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Ex Parte Jackson/Opinion of the Court

The power vested in Congress 'to establish post-offices and post-roads' has been practically construed, since the foundation of the government, to authorize not merely the designation of the routes over which the mail shall be carried, and the offices where letters and other documents shall be received to be distributed or forwarded, but the carriage of the mail, and all measures necessary to secure its safe and speedy transit, and the prompt delivery of its contents. The validity of legislation prescribing what should be carried, and its weight and form, and the charges to which it should be subjected, has never been questioned. What should be mailable has varied at different times, changing with the facility of transportation over the post-roads. At one time, only letters, newspapers, magazines, pamphlets, and other printed matter, not exceeding eight ounces in weight, were carried; afterwards books were added to the list; and now small packages of merchandise, not exceeding a prescribed weight, as well as books and printed matter of all kinds, are transported in the mail. The power possessed by Congress embraces the regulation of the entire postal system of the country. The right to designate what shall be carried necessarily involves the right to determine what shall be excluded. The difficulty attending the subject arises, not from the want of power in Congress to prescribe regulations as to what shall constitute mail matter, but from the necessity of enforcing them consistently with rights reserved to the people, of far greater importance than the transportation of the mail. In their enforcement, a distinction is to be made between different kinds of mail matter,-between what is intended to be kept free from inspection, such as letters, and sealed packages subject to letter postage; and what is open to inspection, such as newspapers, magazines, pamphlet, and other printed matter, purposely left in a condition to be examined. Letters and sealed packages of this kind in the mail are as fully guarded from examination and inspection, except as to their outward form and weight, as if they were retained by the parties forwarding them in their own domiciles. The constitutional guaranty of the right of the people to be secure in their papers against unreasonable searches and seizures extends to their papers, thus closed against inspection, wherever they may be. Whilst in the mail, they can only be opened and examined under like warrant, issued upon similar oath or affirmation, particularly describing the thing to be seized, as is required when papers are subjected to search in one's own household. No law of Congress can place in the hands of officials connected with the postal service any authority to invade the secrecy of letters and such sealed packages in the mail; and all regulations adopted as to mail matter of this kind must be in subordination to the great principle embodied in the fourth amendment of the Constitution.

Nor can any regulations be enforced against the transportation of printed matter in the mail, which is open to examination, so as to interfere in any manner with the freedom of the press. Liberty of circulating is as essential to that freedom as liberty of publishing; indeed, without the circulation, the publication would be of little value. If, therefore, printed matter be excluded from the mails, its transportation in any other way cannot be forbidden by Congress.

In 1836, the question as to the power of Congress to exclude publications from the mail was discussed in the Senate; and the prevailing opinion of its members, as expressed in debate, was against the existence of the power. President Jackson, in his annual message of the previous year, had referred to the attempted circulation through the mail of inflammatory appeals, addressed to the passions of the slaves, in prints, and in various publications, tending to stimulate them to insurrection; and suggested to Congress the propriety of passing a law prohibiting, under severe penalties, such circulation of 'incendiary publications' in the Southern States. In the Senate, that portion of the message was referred to a select committee, of which Mr. Calhoun was chairman; and he made an elaborate report on the subject, in which he contended that it belonged to the States, and not to Congress, to determine what is and what is not calculated to disturb their security, and that to hold otherwise would be fatal to the States; for if Congress might determine what papers were incendiary, and as such prohibit their circulation through the mail, it might also determine what were not incendiary, and enforce their circulation. Whilst, therefore, condemning in the strongest terms the circulation of the publications, he insisted that Congress had not the power to pass a law prohibiting their transmission through the mail, on the ground that it would abridge the liberty of the press. 'To understand,' he said, 'more fully the extent of the control which the right of prohibiting circulation through the mail would give to the government over the press, it must be borne in mind that the power of Congress over the post-office and the mail is an exclusive power. It must also be remembered that Congress, in the exercise of this power, may declare any road or navigable water to be a post-road; and that, by the act of 1825, it is provided 'that no stage, or other vehicle which regularly performs trips on a post-road, or on a road parallel to it, shall carry letters.' The same provision extends to packets, boats, or other vessels on navigable waters. Like provision may be extended to newspapers and pamphlets, which, if it be admitted that Congress has the right to discriminate in reference to their character, what papers shall or what shall not be transmitted by the mail, would subject the freedom of the press, on all subjects, political, moral, and religious, completely to its will and pleasure. It wou d in fact, in some respects, more effectually control the freedom of the press than any sedition law, however severe its penalties.' Mr. Calhoun, at the same time, contended that when a State had pronounced certain publications to be dangerous to its peace, and prohibited their circulation, it was the duty of Congress to respect its laws and co-operate in their enforcement; and whilst, therefore, Congress could not prohibit the transmission of the incendiary documents through the mails, it could prevent their delivery by the postmasters in the States where their circulation was forbidden. In the discussion upon the bill reported by him, similar views against the power of Congress were expressed by other senators, who did not concur in the opinion that the delivery of papers could be prevented when their transmission was permitted.

Great reliance is placed by the petitioner upon these views, coming, as they did in many instances, from men alike distinguished as jurists and statesmen. But it is evident that they were founded upon the assumption that it was competent for Congress to prohibit the transportation of newspapers and pamphlets over postal-routes in any other way than by mail; and of course it would follow, that if, with such a prohibition, the transportation in the mail could also be forbidden, the circulation of the documents would be destroyed, and a fatal blow given to the freedom of the press. But we do not think that Congress possesses the power to prevent the transportation in other ways, as merchandise, of matter which it excludes from the mails. To give efficiency to its regulations and prevent rival postal systems, it may perhaps prohibit the carriage by others for hire, over postal routes, of articles which legitimately constitute mail matter, in the sense in which those terms were used when the Constitution was adopted, consisting of letters, and of newspapers and pamphlets, when not sent as merchandise; but further than this its power of prohibition cannot extend.

Whilst regulations excluding matter from the mail cannot be enforced in a way which would require or permit an examination into letters, or sealed packages subject to letter postage, without warrant, issued upon oath or affirmation, in the search for prohibited matter, they may be enforced upon competent evidence of their violation obtained in other ways; as from the parties receiving the letters or packages, or from agents depositing them in the post-office, or others cognizant of the facts. And as to objectionable printed matter, which is open to examination, the regulations may be enforced in a similar way, by the imposition of penalties for their violation through the courts, and, in some cases, by the direct action of the officers of the postal service. In many instances, those officers can act upon their own inspection, and, from the nature of the case, must act without other proof; as where the postage in not prepaid, or where there is an excess of weight over the amount prescribed, or where the object is exposed, and shows unmistakably that it is prohibited, as in the case of an obscene picture or print. In such cases, no difficulty arises, and no principle is violated, in excluding the prohibited articles or refusing to forward them. The evidence respecting them is seen by every one, and is in its nature conclusive.

In excluding various articles from the mail, the object of Congress has not been to interfere with the freedom of the press, or with any other rights of the people; but to refuse its facilities for the distribution of matter deemed injurious to the public morals. Thus, by the act of March 3, 1873, Congress declared 'that no obscene, lewd, or lascivious book, pamphlet, picture, paper, print, or other publication of an indecent character, or any article or thing designed or intended for the prevention of conception or procuring of abortion, nor any article or thing intended or adapted for any indecent or immoral use or nature, nor any written or printed card, circular, book, pamphle, advertisement, or notice of any kind, giving information, directly or indirectly, where, or how, or of whom, or by what means, either of the things before mentioned may be obtained or made, nor any letter upon the envelope of which, or postal-card upon which indecent or scurrilous epithets may be written or printed, shall be carried in the mail; and any person who shall knowingly deposit, or cause to be deposited, for mailing or delivery, any of the hereinbefore mentioned articles or things,. . . shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall, for every offence, be fined not less than $100, nor more than $5,000, or imprisonment at hard labor not less than one year nor more than ten years, or both, in the discretion of the judge.'

