all concerned. Parties are bound to good faith in their dealings with the United States as well as with individuals, and the court is of the opinion that no party in such a case could be justified, after accepting such a compromise and executing such discharge, in claiming damages for a breach of the prior contract which had been voluntarily modified and surrendered, unless the new contract was accepted under protest or with notice that damages would be claimed for the refusal of the United States to allow the claimant to fulfil the contract which was modified in the new arrangement.

It is contended by the appellant that the case is different in principle from the case of United States v. Adams, and the other cases of a corresponding character decided by this court, and the court is inclined to the same opinion, as it is a plain case of voluntary adjustment between the parties, which all courts hold is final and conclusive. None of those cases proceed upon the ground that such a commission possessed any judicial power to bind the parties by their decision, or to give the decision any conclusive effect. Nor can such a commission compel a claimant to appear before them and litigate his claim, but if he does appear and prosecute it, or subsequently accepts the terms awarded as a final settlement of the controversy, without protest, he must be understood as having precluded himself from further litigation.

Attempt is made in argument to show that the adjustment in this case, so far as the claimant is concerned, was the result of duress, but the charge is wholly unsupported by evidence of any kind, except that the United States proposed to annul the old contract if the claimant refused to accept the modification, which is wholly insufficient to establish such a charge.

Apart from that, it is also suggested that the claimant at that time could have no remedy by suit against the United States, as the transaction preceded the passage of the law establishing the Court of Claims. But he might have applied to Congress for relief, as all other claimants were compelled to do from the organization of the government until the law was passed allowing such parties to prosecute suits against the United States.

Duress, if proved, may be a defence to an action, and it would doubtless be sufficient to relieve a party from the effect of compromise which was procured by such means, but the burden of proof to establish the charge, in every such case, is upon the party making it, and if he fails to introduce any such evidence to support it, the presumption is that the charge is without any foundation. Acceptance from the government of a smaller sum than the one claimed, even in a case where the amount relinquished is large, does not leave the government open to further claim on the ground of duress, if the acceptance was without intimidation and with a full knowledge of all the circumstances; and the case is not changed because the circumstances attending the transaction were such that the claimant was induced from the want of the money to accept the smaller sum in full, which is not proved in this case.

Examined in any point of view we think the decision of the Court of Claims is correct.

DECREE AFFIRMED.

I am unable to concur in the opinion just read. The original contract was honestly and fairly made without taint of fraud. This is not disputed. Large preparation at great expense was made by the claimant for the fulfilment of it on his part. It was violated by the United States without reasonable cause, as I think, as expressly found by the Court of Claims, without the consent, and against the remonstrances of the claimant. A modified contract, so called, but really a second contract, was then made between the parties, which was fulfilled on both sides; but there is nothing to show that this contract was freely made, or made at all by the claimant in place of the first, or that payment of the sums due under it from the United States was accepted by him in satisfaction of damages for the breach of the first. I think that the United States are not absolved in their dealings with citizens from the obligations of honesty by which individuals are usually controlled, and that the claimant is entitled to damages.

[See the case next following.]


text: Talk:Mason v. United States (84 U.S. 67)/Opinion of the Court


text:
Sweeny v. United States

APPEAL from the Court of Claims; the case being thus:

One Sweeny, owner of a steamer, chartered her at Louisville, March 3d, 1863, to the United States (the assistant quartermaster of the military department where she was, signing the charter-party in behalf of the government), at $175 per day; no term of service being specified. On the 10th the per diem was increased, in writing, to $200, and was so paid till the 20th March. In that month she was ordered and went into another military department; and came under the control of an assistant quartermaster at St. Louis, Captain Parsons, under whose control she remained till the 17th of September, when she was discharged.

It was not conceded by Captain Parsons that the steamer was retained in the service under the charter-party. On the contrary, her account was stated by him on the 15th of September, 1863 (running from the 21st of March to the 31st of July, 1863), at $140 a day. This account was paid by him, and receipted for by the owner of the boat on the 22d of October following. Subsequent accounts for subsequent services were also stated and paid by Captain Parsons, and receipted for by the owners of the boat, none of which accounts or receipts referred in terms to any charter-party. The owner remonstrated at the rate allowed, and, on the 19th of December, 1863, a settlement was made with him by Captain Parsons, by allowing to him, from the 21st of March to the 31st of August, $5 per day, which amount was received and receipted for by the claimant, 'as in full of the above account,' being the account for the steamer's services.

But no release under seal was executed by the claimant, nor was any other consideration given by the government than that expressed of $5 per day for the term named.

