text:
Canal Company v. Ray/Opinion of the Court

Assuming the facts to be such as are averred in the bill, and not denied in the answer, we have this case: In 1860 the complainants were engaged in enlarging the machinery and capacity of their flouring mill, situate near the canal of the defendants, between it and the Potomac River, and dependent for its power upon water obtained from the canal. While thus engaged it was agreed between them and the defendants that for a stipulated rent they should have full right, permission, and authority to draw from the canal, for the uses of their mill, so much water as would pass through an aperture of specified dimensions, in an iron plate not exceeding an half inch in thickness, on certain conditions. The first of these related to the form of the aperture and its capacity. The second was that the aperture should not be placed nearer the canal bottom proper than two feet. The third prohibited any attachment, contrivance, or device to increase the quantity of water that could be drawn through the aperture above what could be drawn if such device were not used. The fourth required that a sliding gate or gates should be placed in front of the aperture, so that the whole water-power granted might, as occasion under the provisions of the contract required, be entirely or partially stopped from passing through it. The fifth condition related to the construction of the forebay, the aperture and sliding gates, requiring them, inter alia, to be put down, constructed, and thereafter kept in repair at the sole cost of the complainants, under the special direction and superintendence, and subject in every particular to the approval of such officer of the company as might be charged with that duty. The sixth condition was that, in like manner, at the sole cost of the grantees or complainants, and under the special direction o the officers of the company charged with that duty, such alterations should be made from time to time in the forebay or trunks, cover, or bridge aperture, and sliding gate or gates as might be considered necessary by the company or their officers, to prevent or lessen the inconvenience to the navigation of the canal and the use of its towing-path, which might be found to arise from said use of the water, or that might be thought necessary by the company for the greater security of the canal or of its works. The seventh condition reserved to the company the right of full ingress and egress, by their officers, to and from the premises of the grantees for the purpose of examining, repairing, and preserving the fixtures and works connected with drawing off the water, repairing the embankment and other parts of the canal, and also for the purpose of ascertaining whether any defects existed in the fixtures and works for drawing off water, repairing the embankment and other parts of the canal, and also for the purpose of ascertaining whether any defects existed in the fixtures and works for drawing off water, occasioning leakage from the canal, or endangering its security and that of its works, and also for ascertaining whether more water was drawn off than was granted by the contract. The remaining conditions need not be noticed. They have no possible bearing upon the matter now in controversy.

Obviously this grant of the water privilege contemplated that the aperture, the trunk or forebay, and the sliding gate or gates should be constructed after the grant was made. To that extent the contract was executory. It did not expressly require that the aperture and guage should be located at the bank of the canal, in front of an opening there made, though probably such was the understanding of the parties. But conceding that it was, and that the contract in terms required such a location, it was nevertheless competent for the parties in the subsequent execution thereof to substitute another location in place of that first contemplated, and if such a change was made by mutual consent it amounted to a compliance with the provisions of the contract. The company, after having accepted or acquiesced in a location of the aperture and gate at a point nearer the complainants' mill than the canal bank, could not afterwards complain that the condition respecting the location had not been performed, unless a right to require arbitrarily a change was reserved.

The bill avers that after the enlargement of the complainants' mill had been completed, the works for conducting the water from the canal to the mill, and for measuring the quantity of water granted by the contract, were constructed and located under the special direction of the engineer and superintendent of the canal company, the officers charged with the duty, and with their approval, and that with like approval the aperture or gauge, and sliding gate thereat, were constructed and located at the wheel of the complainants' mill, where they have since remained, having been repeatedly inspected and approved by the officers of the company. This averment is, at most, only evasively denied. The answer does indeed deny that the gauge and sliding gate were located at the wheel of the complainants' mill with the knowledge and consent of the company, and denies that such location was made with the approval or by the direction of the officers of the company, if it is meant by the averment (of the bill) 'to that effect that such arrangement was intended as permanent, or as other than a temporary indulgence.' Such an equivocal denial cannot be considered as breaking the force of the complainants' allegation. Then, what is the effect of that averment? If, in executing the contract between the parties, the gauge and sliding gate were placed at the wheel of the mill with the knowledge of the company and with their consent, and if the location was thus made under the special direction of their engineer and superintendent, the officers charged with the duty; if for years the location remained unchanged and unchallenged, having been repeatedly inspected and approved by the company's proper officers, as averred in the bill and not denied, it would be grossly inequitable to hold that the location was not intended by both parties to be an execution of the contract, and accepted as such. Especially is this true when the location was made at the cost of the grantees of the water, and when, at the time when the works were thus constructed and located, there was also placed at the opening of the forebay into the canal, as part and in consideration thereof, and at the cost of the grantees, a gate to enable the company to control the water-power granted, in accordance with the provisions of the grant. And it matters not that the company may not have intended such location of the gauge to be permanent, unless such was the understanding of both parties, which is not averred. There can be no doubt that a party to a contract imposing mutual obligations may accept, as performance by the opposite party, some other thing than that specifically designated; and if he does, he cannot afterwards insist upon exact performance. Nothing is more common than such fulfilment of contract obligations. In equity it is certainly regarded as sufficient fulfilment. In the present case the location of the aperture and sliding gate at the mill wheel, instead of at the canal bank, effectuated the leading purpose of the contract, which was to give the complainants a specified quantity of water; and the company was fully protected by an additional gate at the canal, at the entrance of the forebay, by which they were enabled conveniently to control the flow of water to the mill.

This, however, is not all the case. On the 23d of February, 1865, some other millers having preferred requests that they might be allowed to draw at the wheels of their mills the quantity of water leased to them by the canal company, the board of directors of the company adopted the following resolution:--

'Resolved, that the superintendent of the Georgetown division, under the direction of W. E. Smith, C. E., be directed to place the water-gauges for the mills at Georgetown at such point as may be deemed most advisable to effect the objects of the respective water grants, and to limit the flow of water to the quantity to which the lessees are severally entitled: Provided, that said lessees shall severally assent in writing that the officers of the company may, at all times, have free access to their premises for examination or regulation of such parts as may be constructed upon them; and provided further, that the board may, at any time during their pleasure, if they shall deem it necessary, alter or change the position of such gauge or gauges, or any of them, as contemplated by the lease, and that this resolution shall not in any manner change or impair the provisions or requirements of the respective leases granted to said parties.'

On the 25th of the same month the several millers, together with the complainants in this case, gave their written consent to the resolution, and requested that their water-guages should be placed upon their respective premises, at or near the water-wheel. This resolution (made a contract by the acceptance of its provisions) certainly cannot be construed so as to deprive the complainants of the right they had previously acquired. It was intended mainly for the benefit of the other millers whose water-guages were not located at the wheels of their respective mills. And though the complainants assented to it, and thus subjected themselves to the obligations prescribed, they did not thereby agree that the location of the gauge at their water-wheel might be changed at the pleasure of the company, without cause, or for any reasons except such as were specified in the grants of water to them. The proviso declared that the board of directors might alter or change the position of the gauge, 'as contemplated by the lease.' That means that the company reserved the same powe to change the location which they had by the original contract. It stated expressly that the resolution should not in any manner change or impair the provisions or requirements of the respective leases granted to the parties. Now, what were the provisions of the leases, or contemplated by them, respecting changes in the position of the water-gauges? They are to be found in the sixth condition upon which the grants of water were made. They are that such alterations in the forebay or trunk, cover, or bridges, aperture, and sliding gate or gates, from time to time shall be made, as the company or their officer charged with that duty might consider necessary 'to prevent or lessen the invonvenience to the navigation of the said canal, and the use of its towing path, which may be found to arise from the use of said water, or that may be thought necessary by the said company for the greater security of the said canal or of its works.' No right was reserved to require such alterations arbitrarily, or for any other cause than one of those thus specified, and none to enforce such a requirement by stopping the flow of the water. It is admitted here by stipulation that the company has no knowledge of abuses by the complainants of the privileges conceded to them by the resolution of February, 1865, necessitating a change of their gauge to the canal bank for the purpose of navigation, or in respect of the tow-path, or for the security of the canal or of its works. The change required, therefore, is without any cause that justifies a demand that it be made-without the existence of any circumstance that, by the conditions of the grant, authorized the company to enforce it.

It is said on behalf of the appellants that the contract of lease between the canal company and the complainants, being a sealed instrument, could not be changed by any instrument of a less formal nature. From this it is inferred that neither the action of the company's officers in 1860 nor the resolution of 1865 could change the provisions of the grant. It is admitted that the company could waive any conditions therein for the benefit of the grantors,-such as the condition that the guage should be at the canal bank,-but is insisted that such a waiver would amount to no more than a license, revocable at will. But were it conceded that the location of the gauge at the water-wheel of the complainants' mill was in pursuance of a mere license, the license, when followed by the expenditure of the licensee's money in the construction of the works, on the faith of it, became a contract irrevocable by the grantor. The case, however, does not rest on that ground. The location of the gauge in 1860, under the direction and with the approval of the officers of the company charged with the duty of directing and superintending its construction, was, as we have said, an execution of the contract in that regard and not an alteration of it. And if it was not an execution of the contract, the resolution of 1865, accepted by the complainants, was a contract on sufficient consideration, which the parties were competent to make. Notwithstanding what was said in some of the old cases, it is now recognized doctrine that the terms of a contract under seal may be varied by a subsequent parol agreement. Certainly, whatever may have been the rule at law, such is the rule in equity. Dearborn v. Cross, 7 Cow. (N. Y.) 48; Le Fevre v. Le Fevre, 4 Serg. & R. (Pa.) 241; Fleming v. Gilbert, 3 Johns. (N. Y.) 527. These are cases at law. Numerous others might be cited. The rule in equity is undoubted.