All that Congress meant by this act was, that the mail should not be used to transport such corrupting publications and articles, and that any one who attempted to use it for that purpose should be punished. The same inhibition has been extended to circulars concerning lotteries,-institutions which are supposed to have a demoralizing influence upon the people. There is no question before us as to the evidence upon which the conviction of the petitioner was had; nor does it appear whether the envelope in which the prohibited circular was deposited in the mail was sealed or left open for examination. The only question for our determination relates to the constitutionality of the act; and of that we have no doubt.

The commitment of the petitioner to the county jail, until his fine was paid, was within the discretion of the court under the statute.

As there is an exemplified copy of the record of the petitioner's indictment and conviction accompanying the petition, the merits of his case have been considered at his request upon this application; and, as we are of opinion that his imprisonment is legal, no object would be subserved by issuing the writs; they are therefore

Denied.

title: Ex Parte Jackson/Opinion of the Court


text: Talk:Ex Parte Jackson/Opinion of the Court

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


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National Bank v. Omaha

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

Mr. J. M. Woolworth for the appellant.

No counsel appeared for the appellee.

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

title: National Bank v. Omaha


text: Talk:National Bank v. Omaha

title: Talk:National Bank v. Omaha


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

The decree is this case was rendered Nov. 13, 1874; and at the end appears the following entry:--

'Whereupon said complainant, by its solicitor, prays an appeal to the Supreme Court of the United States, which is allowed; and bond to be given on said appeal is fixed at $500.'

A bond was filed Sept. 30, 1875, which appears to have been approved by the clerk, and not by the judge. No citation has been issued or served, and there is no appearance in this court by the appellees.

We have decided at the present term, in Sage v. Railroad Company (supra, p. 712), that, even though an appeal is asked for in open court, if the security is not taken until after the term, 'a citation should be issued to bring in the parties, unless they voluntarily appear, for, until the security has been accepted, the allowance of the appeal cannot be said to have been perfected;' and, in O'Reilly v. Edrington (supra, p. 724), that 'the security upon writs of error and appeals must be taken by the judge or justice. He cannot delegate this power to the clerk.'

Appeal dismissed.


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


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Troy v. Evans

MOTION to dismiss a writ of error to the Circuit Court of the United States for the Middle District of Alabama.

This is an action commenced Oct. 31, 1872, by Evans, Gardner, & Co., against the Mayor and Councilmen of Troy, a municipal corporation in Alabama.

The declaration alleges that the defendant, on the 19th of February, 1869, pursuant to lawful authority, issued certain town bonds, each for $100, payable to bearer, with interest at eight per cent per annum from said date, in ten annual instalments, after the completion of the Mobile and Girard Railroad to said town, together with the accrued interest; that sixty-three of said bonds are the property of the plaintiffs; that said road was completed to the town of Troy June 9, 1870; and that three annual instalments of ten per cent each, amounting to $30 of the principal, are due and unpaid on each of said bonds, besides interest. The plaintiffs therefore claim $1,890, the amount of the instalments due on said bonds, with interest on said bonds, at eight per cent per annum, from Feb. 19, 1869.

The defendant's plea sets forth that at the commencement of the suit the plaintiffs held the bonds as security for an existing liability or indebtedness of one Jones to them, which was much smaller in amount than the amount of said bonds, and which was neither paid nor extinguished by said bonds, nor by their delivery to the plaintiffs by said Jones; that the plaintiffs obtained said bonds from Jones, before the commencement of the suit, as security for his liability or indebtedness to them, and held the same as such security at the commencement of the suit, and not otherwise; and that, when they so obtained said bonds, they had notice that Jones was a citizen of the State of Alabama, as in fact he then was, and ever since has been.

There was a judgment for the plaintiffs, May 27, 1875, for $3,926.96. The defendant below then sued out this writ of error, which the defendants in error now move to dismiss, on the ground that the amount in controversy is not sufficient to give this court jurisdiction.

Mr. H. A. Herbert for the defendants in error, in support of the motion.

Mr. Samuel F. Rice and Mr. Thomas G. Jones, contra.

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

title: Troy v. Evans


text: Talk:Troy v. Evans

title: Talk:Troy v. Evans


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Troy v. Evans/Opinion of the Court

The writ of error in this case was sued out by the defendants below, upon a judgment rendered May 27, 1875, for $3,926.96. If there were nothing more, it would be clear that we have no jurisdiction. The bonds sued upon, however, were payable in instalments, and amounted in the aggregate to more than $5,000, while the instalments due when the judgment was rendered were less. The plea upon which the case was tried put in issue only the ownership of the bonds and the right of the plaintiffs to bring the suit, the claim being that one Jones, a citizen of Alabama, was the real owner, and that the plaintiffs held them only as security for a debt which he owed, less in amount than the bonds. The amount of the debt nowhere appears in the pleadings, though it is admitted that the bonds were held as security only.

Conceding all that is claimed in the argument opposing this motion, to wit, that the judgment in this action will be conclusive in another by the present plaintiffs upon the same bonds as to the liability of the defendants upon the bonds to the extent of the debt of Jones, for which they are held, still our jurisdiction cannot be maintained, unless it also appears that this debt exceeds $5,000. Prima facie, the judgment against a defendant in an action for money is the measure of our jurisdiction in his behalf. This prima facie case continues until the contrary is shown; and, if jurisdiction is invoked because of the collateral effect a judgment may have in another action, it must appear that the judgment conclusively settles the rights of the parties in a matter actually in dispute, the sum or value of which exceeds the required amount. No issue was raised here as to how much was actually due the plaintiffs from Jones, and the testimony is by no means clear upon that subject. Certainly there is nothing in the record which concludes the parties upon that question; and, as it rests upon the plaintiff in error to establish our jurisdiction affirmatively before we can proceed, the writ is

Dismissed.

title: Troy v. Evans/Opinion of the Court


text: Talk:Troy v. Evans/Opinion of the Court

title: Talk:Troy v. Evans/Opinion of the Court


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Glue Company v. Upton

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

This is a suit in equity by the Milligan and Higgins Glue Company, against George Upton, for the alleged infringement of reissued letters-patent No. 4072, for an improvement in the manufacture of glue, granted July 12, 1870, to Thomas P. Milligan and Thomas Higgins, assignees of Emerson Goddard, upon the surrender and cancellation of original letters-patent No. 44,528, issued to the latter Oct. 4, 1864. The complainant is the assignee of Milligan and Higgins. The bill prays for an injunction, and for an account of the defendant's gains and profits arising from the manufacture and sale of the patented article. Upon hearing, the court below dismissed the bill, whereupon the complainant appealed here. The facts relating to the alleged invention are stated in the opinion of the court.

The case was argued by Mr. Edmund Wetmore for the appellant.

The court declined to hear Mr. George L. Roberts and Mr. Chauncey Smith for the appellee.