Sweeny now filed a petition in the Court of Claims, asking for compensation at the charter rate of $200 per day for the one hundred and eighty-one days, between the 20th of March and the 17th of September.

The Court of Claims dismissed the petition on the ground that the demand of the claimant was a doubtful and disputed claim, which might be the subject of a valid parol compromise, and that the payment of the $5 a day for the term named, constituted a valid and binding compromise, which barred the claimant's action. From this action of the Court of Claims the owner of the vessel appealed.

Mr. James Hughes, for the appellant; Mr. C. H. Hill, Assistant Attorney-General, contra.

Mr. Justice CLIFFORD delivered the opinion of the court.

title: Sweeny v. United States


text: Talk:Sweeny v. United States

title: Talk:Sweeny v. United States


text: Dictionary of National Biography, 1885-1900/Waldegrave, Edward


text:
Sweeny v. United States/Opinion of the Court

Claims against the United States which are disputed by the officers authorized to adjust such accounts may be compromised, and if the claimant voluntarily enters into such a compromise and accepts a smaller sum than the claim and executes a discharge in full for the whole claim he is bound by the adjustment and cannot sue for what he voluntarily relinquished.

Sweeny was the owner of the steamer Ben. Franklin, and on the 3d of March, 1863, he chartered the steamer to the United States for $170 per day, the charter-party being signed by the owner of the steamer and an assistant quartermaster, without any stipulation as to the term of service. He complained of the rate allowed and subsequently applied for an increase, and the quartermaster at St. Louis directed that the steamer should be allowed $200 per day, by an indorsement on the application. She continued under the first contract and was borne upon the returns of the assistant quartermaster for the months of March and April following, but the claimant was only paid at that rate up to the 20th of March, and the steamer was not borne upon the returns of the assistant quartermaster after April of that year. He ordered her to proceed to Milliken's Bend, in the Mississippi River, and in so doing she passed within the limits of another military department, and came under the control of another assistant quartermaster, where she remained until the 17th of September following, when she was discharged.

It was denied by the assistant quartermaster that the steamer was retained in service under the original charter-party, and he stated the account for her services from the 21st of March to the 31st of July, at $140 per day, which was regularly paid by the assistant quartermaster, and was duly receipted for by the claimant, and it appears that none of those accounts or receipts make any reference to the charter-party.

Complaint was made by the owner of the steamer that the compensation allowed was insufficient, and the assistant quartermaster, on the 19th of December of that year, made a settlement with the claimant and increased the allowance to $145 per day, and the finding of the Court of Claims shows that the account made out in that way was received and receipted by the claimant 'as in full of the above account,' being the account made out in that way for the services of the steamer.

Enough appears to satisfy the court that the charter-party was superseded, and that the claim was in fact for a quantum meruit, and as such that it was the proper subject of compromise within the principle adopted and applied in the case of Mason v. United States, decided at the present term. Prior to the adjustment the sum allowed was $140 per day, but that allowance was not satisfactory to the claimant, and the assistant quartermaster, as matter of compromise, agreed to add $5 per day in addition to that allowance, and the claimant having accepted the offer, received the money, and executed a discharge in full of the claim, cannot prosecute a suit in the Court of Claims for what he voluntarily relinquished in the compromise.

Parties may adjust their own disputes, and when they do so voluntarily and understandingly, no appeal lies to the courts to review their mutual decision.

DECREE AFFIRMED.


text: Talk:Sweeny v. United States/Opinion of the Court


text: Dictionary of National Biography, 1885-1900/Waldegrave, Frances Elizabeth Anne


text:
Harwood v. Cincinnati and Chicago Railroad Company

APPEAL from the District Court for the District of Indiana.

Harwood, March, and several other persons, representing that they were stockholders in the Cincinnati and Chicago Railroad, 'a corporation now disorganized and unable to sue,' filed, on the 25th of December, 1865, a bill in the court below against the Air-Line Railroad Company, one Brandt, and several additional persons, to vacate a decree rendered in the same court in the early part of the year 1860, in a suit by George Carlisle as trustee of a second mortgage on the road for the benefit of a certain second issue of bonds, against the said Cincinnati and Chicago Railroad Company. The suit of Carlisle had been for the foreclosure of the said mortgage upon the road, given to secure the second mortgage bonds; and, in form at least, had been regular. The bill in the present case alleged fraud and collusion in that suit between Carlisle and his confederates and certain other persons, who were lessees of the road and in its possession, and who had agreed to pay the interest on its mortgages. It alleged that by the concurrence of these several parties the road had been allowed to lose credit, and that the payment of interest on its second mortgage bonds was wilfully neglected in order that the property might be sold; that this arrangement had been carried out, and that the road had been sold and purchased in by the conspirators for about $25,000, when it was really worth about $2,000,000 above a first mortgage of the same sum to which it was subject; and that the stockholders in the original road were injured by this collusive and fraudulent sale.