The objections we have thus expressed lead directly to an affirmance of the decree rendered by the court below. In 1873, thirteen years after the gauge had been constructed at the water-wheel, the canal company required the complainants to place the gauge and sliding gate at the canal bank, and threatened to shut off the water from the mill if the requirement was not complied with. The company had no right to make and had none to enforce such a requirement, except in the cases specified in the leases, and those cases have now no existence.

Decree affirmed.


text: Talk:Canal Company v. Ray/Opinion of the Court

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


text:
Railway Company v. Philadelphia

ERROR to the Supreme Court of the State of Pennsylvania.

This was an action brought in the Court of Common Pleas, No. 2, for the county of Philadelphia, by the city of Philadelphia against the Union Passenger Railway Company of Philadelphia.

The following case was stated for the opinion of the court, with the right to either party to sue out a writ of error to the judgment.

That by 'An ordinance supplementary to an ordinance entitled 'An ordinance to regulate passenger railways,' approved July 7, 1857,' approved April 1, 1859 (139), and by the third section thereof, it is provided,--

'That each and every passenger railway company shall pay into the office of the chief commissioner of highways in the month of January of each year, for the use of the city, the sum of thirty dollars for each car intended to be run upon any road, and for each and every car placed upon any road before the time herein provided for paying the license, a proportionate sum shall be paid until the succeeding January, and that no car shall be placed or run upon any road or street until it shall be regularly licensed, and a certificate duly numbered hung in a conspicuous place in said car.'

That the defendants were created a body politic by an act passed April 8, 1864 (P. L. 297), with the authority to construct a railway on certain named streets in the city of Philadelphia. Among other things in said act, it is enacted,--

'SECT. 4. . . . Said railway shall conform in gauge to the passenger railways now laid in the city of Philadelphia. . ..

'SECT. 8. . . . And the said company is hereby authorized and empowered to construct and lay the said railway, without obtaining the consent of the city councils of the city of Philadelphia; but whenever the said railway shall be laid and used, by running passenger cars thereon, the said company shall be subject to the ordinances of the city of Philadelphia regulating the running of passenger railway cars.'

'SECT. 10. That the said company shall pay annually into the treasury of the city of Philadelphia, for the use of said city, whenever the dividends declared by said company shall exceed six per cent per annum, on the par value of the capital stock thereof, a tax of six per cent on such excess over six per cent,. . . and the said company shall also pay such license for each car run by said company as is now paid by other passenger railway companies in the city of Philadelphia.'

By 'a further supplement to an ordinance to regulate passenger railways, approved July 7, 1857,' approved Jan. 2, 1867 (1), it is enacted,--

'That each and every passenger railway company shall pay to the chief commissioner of highways the sum of fifty dollars for each car run upon their respective roads.'. ..

That by 'An Act to define the duties and liabilities of passenger railway corporations in the city of Philadelphia,' approved April 11, 1868 (P. L. 849), it is enacted,--

'That the several passenger railway corporations in the city of Philadelphis shall pay annually to the said city, in the month of January, the sum of fifty dollars, as required by their charters, for each car intended to be run over their roads during the year, and they shall not be obliged to pay any larger sum; and said city shall have no power by ordinance or otherwise to regulate passenger railway companies, unless authorized so to do by the laws of this Commonwealth, expressly in terms relating to passenger railway corporations in the city of Philadelphia.'. ..

That in each year previous to the year 1875 the defendants paid the said plaintiff the sum of fifty dollars for each of the cars run by them during such year.

The defendants, in the month of January, 1875, did run seventy-nine cars on their road, and admit their liability to pay to the plaintiffs for ea h car the sum of thirty dollars and no more.

If the court shall be of opinion that the plaintiffs are entitled to recover the sum of fifty dollars for each car, then judgment to be entered for the plaintiffs at that rate; if not, then judgment to be entered for the plaintiffs at the rate of thirty dollars for each car. The damages to be assessed by the prothonotary.

It is agreed that any act of assembly or ordinance of the city of Philadelphia which may be pertinent to the case here stated shall be considered as embraced herein.

Judgment was rendered in favor of the city at the rate of fifty dollars for each car. It was affirmed by the Supreme Court of the State, and this writ was then sued out. The errors assigned are set out in the opinion of this court.

Mr. David W. Sellers and Mr. F. Carroll Brewster for the plaintiff in error.

The contract between the State and the company arose by the acceptance of the charter by the corporators acting thereunder. It must therefore be construed as of that date. The franchise conferred was subject to certain terms, among which were that whenever the dividends declared should exceed six per cent per annum on the par value of the stock, a tax of six per cent should be paid on such excess, and that a license for each car run, such as was then paid by other passenger railway companies, should be paid.

The annual charge on each car is not technically a tax. Taxation is imposed by the State and city under general laws, and no exemption is here claimed from their exercise. The taxing power of the city conferred by the statute of Aug. 25, 1864, extends to all subjects of taxation specified by sect. 32 of the act of April 29, 1844. It does not, therefore, reach the cars of the company, as they are necessary to the enjoyment of the franchise. Under that section every thing incidental to, or inseparable from, the franchise is exempt from taxation. Navigation Company v. County, 8 Watts & S. (Pa.) 334; Navigation Company v. Commissioners, 11 Pa. St. 202.

The power of the city to open and repair streets does not interpose any barrier against the paramount authority of the State to grant the right to construct railways over them on such terms and conditions as the legislature may prescribed. Case of The Philadelphia and Trenton Railroad Company, 6 Whart. (Pa.) 25; Stormfeltz v. Turnpike Company, 13 Pa. St. 555; Mercer v. Railroad, 36 id. 99. The terms and conditions which are set forth in the company's charter exclude by necessary implication the exercise by the city of any power which would interfere with the enjoyment of the franchise, or diminish its value, even if such power had been, as it was not, vested in the city by pre-existing legislation.

The ordinance of the city passed pursuant to a later statute, and imposing burdens upon the franchise greater than those specified in the charter, is in direct conflict with the contract clause of the Constitution of the United States, and void.

Mr. Charles E. Morgan, Jr., and Mr. W. Nelson West, contra.

MR. JUSTICE CLIFFORD delivered the opinion of the court.

title: Railway Company v. Philadelphia


text: Talk:Railway Company v. Philadelphia

title: Talk:Railway Company v. Philadelphia


text:
Railway Company v. Philadelphia/Opinion of the Court

Stipulations, in a statute of a State, exempting certain property, rights, or franchises from taxation, or engaging that the same shall be taxed only at a certain rate, if made for a valuable consideration received by the State whose legislature enacted the stipulations, is a contract, and as such comes within the rules of decision specifying the description of contracts entitled to protection from modification or repeal under the guaranty of the tenth section of the first article of the Constitution.

Exemptions of the kind, however, are to be strictly construed, the rule being that the right of taxation exists unless the exemption is expressed in clear and unambiguous terms, and that in order that it may be effectual it must appear that the contract was made in consequence of some beneficial equivalent received by the Sta e, it being conceded that if the exemption was granted only as a privilege it may be recalled at the pleasure of the legislature. Cooley, Const. Lim. (4th ed.) 342; Cooley, Taxation, 146.

Companies were created by the legislature of the State, more than thirty years ago, for running street cars in the streets of the plaintiff city, whose charters made it necessary that the managers should obtain the consent of the city councils before they commenced to use and occupy the streets for that purpose. Ordinances were accordingly passed by the city authorities which required companies organized under such statutes to pay for the use of the city a license fee of thirty dollars for each car intended to be run. Subsequent charters of the kind were granted by the legislature which did not contain any provision requiring the companies or their agents to procure the consent of the authorities of the city before they could use the public streets for the running of their passenger cars. These companies denied the validity of the license charge, which gave rise to litigation and to new legislation, by which authority was given to the city councils to provide by ordinance for the proper regulation of omnibuses or vehicles in the nature thereof, and to that end it was enacted that they might from time to time pass ordinances to provide for the issuing of licenses to as many persons as may apply to keep and use omnibuses or vehicles in the nature thereof, and to charge a reasonable annual or other sum therefor, and to provide for the punishment of the owners and drivers of the same for any violation of the provisions of the ordinances to be created by virtue of the authority conferred. Sess. Laws Penn. (1850) 469.

Authority was by that act expressly vested in the city authorities to pass ordinances upon the subject therein described, and to charge a reasonable annual license fee for the license or other sum for the same. Pending the period during which that enactment continued to be in operation the legislature of the State passed the act incorporating the defendant company, with the powers, privilges, duties, and obligations expressed in the act of incorporation. Id. (1864) 300.

Corporate privileges of the usual character are by the charter granted to the company, and the tenth section provides that whenever their dividends shall exceed six per cent per annum on the par value of the capital stock, the company shall pay for the use of the city a tax of six per cent on such excess over six per cent on the par value, and that they shall also pay 'such license fee for each car run by the company as is now paid by other passenger railway companies.'

Railway companies running cars on the streets of the city were required to pay at the time the defendant company was incorporated, for each and every car intended to be run, the annual license fee of thirty dollars, as appears by the ordinance then in force and fully set forth in the agreed statement of facts. Annual payments to that amount, it seems, were made by the defendant company, which may be inferred from the fact that the plaintiff city makes no claim for any deficit during that period.

Coming to the matter in controversy, it appears that the legislature, on the 11th of April, 1868, passed the act which is the principal subject of controversy. Sect. 1 provides that the passenger railway corporation of the city shall pay annually to the city in the month of January, the sum of fifty dollars, as required by their charters, for each car intended to run over their roads during the year, and that they shall not be obliged to pay any larger sum; and the same section provides that the city shall have no power to regulate such companies unless so authorized by the laws of the State. Sess. Laws Penn. (1868) 849.

