text:
Atchison v. Peterson/Opinion of the Court

By the custom which has obtained among miners in the Pacific States and Territories, where mining for the precious metals is had on the public lands of the United States, the first appropriator of mines, whether in placers, veins, or lodes, or of waters in the streams on such lands for mining purposes, is held to have a better right than others to work the mines or use the waters. The first appropriator who subjects the property to use, or takes the necessary steps for that purpose, is regarded, except as against the government, as the source of title in all controversies relating to the property. As respects the use of water for mining purposes, the doctrines of the common law declaratory of the rights of riparian owners were, at an early day, after the discovery of gold, found to be inapplicable or applicable only in a very limited extent to the necessities of miners, and inadequate to their protection. By the common law the riparian owner on a stream not navigable, takes the land to the centre of the stream, and such owner has the right to the use of the water flowing over the land as an incident to his estate. And as all such owners on the same stream have an equality of right to the use of the water, as it naturally flows, in quality, and without diminution in quantity, except so far as such diminution may be created by a reasonable use of the water for certain domestic, agricultural, or manufacturing purposes, there could not be, according to that law, any such diversion or use of the water by one owner as would work material detriment to any other owner below him. Nor could the water by one owner be so retarded in its flow as to be thrown back to the injury of another owner above him. 'It is wholly immaterial,' says Mr. Justice Story, in Tyler v. Wilkinson, 'whether the party be a proprietor above or below in the course of the river; the right being common to all the proprietors on the river, no one has a right to diminish the quantity which will, according to the natural current, flow to the proprietor below, or to throw it back upon a proprietor above. This is the necessary result of the perfect equality of right among all the proprietors of that which is common to all.' 'Every proprietor of lands on the banks of a river,' says Kent, 'has naturally an equal right to the use of the water which flows in the stream adjacent to his lands, as it was wont to run (currere solebat) without diminution or alteration. No proprietor has a right to use the water to the prejudice of other proprietors above or below him, unless he has a prior right to divert it, or a title to some exclusive enjoyment. He has no property in the water itself, but a simple usufruct while it passes along. Aqua currit et debet currere ut currere solebat. Though he may use the water while it runs over his land as an incident to the land, he cannot unreasonably detain it or give it another direction, and he must return it to its ordinary channel when it leaves his estate. Without the consent of the adjoining proprietors he cannot divert or diminish the quantity of the water which would otherwise descend to the proprietors below, nor throw the water back upon the proprietors above without a grant or an uninterrupted enjoyment of twenty years, which is evidence of it. This is the clear and settled doctrine on the subject, and all the difficulty which arises consists in the application.'

This equality of right among all the proprietors on the same stream would have been incompatible with any extended diversion of the water by one proprietor, and its conveyance for mining purposes to points from which it could not be restored to the stream. But the government being the sole proprietor of all the public lands, whether bordering on streams or otherwise, there was no occasion for the application of the common-law doctrine of riparian proprietorship with respect to the waters of those streams. The government, by its silent acquiescence, assented to the general occupation of the public lands for mining, and, to encourage their free and unlimited use for that purpose, reserved such lands as were mineral from sale and the acquisition of title by settlement. And he who first connects his own labor with property thus situated and open to general exploration, does, in natural justice, acquire a better right to its use and enjoyment than others who have not given such labor. So the miners on the public lands throughout the Pacific States and Territories by their customs, usages, and regulations everywhere recognized the inherent justice of this principle; and the principle itself was at an early period recognized by legislation and enforced by the courts in those States and Territories. In Irwin v. Phillips, a case decided by the Supreme Court of California in January, 1855, this subject was considered. After stating that a system of rules had been permitted to grow up with respect to mining on the public lands by the voluntary action and assent of the population, whose free and unrestrained occupation of the mineral region had been tacitly assented to by the Federal government, and heartily encouraged by the expressed legislative policy of the State, the court said: 'If there are, as must be admitted, many things connected with this system which are crude and undigested, and subject to fluctuation and dispute, there are still some which a universal sense of necessity and propriety have so firmly fixed as that they have come to be looked upon as having the force and effect of res adjudicata. Among these the most important are the rights of miners to be protected in their selected localities, and the rights of those who, by prior appropriation, have taken the waters from their natural beds, and by costly artificial works have conducted them for miles over mountains and ravines to supply the necessities of gold diggers, and without which the most important interests of the mineral region would remain without development. So fully recognized have become these rights, that without any specific legislation conferring or confirming them, they are alluded to and spoken of in various acts of the legislature in the same manner as if they were rights which had been vested by the most distinct expression of the will of the law-makers.'

This doctrine of right by prior appropriation, was recognized by the legislation of Congress in 1866. The act granting the right of way to ditch and canal owners over the public lands, and for other purposes, passed on the 26th of July of that year, in its ninth section declares 'that whenever, by priority of possession, rights to the use of water for mining, agricultural, manufacturing, or other purposes, have vested and accrued, and the same are recognized and acknowledged by the local customs, laws, and decisions of courts, the possessors and owners of such vested rights shall be maintained and protected in the same.'

The right to water by prior appropriation, thus recognized and established as the law of miners on the mineral lands of the public domain, is limited in every case, in quantity and quality, by the uses for which the appropriation is made. A different use of the water subsequently does not affect the right; that is subject to the same limitations, whatever the use. The appropriation does not confer such an absolute right to the body of the water diverted that the owner can allow it, after its diversion, to run to waste and prevent others from using it for mining or other legitimate purposes; nor does it confer such a right that he can insist upon the flow of the water without deterioration in quality, where such deterioration does not defeat nor impair the uses to which the water is applied.

Such was the purport of the ruling of the Supreme Court of California in Butte Canal and Ditch Company v. Vaughn, where it was held that the first appropriator had only the right to insist that the water should be subject to his use and enjoyment to the extent of his original appropriation, and that its quality should not be impaired so as to defeat the purpose of that appropriation. To this extent, said the court, his rights go and no farther; and that in subordination to them subsequent appropriators may use the channel and waters of the stream, and mingle with its waters other waters, and divert them as often as they choose; that whilst enjoying his original rights the first appropriator had no cause of complaint. In the subsequent case of Ortman v. Dixon, the same court held to the same purport, that the measure of the right of the first appropriator of the water as to extent follows the nature of the appropriation or the uses for which it is taken.

What diminution of quantity, or deterioration in quality, will constitute an invasion of the rights of the first appropriator will depend upon the special circumstances of each case, considered with reference to the uses to which the water is applied. A slight deterioration in quality might render the water unfit for drink or domestic purposes, whilst it would not sensibly impair its value for mining or irrigation. In all controversies, therefore, between him and parties subsequently claiming the water, the question for determination is necessarily whether his use and enjoyment of the water to the extent of his original appropriation have been impaired by the acts of the defendant. But whether, upon a petition or bill asserting that his prior rights have been thus invaded, a court of equity will interfere to restrain the acts of the party complained of, will depend upon the character and extent of the injury alleged, whether it be irremediable in its nature, whether an action at law would afford adequate remedy, whether the parties are able to respond for the damages resulting from the injury, and other considerations which ordinarily govern a court of equity in the exercise of its preventive process of injunction.

If, now, we apply the principles thus stated to the present case, the question involved will be of easy solution. It appears from the evidence that there is at the point where the defendants work their mining claims only about two hundred inches of water in the creek, according to miners' measurement; that between that point and the point where the Helena ditch taps the creek the distance is about fifteen miles; and that between those points the creek is supplied by several tributary streams of clear water, so that at the point where the water is diverted its volume amounts to about fifteen hundred inches. Of this water the Helena ditch diverts five hundred inches, and conveys it nearly eighteen miles to the localities where it is sold. Running water has a tendency to clear itself, and that result is often produced by a flow of a few miles. But in this case the evidence shows that the water as it enters the Helena ditch is muddied and to some extent is affected by sand. At the same time there is a great preponderance in the evidence to the effect that the deterioration in quality from this circumstance is very slight and does not render the water to any appreciable extent less useful or salable for mining purposes at the localities to which it is conveyed; and that no additional labor is required on the ditch on account of the muddied condition of the water. There is also much doubt left does not to a very great extent come from the hillsides lying between it and the mining of the defendants, or lying along the course of the ditch. A sand-gate at the head of the ditch is necessary, whether there is or is not mining on the stream above; and the accumulation of sand from all sources, from the hillsides as well as from the mining of the defendants, only requires the additional labor of one person for a few minutes each day. The injury thus sustained, and which is only to a limited extent attributable to the mining of the defendants, if at all, is hardly appreciable in comparison with the damage which would result to the defendants from the indefinite suspension of work on their valuable mining claims. The defendants are also responsible parties, capable, according to the evidence, of answering for any damages which their mining produces, if any, to the plaintiffs. Under these circumstances we think there was no error in the refusal of the court below to interfere by injunction to restrain their operations, and in leaving the plaintiffs to their remedy, if any, by an action at law.