MR. JUSTICE FIELD delivered the opinion of the court.

title: Glue Company v. Upton


text: Talk:Glue Company v. Upton

title: Talk:Glue Company v. Upton


text:
Glue Company v. Upton/Opinion of the Court

In the court below, the defendant questioned the validity of the surrender of the original patent and of the reissue; but, from the view we take of the alleged invention or discovery, it is unnecessary to consider this point. We shall treat the reissue as for the same invention or discovery, differing in no substantial particular from that originally patented. In the specification accompanying the reissue, the patentee states that he has invented a new and useful article, which he denominates 'instantaneous or comminuted glue;' and then proceeds to describe the glue of commerce previously found in the market, and to point out the inconveniences attending its use, and the manner in which they are obviated by his invention. He states that the ordinary glue of commerce was then sold in the form of hard, angular flakes, and that it required a good deal of time to prepare it for use,-first by soaking it in cold water, and afterwards by heating it in a hot-water bath until the flakes were dissolved. The time thus occupied, he says, is saved by his invention, as his article does not require to be prepared for solution by soaking, is quickly permeated by water, so that it can be dissolved in large quantities ready for mechanical use in less than five minutes, and in smaller quantities for domestic use in less than one minute. Another objection stated to the glue of commerce as previously sold is, that great inconvenience was experienced in retailing it, from the difficulty of putting it up in small packages, by reason of the sharp, angular corners and edges of the broken flakes, which cut the wrappers, causing a waste of time and stock. The new article, he says, can be put up by machinery or by hand into packages of uniform size and of regular form and weight, similar to those in which ground spices are put up for domestic use, and sold by retail traders. He also states that the new article has a more pleasing appearance than the ordinary glue of commerce, in that it has a white color, and is consequently more merchantable, and brings a higher price.

The specification then proceeds to describe the best process which the inventor has devised for making such instantaneous glue, and the apparatus or machinery he has used. These consist of a breaking machine, for crushing the flakes into small pieces, and of a rasping or grating machine, for comminuting the broken pieces into uniform grains. But for these mechanical means or processes the patentee makes no claim, observing, that it is obvious that other means or processes of crushing or reduction may be used to manufacture his article out of dry flake glue or gelatine by a crushing or breaking operation, and that his claim is only to the comminuted glue as a new article of manufacture.

It thus appears that the invention claimed is not any new combination of ingredients, creating a different product, or any new mechanical means by which a desirable change in the form of a common article of commerce is obtained; but it consists only of the ordinary flake glue reduced to small particles by mechanical division. The advantages from such division consist in its more ready and rapid solution, its greater convenience for packing and retailing, and its whiter appearance and enhanced salableness. The whole claim is to an old article of commerce in a state of mechanical division greater than previously used, but unchanged in composition and properties; and the benefits arising from the increased division are such as appertain to every soluble substance when divided into minute particles.

This statement, which is substantially a repetition in a condensed form of that by counsel, is supported by reference to numerous instances where similar results have followed the mechanical division of soluble objects into small particles; but we do not deem it necessary to mention them, for the point involved presents no difficulty. There is nothing new in the fact that the solution of a soluble substance is accelerated by increasing its fragmentary division; nor is there any thing new in the fact that articles with rough angles and edges can be more readily put up into packages without injury to their wrappers when reduced by mechanical division into small particles; nor is there any thing new in the fact that such articles generally improve in appearance by granulation or powdering.

A distinction must be observed between a new article of commerce and a new article which, as such, is patentable. Any change in form from a previous condition may render the article new in commerce; as powdered sugar is a different article in commerce from loaf sugar, and ground coffee is a different article in commerce from coffee in the berry. But to render the article new in the sense of the patent law, it must be more or less efficacious, or possess new properties by a combination with other ingredients; not from a mere change of form produced by a mechanical division. It is only where one of these results follows that the product of the compound can be treated as the result of invention or discovery, and be regarded as a new and useful article. The three advantages attributed to comminuted glue over the flake glue were, previous to the alleged invention of Goddard, recognized as following from a division of soluble objects into small particles, in the treatment of a great variety of articles in constant use in the kitchens of families, and in pharmacy. Where certain properties are known to belong generally to classes of articles, there can be no invention in putting a new species of the class in a condition for the development of its properties similar to that in which other species of the same class have been placed for similar development; nor can the changed form of the article from its condition in bulk to small particles, by breaking or bruising or slicing or rasping or filing or grinding or sifting, or other similar mechanical means, make it a new article, in the sense of the patent law.

This subject is elaborately considered by the presiding justice of the Circuit Court, in his opinion, with reference to numerous adjudications of the courts of England and the United States; and in his conclusion on this point we concur.

Decree affirmed.


text: Talk:Glue Company v. Upton/Opinion of the Court


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Rubber-Coated Harness-Trimming Company v. Welling

APPEAL from the Circuit Court of the United States for the District of New Jersey.

The facts are stated in the opinion of the court.

Mr. J. C. Clayton and Mr. H. Q. Keasley for the appellants.

Mr. Frederic H. Betts, contra.

MR. JUSTICE HUNT delivered the opinion of the court.


text: Talk:Rubber-Coated Harness-Trimming Company v. Welling


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Rubber-Coated Harness-Trimming Company v. Welling/Opinion of the Court

William M. Welling brought this suit in the Circuit Court against the Rubber-Coated Harness-Trimming Company and others, alleging an infringement of his letters-patent No. 37,941, bearing date March 17, 1863, for an improvement in rings for martingales, and recovered damages. The company thereupon appealed to this court.

Welling's patent bears date of March 17, 1863, and recites that a previous patent to him described a particular mode of making factitious ivory, out of which billiard-balls and rings of various kinds were manufactured, and states that his present invention does not relate to that particular composition, but that 'the nature of my said invention consists in the employment of a metallic ring within a ring formed of artificial ivory or similar materials, for giving strength to the same, thereby producing a new article of manufacture.'

His method of proceeding is as follows:--

'In order to make my improved rings, I take a ring of metal, such as shown at a, or said ring may be formed by punching out a washer from a sheet of metal, or in any other suitable way. I take the amount of artificial ivory composition, and by dies or by hand cause the said composition to completely envelop the said ring with as much uniformity as possible, as at b; and, to give the exterior finish to the same, press and solidify the mass of composition around the ring by means of dies, and in so doing any plain or more or less ornamental shape may be given to the said ring, or the surface thereof. My ring is thus made of the desired ornamental appearance, while great strength is attained at very little cost.'

His claim is in these words:--

'What I claim and desire to secure by letters-patent is the ring for martingales, &c., manufactured as set forth, with a metal ring enveloped in composition, as and for the purposes specified.'

In ascertaining the construction to be put upon this patent, the state of the art is a legitimate and necessary subject of consideration.

1. The fact that metallic rings covered with a composition such as lacquer or varnish, rubber, enamel, or glass, had been in use for many years before Welling's invention, is clearly proved, and is conceded in the briefs on both sides. In most instances, these coverings were applied and secured first by the hand of the operator, and then by machinery.

2. It is proved by witnesses, and shown by the patents hereafter referred to, that prior to his invention dies were also made use of in the manufacture of pipes or rings upon iron cores. Elliot, an expert witness, says, in reply to the question: 'Is it a part of your knowledge of the state of the art of manufacturing articles of composition or plastic materials, that pipes of lead composition have been formed upon iron cores by pressure in dies?' 'It is.' Again: 'Do you mean to say, in the manufacture of rings, that dies were well known prior to the invention in suit? Ans. I believe rings were formed in dies prior to that time, but without metal cores.'Hedrick says: 'It was not new two years before the date of Welling's application to make a martingale-ring by covering a metallic ring with a shell of plastic material which could be moulded or pressed thereupon and afterwards hardened.'