Regular payments, as required, were made by the defendant company until the year 1875, when they refused to pay any greater sum than thirty dollars per year for each car run. Payment of the excess beyond thirty dollars being refused, he authorities of the city instituted the present suit in the common pleas to recover the balance as claimed. Service was made, and the parties having appeared, filed the agreed statement of facts exhibited in the transcript. Hearing was had, and the court of original jurisdiction rendered judgment in favor of the plaintiff city for the sum of $4,218.60. Dissatisfied with the judgment, the defendant company removed the cause into the Supreme Court of the State, where the judgment was affirmed. Still not satisfied, the defendant company removed the cause into this court, and assigns for error the following causes: 1. That the act of the legislature defining the duties and liabilities of railway companies is in conflict with that provision of the Constitution which prohibits a State from passing any law impairing the obligation of contracts. 2. That the judgment of the court below is in conflict with that provision of the Constitution.

Attempt was made about the time the defendant company was incorporated to support the theory that a street passenger car was not a vehicle in the nature of an omnibus, and that the street passenger cars were not taxable in any form under the legislative act which authorized the city authorities to issue licenses to persons to keep and use omnibuses or vehicles in the nature thereof, upon the ground that the street passenger car was not a vehicle in the nature of an omnibus. Controversy arose, and the Supreme Court of the State effectually disposed of the question in favor of the city.

Questions of importance were decided by the court in that case, most or all of which are more or less applicable to the case before the court. They are as follows: 1. That a grant to a corporation to carry passengers in cars over the streets of a city does not necessarily involve exemption from liability to municipal regulations, the right granted being neither greater nor less than that possessed by a natural person. 2. That when a corporation is authorized to pursue a specified business within a municipality it is intended that the business shall be conducted under the rules, restrictions, and regulations which govern others transacting the same business. 3. That the right to construct cars and own a railway neither enlarges nor diminishes the right to run cars and carry passengers, and that a reasonable charge for the use of the privilege to transact such a business is not a denial of the right. 4. That an ordinance requiring passenger cars to be numbered and pay a stipulated sum when licensed is a valid police regulation, and that such an ordinance might be passed under the act which authorized the city authorities to pass ordinances for the licensing of omnibuses and other vehicles of conveyance of a like nature.

Since that decision it is not doubted that the subject of imposing license fees, in cases like the present, is within the jurisdiction of the city authorities, if the statute under which they have exercised such jurisdiction is a valid act passed in pursuance of the Constitution.

When the company was incorporated the charter, as before remarked, contained the provision providing for the payment of a six per cent tax on the excess of dividends over six per cent on the par value of the stock, and the further provision that the company shall also pay such license for each car run as is now paid by other passenger railway companies in the city. What the defendants contend is that the closing enactment of the section amounts to a contract that the railway company shall never be required to pay any greater license-fee than was then required of such companies running passenger cars on the streets of the city. Other railway companies at that time paid an annual license of thirty dollars, and the defendants insist that the act of the legislature increasing the license to fifty dollars per annum is unconstitutional and void.

Two answers are made to that proposition by the plaintiff city, either of which is sufficient to show that the judgment must be affirmed: 1. That the la guage of the act of incorporation referred to does not amount to a contract of any kind, and certainly not to such a contract as that attempted to be set up by the defendants. 2. That even if the language employed in the charter is sufficient to amount to a contract that the license charge should not exceed the amount paid at that date by other such companies, still it cannot benefit the defendants for the reason that the Constitution of the State in force when the act of incorporation was passed provides that the legislature shall have the power to alter, revoke, or annul any charter of incorporation hereafter conferred by or under any special or general law, whenever in their opinion it may be injurious to the citizens, subject only to the condition that the alteration, revocation, or annulment shall be made in such manner 'that no injustice shall be done to the corporators.' Art. 1, sect. 26; Purdon, Dig. (9th ed.), p. 17.

Exemptions of the kind set up are to be strictly construed, but it is unnecessary to invoke that canon of construction to any considerable extent, as the language employed is not sufficient to take the case out of the rule that the alleged exemption will not be sustained unless it be expressed in clear and unambiguous terms. Taken in their widest sense, the words employed are no more than sufficient to warrant the construction that the legislature intended that the corporation should not then be required to pay any greater charge as license than other companies were required to pay for the same privilege, and it may perhaps be regarded as a guaranty against invidious exemptions adverse to the corporators in future legislation upon the subject, but it is plain that there is nothing in the language of the section to warrant the court in holding that the legislature intended to contract that the license charged for such passenger-cars should never exceed the annual sum of thirty dollars.

Railway companies of the kind, it appears, were first required to pay an annual sum of fifty dollars for each car run the year previous to the passage of the act which is the subject of controversy in the present litigation. Neither party refers to that act as of any importance in this case, except as a part of the State legislation upon the subject. Then comes the act in controversy, to which reference has already been made. 9 Sess. Laws Penn. (1868) 848.

When the street railway system of the city was comparatively in its infancy the city authorities, under the legislative act empowering them as such authorities to charge reasonable fees for granting licenses to such companies, fixed the sum at thirty dollars per annum for each car run. Regulations of the kind were in force and operation when the charter of the defendant company was granted. Other companies previously incorporated were at the time paying only that sum per annum for each car, and the tenth section of the charter granted to the defendant company provided that the then new company should pay the same as was paid by the other passenger railway companies.

Beyond doubt they were required to pay the same amount as was paid by the other companies, and it is perhaps a reasonable construction that without further legislation they could not be required to pay any greater sum, but the language of the section does not in terms contain any such prohibition. None of the other companies have any such immunity from increased taxation, and if construed to have that effect in favor of the defendant company it would have an extremely invidious operation at the expense of all other similar companies. Invidious exemptions are not favored, nor ought they to be, as they are in principle utterly opposed to the rule of equality, which ought always to prevail in imposing public burdens.

Taxation is an act of sovereignty to be performed, so far as it conveniently can be, with justice and equality to all. Crawford v. Burrell Township, 53 Pa. St. 219; Cooley, Taxation, 152. Common burdens should be sustained by common contributions, regulated by fixed rules, and be apportioned, as far as possible, in the ratio of justice and equity. Sutton v. Louisville, 5 Dana (Ky.), 28, 31.

Viewed in the light of these suggestions it is clear that the State never made such a contract with the defendant company as that supposed in the assignment of errors.

It seems that the Supreme Court of the State, when it became their duty at an earlier period to examine the question, came to the conclusion that the power to impose the license or tax might be supported as a police power derived under the act passed for the regulation of omnibuses or vehicles in the nature of the same, it appearing that at that time no legislative act had conferred the express power to tax the cars of the company. ''The Frankford, &c. Railway Co. v. City of Philadelphia'', 58 Pa. St. 119-124.

Since that the act in question in this case has been enacted, which itself requires all such companies without discrimination to pay the annual license or tax of fifty dollars for each car intended to be run over the city roads during the year.

Stress it appears was laid in the court below upon the words of the act, 'as required by their charters,' as if the obligation did not arise unless it was created by the terms of the charter, but the Supreme Court showed conclusively that the act of the legislature, when properly construed, did not sustain the proposition, and it appears to have been abandoned. Charters of the kind, as the Supreme Court showed in the opinion given in this case, required obedience to the lawful ordinances of the city under the exercise of its municipal powers, which, as the Supreme Court there say, is plainly evidenced by the remainder of the section imposing the tax of fifty dollars, by which the legislature took away from the city all power by ordinance or otherwise to regulate passenger railways, 'unless authorized by the express terms of a law referring directly to such corporations.'

Voluntary payments of the amount imposed by the new act were made by the company for sixty or seventy cars, from which the Supreme Court of the State held that it followed as a legal conclusion that the company had accepted the act.

All power to regulate such companies by ordinance or otherwise was taken away from the city during that period, and the Court held that inasmuch as the company had enjoyed the benefit of that prohibition ever since it was enacted, it must be understood that they have accepted the act. Some weight is doubtless to be given to that argument, but it is clear that the right of the State to impose such a tax, rate, or imposition in the future cannot be taken away by mere implication arising from a direction to pay a certain sum, the universal rule being that it requires some plainer negative of the power of the State to levy moneys for public purposes than is found in such a direction. Indications of such an intention might perhaps be found in other statutory provisions, sufficient, when added to such a direction and when taken together as a whole, to amount to a contract to relinquish the power; but when it is sought to prove such an exemption the statutory evidence of the same must be plain and unambiguous, and if not direct it must at least be such as is inconsistent with any other hypothesis, and conclusive that such was the intention of the legislature, Cooley, Const. Lim. (4th ed.) 341.

Much discussion of the second proposition, in view of the conclusive support given to the first, is quite unnecessary. Power to alter, revoke, or annul any charter of incorporation was vested in the legislature by the Constitution more than a quarter of a century before the defendant company was incorporated.

Even when the language of the charter is sufficient to amount to a contract, it was twice admitted by Mr. Justice Story, in Trustees of Dartmouth College v. Woodward, that alterations and amendments may be made in the charter, where the power the that purpose is reserved to the legislature in he act of incorporation. 4 Wheat. 518, 708, 712.

Acts of incorporation granted subsequently to the adoption of the Constitution must be construed as if the provision of the instrument in question was embodied in the charter. Private charters of the kind importing such an exemption are held to be contracts, because they are based for their consideration on the liabilities and duties which the corporators assume by accepting the terms therein specified; and the general rule is that the grant of the franchise on that account can no more be resumed by the legislature, or its benefits be diminished or impaired without the assent of the corporators, than any other grant of property or legal estate, unless the right to do so is reserved in the act of incorporation, or by some immemorial usage or general law of the State in operation at the time the charter was granted. Holyoke Company v. Lyman, 15 Wall. 500, 511.