The bill prayed that the said alleged collusive and fraudulent sale might be set aside, the complainants and their costockholders remitted to their original rights in the former corporation, and permitted to redeem the road from the first mortgage, still upon it.

Carlisle was not made a party defendant to this bill.

By way of showing why their bill was not earlier brought, the complainants alleged that they knew the road was leased out of the power of the company, as they supposed, until 1862, and that they knew that it had been sold as above set forth, except that they were entirely ignorant of the fraudulent acts, arrangements, and combinations by which the sale was brought about and executed; that they trusted in their officers and supposed that all was fairly done; that on the sale the corporation ceased practically to exist, and that the officers industriously concealed from the stockholders the frauds perpetrated, and that these last had no organ to act in the premises; that in 1865 they learned from divers sources (the war having previously directed attention from the matter), that frauds had been perpetrated, but that they did not learn particulars; that the stockholders were scattered in several States, and had to be consulted and measures taken to raise men and money to investigate the transactions; that this was done as expeditiously as disorganized and scattered stockholders could do it, and agents be employed to investigate facts and counsel be consulted.

The defendants demurred. The demurrer was sustained by the court below, and on appeal here the question now was upon the correctness of its said judgment.

Mr. T. A. Hendricks, for the appellant; Messrs. McDonald, Roache, and Walker, contra.

Mr. Justice HUNT delivered the opinion of the court.


text: Talk:Harwood v. Cincinnati and Chicago Railroad Company


text:
Harwood v. Cincinnati and Chicago Railroad Company/Opinion of the Court

We are of opinion that the judgment must be affirmed, for two reasons:

1. Mr. Carlisle, the plaintiff in the suit in which the decree is sought to be vacated, is not a party to this proceeding. In the former suit all the forms of law, at least, were complied with. The parties having interests which it was sought to foreclose were made parties, a decree was taken in the ordinary form that they be foreclosed and that the property be sold. A sale was had under which the present defendants claim title. This was done upon the prayer of Mr. Carlisle, by his authority, and upon his procurement. Third parties now come into court and ask that all these proceedings, completed according to the forms of law, and sanctioned by the decree of the court, taken at the request of Mr. Carlisle and for which he is responsible, be vacated and declared fraudulent and void. This is sought to be done without his knowledge, and no opportunity is given to him to sustain his decree or to rebut the alleged fraud, and no reason or excuse is given why he is not made a party. This is against authority and principle. No case is cited to justify it, and it is believed that none can be found. The judgments of courts of record would be scarcely worth obtaining if they could be thus lightly thrown aside. The absence of the plaintiff in the original suit is a fatal defect.

2. We are of the opinion also that there has been too great delay in initiating this suit, and that no sufficient excuse is given for it. The sale was made five years before the commencement of this suit, and it is fairly to be inferred from the bill that the plaintiffs were aware of the proceedings as they progressed. Their knowledge of the mortgage sale is expressly admitted. The allegation of ignorance is, in general terms, of the fraudulent acts and arrangements. They do not allege when they acquired the knowledge, nor give a satisfactory reason why it was not sooner obtained. For aught that appears they have slept upon their knowledge for several years. Without reference to any statute of limitations, the courts have adopted the principle that the delay which will defeat a recovery must depend upon the particular circumstances of each case. This case does not show a sufficient degree of diligence to justify the overthrow of a decree of foreclosure, under which new rights and interests must necessarily have arisen.

JUDGMENT AFFIRMED.


text: Talk:Harwood v. Cincinnati and Chicago Railroad Company/Opinion of the Court


text:
Averill v. Smith

ERROR to the Circuit Court for the Northern District of New York.

AN act of Congress of February 24th, 1807, enacts:

'That when any prosecution shall be commenced on account of the seizure of any ship or vessel, goods, wares, or merchandise, made by any collector or other officer, under any act of Congress, authorizing such seizure, and judgment shall be given for the claimant or claimants, if it shall appear to the court before whom such prosecution shall be tried, that there was a reasonable cause of seizure, the said court shall cause a proper certificate or entry to be made thereof; and in such case the claimant or claimants shall not be entitled to costs, nor shall the person who made the seizure, or the prosecutor, be liable to action, suit, or judgment on account of such seizure and prosecution; provided, that the ship or vessel, goods, wares, or merchandise, be, after judgment, forthwith returned to such claimant or claimants, his, her, or their agent or agents.'