The English patent issued to Moses Poole, dated Oct. 1, 1852, and of which the specification is dated March 30, 1853, was referred to by a witness, but was not given in evidence. We therefore pass it without comment.

The English patent of 1851, to Newton, referred to in the testimony, recites:--

'When it is desired that the compound of caoutchouc or guttapercha shall serve as a covering to the iron or other substance, a thin sheet of the compound, sometimes one thirty-second part of an inch in thickness, or less, is pressed with great care upon the iron or other substance, so as to expel all air from between the adjoining surface, and to cause the most perfect union and adhesion; the coated article is bound with strips or ribbons of cloth, or other suitable material, whereby the compound is kept in close contact with the article during the process of hardening. The combined materials thus treated will be found to possess the qualities desired, the iron or other substance giving strength, and the compound giving a hard and durable surface. In this way may be produced many articles used in and about harness or carriages, such as saddle-trees, buckles, terrets, bits, stirups, martingale-rings, dasher-irons, and articles intended to be used as furniture,' &c.

'Another plan consists in so treating the compositions while in a plastic state that they will harden into any desired shape. . . . For this purpose, the compounds of caoutchouc or gutta-percha, before described, are taken in the plastic state, and cut or pressed or otherwise formed into the exact shapes which it is desired they shall retain after vulcanization.'

In the English patent to Edward Benton, of 1843, the rings, terrets, and other parts are covered with an enamel or vitreous composition, of which the composition and the manner of applying it to the ring are described; and in speaking of these linings it is said, 'The said linings are formed in moulds by processes well understood,' &c.

Similar language is used in the English patent to Barnwell & Rollauson, dated 1860: 'We make toys, &c., by employing moulds or dies of any suitable material for which our composition has no affinity, or to which it will not adhere.'

A die is a piece of metal on which is cut a device which by pressure is to be placed upon some softer body. A mould is a receptacle into which a softer material is injected, to take its shape when hardened. Both dies and moulds are there spoken of; and it thus appears that not only were there well known and in extensive use, before Welling's patent, iron rings, tubes, pipes, toys, and other articles of manufacture, enveloped in and surrounded by glass, enamel, rubber, and other like substances, but these coverings had been applied and ornamented by means of moulds or dies.

As we read Welling's patent of 1863, it is for a product, and not for a process.

In 1857, he obtained letters-patent No. 17,999, for the manufacture of artificial ivory. He gives the proportions of white shellac, of impalpable white, of ivory dust and camphor, which are to be heated, thoroughly incorporated, and brought into heated moulds for the manufacture of various articles. His claim in that patent is for forming artificial ivory, by thoroughly mixing the articles specified, or others having equivalent properties, while under the operation of heat, substantially as specified. The patent was for a product resulting from the materials and proportions described, to wit, factitious ivory.

Having the advantages of his manufactured ivory strongly impressed upon his mind, he makes, in 1863, a more specific application of this invention of ivory to the production of martingale-rings.

He says in his description, 'I have invented and applied to use a certain new and useful improvement in rings for martingales.' He does not here claim to have invented a substance or material or composition; he claims no benefit of any process to reach his result, but claims a ring only. He claims a product; and all else is a description of the mode of obtaining that product, which would enable a skilled mechanic to make the article, and which the law requires him to set forth in his specification. Of this character is the statement that the composition envelops the ring by means of dies or the hand, and that an exterior finish and ornament is produced by solidifying by the means of dies.

Again, he says: 'The nature of my invention consists in the employment of a metallic ring within a ring formed of artificial ivory, or similar materials for giving strength to the same, thereby producing a new article of manufacture,' &c.

A metallic ring within a ring of factitious ivory is the article to be produced, and that is the nature of the invention.

Nothing can be more specific than the summing up as to the nature of his invention by the patentee, when he says, 'What I claim and desire to secure by letters-patent is the ring for martingales, manufactured as set forth, with a metal ring enveloped in composition, as and for the purposes specified.' A metal ring enveloped in composition would seem to be the plain subject of the monopoly, the other language being merely illustrative of or supplemental to the main idea.

What, then, is the product thus secured by his patent?

Welling gives this construction to his patent: 'I claim (under my patent) all compositions for covering martingalerings or rings for harness.' 'Do you claim that all metallic harness-rings covered with composition of any kind are subject to your patent? I do most certainly.'

If this is the true construction of the patent, it cannot be sustained under the evidence showing the use of covering of harness-rings by various compositions, and patents providing for such use, prior to his patent.

Another construction claims that the patent covers a ring having in iron core covered with a plastic composition, if and provided the article is finished by dies. This is the view of the appellee's expert witness, Elliot, who states expressly that, if made without the use of dies, he does not consider the article within the patent.

Nearly allied to this idea, if not identical with it, is that of the judge who tried this case at the circuit. He says of Welling's patent: 'His instrumentalities were all old,-an iron ring, a plastic composition, and a die; but, so far as appears in the case, they were new in combination. If his patent had been simply for a metallic ring, covered with any compound capable of being moulded, or with factitious ivory or similar materials, it would have been void for want of novelty. If it had been for the use of the die in pressing and solidifying plastic substances generally, it would have been probably anticipated in this regard by the English letters-patent to Barn-well & Rollauson of 1860, in which such use of dies is plainly indicated. But the invention is for a combination; and the combination is a metal ring surrounded with some plastic composition, like artificial ivory, of such a nature that it is capable of being compressed, solidified, and polished by the action of the dies, and which is in fact subjected to such action, whereby a martingale-ring is produced with an exterior surface more durable and more highly polished than had before been obtained by different processes of manufacture, and greater cost.'

We think the evidence shows that this combination, if it is entitled to that rank in mechanics, as well as the ring and the compound, is old. There is, in truth, no combined action. The iron core is used as a basis, the covering is of a pliable composition, and it is pressed or stamped by dies or moulds. All this is done separately, by no combined action. This is just as much, and nothing more, than is described by the witnesses, and by the patents prior to Welling's. It is simply the application and the action of old and well-known modes and materials in an accustomed manner. It is a case of aggregation, not of combination.

Can the appellee recover in this action upon a patent for this product, to wit, a metal ring enveloped in a composition of artificial ivory or a similar material?

It is evident, from what has already been said, that a patent for the manufacture of a metal ring enveloped in a composition of ivory or similar material is void for the want of novelty.

Such is the testimony of the expert witnesses on both sides, as well as the inevitable result from an examination of the English patents heretofore referred to. Indeed, we do not understand the counsel as contending that the patent can be sustained if this is held to be its construction.