Charters of private corporations duly accepted, it must be admitted, are in general executed contracts, but the different provisions, unless they are clear, unambiguous, and free of doubt, are subject to construction, and their true intent and meaning must be ascertained by the same rules of interpretation as apply to other legislative grants, the universal rule being that whenever the privileges granted to such a corporation come under revision in the courts, the grant it to be strictly construed against the corporation and in favor of the public, and that nothing passes to the corporation but what is granted in clear and explicit terms. Rice v. Railroad Company, 1 Black, 358; Charles River Bridge v. Warren Bridge, 11 Pet. 420.

Whatever is not unequivocally granted in such charters is taken to have been withheld, as all such charters and acts extending the privileges of corporate bodies are to be taken most strongly against the corporators. Sedgwick, Stats. (2d ed.) 292; Lees v. The Manchester & Ashton Canal Co., 11 East, 644.

Vested rights, it is conceded, cannot be impaired under such a reserved power, but it is clear that the power may be exercised and to almost any extent, to carry into effect the original purposes of the grant and to protect the rights of the public and of the corporators, or to promote the due administration of the affairs of the corporation. Pennsylvania College Cases, 13 Wall. 190, 218.

Tested by these considerations, it is clear, even if it be admitted that the language of the charter is sufficient to import a contract, that the power of the legislature under the Constitution is amply sufficient to justify that department of the State to pass the act raising the license for each car from thirty to fifty dollars.

Judgment affirmed.


text: Talk:Railway Company v. Philadelphia/Opinion of the Court


text:
Lovell v. Davis

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

This action was brought against Lovell & Bailey on a charter-party entered into by them March 14, 1871, for a voyage of the American ship 'Adorna,' 'now lying in the harbor of New Orleans,' from the port of New Orleans to Liverpool, between Havre and Hamburg, both inclusive, or Cronstadt. It was agreed between the parties that 'this charter shall commence when the vessel is ready to receive cargo at the place of loading, and notice thereof is given to the party of the second part or their agent, and to end on a true delivery of cargo at the port of discharge.'

The defence was that by reason of the plaintiff's delay in presenting his vessel at New Orleans for receiving the cargo, the defendants had rescinded the contract, and were justified in doing so. A verdict and judgment were rendered for the plaintiff, the master of the chartered vessel. The defendants sued out this writ of error.

The remaining facts, and the instructions to the jury, are set forth in the opinion of the court.

Mr. Philip Phillips and Mr. W. Hallett Phillips for the plaintiffs in error.

No counsel app ared for the defendant in error.

MR. JUSTICE MILLER, after stating the facts, delivered the opinion of the court.

title: Lovell v. Davis


text: Talk:Lovell v. Davis

title: Talk:Lovell v. Davis


text:
Lovell v. Davis/Opinion of the Court

The charter-party contains a recital that at the date of its execution the vessel was lying in the harbor of New Orleans, while the bill of exceptions shows that she was then at sea. The court charged the jury that if at the time the defendants signed the charter-party they knew that the ship was at sea, the words 'now lying in the harbor of New Orleans' should be regarded as of no significance.

That language in the charter is not a warranty or contract, but a representation; and if the charterers knew certainly that the vessel was not there, of course they were not deceived or misled by the recital, which was probably part of a printed form that attracted no attention. The evidence on the subject of this knowledge is not in the record, and it is, therefore, to be presumed in favor of the action of the court that it was full and complete. There was no error in this instruction.

The court also charged the jury that as the charter-party fixed no definite time for the vessel to be at New Orleans ready to receive the cargo, the master was bound to use reasonable diligence in bringing her to the port, and was bound to use no more. If he did, the defendants were bound by the contract. If he did not use such diligence, they were not. To this charge also defendants excepted.

To the charge in the abstract there could be no just objection.

But plaintiffs in error argue, in effect, that it was not warranted by the testimony.

The evidence tended to show that the master was compelled to cross the bar at the mouth of the Mississippi and to sail one-fourth of the way up the river to the city without the aid of a steam-tug (which was the usual mode of carrying such vessels up to New Orleans), because no such tug was in sight, and that then a tug which offered itself at the request of the defendants was refused because of the exorbitant charge asked for the remaining part of the voyage. The bill of exceptions does not set out all of the evidence, and what is found there is very meagre, especially on this point.

Under what precise circumstances the master refused thd aid of the tug which offered its services, to what extent its offer was exorbitant, how it came to be sent there by defendants, and then refused to serve without excessive compensation, are all unknown to us, but were probably clear to the jury. The charge by the court that the master was bound to use due and reasonable diligence furnished the general rule of law. If there was anything in reference to his refusal to employ the tug which made a more definite instruction proper, counsel for defence should have asked for it. But none was prayed.

We are not able to see, therefore, any error in the charge of the court.

A question was asked the master as to what he would have done if the tug-boat had offered to take him up the river at the usual rates, to which defendants objected, and the question being permitted they excepted.

The answer is not given, and we cannot tell, therefore, whether it was favorable to plaintiff or defendants. It is settled law, at least in this court, that under such circumstances it is the evidence given which constitutes the error, if there be one, and this must be shown by the answer. Nailor v. Williams, 8 Wall. 107.

We see no error in the record.

Judgment affirmed.

title: Lovell v. Davis/Opinion of the Court


text: Talk:Lovell v. Davis/Opinion of the Court


text: Railroad Company v. United States (101 U.S. 543)


text: Talk:Railroad Company v. United States (101 U.S. 543)


text:
Railroad Company v. United States (101 U.S. 543)/Opinion of the Court

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

This is an action by the United States against the Western Union Railroad Company, a corporation of Wisconsin, to recover certain internal revenue taxes alleged to have accrued from Aug. 1, 1862, to Dec. 31, 1871. The company filed a general denial of the allegations of the complaint, and in addition thereto set up a counter claim.

The plaintiff, to maintain the issue on its part, introduced statements from the books of the defendant, which were admitted to be true, from which it appeared that the gross amount of all receipts of the company for the transportation of passengers between Aug. 1, 1862, and July 1, 1864, was $190,863.68; that its entire gross receipts from and after June 30, 1864, until Aug. 1, 1866, were $1,427,685.36; that its gross receipts for fares and carrying the mails, from Aug. 1, 1866, until Jan. 1, 1870, were $605,770.09, and that of the said last amount $61,676.01 were for carrying the mails, and $544,094.08 for fares.

It further appeared from the books of the company, that there were no net earnings subject to tax in this suit. There were entries crediting the agent of its bondholders with interest on bonds of the Northern Illinois Railroad, from July 1 to Dec. 31, 1864, the sum of $38,876.00, and from Jan. 1 to Dec. 31, 1865, a like credit to him for interest on said bonds, $33,648.54; and in the year 1866 a like credit of $24,372.25; upon which the plaintiff claimed that it was entitled to a tax of five per cent. It further appeared from said books that interest on the bonded debt to the amount of $61,495.00 fell due Aug. 1, 1870, and was paid by the company on or after that date; that interest to the amount of $53,767.65 on the bonded debt became payable Feb. 1, 1870, and was paid on or after that date; and that $52,929.37 became due and payable on the bonds Aug. 1, 1871, and was paid on or after that date by the company.

The plaintiff, to further maintain the issue on its part, offered to show by said books that, Feb. 1, 1872, the further sum of $52,423.71 became due and payable on the said bonds, and was paid on or after said date, to which the defendant objected on the ground that said evidence was incompetent and immaterial. The court overruled the objection and the defendant excepted. The plaintiff then showed that the sum of $52,423.71 so became due and payable Feb. 1, 1872, and was paid on or after that date, and claimed and insisted that the plaintiff was entitled to a tax of two and a half per centum on five-sixths of said amount.

The plaintiff then rested, and the defendant called as a witness one Ranney, who testified that he was secretary and treasurer of the company and had charge of its books and papers, and he as their bookkeeper had charge of the books of said company from Feb. 22, 1866; that he had examined the company's books, papers, and files, and found therein no reference to pay contract for carrying the mails; that so far as he could ascertain from his examination no such contract was ever made, and that he had no knowledge thereof.

He further testified that that portion of the road between Freeport and Savannah was known and called as the Northern Illinois Railroad, and that the bonds mentioned as Northern Illinois Railroad bonds were issued on that road; that said road was a part of the road operated by the Racine and Mississippi Railroad, and that it was consolidated with the Western Union Railroad in January, 1866, and that all of the earnings of said road for the whole time mentioned in the declaration are included in the books of the company; and that on the consolidation of the said company with the Western Union Railroad Company the latter company succeeded to all its rights, privileges, franchises, and liabilities. That the entries in the books of interest paid on bonds of Northern Illinois Railroad, to wit, $38,876, $33,648.54, and $24,372.25, were made to show the relative rights of the bondholders of the different portions of the entire road, and that in fact no interest was ever paid upon such bonds, except the sum of $2,360.67, and that said accounts still remain open and unsettled upon the books, and that there never were any net earnings of said company to pay interest on said bonds, and that no such interest was ever paid; but at the time of the change of management, July 1, 1869, he understood that the said bonds were arranged or settled, but in what way he was unadvised.

The defendant then introduced in evidence vouchers for taxes paid by it, amounting to $58,832.23, and they show the payments made from month to month to the collector of internal revenue for the district in which the defendant's office was located, including taxes on account of receipts for transportation of mails.

The defendant also offered and read in evidence in addition thereto a voucher in the words and figures following, to wit:--

'(Official.)

'TREASURY DEPARTMENT,

'OFFICE OF INTERNAL REVENUE,

'$3,866.66.]

WASHINGTON, NOV. 7, 1865.

'Rec'd from Northern Illinois Railroad Company, by the letter of first instant, 3,866.66 dollars in certificate of deposit 689, issued by First National Bank, Milwaukee, on account of internal revenue tax on interest on bonds.