With respect to the water diverted by the Yaw-Yaw ditch, it is shown that its deterioration, so far as the deterioration exceeds that of the water in the Helena ditch, is caused by sand and sediment brought by a tributary which enters the creek below the head of the Helena ditch.

DECREE AFFIRMED.


text: Talk:Atchison v. Peterson/Opinion of the Court

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


text: United States v. Gill

title: United States v. Gill


text: Talk:United States v. Gill

title: Talk:United States v. Gill


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

APPEAL from the Court of Claims; the case as found by that court being thus:

I. In November, 1864, A. J. Gill was owner of five hundred and thirty-six tons of hay, at Point of Rocks, near Fort Fillmore, in the Territory of Colorado. On the 27th November, 1864, he applied to Lieutenant Dunn, the commanding officer at the fort, to purchase the same for the use of the United States. Dunn declined to make any such purchase, stating that he was not authorized to do so, but he gave to Gill his receipt in writing, wherein it was stated that he had 'received of A. J. Gill five hundred and thirty-six tons of hay, in good order and well ricked, for the use of the government,' and he at the same time referred Gill to the commander of the district and to the quartermaster at Denver, who could purchase the hay if they saw fit. The commander of the district was applied, to, but declined to purchase it that time. During the same month the military inspector of the district of Colorado, anticipating a short supply of hay for the winter, ordered the quartermaster of Fort Lyon 'to take the hay belonging to A. J. Gill and use it for government stock.' After this Gill exercised no control over the hay. He left Colorado on the 4th February, 1865, on business of his own, and did not return until the summer of 1866. In consequence of Indian troubles then existing it was unsafe for small parties to remain outside of government posts, and he was compelled to leave the hay without any one in charge of it; but in July, 1865, his agent visited the place and found the entire five hundred and thirty-six tons gone. The claimant did not abandon or intend abandonment of the hay, and at the time he left the Territory it had gone into government use, as set forth in what is now next stated.

In December, 1864, and during the winter 1864-65 the quartermaster and foragemaster at Fort Lyon directed government trains to go to the hay and quarter there. A military expedition having about two thousand horses was also quartered there, and used the hay. In the spring, about one-half of the hay had been given to government animals, about one-quarter had been thrown out of the ricks, trampled down, wasted, and destroyed and about one-quarter remained in the ricks, though in a worthless condition.

After Lieutenant Dunn was relieved at Camp Fillmore, his successor, Lieutenant Dennison, assumed the responsibility of the custody of the hay, and in June, 1865, the post commander at Fort Lyon ordered the quartermaster there to receive the rest of the hay remaining, so as to relieve Lieutenant Dennison from responsibility. A board of survey being demanded, it was found that the rest was spoiled and worthless, and no receipt was given or responsibility assumed by the post quartermaster.

II. The value of the hay in November, 1864, was $38.50 per ton, and during the winter, at the time it was used, $45 a ton.

Upon the foregoing case the Court of Claims decided, as a conclusion of law—

That there being no valid express contract founded upon advertisement or military exigency for the sale and purchase of the hay, the government was not liable for the entire quantity sold in November, 1864, at $38.50 per ton; but was liable for the hay taken and used, at its fair and reasonable value at the time of taking; and responsible for the wasteful and destructive manner in which it was taken and used; and that Gill should recover for three-fourths of the entire quantity ricked, at the rate of $45 a ton. It accordingly gave judgment in his favor for $18,090. The government brought the case here.

Mr. G. H. Williams, Attorney-General, and Mr. John Goforth, Assistant Attorney-General, for the appellant:

1. There having been no valid express contract founded upon advertisement, nor any military emergency, the defendants were not liable for the hay alleged to have been sold, if the taking was not a trespass by government troops. The refusal of the district commander to receive the hay was a notice to him as well as to all officers and agents of the defendants that the hay would not be purchased for the use of the government animals. The direction of the district inspector to the post quartermaster at Fort Fillmore to use the hay was illegal and of no effect, as it was not within the line of his duty or within his power to declare an emergency.

2. If the hay was taken and used by order of an officer without authority to act, or by government troops and parties without the claimant's knowledge and consent, and when he had left the Territory, much more if they scattered and trampled it under foot, it was a trespass, and the Court of Claims had no jurisdiction of the case.

3. The taking and using of the hay by the government troops and parties was an 'appropriation within the act of July 4th, 1864,' and the Court of Claims has no jurisdiction of the action.

4. The memorandum receipt given to claimant by Lieutenant Dunn was not binding upon the United States, there being no delivery or acceptance of the hay; but, on the other hand, the receipt of it having been accompanied by a statement by Dunn that he was not authorized to make the purchase, and the receipt being given as an accommodation to the owner in order that the district commander might know that he, Dunn, was cognizant of the fact that the owner had five hundred and thirty-six tons of hay cut and ricked in the vicinity of Fort Fillmore.

If judgment was to be given for the owner at all it should have been at the rate of $38.50 per ton, and no more. It was improper for the court to rate it as worth $45 per ton.

Messrs. T. J. Durant and C. W. Hornor, contra.

Upon the facts found, we think the judgment should have been for the value of the hay in November, 1864, to wit: $38.50 per ton, instead of $45, its value during the winter. To this extent the Court of Claims erred. The judgment is therefore REVERSED, and the cause remanded, with instructions to enter a new judgment

IN ACCORDANCE WITH THIS OPINION.


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


text:
Pollard v. Bailey

ERROR to the District Court for the Middle District of Alabama.

By an act passed in 1854, the legislature of Alabama chartered a bank to be called the Central Bank of Alabama. The capital was $900,000, divided into shares of $100 each.

The charter made certain provisions in case of the insolvency of the bank, or of its suspension of payments in specie. They were thus:

'SECTION 16 (ARTICLE 2). Individual stockholders, having shares in said bank, shall be bound respectively for all the debts of the bank in proportion to their stock holden therein.

'SECTION 20. If any debt due from said bank for an amount exceeding $100, shall remain unpaid for more than ten days after proper demand, the holder of such debt may file a bill in the chancery court, of the county. . . in which said bank may be located, for the settlement of all the debt of the bank, if he elect so to do, and may, on proof, &c., pray an injunction to restrain the said bank and its officers from paying out, or in any way transferring or delivering to any person any money or assets of said bank, or incurring any obligation or debt until such order be vacated or modified; and if such chancellor shall be of opinion that the debt is justly due, and that the bank has no just defence against the demand, and if it shall appear expedient and necessary, upon the proof presented, in order to prevent fraud and injustice, he shall grant an order for such injunction, and the said chancellor shall then proceed to inquire whether the said bank be solvent or not; and if it shall appear that the said bank is not clearly solvent, then he may make an order declaring the same to be insolvent, and requiring its affairs to be wound up and settled; and, further, if, in his opinion, the safety of the creditors shall require it, such chancellor may appoint a receiver to take charge of all the assets of the bank, and to close and settle its affairs.

'SECTION 21. In case the said bank be found insolvent, and settlement of its affairs be ordered, the same shall be done upon bill filed in said chancery court, under the orders of the court and rules of chancery, and full distribution shall be made of the assets according to the rights of all parties; but the holders of bank-notes and obligations issued by the bank for circulation as money shall be first called in and paid, and shall have priority over debts due from the bank; and after the assets of the bank are exhausted, if they be not sufficient to pay all debts and liabilities, a further call shall be made on the shareholders in the bank for further payment of capital, over and above the sum of $100, of an amount equal to the deficiency, which shall be apportioned among all the shares of stock; and an order shall be made by the court for the payment of each shareholder of the sum or proportion due on his shares of stock; and each shareholder shall pay the sum so assessed to him severally in proportion to his stock, which shall be collected by the receiver and applied.

'SECTION 22. The summary remedy in this act, specially given for settling up and closing the affairs of said bank, shall apply to the case of insolvency, but shall not be allowed in case of a suspension only by the bank of specie payment, so long as suspension shall be sanctioned by the General Assembly; but nothing in this act shall be construed so as to deprive a creditor of said bank from his right to suit in any other appropriate mode of proceeding, or to prevent the General Assembly from hereafter regulating, by a general law in relation to banking institutions, the mode of enforcing and satisfying the rights of creditors of said bank: Provided, Any billholder shall also have the right to move in any court having jurisdiction, or before any justice of the peace in the city or county in which said bank is located, as the case may require, for the collection of any bill the payment of which may be refused.'

Of the capital authorized by the charter a certain Pollard took $20,000, or two hundred shares. In 1865 the bank became insolvent, and in 1869 had ceased to do any business, having about $700,000 of bills outstanding and unpaid. In 1872, one Bailey, who had $17,000 of these bills, sued Pollard, at law, as the owner of two hundred shares of stock, assuming that he could thus sue him under the above-quoted section sixteen (article two) of the charter of the bank, which prescribes, as the reader will remember, 'that the stockholders shall be respectively bound for all of the debts of the bank in proportion to their stock holden therein.' The declaration contained averments that the bank had ceased to do business since 1868, and that no demand had been made of the bank for the payment of the bills, and that a demand had been made of the defendant, who was a stockholder of the bank during the period the plaintiff had been the owner. But there was no reference to the other creditors or the ability of the other stockholders to pay any proportion of the claim.