Upon the whole case, we are of the opinion that the decree must be reversed and the case remitted to the Circuit Court, with directions to enter a decree dismissing the bill of complaint, with costs; and it is

So ordered.


text: Talk:Rubber-Coated Harness-Trimming Company v. Welling/Opinion of the Court


text:
Hotel Company v. Wade

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

This is a bill filed Sept. 24, 1873, by Jeptha H. Wade, a citizen of Ohio, and James W. Bosler, a citizen of Pennsylvania, against the Omaha Hotel Company, a corporation of Nebraska, Milton Rogers, Thomas Wardell, Edward Creighton, Augustus Kountze, Herman Kountze, Andrew J. Poppleton, Henry W. Yates, Edward D. Pratt, Charles W. Hamilton, and others, citizens of that State, to foreclose a mortgage of certain lands in Omaha, and the hotel and other buildings then or thereafter to be erected thereon, executed by that company Sept. 1, 1871, to said Rogers, as trustee, to secure one hundred coupon bonds for $1,000 each, issued by it, and payable in five years, with interest at twelve per cent per annum, payable September 1 and March 1 in each year. It was, among other things, covenanted that the company should keep the hotel insured for not less than $100,000, by good and responsible companies, and assign the policy for the benefit of the bondholders; that it should pay all taxes and assessments, general or special, on the premises; and that the sum raised by the mortgage should, under the management, direction, and control of the company, be faithfully and honestly applied to the completion of the hotel. The condition was, that if the company 'shall well and truly pay the interest on said bonds, as it becomes due, and the principal at maturity, and perform each and every other covenant and agreement herein, then this conveyance shall be void; otherwise, to remain in full force and effect. And in case of a failure to pay the interest according to the tenor and effect of said bonds, or to perform any other covenant or agreement herein contained, then, in that case, not only the interest but the principal of said bonds shall become due and payable; and the said party of the second part or his successors shall have the right to take immediate possession of said property, foreclose this mortgage, and sell said mortgaged premises.'. ..

The bill alleges that the bonds were, immediately upon their execution, delivered to Creighton and other parties, who advanced the $100,000, which was duly expended by the company as required by the mortgage; and that on July 25, 1873, Wade, in the usual course of business, and without knowledge of any defences thereto, purchased in good faith from Creighton thirty-five of the bonds, and that on the 23d of that month, Bosler, in like manner, purchased from Augustus Kountze forty of them, both purchases having been made without any knowledge, suspicion, or reason to suspect that any overdue coupons theretofore attached to said bonds had not been paid, and that Wardell holds the remaining twenty-five bonds. It also alleges that, save that due March 1, 1872, no interest has been paid on the bonds, but that the past-due coupons are held by Creighton, Augustus Kountze, Herman Kountze, and Yates, who claim to be interested in the security of the mortgage; that the coupons held by the complainants, and due Sept. 1, 1873, were duly presented by them for payment, and payment having been refused, they were protested, and notice thereof given to the company; that default was made in the payment of State and county taxes due on the property in December, 1872, on which account it was sold, Sept. 8, 1873, Augustus Kountze becoming the purchaser, and that it was again, on the 18th of that month, sold for the non-payment of taxes to the city of Omaha; that since Sept. 5, 1873, the premises have been insured but for $40,000; and that the company has, by the foregoing and other breaches of its covenants, caused the principal as well as the interest of the bonds to become due and payable. It further alleges that the complainants applied to the said trustee to take possession of the premises, and bring an action to foreclose the mortgage, offering to indemnify and save him harmless from all costs and expenses, but that he refused so to do; and that they applied to Wardell, Creighton, Poppleton, Augustus Kountze, Herman Kountze, and Yates to join in such a suit, but that they and each of them declined. The bill prays for a receiver, an account, a sale of the mortgaged premises, and general relief.

Separate answers were filed by Pratt and Hamilton, by Caldwell and others, and by the Hotel Company. The answer of the latter, after insisting that the bill was defective for want of proper parties, and that therefore the court had no jurisdiction of the suit, sets up certain defences, which are stated in the opinion of the court.

There was a decree for the complainants; whereupon the Hotel Company, and certain other of the respondents, brought the case here.

Mr. Clinton Briggs for the appellants.

In order to sustain the jurisdiction of the court below, each and all of the bond and coupon holders were indispensable parties complainant. The practice of courts of general jurisdiction, where those who refuse to join as complainants may be impleaded as defendants, cannot obtain in the Circuit Court of the United States, where jurisdiction depends upon the citizenship of the parties. There the controversy must be between citizens of different States, not between those of the same State. The only difficulty is, to determine who are and who are not indispensable parties. Russell v. Clark's Executors, 7 Cranch, 69; Shields et al. v. Barrow, 17 How. 130; Coal Company v. Blatchford, 11 Wall. 172; Knapp v. Railroad Company, 20 id. 117; Case of the Sewing-Machine Companies, 18 id. 553; Williams et al. v. Bankhead, 19 id. 563; Ober v. Gallagher, 93 U.S. 199.

The act of March 3, 1875, enlaring the jurisdiction of the Circuit Court, does not change the rule that each plaintiff must be competent to sue, and each defendant liable to be sued.

In a matter so vital as that of jurisdiction, the court will consider who are the real actors. McNutt v. Bland et al., 2 How. 9; Huff et al. v. Hutchinson, 14 id. 586.

The bonds and mortgage are invalid, by reason of the trust relation which the lenders of the money, who were a majority of the board of directors of the company, sustained to the stockholders. Michoud et al. v. Girod et al., 4 How. 503; Koehler v. Black River Falls Iron Co., 2 Black, 715; Drury v. Cross, 7 Wall. 299; Jackson v. Ludeling, 21 id. 616; Stephen v. Beall, 22 id. 329; Twin-Lick Oil Co. v. Marbury, 91 U.S. 587; Luxemburg Railroad Co. v. Macquay, 25 Beav. 586; Cumberland Coal Co. v. Sherman, 30 Barb. (N. Y.) 553; Railroad Company v. Poor, 59 Me. 277; San Diego v. Railroad Company, 44 Cal. 106; Goodwin v. Railroad & Canal Company, 18 Ohio St. 182.

The interest contracted for and received by the lenders of the money was usurious. Bank of the United States v. Owens et al., 2 Pet. 527; Brown v. Vanderburgh, 43 N. Y. 195; Creig v. Bliss, 26 Pa. 271; Feidler v. Darrin, 50 N. Y. 437.

Mr. J. M. Woolworth, contra.

MR. JUSTICE CLIFFORD delivered the opinion of the court.

title: Hotel Company v. Wade


text: Talk:Hotel Company v. Wade

title: Talk:Hotel Company v. Wade


text:
Hotel Company v. Wade/Opinion of the Court

Jurisdiction of the circuit courts, concurrent with the courts of the several States, under the existing act of Congress, is extended, where the matter in dispute exceeds the sum or value of $500, to all suits at common law or in equity in which there shall be a controversy between citizens of different States, without any exception or qualification, employing the very words contained in the Constitution. 18 Stat. 470; Const., art. 3, sect. 2.

Motives of a public character induced certain residents of the city of Omaha to become organized as a corporation, to facilitate their efforts to erect a hotel at that place. Expenditures to a large amount were incurred by the Hotel Company in purchasing the lot and in erecting and enclosing the building; and, being unable to complete the same without pecuniary aid from others, they decided to mortgage the premises to raise the necessary funds for the purpose.

Arrangements were first attempted, and partly perfected, to make a loan of $75,000; but it was soon after determined that it would require $25,000 more to accomplish the object. Negotiations of various kinds ensued, which resulted in a vote of the stockholders in favor of the proposition ultimately carried into effect, to borrow $100,000 to complete the hotel.

Action of a corresponding character was had by the board of directors; and they voted to accept the proposition made to the stockholders, and directed the president and secretary of the company to execute, acknowledge, and deliver to Milton Rogers, trustee, a mortgage or trust deed of the hotel lot and building, as more fully set forth in the record.