'C. H. PARSONS,

'Cashier Internal Revenue.

'Treasurer Northern Illinois Railroad Company, Racine, Wis.'

'THE FIRST NATIONAL BANK OF MILWAUKEE,

'MILWAUKEE, WIS.

'$3,866,66.]

MILWAUKEE, NOV. 1, 1865.

'I certify that The Northern Illinois Railroad Co. has this day deposited to the credit of the Treasurer of the United States thirty-eight hundred sixty-six 66/100 dollars, on account of internal revenue for taxes on coupons, for which I have signed triplicate receipts.

'No. 689.

'H. H. CAMP, Cash'r.

(Across the face:) 'Triplicate.

'This will be retained by the depositor for his own use and security.

'1865, November 1st, Government tax.

'To cash, $3,866.66.

'Amount paid this day by dr'ft on N. Y. to T. J. Emerson, coll., for tax on coupons rem'ning due Oct. 1, '63, to Aug. 1, '65.-W. V. B.

'Aug. 1, 1865. Tax $ 666

Oct. 1, 1873. Tax    600 00'The defendant then asked that it should be credited in this suit as against the claims proven by the plaintiff the said amount of $3,866.66 as mentioned in said voucher, but the court being of opinion that no interest was, in fact, ever paid on said bonds of the Northern Illinois Railroad Company, no tax was ever due or payable thereon, but inasmuch as said $3,866.66 had been paid on account of such tax, the defendant was not entitled to have credit allowed therefor in this suit. To which ruling the defendant excepted.

The defendant further requested the court to rule and decide that the plaintiff was not entitled to a tax of two and a half per cent upon the said $61,676.61 received by the company for transportation of the mails from July 1, 1866, to Jan. 1, 1870, but the court refused to do so, and decided that, although there was no evidence of a contract bearing date prior to Aug. 1, 1866, and no proof of an express contract, yet as the mails were carried and compensation received therefor the law would imply a contract, and therefore that the plaintiff was entitled to said tax on that amount; to which ruling and decision the defendant excepted.

The defendant further requested the court to decide that the plaintiff was not entitled to a tax of five per cent upon the amount of $61,495.00, the amount of interest paid on the bonds of the company on or after the first day of August, 1870, but that a tax of only two and a half per cent was due thereon; but the court refused so to decide, but on the contrary decided that the plaintiff was entitled to a tax thereon of five per cent; to which ruling and decision the defendant also excepted.

The defendant further requested the court to decide that the plaintiff was not entitled to a tax of two and a half per cent on five-sixths of $52,423.71, the amount of interest paid on the bonds of the company on and after Feb. 1, 1872; but the court then and there refused so to decide, but decided that the plaintiff was entitled to said tax of two and a half per cent; to which ruling and decision the defendant excepted.

The case having been tried without the intervention of a jury, the court below rendered judgment in favor of the United States for $5,933.70. The company thereupon sued out this writ, and ass gns for error that the court erred,--1. In refusing to allow the sum of $3,866.66, paid Nov. 7, 1865, by the Northern Illinois Railroad Company, to be credited to the account of the defendant.

2. In deciding that a tax of two and a half per cent was due the plaintiff on the sum of $61,676.61, received by the defendant for transportation of the mails from July 1, 1866, to Jan. 1, 1870.

3. In ruling that a tax of five per cent was due plaintiff upon the amount of $61,495 of interest paid on the bonds of the company on or after Aug. 1, 1870.

4. In admitting evidence to show that the sum of $52,423.71 became due and payable for interest on the bonds of the defendant, Feb. 1, 1872, and that the same was paid.

5. In deciding that a tax of two and a half per cent was due the plaintiff on five-sixths of the amount of interest paid on its bonded debt Feb. 1, 1872.

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

The Solicitor-General, contra.

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

The different assignments of error in this case will be considered in their order.

1. As to the claim for a credit of $3,866.66 on account of taxes erroneously assessed and collected, Nov. 7, 1865.

Sect. 951 of the Revised Statutes provides that 'in suits brought by the United States against individuals, no claim for a credit shall be admitted upon trial, except such as appear to have been presented to the accounting officers of the treasury, for their examination, and to have been by them disallowed in whole or in part,' save under certain circumstances not material to this case. Sect. 3220 of the Revised Statutes authorizes the Commissioner of Internal Revenue, 'on appeal to him made, to remit, refund, and pay back all taxes. . . that appear to be unjustly assessed, or excessive in amount, or in any manner wrongfully collected.'

It does not appear that this claim was ever presented to the accounting officers of the treasury for allowance, on appeal or otherwise, or that it has ever been disallowed. For this reason, notwithstanding its apparent equity, the credit was properly refused in this suit. Halliburton v. United States, 13 Wall. 63; United States v. Giles, 9 Cranch, 212.

2. As to the tax of two and a half per cent on the amount received for the transportation of mails between July 1, 1866, and Jan. 1, 1870.

By the act of July 13, 1866 (14 Stat. 135, sect. 103 of the act of 1864 as amended), 'every. . . corporation owning. . . any railroad. . . engaged or employed in. . . transporting the mails of the United States upon contracts made prior to Aug. 1, 1866, shall be subject to and pay a tax of two and one half per cent of the gross receipts' from such service.

No express contract for carrying the mails was proven, but since the service for which the compensation was paid began before August 1, and was continued without interruption for the whole term in question, the court below implied a contract prior to that time. This, we think, was right. Had payment been refused and suit brought against the United States in the Court of Claims, to recover for the service rendered, there could be no doubt about the right to recover, notwithstanding the jurisdiction of that court is confined to suits on contracts (Salomon v. United States, 19 Wall. 17); and this not alone because the service had been rendered, but because it is to be presumed that when the company commenced the transportation it had been agreed that payment should be made for what was done.

3. As to whether taxes are payable on interest falling due Aug. 1, 1870, at the rate of five per cent or two and a half per cent.

The ruling of the court below on this point was in accordance with our decisions in Stockdale v. Insurance Companies, (20 Wall. 323), and Railroad Company v. Rose, 95 U.S. 78.

4. As to the tax on interest due and payable Feb. 1, 1872.

The act of 1870 (16 Stat. 260, sect. 15) provided 'that there hall be levied and collected for and during the year 1871 a tax of two and one half per centum on the amount of all interest or coupons paid on bonds or other evidences of debt issued and payable in one or more years after date, by any' railroad company, 'and on the amount of all dividends of earnings, income, or gains hereafter declared,' 'whenever and wherever the same shall be payable,. . . and on all undivided profits. . . which have accrued and been earned and added to any surplus, contingent, or other fund.'

The interest in this case was neither payable nor paid in 1871, and as the tax is not leviable or collectible until the interest is payable, we see no way in which the company can be charged on this account. The tax is not on the interest as it accrues, but when it is paid. No provision is made for a pro rata distribution of the burden over the time the interest is accumulating, and as the tax can only be levied for and during the year 1871, we think, if the interest is in good faith not payable in that year, the tax is not demandable, either in whole or in part.

There is no question here of earnings, for the finding is not as to what was earned by the company during the year 1871, but as to what was paid in 1872 on account of interest then for the first time falling due. We are aware that at the present term we held, in Railroad Company v. Collector (100 U.S. 595), that the tax levied under the act now in question was essentially a tax on the business of the corporation, and that in order to secure its payment it was laid on the subjects to which the earnings were to be applied in the usual course of business, but as this tax could not be levied until 1872, and there is no finding of any earnings in 1871, we see nothing to be taxed under that rule. In Barnes v. Railroad Companies (17 Wall. 309) it appeared expressly that the dividends were declared out of the earnings of 1869.

It follows that to the extent of $1,092.16, and the interest thereon, the judgment below was wrong, but in all other respects right. Consequently the judgment below will be reversed, and the cause remanded with instructions to enter a judgment against the railroad company for $5,933.

And interest thereon at six per cent from March 1, 1872.

So ordered.


text: Talk:Railroad Company v. United States (101 U.S. 543)/Opinion of the Court


text:
Nougu v. Clapp

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

The facts are stated in the opinion of the court.

Mr. Bentinck Egan for the appellant.

Mr. Philip Phillips, contra.

MR. JUSTICE MILLER delivered the opinion of the court.

title: Nougu v. Clapp


text: Talk:Nougu v. Clapp

title: Talk:Nougu v. Clapp


text:
Nougu v. Clapp/Opinion of the Court

This is a bill in chancery, which was dismissed by the decree of the court below for want of jurisdiction.

The bill, though very informal, sets out certain proceedings in the State court of Louisiana for the parish of St. John the Baptist, under which real property on which the complainant held a mortgage for a large amount had been sold, which, if permitted to stand, cut off the lien of his mortgage. These proceedings were based ostensibly on notes and mortgages given by himself to one Emory Clapp for the purchase-money of the property. The bill alleges, however, that Schexueyder Brothers, to whom plaintiff had sold the property, had assumed the payment of those notes as part of the consideration of the sale to them, and had given him a mortgage for over $14,000 in addition; that after said Schexueyder Brothers had in fact paid off said mortgage to Clapp, they entered into a fraudulent conspiracy with him to have the property sold under that mortgage for the purpose of cheating the complainant out of the $14,000 due him by defeating his lien on the land; that a suit was commenced in a parish of which the complainant was not a resident, of which he had no sufficient notice, though he was by the petition made a party; that in this proceeding a summary order of sale was had; that before the sale the plaintiff applied to the judge and obtained an order for injunction, which the clerk refused to issue, and the property was sold to said Clapp for the sum of $10,000. He charges that the refusal of the clerk to issue the writ of injunction was a part of the fraudulent conspiracy to cheat him out of his lien on the land, and that the whole proceeding is void. He also alleges that his loss or damage by this proceeding is $20,000, for which he prays a judgment or decree.