The defendant demurred to the declaration, but the court overruled the demurrer and gave judgment for the plaintiff. From that judgment the defendant brought the case here.

Mr. J. A. Elmore, in support of the ruling below:

1. The declaration was properly held to be sufficient. The bank having ceased to act and being without funds and indebted, was in law deemed to be dissolved, so far as to give the remedy afforded against the shareholders to the creditors of the corporation.

This dissolution, or insolvency, being proved, the liability of the stockholders, as declared by its charter, became absolute, and there was no valid objection to its enforcement at law. Various cases in New York settle this.

The election to go into equity must be at the election of the creditors, and the difficulty of the stockholder in protecting himself beyond the statute liability has never been suggested as a ground for proceeding in equity.

The liability is made by the charter several and direct, and not collateral. The measure of damages is different in each case, depending on the number of shares held; each stockholder is responsible to the amount of stock held by him.

Whenever a statute imposes a legal obligation upon one party to pay money to another, the person to whom the payment is to be made may maintain an action of debt, or assumpsit, for the money.

2. Though the charter of the bank in this case gives the creditor a particular remedy, it at the same time, by its twenty-second section, expressly provides that nothing therein contained shall be construed so as to deprive a creditor of the right to sue in any other appropriate mode of proceeding. And the concluding part of the section gives a billholder a right to move in any court for the collection of any bill. We direct attention particularly to these clauses.

Mr. J. A. Campbell (a brief of Mr. G. W. Goldthwaite being filed), contra.

The CHIEF JUSTICE delivered the opinion of the court.

title: Pollard v. Bailey


text: Talk:Pollard v. Bailey

title: Talk:Pollard v. Bailey


text:
Pollard v. Bailey/Opinion of the Court

The right of Bailey to maintain his action against Pollard depends upon the construction to be given to the charter of the bank. Pollard does not deny his liability to the creditors, but insists that it cannot be enforced in this manner.

He is one of the stockholders of the bank and Bailey one of its creditors. Stockholders are, by article two, section sixteen of the charter, 'bound respectively for all the debts of the bank in proportion to their stock holden therein.' The action below was at law, by one creditor against one stockholder, to recover the full amount of his debt without regard to the other creditors or the ability of the other stockholders to respond to their obligations under the charter. The stock of Pollard, at its par value, exceeds in amount the debt owing to Bailey, but it is admitted that the other indebtedness of the bank is very large, and nearly, if not quite, equal to the entire capital.

Each stockholder is bound for the debts in proportion to his stock. His liability is not limited to the par value of his stock, neither is he bound absolutely for the payment of the full amount of that. He must pay a sum which shall bear the same proportion to the whole indebtedness that his stock bears to the whole capital, and is not required to pay more. For the purposes of this case it is not necessary to decide what effect the insolvency of any of the stockholders would have upon the liability of such as are solvent. It is certain that no stockholder is liable for more than his proportion of the debts. This proportion can only be ascertained upon an account of the debts and stock and a pro rata distribution of the indebtedness among the several stockholders. The proper action, therefore, to enforce the liability is one in which such an account can be stated and distribution made. Such an action calls specially for the exercise of the powers of a court of equity, which can bring before it all the necessary parties and adjust all their rights. Every stockholder, when called upon to perform his obligations, has the right to require that the extent thereof shall then be determined once for all, as well that which he is under to his associate stockholders as that to the creditors. Otherwise he might be made to respond to the creditors under one rule and obtain his relief from the other stockholders under another. The provision, therefore, for a proportionate liability is equivalent to a provision for an appropriate form of equitable action to enforce it. The case is different from what it would be if the charter had provided generally that all stockholders should be individually liable for the payment of the debts. The cases from New York cited upon the argument, and which are supposed to be in opposition to the view we have taken, involved the consideration of such a liability.

But when section sixteen is taken in connection with sections twenty and twenty-one, it is very apparent that it was the intention of the legislature only to charge the stockholders upon a proper account, and in the manner therein provided for. The intention of the legislature, when properly ascertained, must govern in the construction of every statute. For such purpose the whole statute must be examined. Single sentences and single provisions are not to be selected and construed by themselves, but the whole must be taken together.

As has been seen, section sixteen created the liability, but provided no remedy for its enforcement except by implication. Section twenty, however, provides in substance that if any debt due from the bank, exceeding $100 in amount, shall remain unpaid for more than ten days after proper demand, the holder may file a bill in the proper chancery court for the settlement of all the debts of the bank, if he elects so to do, and may, on certain specified proof, pray an injunction to restrain the bank and its officers from paying out, or in any manner transferring or delivering to any person, any money or assets of the bank, or incurring any obligations until the order is vacated or modified. It further provides that, upon certain findings, the chancellor shall proceed to inquire whether the bank is solvent or not; and if, upon such inquiry, he shall find that it is not clearly solvent, he may make an order declaring the same to be insolvent and require its affairs to be wound up and settled, and, under certain circumstances, appoint a receiver for that purpose. Section twenty-one provides that if the bank be found insolvent, and settlement of its affairs ordered, the same shall be done upon bill filed in said chancery court under the orders of the court and the rules in chancery, and that full distribution shall be made of the assets according to the rights of all parties, billholders having priority over other debts due from the bank. After the assets were exhausted, if they were not sufficient to pay all debts and liabilities, a further call was directed upon the shareholders for further payment of capital to an amount equal to the deficiency, which was to be apportioned among all the shares of stock, and an order made for the payment by each shareholder of the sum or proportion of his shares. This apportioned call the receiver was required to collect and apply.

The individual liability of stockholders in a corporation for the payment of its debts is always a creature of statute. At common law it does not exist. The statute which creates it may also declare the purposes of its creation, and provide for the manner of its enforcement.

After an examination of the several sections of this charter, it cannot for a moment be doubted that it was not only the intention to provide for a proportionate liability, but for a pro rata distribution of the fund arising therefrom among the different creditors, according to their several priorities. Every provision is entirely inconsistent with the idea that one creditor could, by an individual suit, appropriate to himself the entire benefit of the security, and exclude all others. A common fund was created for the common benefit, to be collected and distributed by the receiver, who was made the common agent of all. There was no liability except for the deficiency. That was to be apportioned and collected for the common benefit.

It was not only to be apportioned and collected, but the mode of apportionment and the manner of collection were specially provided for. The liability and the remedy were created by the same statute. This being so the remedy provided is exclusive of all others. A general liability created by statute without a remedy may be enforced by an appropriate common-law action. But where the provision for the liability is coupled with a provision for a special remedy, that remedy, and that alone, must be employed.

It follows as a necessary consequence from these premises that the action of Bailey cannot be maintained, and that the demurrer to his declaration should have been sustained.

But it is claimed that by section twenty-two Bailey, as a billholder, had the right to move in the proper court for the collection of any bill the payment of which had been refused. This clearly refers to an enforcement of the liability of the bank itself and not to that of the stockholders.

JUDGMENT REVERSED, and the cause remanded with instructions to sustain the demurrer to the declaration, and give

JUDGMENT ACCORDINGLY.

title: Pollard v. Bailey/Opinion of the Court


text: Talk:Pollard v. Bailey/Opinion of the Court


text:
Packet Company v. Clough

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

In January, 1870, Carlos Clough and Sarah, his wife, in right of the wife, sued the Union Packet Company, in an action on the case to recover damages for personal injuries sustained by the wife in consequence of alleged negligence of the company's servants. The declaration was in the regular common-law form: Plea: The general issue.

The company, at the time of the injury, was owner of a steamboat employed by it in carrying passengers and freight on the Mississippi River, between St. Paul, in the State of Minnesota, and St. Louis, in the State of Missouri. During the passage downward, the boat arrived at Read's Landing, in Minnesota, at about two o'clock on the afternoon of September 30th, 1869, where she stopped to receive passengers. At that place Mrs. Clough (who was about to go to Davenport, in Iowa, at which place the boat was in the habit of touching), in attempting to go on board, fell from the gangway provided for entrance to the boat, and received the injury for which the suit was brought. Whether the company was guilty of negligence in having failed to provide a proper gangway, or in having failed to keep it in position, was, of course, an important question in the case, and on the trial the deposition of Mrs. Clough was admitted in support of her claim. Exception was taken to its admission.

Whether this exception could be sustained depended upon certain statutes of the United States and of Wisconsin.

Thus, an act of Congress of July 6th, 1862, enacts that—

'The laws of the State in which the court shall be held shall be the rules of decision as to the competency of witnesses in the courts of the United States, in trials at common law, in equity, and admiralty.'And a statute of Wisconsin, passed in 1863, enacts that—

'A party to a civil action or proceeding may be examined as a witness in his or her behalf, on the trial, except in actions in which the opposite party sues, or defends as administrator, or legal representative of any deceased person. And in case of an action for damages for personal injury to a married woman this section shall be so construed as to allow such married woman to be a witness on her own behalf, in the same manner as if she were not married.'