Bonds of the company executed to bearer, with interest coupons attached, to the number of one hundred, each for the sum of $1,000, with interest at the rate of twelve per cent, payable semi-annually, were issued, the principal payable in five years, with the privilege to the company of paying the same two years earlier. Payment of the bonds, principal and interest, was secured by the mortgage or trust deed executed by the president and secretary of the company, in pursuance of the aforesaid vote of the board of directors to carry into effect the proposition previously adopted by the stockholders at their meeting duly notified and held for the purpose.

Covenants alleged to have been broken are the following: 1. That the company shall keep the hotel building insured in good and responsible companies, to be agreed between the parties, in the sum of not less than $100,000, and that the company shall assign the policies to the trustee, for the benefit of the holders of the bonds. 2. That the company shall pay all taxes and assessments upon the mortgaged premises. 3. That the sum raised by the mortgage shall be applied to the construction and completion of the hotel building. 4. That the company shall well and truly pay the interest as it becomes due, and the principal at maturity; and the instrument provides that in case of failure to pay the interest or to perform any other of the covenants or agreements therein contained, then in that case not only the interest but the principal shall become due and payable, and the trustee shall have the right to take immediate possession of the property, foreclose the mortgage, and sell the mortgaged premises.

Specific breaches of the covenants of the instrument are alleged, and failures, neglects, and refusals of the company to perform the same, in consequence of which the complainants aver and charge that the principal as well as the interest of the mortgage debt has become due, and that they are entitled to a decree foreclosing the mortgage.

Service was made, when most of the respondents entered an appearance, and two of the respondents, to wit, E. D. Pratt and Charles W. Hamilton, filed an answer. Certain interlocutory proceedings followed, which it is not material to notice in this investigation. Six other respondents subsequently appeared and filed an answer, and at a still later period the Hotel Company appeared and filed their answer. Special reference need only be made to the answer of the Hotel Company, as the other two answers relate chiefly to the application for a receiver.

Four principal defences were set up by the company: 1. That the Circuit Court had no jurisdiction of the case. 2. That the bonds and mortgage were void because of the trust relation which the lenders of the money sustained to the stockholders. 3. Because the lenders of the money contracted for and received usurious interest. 4. That the complainants were not bona fide holders of the bonds, and that the bonds do not equitably bind the Hotel Company.

Due process was served, and it is conceded that the respondents who did not answer suffered the bill of complaint to be taken as confessed. Without unnecessary delay, the complainants filed the general replication, and proofs were taken on both sides. Hearing was had upon bill, answer, replication, and proofs; and the Circuit Court entered a decree in favor of the complainants, as fully set forth in the record, the details of which are not material to the questions to be decided in this court.

Prompt appeal was taken by the respondents; and since the cause was entered here they have filed as an assignment of errors the rulings of the Circuit Court in overruling the four defences set up in the answer of the Hotel Company, the first being that the Circuit Court had not jurisdiction of the case, by which is meant that proper parties are not made in the bill of complaint to enable the Circuit Court to decree the relief for which the complainants pray.

Want of proper parties is the true nature of the alleged error, the principal defects specified being the following: 1. That the suit is in the name of certain bondholders, and not in the name of the trustee designated in the mortgage. 2. That the other bondholders are not joined as complainants in the suit.

Application was made to the trustee by the complainants to take possession of the mortgaged premises, and to bring an action in proper form for the foreclosure of the deed of trust and for the sale of the premises; and they allege that he refused to comply with their request, notwithstanding that they offered to indemnify him and save him harmless.

Sufficient appears to show, beyond controversy, that the complainants had a right to have suit for a foreclosure in the name of the trustee; and having applied to him for that purpose, and he having refused to perform his duty, the complainants, with the other parties interested in the security, might properly become the actors in such a suit against the mortgagor, impleading the trustee also as a respondent. Resident parties interested to foreclose the mortgage or trust deed also refused to join in the suit with the complainants, and they were joined as respondents with the Hotel Company and the recusant trustee.

Circuit courts, it is admitted, have jurisdiction, under the judiciary act, of all suits of a civil nature, at common law or in equity, where the amount in dispute is sufficient, and the suit is between a citizen of the State where the suit is brought and a citizen of another State. 1 Stat. 78. Words and phrases of a much wider signification are used in the recent act of Congress defining the jurisdiction of the circuit courts, which provides that those courts shall have original cognizance, concurrent with the courts of the several States, of all suits of a civil nature, at common law or in equity, where the matter in dispute exceeds the sum or value of $500, and in which there shall be a controversy between citizens of different States. When the decree in this case was entered, the latter provision was in operation, but the suit was commenced before the act which contains it was passed. 18 id. 470.

Tested by either provision, the court is of the opinion that the objections to the jurisdiction of the Circuit Court cannot be sustained, as the respondents are citizens of the State where the suit is brought, and the complainants are citizens of other States; nor does it make any difference that some of the respondents were joined as such because they refused to unite with the complainants in the prosecution of the suit. Equity practice in such cases is more flexible than the rules of pleading at common law, and often enables a complainant in equity to maintain the jurisdiction of the court in a case where a plaintiff in an action at law would find it to be difficult to do so, and perhaps impossible.

Argument to show that the case made in the record shows that the holders of the overdue and unpaid securities were entitled to sue for the foreclosure of the mortgage or trust deed is unnecessary, as the pleadings and proofs are full and decisive to that effect; and if so, then it is clear that the complainants, under the circumstances of this case, might select the Circuit Court as the forum for the adjudication of their rights.

Holders of such securities otherwise entitled to sue in the Circuit Court to foreclose the mortgage or trust deed are not compelled to join as respondents other holders of similar securities, if resident in other States, even if they refuse to unite as complainants, as the effect would be to oust the jurisdiction of the court. Cases of the kind frequently arise; and the rule is that such a party, if he refuses to unite with the complainant, may be omitted as a respondent, unless it appears that his rights would be prejudicially affected by the decree. But it is suggested that the proper parties for a decree are not before the court, as the bill of complaint shows that there are other holders of the securities besides the complainants.

It is true, beyond doubt, that all persons materially interested in the fund to be distributed should be made parties to the litigation; but this rule, like all general rules, will yield whenever it becomes necessary that it should be modified in order to accomplish the ends of justice. Authorities everywhere agree that exceptions exist to the general rule; and this court decided that the general rule will yield if the court is able to proceed to a decree and do justice to the parties before the court, without injury to others not made parties, who are equally interested in the litigation. Payne v. Hook, 7 Wall. 425.

Examples of the kind are put by Judge Story, in his work on Equity Pleading. Speaking of a bill brought by one of several residuary legatees for a final settlement and distribution of the estate of a testator or intestate, he says, all the residuary legatees or distributees ought in general to be made parties; but he admits that, if some are out of the jurisdiction of the court and cannot conveniently be joined, the court will dispense with them, and proceed to decree the shares of those before the court, the rule being that the decree is conclusive only as to those who are parties to the litigation. Story, Eq. Pl., sect. 89; West v. Randall, 2 Mas. 193; Wood v. Dummer, 3 id. 308.

Parties who are not named may intervene and make themselves actual parties, so long as the proceedings are in fieri and are not definitely closed by the course and practice of the court. Campbell and Others v. The Railroad Company, 1 Woods, 369.

Suppose that is so, then it is insisted that the bonds and mortgage are invalid because the lenders of the money sustained a trust relation to the stockholders.