To this bill Clapp filed what is called an exception to the jurisdiction, a demurrer, and a plea. Both the exception and the demurrer are founded on the proposition that the bill being the equivalent of a proceeding in the State courts to procure a declaration of nullity of a judgment, can only be filed in the court which rendered the judgment. The plea sets up a proceeding in the State court on a monition whereby, under the laws of Louisiana, after a judicial sale, certain proceedings in the nature of notice to all the world are had, and a judgment of confirmation of the sale is rendered.

The final decree of the court is thus set out in the record:

'This cause came on to be heard on the plea in bar, exception, and demurrer to complainant's bill, and was argued by counsel.

'On consideration whereof it is ordered, adjudged, and decreed that the exception to jurisdiction of the court and demurrer be sustained, and complainant's bill dismissed with costs.

'Decree rendered March 20, 1877.

'Decree signed March 24, 1877.'

It will thus be seen that the plea was not considered in the case, or if considered, the decree was not founded on it. Indeed, this could not be so without error. The proper mode of treating a plea is to set it down for hearing as to its sufficiency to meet the bill, or so much of the bill as it purports to cover. If found to be sufficient, the complainant has a right to reply to it by denying its allegations, or otherwise putting it in issue. See Equity Rules, 32, 33, and 34, prescribed by this court. So also by these rules the charge of a fraudulent combination to cheat the complainant required that the plea should have been accompanied by an answer denying the fraud under oath. The plea may, therefore, be considered as out of the case.

The demurrer may be held to include the exception as one of its grounds, and thus the case stands on bill and demurrer, and the sole question is whether, though there may be things in the bill which, if specially demurred to, would be bad, it is a bill in which a court of equity could found relief.

As regards the claim to recover $20,000 damages we see no reason for going into equity. If such a recovery can be had at all it can be had as well at law. It is a proper case for a jury to determine whether there has been a combination to cheat and defraud plaintiff, and the amount he should recover for such fraud. It would seem, also, that to such a suit the Schexueyder Brothers, for whose benefit the fraud was committed, and who were its principal instigators, and whose actions were essential to its success, should be made parties. The charge is that they had assumed to pay the mortgage to Clapp, and had paid it, and then conspired with him to have the property, which was in their possession, and to which they had title, sold to defraud complainant out of his $14,000. However it may be at law, in chancery they are necessary parties to such a suit.

But the main purpose of this bill, perhaps its only real object, is to have the proceedings in the State court declared void.

That court had jurisdiction of the parties and of the subjectmatter of the controversy. Complainant in this bill entered his appearance in that suit at a proper stage of it, to enable him to contest the right of Clapp to have the property sold. The debt for which it was to be sold was complainant's debt to Clapp.

The usual mode in the courts of Louisiana of contesting the right to foreclose a mortgage is by obtaining an injunction, after which the rights of the parties are judi ially determined by the court. Complainant appeared and obtained an order for such an injunction.

If this order was not obeyed it was for that court, not this, to give remedy. If the court below refused to do it, there was an appeal to the Supreme Court of the State. After the sale he could, by a motion to the court, have had it set aside; and that was the proper place for such a remedy.

The laws of Louisiana also provide a remedy by a special proceeding, to have a declaration of nullity of judgment in such cases as this in the court where the decree is entered. There is no allegation that the plaintiff sought any of these remedies.

We think that for this court, after all this has been done, to undertake to decree that what that court did is void, to sit in review on its judgment, and reverse its decree and set aside its sale, in a case where its jurisdiction is undoubted, is unwarranted by the relations which subsist between the two courts. It would be an invasion of the powers belonging to that court, and such a doctrine would, upon the simple allegation of fraud practised in the court, enable a party to retry in a Federal court any case decided against him in a State court.

We are not without precedent in such a case. In Randall v. Howard (2 Black, 585), the owner of lands encumbered by a mortgage made a friendly arrangement with the mortgagee, by which the latter was to foreclose the mortgage and buy them in, ostensibly for his own use, but with the understanding that he was to hold them for the use of the mortgagor as if no sale had been made. Regular proceedings were had in the State courts of Maryland, by which a decree of foreclosure and a sale were had, to all which the mortgagor made no defence. He afterwards filed his bill in chancery in the Circuit Court of the United States for the District of Maryland, charging that by reason of this agreement the mortgagee bought in the property for much less than its real value; that he now refuses to acknowledge any interest of complainant in the property, and is trying to sell it, whereby it may come into the hands of innocent purchasers for value; that all this is in violation of his agreement and a fraud upon complainant's rights, and in furtherance of this fraudulent and oppressive course he has ejected complainant from the premises by a process of the State court. He prays for an injunction to restrain the defendant from selling the property, for a sale of so much of the land as is necessary to pay the mortgage debt, and for a conveyance to complainant of the remainder, and for general relief. The bill was dismissed on demurrer.

The question whether that court had jurisdiction is answered in this language: 'The bill in this case brings in review various matters passed on in the progress of the suit by the Cecil County Circuit Court, a court of general jurisdiction, having complete control of the parties and of the subject-matter of the controversy.

'It seeks to annul a sale of lands made by virtue of a decree of the Cecil court, sitting as a court of equity, in a cause depending between the same parties; to effect the distribution of the proceeds of the sale, to enjoin the defendant from making any disposition of the lands purchased by him; to disturb his possession, to invalidate his title, and to have the property resold.

'This is a direct and positive interference with the rightful authority of the State court. If there was error in the proceedings of the court a review can be had in the appellate tribunals of the State. If, as is charged, the decree is sought to be perverted, and made the medium of consummating a wrong, then the court on petition or supplemental bill can prevent it.'

These views, we think, dispose of the present case, and require an affirmance of the decree of the court below. It is

So ordered.

title: Nougu v. Clapp/Opinion of the Court


text: Talk:Nougu v. Clapp/Opinion of the Court


text:
Durant v. Essex Company (101 U.S. 555)

APPEAL from the Circuit Court of the United States for the District of Mass chusetts.

The facts are stated in the opinion of the court.

Mr. E. F. Hodges for the appellant.

The court declined to hear counsel for the appellee.

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

title: Durant v. Essex Company (101 U.S. 555)


text: Talk:Durant v. Essex Company (101 U.S. 555)


text:
Durant v. Essex Company (101 U.S. 555)/Opinion of the Court

This case shows that on or about the 11th of October, 1847, the present appellant filed his bill in equity in the court below against certain defendants for certain relief. After pleadings, proofs, and hearing, that court dismissed his bill absolutely. Appeal was thereupon taken in due form to this court. After one hearing, we ordered a reargument. Upon the reargument, the decree below was affirmed 'by a divided court.' When our mandate went down, the present appellant, in May, 1858, asked the Circuit court that he might have leave to discontinue his suit, or if that could not be done, that his 'bill might be dismissed without prejudice.' All these several requests were refused, and the court simply ordered execution on the decree which had been affirmed.

Afterwards, the appellant filed a new bill in the Circuit Court to obtain the same relief as in the old suit, but setting up what he called new matter. To this bill the former decree was pleaded in bar, and the plea sustained by the Circuit Court, because the first bill had been dismissed absolutely. From that decree an appeal was taken to this court, and at the December Term, 1868, in Durant v. Essex Company (7 Wall. 107), we decided that the decree, absolute in its terms, dismissing the bill on the merits, was a final determination of the controversy, and constituted a bar to any further litigation of the same subject between the same parties.

Thereupon on the 29th of June, 1874, the appellant filed a petition in the Circuit Court setting up these facts and his newly discovered matter, and asked that the decree affirmed here in 1858, might 'be revoked or so modified that his bill of complaint be dismissed without prejudice to his further proceeding at law or equity.' This petition was denied, and to reverse that order the present appeal was taken.

Waiving all questions as to the right of appeal from such an order, we are clearly of the opinion that the Circuit Court could do no otherwise than it did. On a mandate from this court affirming a decree, the Circuit Court can only record our order and proceed with the execution of its own decree as affirmed. It has no power to rescind or modify what we have established. Our judgment by a divided court is just as much our judgment for all the purposes of the case in hand as if it had been unanimous. The result of the appeal to us was an affirmance of what had been done below. After the appeal had been taken, the power of the court below over its own decree was gone. All it could do after that was to obey our mandate when it was sent down. We affirmed its decree and ordered execution. We might have ordered a modification so as to declare that the dismissal should be without prejudice. We did not do so. The Circuit Court had no power after that to do what we might have done and did not do.

Decree affirmed.


text: Talk:Durant v. Essex Company (101 U.S. 555)/Opinion of the Court


text:
Shaw v. Railroad Company

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

This is an action of replevin brought by the Merchants' National Bank of St. Louis, Missouri, against Shaw & Esrey, of Philadelphia, Pennsylvania, to recover possession of certain cotton, marked 'W D I.' One hundred and forty-one bales thereof having been taken possession of by the marshal were returned to the defendants upon their entering into the proper bond. On Nov. 11, 1874, Norvell & Co., of St. Louis, sold to the bank their draft for $11,947.43 on M. Kuhn & Brother, of Philadelphia, and, as collateral security for the payment thereof indorsed in blank and delivered to the bank an original bill of lading for one hundred and seventy bales of cotton that day shipped to the last-named city. The duplicate b ll of lading was on the same day forwarded to Kuhn & Brother by Norvell & Co. The Merchants' Bank forwarded the draft, with the bill of lading thereto attached, to the Bank of North America. On November 14, the last-named bank sent the draft-the original bill of lading still being attached thereto-to Kuhn & Brother by its messenger for acceptance. The messenger presented the draft and bill to one of the members of that firm, who accepted the former, but, without being detected, substituted the duplicate for the original bill of lading.