Another statute, also passed in 1868, enacts that—

'A party to any civil action or special proceeding in any and all courts, and before any and all tribunals, and before any and all officers acting judicially, may be examined as a witness in his own behalf, or in behalf of any other party, in the same manner and subject to the same rules of examination as any other witness.'

After direct testimony had been given by Mrs. Clough that the plaintiffs were married on the 24th day of December, 1845, the defendants proposed to prove by other witnesses that the plaintiffs had not lived together and cohabited as husband and wife since December, 1869; that it was commonly reputed that they had not so lived together, and that there was a common reputation that Carlos Clough was living and cohabiting with another woman. This proof was offered, as alleged, for two purposes,-one, to disprove the fact alleged in the declaration, that the plaintiffs were husband and wife, and the other in mitigation of damages. The court refused to receive it for either purpose, asserting, in regard to the first alleged purpose, that the question of the plaintiffs' relation to each other was not in issue by the pleadings; and, in regard to the second, that the evidence was not admissible in mitigation of damages: that the marriage of the plaintiffs had been proved without objection, and was not controverted by the defendant.

It appeared by the statements of Mrs. Clough that she went to Davenport, arriving there in the evening; that she was on the boat two days and a half; that on account of the injury received by her she had been unwilling to pay fare, that the captain demanded none of her, and that she thanked him for the free passage.

In the course of the trial the plaintiffs' counsel asked Mrs. Clough this question:

'What conversation, if any, did you have with the captain after the accident, on her trip down to Davenport?'

The question was objected to by the defendant's counsel, but the court overruled the objection, and the answer to the objection was read as follows:

'He said it was through the carelessness of the hands in putting out the plank that I fell; that they did not put out the regular plank, but loose planks. It was in the evening, before we got into Davenport, that I had the conversation with the captain.'

The defendant then offered in evidence the ex parte deposition of one Turner, taken in Memphis, Tennessee, under the thirtieth section of the Judiciary Act.

The court rejected the deposition because it conceived it not to be properly certified by the magistrate taking it. This rejection made another exception. Neither the bill of exceptions nor anything else contained the deposition, nor any statement of what it tended to prove.

The twenty-first rule of this court, in that part of it relating to 'briefs' and 'specifications of error,' says:

'When error alleged is to the admission or rejection of evidence, the specification shall quote the full substance of the evidence offered, or copy the offer as stated in the bill of exceptions; any alleged error not in accordance with these rules will be disregarded.'

The judge charged—

'That the consent of the captain not to charge any fare, as testified to by Mrs. Clough, was not a settlement or release of Mrs. Clough's right of action in this case, and would not prevent a recovery unless she so understood it and so agreed at the time.'To which charge the defendant excepted.

Verdict and judgment having been given for the plaintiffs in $6000, the company brought the case here, assigning for error—

1st. The admission of the deposition of Mrs. Clough.

2d. The rejection of the evidence to prove that plaintiffs did not live and cohabit together.

3d. The holding that the marriage of the plaintiff was not in issue under the pleadings.

4th. The holding, because Mrs. Clough had testified that the plaintiffs were married, that the defendant could not disprove the fact by such testimony as was offered.

5th. The charging that the demand of Mrs. Clough, that she should not pay fare in consequence of the injury received in going on to the boat, and the assent thereto of the captain, did not amount to a settlement of her claim for the injury done to her unless she so understood it.

6th. The allowing Mrs. Clough to state, as she did, what the captain had said to her after the accident, and on the trip down to Davenport and just before arriving at that place, in regard to the cause of the injury.

7th. The rejection of the deposition of Turner.

Mr. J. W. Cary, for the plaintiff in error:

1. The court erred in admitting the deposition of Mrs. Clough, if she was the wife of Carlos Clough.

The judgment in this action, when recovered, would belong to Carlos Clough. The wife, in such cases, is joined as a formal party, but the husband would be entitled to the judgment. The case, therefore, presents the question, can a wife be a witness for her husband? The question is not whether she is interested in the event, the suit, but as to the policy of the law. If she can be a witness for her husband, she must be competent as a witness against him, and in that case a wife may be called in a suit against the husband and compelled to disclose all the domestic and marital secrets of the household. We acknowledge the force of the statutes relied on, but these results are so alarming as perhaps to control their interpretation.

2. The court erred in rejecting the evidence to prove that the plaintiffs did not live and cohabit together as husband and wife.

(a) It was competent evidence, tending to show that such relation did not at the time of the injury or trial exist between the parties. The fact that two persons live and cohabit together as husband and wife is some proof that such relation exists between them. On the other hand, the fact that two persons do not live and cohabit together as husband and wife is some evidence that the relation does not exist. The only evidence in this case that this relation did or ever had existed between the plaintiffs was by one of the plaintiffs. She produced no certificate or record evidence of marriage, but simply her verbal statement that they had been married many years previously. The defendants offered proof by persons who had known them, that they did not and had not lived or cohabited together as husband and wife since they had known them. This tended to prove the absence of a marriage.

(b) It was competent evidence to mitigate the damages. As already said this prosecution was for the sole benefit of Carlos Clough. He alone was entitled to the judgment and to the money sought to be collected. The loss and damage which he sustained by the injury was what the jury were to find in that case. Would not this loss be much greater to him if she was a wife with whom he was living and cohabiting, one whom he loved and cherished, than it would be if she was one with whom he had no intercourse or society?

3 and 4. The court erred in holding that the marriage of plaintiffs was not in issue by the pleadings; and that the defendant could not disprove the fact by such testimony as was offered.

Their right to join in this action depended wholly upon the question as to whether they were husband and wife. It was necessary for them to allege that fact, otherwise their declaration would have been demurrable. The defendant pleaded the general issue, which was a denial of every material fact in the declaration; therefore this question was in issue by the pleadings, and was necessary to be proved. If necessary to be proved it was competent for the defendant to adduce evidence to disprove it. It was, therefore, error to hold that it was a fact not in issue.

5. The court erred in charging the jury that the demand of Mrs. Clough, that she should not pay fare in consequence of the injury, and the assent thereto of the captain, did not amount to a settlement of the claim now set up unless she so understood it.

Mrs. Clough paid no fare. When called upon for fare she was unwilling to pay, because she met with an accident in coming on board the boat; and her view was assented to. On what principle? Simply as a settlement of her claim for the injury against the company. She used that claim against the company to excuse herself from paying the fare which the captain of the boat had a right to collect. He yielded to her claim and received the consideration claimed. Is she not estopped further to assert it?

6. The conversation testified to by Mrs. Clough with the captain should have been excluded.

On this exception we rely confidently.

The accident occurred on the 30th of September, 1869, at about two o'clock P.M. Two and a half days afterwards, just as the boat was nearing Davenport, the alleged conversation with the captain in regard to the accident took place. In the Milwaukee and Mississippi Railroad Company v. Finney, a suit against a railroad company, the court below allowed the plaintiff to give in evidence the declarations of the defendant's ticket agent, made after the transaction of selling the ticket was closed. The court held it clearly erroneous, and reversed the judgment, and Dixon, C.J., in disposing of it, quotes Story, J., as follows:

title: Packet Company v. Clough


text: Talk:Packet Company v. Clough

title: Talk:Packet Company v. Clough


text:
Packet Company v. Clough/Opinion of the Court

'Where the acts of the agent will bind the principal, then his representations, declarations, and admissions respecting the subject-matter, will also bind him, if made at the time, and constituting a part of the res gestae.'

7. The court erred in rejecting the deposition of Turner.

Messrs. W. P. Bartlett and M. H. Carpenter, contra:

1. The act of Congress and the statutes of Wisconsin (stated, supra, p. 530) settle the first assignment of error.

The court cannot look at those statutes and have doubt as to their potential operation. The courts of Wisconsin apply them to just such cases as this case. Indeed, this first exception is hardly pressed. The whole force of the opposite argument lies in an assumption, not true, that the husband alone was the party suing. Now, Mrs. Clough was a necessary and proper party plaintiff. The injury was to her person. With, in, and by her, the cause of action existed. Without her there was no right of action. She and the meritorious cause coexisted. She was the party seeking to enforce her legal remedy for the actual injury practiced upon her body. The joining of the husband as a coplaintiff was a nominal thing, to answer a technical requirement of the law. The death of the husband, at any time, could not have defeated the right of action. If it is argued, that in case of a judgment for the plaintiff, Carlos Clough could control the judgment, the answer to that is, that the court, on a proper application, in behalf of Mrs. Clough, would control him, and would see that the proceeds of the judgment were properly applied for the use of the injured person.

2, 3, and 4. The second, third, and fourth assignments may be treated together and are equally unfounded.