Voluminous as the proofs are, it is scarcely possible to enter into the details of the evidence without extending the opinion to an unreasonable length, nor is it necessary, as we are all of the opinion that the finding of the circuit judge in respect to the theory of fact involved in the present proposition is correct. His finding is that the bonds and mortgage are not void upon the ground that the lenders of the money were also the directors of the company; that the terms of the contract were sanctioned by the stockholders; and that the money loaned was needed to complete the building, and that it was applied to effect the purpose for which it was borrowed.

Preliminary to any action in the matter, the proposition for the loan was submitted to the stockholders, and the record shows that it was adopted by a stock vote. Stockholders and directors knew what amount was to be borrowed, and all the terms and conditions of the contract, and that bonds payable to bearer were to be issued for the loan, and that the bonds were to be secured by a mortgage or trust deed of the hotel property. All knew that a loan was indispensable to the completion of the building, and all were anxious that it should be effected without further delay.

Differences of opinion existed among the stockholders as to the best way of raising the money, and prior discussions had not tended to quiet the dissensions, but the stockholders at the meeting referred to decided to adopt the proposition which was carried into effect. Beyond doubt, some of the conditions of the proposition were somewhat peculiar, but the proofs show that it was openly submitted to the stockholders, and that they adopted it by a majority of their votes; that the bonds were subsequently issued, and that they were voluntarily secured by the mortgage or trust deed set forth in the record.

Taken as a whole, the proofs satisfy the court that the money was advanced in good faith, and that the bonds were duly executed and delivered; nor is the legality of the transaction affected by the fact that others of the directors besides the party who submitted the proposition took certain proportions of the bonds and furnished corresponding proportions of the money. It was the company or their agents that prescribed the form of the bonds, and, having issued the same in the form of negotiable securities, it must have been expected that they would be negotiated in the market. Enough appears, also, to warrant the conclusion that the stockholders were more interested to raise the money than to ascertain who would become the holders of the bonds.

Examined in the light of the circumstances attending the transaction, as the case should be, the court is of the opinion that the evidence fails to support the proposition that the bonds and mortgage are invalid because the directors became the holders of the bonds and advanced the money. Transactions of the kind have often occurred; and it has never been held that the arrangement was invalid, where it appeared that the stockholders were properly consulted, and sanctioned what was done, either by their votes or silence. Stark & Wales v. Coffin, 105 Mass. 328; Credit Association v. Coleman, Law Rep. 5 Ch. 568; Troup's Case, 29 Beav. 353; Hoare's Case, 30 id. 225; Smith v. Lansing, 22 N. Y. 520; Busby v. Finn, 1 Ohio St. 409.

Most of the directors who took the bonds and advanced the money were owners of stock in the bank where the money when paid to the use of the company was deposited. Interest not having been paid on the deposits, it is insisted by the respondent company that the transaction was usurious; but the court is not able to sustain the proposition, as there is no evidence that any agreement was ever made that the money should be deposited in that bank. Usury, certainly, is not to be favored; but the rule is well settled, that, when the contract on its face is for legal interest only, then it must be proved that there was some corrupt agreement, device, or shift to cover usury, and that it was in full contemplation of the parties. Bank of the United States v. Waggener, 9 Pet. 378.

Nor is that rule at all inconsistent with what was previously decided by the court. Profit made or loss imposed on the necessities of the borrower, whatever form, shape, or disguise it may assume, where the treaty is for a loan and the capital is to be returned at all events, has always been adjudged to be so much profit taken upon the loan, and to be a violation of those laws which limit the lender to a specified rate of interest. Bank of the United States v. Owens, 2 Pet. 527; Dowdall v. Lenox, 2 Edw. (N. Y.) Ch. 267.

Much depends upon the intent of the parties in the transaction. Consequently, where a certificate of deposit was given, payable at a future day, it was held not to be usury, it appearing that it was given at the request of the depositor, and for his accommodation, without any intent to secure usury. Knox v. Goodwin, 25 Wend. (N. Y.) 643.

Decided cases also establish the rule that the withholding a part of a loan for a time in violation of the agreement of the parties does not constitute usury, as the retention of the money was no part of the contract or loan. Adm'r of Auble v. Trimmer, 17 N.J. Eq. 242; Executors of Howell v. Auten et al., 1 Green (N. J.) Eq. 44.

So where checks were drawn before the discount was made and deposited, and the bank treated the note as discounted at the date of the checks, the court held that it was not usury, as the circumstances negatived any unlawful intent. Walker v. Bank of Washington, 3 How. 62.

When the bonds were converted into money, the proceeds were deposited in the aforesaid bank, which, no doubt, resulted in an incidental advantage to the directors owning portions of the capital stock; but that matter was adjusted in the decree to the satisfaction of the court, and may be dismissed without further comment. Some delay ensued after the bonds were issued before the money was deposited; but nothing of the kind was contemplated when the agreement was made, nor did it take place as a means of increasing the rate of interest.

Other defences failing, the suggestion is that the complainants are not bona fide holders of the securities for value; but the suggestion is unsupported by proof, and, of course, cannot prevail, the burden of proof being upon the respondent company. Goodman v. Simonds, 20 How. 343; Collins v. Gilbert, 94 U.S. 753.

Suffice it to say, there is no error in the record.

Decree affirmed.


text: Talk:Hotel Company v. Wade/Opinion of the Court


text:
Beer Company v. Massachusetts

ERROR to the Superior Court of the Commonwealth of Massachusetts.

This was a proceeding in the Superior Court of Suffolk County, Massachusetts, for the forfeiture of certain malt liquors, belonging to the Boston Beer Company, and which had been seized as it was transporting them to its place of business in said county, with intent there to sell them in violation of an act of the legislature of Massachusetts, passed June 19, 1869, c. 415, commonly known as the Prohibitory Liquor Law. The company claimed that, under its charter, granted in 1828, it had the right to manufacture and sell said liquors; and that said law impaired the obligation of the contract contained in that charter, and was void, so far as the liquors in question were concerned. The court refused to charge the jury to that effect, and a verdict was found against the claimant. The rulings of the Superior Court having been affirmed by the Supreme Judicial Court of the Commonwealth, the company brought the case here. The statutes of Massachusetts bearing on the case are referred to in the opinion of the court.

Mr. H. W. Paine and Mr. F. O. Prince for the plaintiff in error.

Although the franchise of the company, when granted, was subject to the provisions of the act of 1809, and might, while they continued in force, have been modified or revoked, after due notice, the legislature, by repealing that act, relinquished the power thereby reserved, and rendered the grant absolute and unqualified.

The franchise was that of 'manufacturing malt liquors in all their varieties in the city of Boston.' The power to sell, although not expressly given, was clearly implied, as otherwise the charter would have been utterly worthless. Co. Litt. 56; Shep. Touch. 49; Thayer v. Payne, 2 Cush. (Mass.) 327; Pomfret v. Ricroft, 1 Saund. 321; Darcy v. Askwith, Hob. 234; Planters' Bank v. Grant, 6 How. 318; United States v. Babbitt, 1 Black, 55; Huidekooper's Lessee v. Douglass, 3 Cranch, 1; Charles River Bridge v. Warren Bridge et al., 11 Pet. 420; People v. Platt, 17 Johns. (N. Y.) 215.