On the day upon which this transaction occurred, Kuhn & Brother indorsed the original bill of lading to Miller & Brother, and received thereon an advance of $8,500. Within a few days afterwards, the cotton, or rather that portion of it which is in controversy, was, through the agency of a broker, sold by sample with the approval of Kuhn & Brother to the defendants, who were manufacturers at Chester, Pennsylvania. The bill of lading, having been deposited on the same day with the North Pennsylvania Railroad Company, at whose depot the cotton was expected to arrive, it was on its arrival delivered to the defendants.

The fact that the Bank of North America held the duplicate instead of the original bill of lading was discovered for the first time on the 9th of December, by the president of the plaintiff, who had gone to Philadelphia in consequence of the failure of Kuhn & Brother and the protest of the draft.

The defendants below contended that the bill of lading was negotiable in the ordinary sense of that word; that Miller & Brother had purchased it for value in the usual course of business, and that they thereby had acquired a valid title to the cotton, which was not impaired by proof that Kuhn & Brother had fraudulently got possession of the bill; but the court left it to the jury to determine,--

1st, Whether there was any negligence of the plaintiff or its agents in parting with possession of the bill of lading.

2d, Whether Miller & Brother knew any fact or facts from which they had reason to believe that the bill of lading was held to secure payment of an outstanding draft.

The jury having found the first question in the negative and the second in the affirmative, further found 'the value of the goods eloigned' to be $7,015.97, assessed the plaintiff's damages at that sum with costs, for which amount the court entered a judgment. Shaw & Esrey thereupon sued out this writ of error.

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

Mr. James E. Gowen for the plaintiffs in error.

The original bill of lading was a negotiable instrument. By its indorsement, while the cotton was in transit to Miller & Brother for a valuable consideration, and without notice of any defect in the title of Kuhn & Brother, they acquired a valid title to the goods.

When the Merchants' National Bank of St. Louis took the bill of lading, Missouri was the place in which the contract was made, the place in which the property was actually situated,-and it was the domicile of all the contracting parties. There can be no doubt, therefore, that the legal effect of the bill was, for the time being, at least determinable by the law of that State. Scudder v. Union National Bank, 91 U.S. 406; Peninsular and Oriental Steamship Co. v. Shand, 3 Moo. P. C. C. N. S. 272; McDaniels v. Chicago & Northwestern Railway Co., 24 Iowa, 412; First National Bank of Toledo v. Shaw, 61 N. Y. 283; Henry v. Philadelphia Warehouse Co., 81 Pa. St. 76; Ory v. Winter, 4 Mart. N. S. (La.) 277; Slacum v. Pomery, 6 Cranch, 221; De la Chaumette v. Bank of England, 2 Barn. & Adol. 385; Trimbey v. Vignier, 1 Bing. N. C. 151; Lebee v. Tucker, Law Rep. 3 Q. B. 77; Robertson v. Burdekin, 1 Ross, L. C. 559; Story, Confl. of Laws, sect. 263; Wharton, Confl. of Laws, sects. 452, 453, 454, 471.

The bill of lading in the hands of Miller & Brother, even if its effect were determinable by he law of Pennsylvania, would be a negotiable instrument. The statute of that State expressly enacts that warehouse receipts or bills of lading shall be negotiable. It is a familiar principle that technical words in a statute are to be taken in a technical sense, unless it appears that they were intended to be applied differently from their ordinary or legal acceptation. United States v. Jones, 3 Wash. 209; United States v. Wilson & Peters, Baldw. 78; McCool v. Smith, 1 Black, 459.

"Negotiable' and 'negotiability' signify that an instrument is capable of being transferred so as to be free from any questions between original parties, the quality of being vendible by commercial indorsement.' Abbott's Law Dictionary.

It is necessary to inquire, then, whether there is any thing in the act which denotes an intent to use the word 'negotiable' in its ordinary legal sense. An examination shows that the legislature had in view the ordinary meaning of the word. The act provides that bills of lading and warehouse receipts may be transferred by 'indorsement and delivery,' thus using a term applicable solely to the transfer of negotiable instruments. The proviso to the first section enacts that all warehouse receipts or bills of lading having the words 'not negotiable' plainly written or stamped on the face thereof shall be exempt from the provisions of the act. The proviso would be unmeaning, if the object of the act was not to make bills of lading actually negotiable instead of merely assignable, since it must be presumed that 'negotiable' is used in the same sense in the proviso as in the body of the section.

Moreover, it should not be assumed that the object in passing the act was to impart to bills of lading the quality of assignability when by the common law they already had that quality to the fullest extent.

In a number of the States, statutes were passed at an early period for the purpose of making promissory notes negotiable instruments. Many of them resembled the Missouri statute in the present case, in superadding the words 'like bills of exchange.' Thus the statute of New York provided that 'all notes in writing. . . shall be negotiable in like manner as inland bills of exchange.' But in many of the States all such words were omitted. Thus in Virginia the statute enacted that 'every promissory note or check for money payable in this State at a particular bank. . . and every inland bill of exchange payable in this State shall be deemed negotiable.' Code of Virginia (edition of 1860), p. 629. Yet certainly no one would contend that the omission of the words 'like bills of exchange' in some of these statutes rendered promissory notes negotiable in some other sense than bills of exchange were negotiable.

The fact that Miller & Brother knew any fact or facts from which they had reason to believe that the bill of lading was held to secure payment of an outstanding draft does not invalidate their title,-mala fides on their part must be shown. Goodman v. Simonds, 20 How. 343; Murray v. Lardner, 2 Wall. 110. Phelan v. Moss (67 Pa. St. 59) holds that a bona fide holder for value of a negotiable note without notice can recover upon it, notwithstanding he took it under circumstances which ought to have excited the suspicions of a prudent man, and that, in order to destroy his title, his taking the note mala fide must be shown.

The court erred in entering a judgment upon the verdict which found, not the value of the goods which had been replevied, but the value of those which were eloigned. This was a palpable error, but at the same time it is not pretended that it was any thing but the consequence of an unnoticed mistake in entering the verdict. The difficulty, however, is that the record, as it now stands, shows a judgment relating not to the property in actual controversy, but to that with which the defendants had nothing to do. They therefore have a right to complain of the insufficiency of the record, in not showing their discharge from responsibility for the cotton which really formed the subject-matter of this suit.

Mr. Robert N. Willson and Mr. George Junkin, contra.

MR. JUSTICE STRONG delivered the opinion of the court.

title: Shaw v. Railroad Company


text: Talk:Shaw v. Railroad Company

title: Talk:Shaw v. Railroad Company


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

The defendants below, now plaintiffs in error, bought the cotton from Miller & Brother by sample, through a cotton broker. No bill of lading or other written evidence of title in their vendors was exhibited to them. Hence, they can have no other or better title than their vendors had.

The inquiry, therefore, is, what title had Miller & Brother as against the bank, which confessedly was the owner, and which is still the owner, unless it has lost its ownership by the fraudulent act of Kuhn & Brother. The cotton was represented by the bill of lading given to Norvell & Co., at St. Louis, and by them indorsed to the bank, to secure the payment of an accompanying discounted time-draft. That indorsement vested in the bank the title to the cotton, as well as to the contract. While it there continued, and during the transit of the cotton from St. Louis to Philadelphia, the endorsed bill of lading was stolen by one of the firm of Kuhn & Brother, and by them indorsed over to Miller & Brother, for an advance of $8,500. The jury has found, however, that there was no negligence of the bank, or of its agents, in parting with possession of the bill of lading, and that Miller & Brother knew facts from which they had reason to believe it was held to secure the payment of an outstanding draft; in other words, that Kuhn & Brother were not the lawful owners of it, and had no right to dispose of it.

It is therefore to be determined whether Miller & Brother, by taking the bill of lading from Kuhn & Brother under these circumstances, acquired thereby a good title to the cotton as against the bank.

In considering this question, it does not appear to us necessary to inquire whether the effect of the bill of lading in the hands of Miller & Brother is to be determined by the law of Missouri, where the bill was given, or by the law of Pennsylvania, where the cotton was delivered. The statutes of both States enact that bills of lading shall be negotiable by indorsement and delivery. The statute of Pennsylvania declares simply, they 'shall be negotiable and may be transferred by indorsement and delivery;' while that of Missouri enacts that 'they shall be negotiable by written indorsement thereon and delivery, in the same manner as bills of exchange and promissory notes.' There is no material difference between these provisions. Both statutes prescribe the manner of negotiation; i.e., by indorsement and delivery. Neither undertakes to define the effect of such a transfer.

We must, therefore, look outside of the statutes to learn what they mean by declaring such instruments negotiable. What is negotiability? It is a technical term derived from the usage of merchants and bankers, in transferring, primarily, bills of exchange and, afterwards, promissory notes. At common law no contract was assignable, so as to give to an assignee a right to enforce it by suit in his own name. To this rule bills of exchange and promissory notes, payable to order or bearer, have been admitted exceptions, made such by the adoption of the law merchant. They may be transferred by indorsement and delivery, and such a transfer is called negotiation. It is a mercantile business transaction, and the capability of being thus transferred, so as to give to the indorsee a right to sue on the contract in his own name, is what constitutes negotiability. The term 'negotiable' expresses, at least primarily, this mode and effect of a transfer.

In regard to bills and notes, certain other consequences generally, though not always, follow. Such as a liability of the indorser, if demand be duly made of the acceptor or maker, and seasonable notice of his default be given. So if the indorsement be made for value to a bona fide holder, before the maturity of the bill or note, in due course of business, the maker or acceptor cannot set up against the indorsee any defence which might have been set up against the payee, had the bill or note remained in his hands.