The action was a common-law 'action on the case,' for consequential damages-tortious, in form, ex delicto. The cause of action is set forth in and by a common-law declaration. The plea is not guilty. That plea puts in issue the gravamen of the complaint, the fault or guilty negligence and carelessness of the defendant, and not the relationship of the plaintiffs, or the corporate existence of the defendant, or citizenship of the parties. All of these matters however essential are impliedly admitted by the plea of not guilty. The existence of the defendant as a corporation might have been put in issue, but it was not; so might the citizenship of the respective parties, but was not; so might the relationship of the plaintiffs, but was not. Had issues on these several subjects been formed, they would have been issues in abatement of the action and not to the merits. The defendants elected to plead to the merits, not guilty, thereby waiving all formal objections or dilatory pleas. The court well said, that the plaintiffs' relation to each other was not in issue by the pleadings, though to avoid controversy or argument the marriage of the plaintiffs was proved, and that too without any objection.

5. The attempt to set up the non-payment of fare as a release for the injury.

The verdict and judgment was for $6000. The injury was of course great. The attempt to release a claim for such injury by non-payment of a few dollars passage-money is hard to support. No captain in common decency could have extorted fare in such a case. The clearest proof of intention to release should have been given if such a pretension was to be supported. The charge was right.

6. The statement made by the captain in conversation with Mrs. Clough was evidence.

It was made while Mrs. Clough was still a passenger upon the boat, not having reached her destination. It was competent as a part of the res gestae, and independent of the question whether the admission was a part of the res gestae or not, it was made during the time that the plaintiff was on her journey, and before its termination, and is competent evidence in that view alone. In The Enterprise, Curtis, J., says:

'I am quite sure the practice has been to admit  declarations made by the master while in command   concerning any matters which came under his authority as master, though not part of      any res gestae strictly speaking.'

In Burnside v. Grand Trunk Railway Company, it was held by the court that the statements of the general freight agent of the railway company as to the condition of goods delivered to him for transportation, made while the goods were in transit, were admissible in evidence against the company, although made eight months after the goods were delivered, and the court says that the only question is,

'Whether at the time these statements were made the contract with the railroad was still in the course of execution, and we think it must be so considered.'

7. Whether the ex parte deposition of Turner was rightly ruled out this court will not inquire.

The record nowhere shows to this court what the testimony was which was excluded, nor what it proved or if it tended to prove anything. This omission in the record is of itself fatal under the twenty-first rule, and independently of it. The counsel should show that the deposition contained testimony competent in itself, and which had it not been ruled out by the court, would or might have prevented a verdict against the packet company.

Mr. Justice STRONG delivered the opinion of the court.

In considering the first assignment of error-that is to say, the question whether on the trial the deposition of Mrs. Clough was rightly admitted in support of her claim, it is unnecessary to inquire whose will be the damages, if any, which may be recovered whether they will belong to the husband or to the wife. The competency of the witness, or her incompetency, must be determined by the statutes of Wisconsin, where the case was tried. The act of Congress of July 6th, 1862, has enacted that 'the laws of the State in which the court shall be held shall be the rules of decision as to the competency of witnesses in the courts of the United States, in trials at common law, in equity, and admiralty.' And the statutes of Wisconsin very plainly declare that the wife is a competent witness for herself in such a case as this. The first assignment of error cannot, therefore, be sustained.

The second, third, and fourth assignments present substantially the same question, and they may be considered together. After direct testimony had been given by Mrs. Clough that the plaintiffs were married on the 24th day of December, 1845, the defendants proposed to prove by other witnesses that the plaintiffs had not lived and cohabited together as husband and wife since December, 1869; that it was commonly reputed that they had not so lived together, and that there was a common reputation that Carlos Clough was living and cohabiting with another woman. This proof the court refused to receive. It was offered for two avowed purposes-one in mitigation of damages, and the other to disprove the fact alleged in the declaration that the plaintiffs were husband and wife. But how, if received, it could have tended to mitigate damages has not been made plain to us. The suit, as the case shows, was for an injury inflicted upon the wife. Surely the injury was the same whether the husband lived with her or not. And the evidence was inadmissible for the other purpose for which it was offered. It is true, ordinarily, the general issue in an action of trespass on the case imposes upon the plaintiff the necessity of proving all the material facts averred in the declaration, but the ability of the plaintiffs to sue is not a fact directly averred, and, therefore, it cannot be disproved under a plea of not guilty. In fact it is not put in issue by such a plea. The defence that the plaintiffs suing as husband and wife are not married goes to the form of the writ, rather than to the cause of action, and it should, therefore, be pleaded in abatement, and not in bar. Thus, in Chitty's Pleadings it is laid down as a proper plea in abatement to the form of the writ that the plaintiffs or defendants suing, or being sued, as husband and wife, are not married. And in Stephens on Pleading, it is said 'the plea of not guilty in trespass on the case operates as a denial of the breach of duty, or wrongful act alleged to have been committed by the defendant. . . . But not guilty will apply to no other defence than a denial of the wrongful act.' The general issue at length is that the defendant is not guilty of the grievances laid to his charge, in manner and form as the said plaintiff hath above thereof complained against him, and of this he puts himself upon the country, &c. While, since the time of Lord Mansfield, the scope of this issue has been much enlarged, it has not been supposed to extend to a denial of the ability of the plaintiff to sue. In Combs v. Williams, it was ruled that in the trial of an action upon a promise to a feme sole, brought by her husband and herself after marriage, it is not competent for the defendant under the general issue to prove the illegality of the marriage, such matter being wholly in abatement. True, this was in an action of assumpsit, but the general issue is as broad, in such a case, as it is in case for a tort. And if this were not so, even if in the state of the pleadings the defendants were at liberty to prove that the plaintiffs were not husband and wife, they could not prove it by such evidence as that which they offered. Cohabitation as husband and wife may tend to prove marriage, but non-cohabitation has not been accepted as disproving the existence of the marital relation in face of uncontradicted evidence that a marriage in fact had taken place.

The fifth assignment of error is without any foundation. It would be very extraordinary were we to hold that the plaintiff had settled and discharged her claim upon the defendants without any intention or understanding on her part to give it up.

The next assignment is more important. The accident by which the plaintiff was injured occurred at Read's Landing, in Minnesota, on the 30th day of September, 1869, about two o'clock in the afternoon. Two days afterwards, as the boat approached Davenport, in the State of Iowa, Mrs. Clough, the witness, had a conversation with the captain, in which he made some statements respecting the accident, and these statements the court allowed to be given in evidence against the defendants. In this we think there was error. Declarations of an agent are, doubtless, in some cases, admissible against his principal, but only so far as he had authority to make them, and authority to make them is not necessarily to be inferred from power given to do certain acts. A captain of a passenger steamer is empowered to receive passengers on board, but it is not necessary to this power that he be authorized to admit that either his principal, or any servant of his principal, has been guilty of negligence in receiving passengers. There is no necessary connection between the admission and the act. It is not needful the captain should have such power to enable him to conduct the business intrusted to him, to wit, the reception of passengers, and, hence, his possession of the power to make such admissions affecting his principals is not to be inferred from his employment. It is true that whatever the agent does in the lawful prosecution of the business intrusted to him, is the act of the principal, and the rule is well stated by Mr. Justice Story, that 'where the acts of the agent will bind the principal, there his representations, declarations, and admissions respecting the subject-matter will also bind him, if made at the same time, and constituting part of the res gestae.' A close attention to this rule, which is of universal acceptance, will solve almost every difficulty. But an act done by an agent cannot be varied, qualified, or explained, either by his declarations, which amount to no more than a mere narrative of a past occurrence, or by an isolated conversation held, or an isolated act done at a later period. The reason is that the agent to do the act is not authorized to narrate what he had done or how he had done it, and his declaration is no part of the 'res gestae.'

Applying this rule to the present case, how does it stand? The thing of which the plaintiffs complain was negligence, on the 30th of September-a fault in providing for Mrs. Clough's embarkation on the steamer. That, and that alone, caused the injury she sustained. That and nothing else was the 'res gestae.' What the captain of the boat said of the transaction two days afterwards was, therefore, but a narrative of a past occurrence, and for that reason it could not affect his principals. It had no tendency to determine the nature, quality, or character of the act done, or left undone, and it is not, therefore, within the rule stated by Judge Story. That rule has been recognized in totidem verbis in Wisconsin by Chief Justice Dixon, in delivering the opinion of the court in The Milwaukee and Mississippi Railroad Company v. Finney. And there is nothing in any of the decisions cited by the defendants in error inconsistent with such a rule. The case of The Enterprise, cited from 2d Curtis, was a suit in admiralty for subtraction of wages, and the declarations of the master respecting the contract with the seamen were admitted, though not a part of the res gestae. But the decision was rested upon the ground that the admiralty rule is different from the rule at common law. The case of Burnside v. The Grand Trunk Railroad Company, cited from 47 New Hampshire, simply decides that the statements of the general freight agent as to the condition of goods delivered to him for transportation made while the goods are still in transit, or while the duty of the carrier continues, are admissible in evidence against the company. This was a case of contract not executed, and, while it remained unexecuted, the agent had power to vary it; had, in fact, complete control over it. The transaction was still depending, and the agent was still in the execution of an act which was within the scope of his authority. But in the present case the declarations admitted were not made in the transaction of which the plaintiffs complain, or while it was pending. They refer to nothing present. They are only a history of the past.