The 89th section of the Customs Act of March, 1799, contains a provision substantially the same.

These statutory provisions being in force, one Smith brought trespass against Averill, a collector of internal revenue, for taking and carrying away certain barrels of whisky.

The defendant pleaded not guilty, and gave notice, under the practice of the second circuit, of his defences.

The case was tried, and a special verdict found as follows:

'That the defendant, being a collector of internal revenue, on the 4th of February, 1868, seized as forfeited to the United States, and carried away, and deposited in a storehouse at Corning, the whisky mentioned; the same then being in the possession of and owned by the plaintiff; that an information was filed against the same in the District Court of the United States for the said district; that on the 15th of May, 1868, a deputy of the marshal of the district presented to the defendant a process of the said District Court, commanding him, the said marshal, to seize the said property; that the marshal made return that on the 4th of May, 1868, he did seize and attach the said property, and had duly cited all persons to appear and assert their claims thereto; that he did not at any time notify to the person having possession of, and in whose warehouse the said whisky was stored by the said defendant, that he, the said marshal, had taken possession thereof; that a claim and answer to the said property was put in by Smith, the plaintiff, as owner thereof; that a trial was had and a judgment entered that the property did not become forfeited, but that the same belonged to said Smith, the plaintiff; that afterwards, the said court adjudged and certified that there was probable cause for the said seizure; that the plaintiff had never made claim of the defendant for the said property except by bringing the said action; neither had said property, or any part thereof, ever been returned to the plaintiff, nor had any offer been made to return the same, but that the same still remained in such storehouse at Corning aforesaid.'

On this verdict judgment was entered for the plaintiff, and to review that judgment the defendant prosecuted this writ of error.

Mr. G. H. Williams, Attorney-General, and Mr. C. H. Hill, Assistant Attorney-General, for the plaintiff in error:

Upon the facts shown by the special verdict, an action of trespass will not lie against the defendant.

The second resolution in the Six Carpenters' Case, was 'that not doing cannot make the party who has the authority or license by the law a trespasser ab initio, because not doing is no trespass; and, therefore, if the lessor distrains for his rent, and thereupon the lessee tenders him the rent in arrear, &c., and requires his beasts again, and he will not deliver them, this not doing cannot make him a trespasser ab initio.' This principle has been universally recognized. In West v. Nibbs, it was held 'that a landlord who has accepted the rent in arrear, and the expenses of the distress, after the impounding, cannot be treated as a trespasser merely because he retains possession of the goods distrained, although his refusal to deliver them up to the tenant may amount to a conversion so as to render him liable in trover.' And Gardner v. Campbell, Smith v. Egginton, Waterbury v. Lockwood, Jacobsohn v. Blake, and other authorities collected and to be seen in the last edition of Smith's Leading Cases, affirm this rule. The certificate of probable cause showed that the original seizure of the goods was lawful, and threw the onus probandi upon the claimants.

There was an omission, too, in the judgment of the District Court to make any order in respect of the return of the goods. The goods were not in the possession of the collector. The marshal had taken them out of his possession by order of a writ directed to him; and, of course, thenceforth they were in possession of the court. The collector had nothing more to do with them. He could not return them to the plaintiff. The goods being in possession of the court, the plaintiff should himself have come into court and asked to have them back, when he would have received them as of course.

But whatever effect this absence of an order in respect to the return of the goods may have had upon the rights of the parties on the judgment in the District Court, it was necessary for the owner to have taken active measures in some form to recover his property, and to have encountered a refusal; and, without deciding whether he has a remedy in trover or replevin, it is clear on the authorities that the present action will not lie.

Mr. M. W. Cooke, contra:

The case shows a trespass. The defendant, without process, seized, took, and carried away plaintiff's property. The cases cited on the other side, save one, were for acts of officers proceeding upon execution or process of the court. In Gardner v. Campbell, the defendant took the plaintiff's goods under and by virtue of an execution, and it was decided, simply, that replevin would not lie. This case has no bearing except to show that plaintiff herein could not have replevied the goods if the position of plaintiff in error is correct.

In Smith v. Egginton, and Waterbury v. Lockwood, the defendant, an officer, was acting under process of the court directing the seizure of the goods of defendant named in the process. The court seized them. The case of Jacobsohn v. Blake, so far as it has any bearing, is against the position claimed. The officer there did not seize the goods, and it was upon this ground that the judges decided the case. Tindal, C. J., says:

title: Averill v. Smith


text: Talk:Averill v. Smith

title: Talk:Averill v. Smith