So, also, if a note or bill of exchange be indorsed in blank, if payable to order, or if it be payable to bearer, and therefore negotiable by delivery alone, and then be lost or stolen, a bona fide purchaser for value paid acquires title to it, even as against the true owner. This is an exception from the ordinary rule respecting personal property. But none of these consequences are necessary attendants or constituents of negotiability, or negotiation. That may exist without them. A bill or note past due is negotiable, if it be payable to order, or bearer, but its indorsement or delivery does not cut off the defences of the maker or acceptor against it, nor create such a contract as results from an indorsement before maturity, and it does not give to the purchaser of a lost or stolen bill the rights of the real owner.

It does not necessarily follow, therefore, that because a statute has made bills of lading negotiable by indorsement and delivery, all these consequences of an indorsement and delivery of bills and notes before maturity ensue or are intended to result from such negotiation.

Bills of exchange and promissory notes are exceptional in their character. They are representatives of money, circulating in the commercial world as evidence of money, 'of which any person in lawful possession may avail himself to pay debts or make purchases or make remittances of money from one country to another, or to remote places in the same country. Hence, as said by Story, J., it has become a general rule of the commercial world to hold bills of exchange, as in some sort, sacred instrument in favor of bona fide holders for a valuable consideration without notice.' Without such a holding they could not perform their peculiar functions. It is for this reason it is held that if a bill or note, endorsed in blank or payable to bearer, be lost or stolen, and be purchased from the finder or thief, without any knowledge of want of ownership in the vendor, the bona fide purchaser may hold it against the true owner. He may hold it though he took it negligently, and when there were suspicious circumstances attending the transfer. Nothing short of actual or constructive notice that the instrument is not the property of the person who offers to sell it; that is, nothing short of mala fides will defeat his right. The rule is the same as that which protects the bona fide indorser of a bill or note purchased for value from the true owner. The purchaser is not bound to look beyond the instrument. Goodman v. Harvey, 4 Ad. & E. 870; Goodman v. Simonds, 20 How. 343; Murray v. Lardner, 2 Wall. 110; Matthews v. Poythress, 4 Ga. 287. The rule was first applied to the case of a lost bank-note (Miller v. Race, 1 Burr. 452), and put upon the ground that the interests of trade, the usual course of business, and the fact that bank-notes pass from hand to hand as coin, require it. It was subsequently held applicable to merchants' drafts, and in Peacock v. Rhodes (2 Doug. 633), to bills and notes, as coming within the same reason.

The reason can have no application to the case of a lost or stolen bill of lading. The function of that instrument is entirely different from that of a bill or note. It is not a representative of money, used for transmission of money, or for the payment of debts or for purchases. It does not pass from hand to hand as bank-notes or coin. It is a contract for the performance of a certain duty. True, it is a symbol of ownership of the goods covered by it,-a representative of those goods. But if the goods themselves be lost or stolen, no sale of them by the finder or thief, though to a bona fide purchaser for value, will divest the ownership of the person who lost them, or from whom they were stolen. Why then should the sale of the symbol or mere repr sentative of the goods have such an effect? It may be that the true owner by his negligence or carelessness may have put it in the power of a finder or thief to occupy ostensibly the position of a true owner, and his carelessness may estop him from asserting his right against a purchaser who has been misled to his hurt by that carelessness. But the present is no such case. It is established by the verdict of the jury that the bank did not lose its possession of the bill of lading negligently. There is no estoppel, therefore, against the bank's right.

Bills of lading are regarded as so much cotton, grain, iron, or other articles of merchandise. The merchandise is very often sold or pledged by the transfer of the bills which cover it. They are, in commerce, a very different thing from bills of exchange and promissory notes, answering a different purpose and performing different functions. It cannot be, therefore, that the statute which made them negotiable by indorsement and delivery, or negotiable in the same manner as bills of exchange and promissory notes are negotiable, intended to change totally their character, put them in all respects on the footing of instruments which are the representatives of money, and charge the negotiation of them with all the consequences which usually attend or follow the negotiation of bills and notes. Some of these consequences would be very strange if not impossible. Such as the liability of indorsers, the duty of demand ad diem, notice of non-delivery by the carrier, &c., or the loss of the owner's property by the fraudulent assignment of a thief. If these were intended, surely the statute would have said something more than merely make them negotiable by indorsement. No statute is to be construed as altering the common law, farther than its words import. It is not to be construed as making any innovation upon the common law which it does not fairly express. Especially is so great an innovation as would be placing bills of lading on the same footing in all respects with bills of exchange not to be inferred from words that can be fully satisfied without it. The law has most carefully protected the ownership of personal property, other than money, against misappropriation by others than the owner, even when it is out of his possession. This protection would be largely withdrawn if the misappropriation of its symbol or representative could avail to defeat the ownership, even when the person who claims under a misappropriation had reason to believe that the person from whom he took the property had no right to it.

We think, therefore, that the rule asserted in Goodman v. Harvey, Goodman v. Simonds, Murray v. Lardner (supra), and in Phelan v. Moss (67 Pa. St. 59), is not applicable to a stolen bill of lading. At least the purchaser of such a bill, with reason to believe that his vendor was not the owner of the bill, or that it was held to secure the payment of an outstanding draft, is not a bona fide purchaser, and he is not entitled to hold the merchandise covered by the bill against its true owner. In the present case there was more than mere negligence on the part of Miller & Brother, more than mere reason for suspicion. There was reason to believe Kuhn & Brother had no right to negotiate the bill. This falls very little, if any, short of knowledge. It may fairly be assumed that one who has reason to believe a fact exists, knows it exists. Certainly, if he be a reasonable being.

This disposes of the principal objections urged against the charge given to the jury. They are not sustained. The other assignments of error are of little importance. We cannot say there was no evidence in the case to justify a submission to the jury of the question whether Miller & Brother knew any fact or facts from which they had reason to believe that the bill of lading was held to secure payment of an outstanding draft. It does not appear that we have before us all the evidence that was given, but if we have, there is enough to warrant a submi sion of that question.

The exceptions to the admission of testimony, and to the cross-examination of Andrew H. Miller, are not of sufficient importance, even if they could be sustained, to justify our reversing the judgment. Nor are we convinced that they exhibit any error.

There was undoubtedly a mistake in entering the verdict. It was a mistake of the clerk in using a superfluous word. The jury found a general verdict for the plaintiff. But they found the value of the goods 'eloigned' to have been $7,015.97. The word 'eloigned' was inadvertently used, and it might have been stricken out. It should have been, and it may be here. The judgment was entered properly. As the verdict was amendable in the court below, we will regard the amendment as made. It would be quite inadmissible to send the case back for another trial because of such a verbal mistake.

Judgment affirmed.


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


text:
National Bank v. Carpenter

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

The facts are stated in the opinion of the court.

Mr. Andrew L. Robinson and Mr. Asa Iglehart for the appellant.

Mr. Charles Denby and Mr. James Shackelford, contra.

MR. JUSTICE SWAYNE delivered the opinion of the court.

title: National Bank v. Carpenter


text: Talk:National Bank v. Carpenter

title: Talk:National Bank v. Carpenter


text:
National Bank v. Carpenter/Opinion of the Court

This suit was brought by the Mercantile National Bank of the City of Hartford against Willard Carpenter, John Love, and DeWitt C. Keller. The chief difference between it and Wood v. Carpenter (supra, p. 135) is that it is in equity, while that was an action at law. The bill sets out the same facts in the same way as the declaration, except that the latter alleges a fraudulent purchase by Keller of a judgment in favor of Wood against Carpenter, while the bill alleges such a purchase of a judgment in favor of the complainant against him and John Love. The defendants severally demurred. The demurrers were sustained, and the complainant asked leave to amend. Leave was refused and the bill dismissed. The complainant thereupon appealed to this court.

Our reasoning in the case at law and the authorities there cited are applicable here. It appears on the face of the bill that the case which it makes is barred by the Statute of Limitations, and that the excuse of concealment of 'the cause of action' by the defendants is not so alleged as to avail the complainant. This defect can be taken advantage of by demurrer. Rhode Island v. Massachusetts, 15 Pet. 233; Maxwell v. Kennedy, 8 How. 210. The objection of laches is also fatally apparent. Brown v. County of Buena Vista, 95 U.S. 157; Duncan v. Lyon, 3 Johns. (N. Y.) Ch. 351. The demurrers of the defendants were, therefore, rightly sustained, and the bill was properly dismissed.

It is insisted that the complainant was entitled of right to amend under the 29th of the rules of equity practice established by this court, and that the learned judge below erred in refusing the leave asked for. That rule has no application and does not affect the case. It applies only where leave is asked before a demurrer is allowed. Formerly, upon the allowance of a demurrer to a whole bill, the bill was out of court, and no subsequent proceeding could be taken in the cause. 1 Daniel, Ch. Pr. 597; 1 Barb. Ch. Pr. 111. The rigor of this principle was subsequently relaxed. It is unnecessary to pursue the subject further, because the practice in such a state of things in the courts of the United States is regulated by the 35th rule of equity practice, which is as follows:--

'If, upon the hearing, any demurrer or plea shall be allowed, the defendant shall be entitled to his costs. But the court may, in its discretion, upon motion of the plaintiff, allow him to amend his bill upon such terms as it shall deem reasonable.'

In this case it does not appear what amendment or amendments the appellant desired to make, nor that the court below in any wise abused the discretion with which it was c othed. Error must be shown affirmatively. It cannot be presumed.

Decree affirmed.


text: Talk:National Bank v. Carpenter/Opinion of the Court


text:
United States v. Dawson (101 U.S. 569)

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

The Attorney-General for the plaintiff in error.

Mr. Joseph H. Bradley, contra.

MR. JUSTICE MILLER delivered the opinion of the court.

title: United States v. Dawson (101 U.S. 569)


text: Talk:United States v. Dawson (101 U.S. 569)