It is argued they were made before the voyage upon which Mrs. Clough entered was completed. True, they were, but they were not the less mere narration. The accident was past. The injury to Mrs. Clough was complete. The only wrong she sustained, if any, had been consummated two days before. We cannot think the fact that she had not arrived at her port of destination is at all material. If she had left the steamer before the declarations were made it is not claimed, as certainly it could not be, that they were admissible. Now, suppose two persons were injured by the negligence which the plaintiffs assert, and one of them had left the boat before the captain's declarations were made, clearly they would have been inadmissible in favor of the person whose voyage had been completed. This is not denied. Yet the connection between them and the accident would be as close in that case as in this. Can they be admissible in the one case and not in the other? Assuredly not. We must hold, therefore, that there was error in admitting in evidence the statement of the captain of the steamboat made two days after the wrong was done of which the plaintiffs complain.

The last assignment of error is the rejection of the deposition of Turner. Of this it is sufficient to say that we have not before us either the deposition or any statement of what it tended to prove. We cannot know, therefore, that it was of any importance, or that, if it had been admitted, it could have had any influence upon the verdict. A party who complains of the rejection of evidence must show that he was injured by the rejection. His bill of exceptions must make it appear that if it had been admitted it might have led the jury to a different verdict. This must be understood as the practive in this court, and such is the requirement of our twenty-first rule. By that rule it is ordered that when the error assigned is to the admission or rejection of evidence, the specification shall quote the full substance of the evidence offered, or copy the offer as stated in the bill of exceptions. This is to enable the court to see whether the evidence offered was material, for it would be idle to reverse a judgment for the admission or rejection of evidence, that could have had no effect upon the verdict.

But for the reception of the statement made by the captain, shortly before the arrival of the boat at Davenport, the judgment must be reversed.

VENIRE DE NOVO AWARDED.


text: Talk:Packet Company v. Clough/Opinion of the Court


text:
Express Company v. Ware

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

The Code of Nebraska bars actions upon contract in five years. The defendant's absence from the State is not, however, to be computed. But in the case of a foreign corporation, if it has a managing agent in the State, service of the writ may be made upon such managing agent.

These provisions of the code being in force, Ware delivered, on the 29th of September, 1864, and during the late rebellion, to the United States Express Company a quantity of gold, to be carried by it from Nebraska City to New York. The company by its receipt undertook to carry the gold, but exempted itself from any loss by 'the acts of the enemies of the government, or insurrections, or any of the dangers incident to a time of war.'

The company carried the gold on the Hanibal and St. Joseph Railroad, which crosses the north part of Missouri.

At the time when this gold was delivered, that part of Missouri was in a high state of commotion with the rebellion, rebels being nearly as numerous as loyal persons, and of equal or greater activity. In the course of the transit upon the railroad just mentioned, a body of eighty armed rebels, on the 3d of October, 1864, fired into the train of cars, and stopped and robbed it, carrying off this gold.

Hereupon, on the 27th of February, 1870-more than five years after the loss-Ware sued the express company, serving the writ upon a managing agent of it, and alleging that the route at the time of the transportation was unsafe; that the express company was guilty of negligence in carrying gold on it; and that there was, at the time, a safe and suitable route across the State of Iowa, which the company could have and ought to have used. The company set up its special contract and an exemption under it.

Evidence was given by both sides as to the safety or danger of travel on the Hannibal and St. Joseph Railroad on and about the 3d of October, 1870. Trains, it appeared, up to that date had been running regularly, but it appeared equally that tracks had been torn up in places, that a train had been fired into as it passed and a brakeman killed, and that from the generally disturbed condition of the region, there was with many persons a greater or less degree of fear that trains would be captured.

Evidence was also given on both sides-on the company's to show, that at the time of the loss and for some time afterwards, the company did have a 'managing agent,' and that, therefore, as suit could have then been brought by a service on him, the present action not having been brought till the 27th of February, 1870, was barred by the statute of limitations-and on the part of the plaintiff to show that there was no 'managing agent' on whom service could be made prior to the said 27th of February, when the suit was actually brought.

The court below charged the jury:

'If you find that the defendant had a managing agent within the State at the time of the loss, then the statute began to run from that time, and if it had such agent in the State for the next five years after the loss, then this action is barred, but otherwise it is not. In other words, to bar this action the plaintiff must have been able for five years before suit brought to have sued the defendant in this State, and compelled it to answer the suit by a service upon a managing agent therein.'

Verdict and judgment having been given for the plaintiff the express company brought the case here, assigning for error—

1. That the evidence of negligence did not support the verdict.

2. That the action was barred by the statute of limitations, and that the court erred in its instruction on that point.

Mr. J. M. Woolwarth, for the plaintiff in error; Mr. Clinton Briggs, contra.

The CHIEF JUSTICE delivered the opinion of the court.

title: Express Company v. Ware


text: Talk:Express Company v. Ware

title: Talk:Express Company v. Ware


text:
Express Company v. Ware/Opinion of the Court

We see no error in the charge, and cannot examine the evidence to ascertain whether the jury was justified in finding as it did upon the issues of fact.

JUDGMENT AFFIRMED.


text: Talk:Express Company v. Ware/Opinion of the Court


text: Ambler v. Whipple

title: Ambler v. Whipple


text: Talk:Ambler v. Whipple

title: Talk:Ambler v. Whipple


text:
Ambler v. Whipple/Opinion of the Court

APPEAL from the Supreme Court of the District of Columbia.

Ambler filed a bill in the court just named against one Whipple and a certain Dickerson. A cross-bill and a supplemental bill, made additional pleadings.

The suit grew out of a copartnership between Ambler and Whipple, formed May 24th, 1869, for the purpose of experimenting with and bringing to perfection an invention by which gas, for lighting and heating and other useful purposes, was to be generated from petroleum; for obtaining a patent or patents for the result of their labor, and for the management of the business after such patent had been obtained.

The terms of the partnership were clearly stated in a memorandum of agreement signed by the parties, consisting of nine articles.

It sufficiently appeared from these articles that Ambler was looked upon as the man of inventive genius, and Whipple as the man of business, and the source of the funds necessary to conduct the experiments and place the affair on a successful footing.

By these articles it was agreed that if success attended their efforts the profits were to be equally divided, after deducting the expenditures which Whipple might find necessary to be advanced. That Whipple might have full control of his branch of the joint venture, it was stipulated that Ambler should assign to him his interest in the patents which might issue, and in pursuance of this stipulation Ambler did execute an assignment of all his interest in the invention and in the patents which might be granted thereon. The articles of partnership were dated on the day when the partnership was formed, May 24th, 1869, and the assignment the day after.

In view of the present controversy the most important of these articles of agreement was the SIXTH, which was in the words following:

'That any and all letter-patent that may be obtained in this country and all other countries by virtue of said invention, or by reason of any imporvement, or of any modification of the same by either party, shall be owned by and between the parties to this agreement in equal shares, to wit, one undivided half to each, and all proceeds of sale or sales of any and every kind and character shall be shared by and between the parties share and share alike.'

The bill alleged that after expermenting three or four months a result was obtained and a patent issued in the name of Whipple and Ambler, No. 92,687, dated July 18th, 1869, and that while the patentees were experimenting under this patent and seeking remedies for apparent defects and for improvements in their invention, the true principle of success was developed about the 20th or 21st day of August; that immediately thereafter the defendant, Whipple, conceived the design of excluding the complainant from any benefit of the invention, and began a course of proceedings for the purpose of defrauding him of his rights; that in pursuance of this scheme he ignored his rights and character as a joint owner and patentee in the invention; forcibly debarred him from the workshops where his invention was used, and denied him all interest in the result of his labors, and introduced the other defendant, Dickerson, in the absence of the complainant, to the place where the experiments had been made and to the machinery which had been used, and that in a few days Dickerson applied for a patent, afterwards issued (No. 95,665), which embodied the invention of Ambler, with onle a colorable variation; that thereafter Whipple and Dickerson entered into a copartnership and successfully introduced the invention of the complainant into use, and by sales of particular States and districts had received in a short time over $100,000.

This was the substance of the bill of complaint, and the relief prayed was that Whipple and Dickerson might make discovery of the sales and profits; tha they should be enjoined from the use of the complainant's invention, and that a decree be made in favor of the complainant for compensation and damages.

The answer of Whipple admitted the original agreement and assignment, and the issue of the patent to Whipple and Ambler. It admitted also the partnership with Dickerson and the issue of the patent to Dickerson. It denied all intent to defraud the complainant, but admitted the sales or contracts for sale of the Dickerson patent. It denied the identity of the two patents or the inventions set forth in them. It averred that after a full experiment with the first patent it proved a total failure, and that the complainant abandoned all further effort with it and left the city of Washington, where the experiments had been conducted; that Dickerson, having been previously engaged in inquiries in the same direction, perfected an invention of great value which effected what he and Ambler had failed to do, and that he thereupon entered into a partnership with Dickerson in regard to that invention, as he had a right to do, and that in the sales, contracts, or profits growing out of this patent, the complainant had no interest whatever.

The answer set up as a further defence that the complainant by his drunkenness, dishonesty, and general bad repute had rendered a continuance of the partnership impossible; and that through one Martin the defendant Whipple had purchased of Ambler all his interest in the patent of Whipple and Ambler, and in the partnership business in which they had been engaged. It also contained allegations of the fact that before the partnership began, the complainant had been convicted of a felony and was otherwise infamous, but neither in the answer nor in the cross-bill, where this matter was repeated, was it stated that this fact came to the knowledge of Whipple, the defendant, after he had entered into the partnership. It did not deny the allegation of the bill, that after the date specified in it the complainant had been excluded from the workshops.

The cross-bill filed by the defendant Whipple set up a release of Ambler, his improper conduct, the failure of the experiments with the original invention, and prayed that Ambler be enjoined from setting up any right or claim against him on account of said invention, or on account of the articles of agreement between them. To this Ambler answered, very fully denying the release and denying the failure of the invention and his abandonment of it.

Dickerson filed a separate answer, but it contained nothing of moment not included in Whipple's.

The supplemental bill averred that since the filing of the original bill an additional patent (No. 102,662) had issued to the defendants; that it was for the same invention, essentially as that made by Whipple and Ambler, and patented to them by patent No. 92,687.

The answer to this bill denied this, and asserted that the invention patented was one of Whipple and Dickerson.

The testimony occupied a large part of a record of four hundred and eighteen pages, and was contradictory. Notwithstanding its amount, however, some matters necessary to the best comprehension of the case in all its parts were not presented. Thus, though the pleadings referred largely to the patent to Whipple and Ambler (No. 92,687), and to that one (No. 102,662) to Whipple and Dickerson, mentioned in the supplemental bill as having been granted, during the suit, and though the complainant alleged that the latter was for the same invention, with colorable differences, as the former, yet neither was set out in the evidence. Certain leading facts, however, were made sufficiently clear.

Thus the evidence tended plainly to show that after the grant of the patent of July 18th, 1869 (No. 92,687), a series of experiments were conducted through a term of three months, by Whipple and Ambler, in the same place and under their joint supervision, which finally resulted in the discovery of the important and before unknown principle, that the mingled vapors of water and petroleum, when held together at the temperature and under the pressure due to steam, would result in the production of a combustible gas, if such combination was continued long enough to enable the chemical reunion to take place. This discovery would seem to have been developed empirically, and apparently was not demonstrated in confirmation of an antecedent theory. In the first experiment of the partners, upon a practical scale, the endeavor was made to make a gas from the vapor of petroleum, evaporated by heat applied on the outside of a cylinder containing petroleum and fitted with a piston-head to force the gas, when evolved, through strainers of various porous materials placed above the cylinder. This piston-head was very loosely fitted, and steam entered the petrolleum and became mingled with its vapor. After the machine for this purpose was made, it was soon observed, in experimenting with it, that while it made gas with a loose-fitting piston, it made title or none when the piston was fitted tightly, i. e., packed, so as to be steam-tight. This led to the conclusion that the introduction of steam into the oil itself was essential to the proper development of gas in quantities practically sufficient, and a hole was then bored in the cylinder, allowing a free flow of steam through the petroleum, when of a sudden the invention appeared to be complete. Whipple said to a workman, 'I am satisfied with it. There is a million of dollars in it.'There was some conflict of testimony as to the precise time at which, and the persons by whose orders, this boring of the piston was done. Four witnesses, including Ambler and his son, stated that it was by direction of Ambler. Three (Whipple and two persons still in his employ) stated that it was by direction of Whipple.

The decisive experiment just abovementioned was made about the 21st of August, 1869.

There were now certain undisputed facts in the case; facts referred to by this court, in its opinion, as such. They were these:

'The book of accounts of expenditures made by Whipple and kept under his direction showed that up to that date Whipple and Ambler's names had been used in charging up the items. On the 23d Ambler's name was dropped and it was all charged to Whipple. Many declarations of his were proved about this time, that he would make a great fortune; and it was proved by one Holden, with whom Ambler had been boarding, that up to this time Whipple had paid for Ambler's board without objection, but shortly after gave him, Holden, notice that he would do so no longer. It appeared from Dickerson's supplemental and amended answer that in the months of June and July Whipple was in Chicago and tried to interest him in the matter in which he and Ambler were engaged. It was also shown that on the 3d of September, within less than two weeks after the purpose of Whipple to get rid of Ambler was alleged to have been fully conceived, Dickerson, who was not a man of science, but a person having money, made his appearance in Washington, coming from Chicago, and was taken by Whipple to the shop where the recent experiment had been made. This was in the absence of Ambler from the city. Precisely what took place between Whipple and Dickerson was not shown by the testimony. That was to be judged of by the results which followed.

'The first of these was that, on the 16th day of September, only thirteen days after his first sight of the machinery in the workshops, and his first interview in Washington with Whipple, Mr. Dickerson filed in the Patent Office an application for a patent, the specification and claims of which were so nearly like those of Ambler and Whipple, and so nearly embodied the results of their experiments as to leave little doubt that it originated in the Whipple-Ambler experiments, however much it might differ in some particulars from their patent. This application was pressed so successfully that a patent was issued on it to Dickerson and Whipple on the 12th of October. In the meantime Dickerson and Whipple had entered into a partnership in the matter, and Ambler was excluded from all control.'

These facts, as already said, were undisputed, and there was much other testimony of a direct character tending to prove the purpose of Whipple to put Ambler wholly aside and out of the way, and that with this purpose he went after Dickerson, an old acquaintance of his own, and that with this purpose Dickerson came to Washington.

The testimony was voluminous. The whole case involving chiefly questions of intent and of fact, and thus ministering no great deal anywhere to juridical science, the results of it, as they appeared to the reporter and as they were assumed by the court, are along given.

It appeared sufficiently plain that Ambler was a man of intemperate habits, not at all constantly affected by liquor, but getting into drunken debauches from time to time, and, when in that state especially, given to lying and to various degraded habits. The evidence showed, however, that Whipple had known him since 1864, five years before the partnership between him and Ambler was formed, and that the habits were generally known; in fact by almost everybody who knew Ambler at all. They knew him to be a man of genius, with both the weaknesses and the vices in a full measure by which genius is sometimes disfigured. During a part of the month of August it seemed that he left Washington for eight or ten days. When he came home Whipple would not allow him to enter the workshops.

A principal defence of the defendants was the alleged release by Ambler.

The original of the alleged release was in the possession of a person named Martin, already referred to. It was dated September 24th, 1869.

It recited the issuing of the patent No. 92,687, the assignment of it to Whipple, the articles of partnership, and that a disagreement existed between Ambler and Whipple in regard to the construction of the invention; that Ambler was anxious to be released from his obligations to Whipple, and was willing to convey all his interest in the invention to Whipple, and then declared that in consideration of the full discharge of $1000 due by Ambler to Whipple, Ambler sold and conveyed all his interest in the invention, and in all improvements made, or which might be made by Whipple; and that Whipple released Ambler from all boligation on account of the contract, and from the payment of the $1000.

Martin stated that he had got the paper from Whipple at the request of Ambler; that the paper was drawn by him, Martin, at Whipple's request, and signed by Whipple on the 24th of September, 1869, the day of its date; that after getting the paper he could not find Ambler for some time, though he had called at his lodgings and written a letter, &c. However, on the 24th of October he saw Ambler. The witness proceeded:

'Ambler introduced the subject of the release from Whipple to him, and stated that his wife objected to his signing it, and said he ought to hold on; 'But,' said he, 'I differ in opinion with her, and I will sign the agreement.'. . . I handed Mr. Ambler the original of the contract, in my own writing, which was signed by Mr. Whipple and witnessed by Mr. Lombard and myself, and he read the same. I then handed him the duplicate copy, which was to be signed by himself. He made no objection to the contract, put the duplicate in his pocket, said he would take it with him to Washington, would there execute it and hand it to Mr. Whipple, and that I might deliver the original to him after he delivered the copy. I still hold the original of said contract for Mr. Ambler; will deliver it to him as soon as the duplicate is signed and delivered to myself or Mr. Whipple. I would not give Mr. Ambler the original because signed by Mr. Whipple; and I was instructed not to give it to him until the other was signed. I tendered it to him on Sunday, October 24th, at his rooms at his hotel.'

The testimony of Martin showed that he had undertaken, in his conversations with Ambler and while negotiations were going on about the arrangement set out in the paper dated 24th of September, 1869, and signed by Whipple but not by Ambler, to engage that Whipple should release the $1000 recited in the paper as having been due by Ambler to Whipple, and that Whipple did afterwards release the said $1000.

The witness gave a very disparaging account of Ambler's early and long-continued habits of intemperance, and of the great efforts which he had made to reform him. He testified also to his conviction for crime, though it appeared that after his cischarge from prison the witness took an interest with him in a patent, offered by Ambler to him by way of gratitude.

The following, with similar testimony, much too long to be set out in a case involving chiefly questions of fact, was relied on to show that Martin was really the agent of Whipple:

'QUESTION. What time did you first make Mr. Whipple's acquaintance?

'ANSWER. In the spring of 1864.

'QUESTION. Had you a great deal to do with Whipple?

'ANSWER. Yes, sir.

'QUESTION. As much mixed with him as with Ambler?

'ANSWER. No, sir; not quite. It was a different kind of mixing.

'QUESTION. You said that in the course of conversation with Ambler, you agreed that Whipple should discharge him?

'ANSWER. Yes, sir.'

Ambler was indebted, it seemed, to the witness.

'On the 24th of October, 1869, I met Mr. Martin, and he told me that he had prepared an assignment of my interest to Mr. Whipple for, he said, a part consideration of $1000. I took the assignment and looked at it. Said I, 'Shall I take this with me?' He replied, 'Yes, if you choose.' 'I do not wish,' said he, 'to press this case upon you at all; exercise your own judgment.' Said I, 'Mr. Martin, I will take it to Washington and show it to my wife.' I did not say, nor intimate, that I would sign it.'

The court below dismissed the bill and the complainant took this appeal.

Messrs. G. W. Paschall and R. Mason, for the appellant; Mr. J. A. Ballestier, contra.

Mr. Justice MILLER delivered the opinion of the court.

It is to be observed that neither party prays for a dissolution of the partnership. Indeed, the bill and cross-bill, and the answers to both, proceed upon principles which do not recognize the partnership as existing. The complainant seems to imply that by reason of Whipple's course of conduct he is remitted to all his rights as the inventor, and claims that being the sole inventor of the successful machine he is entitled to all the benefit of it. Whipple assumes that by his purchase from Ambler, and Ambler's misconduct, that the partnership has been dissolved, and he has succeeded to all its rights, if they are of any value.

The testimony is voluminous and contradictory. In the view we shall take of the case, while the decision will mainly turn on these questions of fact, released or sold his interest which the testimony has had upon our minds without referring to it in detail.

1. If the complainant really released or sold his interest in the partnership business, or in the patent of Whipple and Ambler, his case is at an end, and we will, therefore, consider that question first.

The instrument of writing dated September 24th, 1869, is supposed to have that effect. There is no doubt that the language of the instrument is sufficient for the purpose for which it was intended, but it wants the signature of Ambler. Nor is it pretended that he ever signed it or any copy of it. It is clearly on its face a paper which requires the signature of both parties to make it binding on either. The releases and assignments are mutual, and each is the consideration of the other, and it requires no great penetration to see that it was drawn in the interest of Whipple, who signed it, and not in the interest of Ambler, who did not sign it.

But it is argued that the paper was procured from Whipple by Martin, the agent of Ambler, at Ambler's request, and was signed by Whipple and delivered to Martin; that Martin delivered it to Ambler, who received a copy of it without objection, and promised to sign it. Admitting all this to be true, it is very clear that both parties intended to have a written instrument signed by each as the evidence of any contract they might make on that subject, and neither considered any contract concluded until it was fully executed. Under these circumstances Ambler had a right to decline to sign the paper, and until he signed he was not bound by it. It was not drawn by him, nor at his dictation. It was first signed by Whipple, and drawn up by him or in his presence, and made to suit his purposes. It is idle to say that because Ambler took a copy of it from Martin to examine he became a party to it, though he never signed it.

Further, we are of opinion, notwithstanding Martin's declaration that he acted on Ambler's suggestion, that he was throughout the whole affair acting for Whipple, and governed solely by his interest. This transaction does not, in our opinion, establish any release or transfer of Ambler's interest in the partnership concern.

2. Nor is there any such evidence of abandonment of the enterprise on the part of Ambler as to justify the court in holding that he had lost or forfeited his rights in the venture. It is true that about the middle of August he left Washington City for a week or two, but when he returned he found himself excluded from the workshops and from all participation in Whipple's plans, and it seems probable he was by Whipple's authority forbidden to go there before he left the city. It is unreasonable to call this a voluntary abandonment of the enterprise.

3. What weight would be given to the charges of bad character, drunkenness, and dishonesty in a suit by Whipple to dissolve the partnership we need not here state. If all that is charged were proved in such a suit it would make a strong case for relief, on such terms as equity might impose for the protection of both parties. But they did not authorize Whipple, of his own motion, to treat the partnership as ended and take to himself all the benefits of their joint labors and joint property. It seems also to be a fair inference from the pleadings and other circumstances that Whipple must have known of Ambler's conviction for felony before he entered into the agreement with him.

We are, therefore, of opinion that the case shows nothing which deprives Ambler of his rights under the original contract with Whipple.

4. We are also of opinion that Whipple is chargeable as trustee for Ambler with one-half of all that has been realized or may be realized from the use of the patent to Whipple and Ambler and the patent to Whipple and Dickerson.

This conclusion we rest upon the sixth article of the agreement between Whipple and Ambler. This article provides that any improvement or modification of the invention which may be made by either party, in this country or any other, for which a patent may be obtained, shall enure to the joint benefit of both. In the peculiarly close and confidential relation which the parties assumed toward each other in regard to an invention which both understood to be imperfect, undeveloped, and the subject of future trial and experiment, this provision was eminently wise and necessary. And since Whipple was, by the assignment of Ambler, invested with the legal title of the patent and chief conduct of the affairs of the partnership, he was under a peculiar obligation of good faith as both partner and trustee of Ambler.

Notwithstanding the bills, cross-bills, and supplemental bills set up both by the patent to Whipple and Ambler and the patent to Whipple and Dickerson, No. 95,665, and another issued to them pending the suit, No. 102,662, which are charged by Ambler to be all covered by his invention, and by the others to be totally distinct, none of these patents are found in the record. It is impossible, therefore, for this court to give any conclusive opinion or judgment as to how far they are identical, or how far there may be distinctive features, under which the whole or some part of the two latter patents might be sustained. We base our decree on other principles.

We are satisfied, from the testimony in the case, that the results of the experiments conducted by Ambler and Whipple in their joint enterprise developed the practicability of success in obtaining the object of their pursuit; that these experiments disclosed the fact that while they had mainly relied on the effect of heat by steam, applied to petroleum indirectly by encompassing the vessel in which the petroleum was, by the steam let into an outer chamber, it was found that it was necessary to introduce the steam into the vessel, thus bringing it into direct contact with the petroleum.

Whether Ambler had seen this as clearly as Whipple is not very well or satisfactorily shown. But it is proved to our entire satisfaction that when Whipple saw this point, and that through it success was within his reach, he immediately recognized its great value. This experiment was made at the same shops, with the same machines, and in the same pursuit, which for three months had engaged the active energies of both Ambler and Whipple. The weight of evidence is that Ambler was present and assisting, but this is denied by other witnesses.

What is clear to us is that as soon as Whipple recognized the value of this discovery he made up his mind to be rid of Ambler.

The undisputed facts of the case, taken in connection with much other testimony of a direct character, convince us that Whipple, in violation of his trust to Ambler, and in fraud of his rights, deliberately entered upon a scheme by which Ambler was to be deprived of the benefits resulting from success in their joint experiments. That in pursuit of this scheme he called in Dickerson, who, without having invented anything, and in a remarkably short space of time, procured letters-patent to issue to himself and Whipple which embraced the results of Ambler's discoveries and experiments, whether they embraced anything else or not.

For all that has come to Whipple's hands, for all that is included in the patents to him and Dickerson, he is, under the terms of the sixth article of the agreement, a trustee for Ambler to the extent of one-half, and must be so charged and held to account in this proceeding.

As to Dickerson, while he is not a trustee under that article, we are of opinion that he has so far knowingly connected himself with and aided in the fraud on Ambler that he cannot resist Ambler's right to an undivided half of both the patents to Dickerson and Whipple, and of the profits made or to be made out of them. What rights or remedies he may have against Whipple we do not decide.

The result of these views is that the decree of the Supreme Court of the District must be reversed; that a decree must be entered in that court declaring Whipple and Dickerson to hold in trust for the benefit of Ambler to the extent of one-half the two patents issued to them, mentioned in the pleadings as 95,665 and 102,662; that an accounting be had as to the profits realized by them, or either of them, from the use or sale, or otherwise, arising from said patents, and for such other and further proceedings as may be

IN CONFORMITY TO THIS OPINION.

title: Ambler v. Whipple/Opinion of the Court


text: Talk:Ambler v. Whipple/Opinion of the Court