The Commonwealth having made a contract with the company, that its chartered rights and immunities should not be revoked, or its franchise essentially impaired, subsequent legislation cannot, directly or indirectly, impair the obligation of that contract, and destroy vested rights under it. Cooley, Const. Lim. 278, and cases cited; Terrett v. Taylor, 9 Cranch, 43; Trustees of Dartmouth College v. Woodward, 4 Wheat. 518; The Binghampton Bridge, 3 Wall. 51; Wales v. Sutton, 2 Mass. 143; Boston & Lowell Railroad v. Salem & Lowell Railroad, 2 Gray (Mass.), 1; Piscataqua Bridge v. New Hampshire Bridge, 7 N. H. 35; Thorpe v. Burlington & Rutland Railroad, 27 Vt. 140; Farrington v. Tennessee, 95 U.S. 679.

If the police power of a State, as defined in Commonwealth v. Alger (7 Cush. (Mass.) 53), be 'the power vested in the legislature by the Constitution to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with penalties or without, not repugnant to the Constitution, as they shall judge to be for the good and welfare of the Commonwealth and the subjects of the same,' the taxing power is clearly of that character. If the legislature may, as the adjudged cases affirm, grant an immunity from taxation, and thus part with that power, why may it not with any other? It cannot, in the pretended exercise of the police power, violate, without a breach of the Constitution, the provisions of an existing charter, nor, under the guise of regulating, take from a corporation any of its essential chartered rights and privileges. Cooley, Const. Lim. 576, and cases cited.

The company does not invoke the aid of the Fourteenth Amendment to the Constitution, but submits that the statute of 1869, under which the liquor was seized and condemned, impairs the obligation of the contract contained in its charter, and is therefore unconstitutional and void. The court below having expressly decided otherwise, there can be no doubt as to the jurisdiction of this court.

Mr. Charles R. Train for the defendant in error.

The case was tried on the general issue, and the record does not present any matter of law. The opinion of the court below showing that a Federal question was considered is not decisive that it was actually raised or necessarily involved. Moore v. Mississippi, 21 Wall. 636.

The act of 1869 does not impair the obligation of a contract, inasmuch as the charter of the company, being subject to the reservation of the act of 1809, is amendable and repealable. The State may, therefore, in the exercise of her police power, subject the company to the same restraints in the use of its property as may be imposed upon natural persons. Bartemeyer v. Iowa, 18 Wall. 129; Peik v. Chicago & North-Western Railway Co., 94 U.S. 164.

Conceding that the charter is not repealable, it is not fairly susceptible of the interpretation that it confers the absolute right to manufacture malt liquor, free from all legislative control. Ohio Life Insurance & Trust Co. v. Debolt, 16 How. 416; Providence Bank v. Billings, 4 Pet. 514; West Wisconsin Railway Co. v. Board of Supervisors of Trempealeau County, 93 U.S. 595; Farrington v. Tennessee, 95 id. 679; Thorpe v. Rutland & Burlington Railroad, 27 Vt. 142; Commonwealth v. Hamilton Manufacturing Co., 120 Mass. 383.

The legislature could not, under the State Constitution, make a binding contract, that the police power should not be thereafter exercised so as to limit this company in the matter of manufacturing malt liquors. Commonwealth v. Bird, 12 Mass. 443; Boston & Lowell Railroad v. Salem & Lowell Railroad, 2 Gray (Mass.), 1; Eastern Railroad v. Maine Railroad, 111 Mass. 125.

The distinction between the power of the legislature in regard to the law-making and other sovereign powers on the one hand, and in regard to the property of the public on the other, is a sound one. Boston & Lowell Railroad v. Salem & Lowell Railroad, supra; Piscataqua Bridge v. New Hampshire Bridge, 7 N. H. 35; Brewster v. Hough, 10 id. 138; Brick Presbyterian Church v. New York, 5 Cow. (N. Y.) 538; The Binghampton Bridge, 3 Wall. 51; State v. Noyes, 47 Me. 189.

The abstract proposition that a person has not the constitutional right to apply, in violation of a statute, his property to those uses which are injurious to the common welfare, though not forbidden by the common law, is, as matter of authority, established law. Fisher v. McGirr, 1 Gray (Mass.), 1; Blair v. Forehand, 100 Mass. 136; Lowell v. Boston, 111 id. 454; Oviatt v. Pond, 29 Conn. 479; State v. Keeran, 5 R. I. 497; State v. Allmond, 2 Houst. (Del.) 612; Commonwealth v. Alger, 7 Cush. (Mass.) 53; Coates v. New York, 7 Cow. (N. Y.) 585; State v. Noyes, 30 N. H. 279; People v. Hawley, 3 Mich. 330; Commonwealth v. Tewksbury, 11 Metc. (Mass.) 55; New Orleans v. Stafford, 27 La. Ann. 417; State v. Noyes, 47 Me. 189; Commonwealth v. Blackington, 24 Pick. (Mass.) 352; The License Cases, 5 How. 504; Bartemeyer v. Iowa, 18 Wall. 129; Munn v. Illinois, 94 U.S. 113.

It is clear, therefore, that the act of 1869 neither violates any provision of the Constitution of the United States, nor impairs any vested rights of the company.

The following cases hold that a prohibitory law, to the same effect as that here in question, does not interfere with the vested rights of a person who owned intoxicating liquors at the time of its enactment: State v. Allmond, 2 Houst. (Del.) 612; State v. Paul, 5 R. I. 185; State v. Keeran, id. 498; Lincoln v. Smith, 27 Vt. 328; Gill v. Parker, 31 id. 610; State v. Court of Common Pleas, &c., 7 Vroom (N. J.), 72; Fisher v. McGirr, 1 Gray (Mass.), 1; Commonwealth v. Huber, 12 id. 29; Commonwealth v. Logan, id. 136; People v. Hawley, 3 Mich. 330; People v. Gallagher, 4 id. 244; Our House No. 2 v. State, 4 Green, 172; Sauto v. State, 2 Iowa, 165; State v. Bartemeyer, 31 id. 601; State v. Wheeler, 25 Conn. 290.

MR. JUSTICE BRADLEY delivered the opinion of the court.

title: Beer Company v. Massachusetts


text: Talk:Beer Company v. Massachusetts

title: Talk:Beer Company v. Massachusetts


text:
Beer Company v. Massachusetts/Opinion of the Court

The question raised in this case is, whether the charter of the plaintiff, which was granted in 1828, contains any contract the obligation of which was impaired by the prohibitory liquor law of Massachusetts, passed in 1869, as applied to the liquor in question in this suit.

Some question is made by the defendant in error whether the point was properly raised in the State courts, so as to be the subject of decision by the highest court of the State. It is contended that, although it was raised by plea, in the municipal court, yet, that plea being demurred to, and the demurrer being sustained, the defence was abandoned, and the only issue on which the parties went to trial was the general denial of the truth of the complaint. But whatever may be the correct course of proceeding in the practice of courts of Massachusetts,-a matter which it is not our province to investigate,-it is apparent from the record that the very point now sought to be argued was made on the trial of the cause in the Superior Court, and was passed upon, and made decisive of the controversy, and was afterwards carried by bill of exceptions to the Supreme Judicial Court, and was decided there adverse to the plaintiff in error on the very ground on which it seeks a reversal.

The Supreme Court, in its rescript, expressly decides as follows:--

'Exceptions overruled for the reasons following:--

'The act of 1869, c. 415, does not impair the obligations of the contract contained in the charter of the claimant, so far as it relates to the sale of malt liquors, but is binding on the claimant to the same extent as on individuals.

'The act is in the nature of a police regulation in regard to the sale of a certain article of property, and is applicable to the sale of such property by individuals and corporations, even where the charter of the corporation cannot be altered or repealed by the legislature.'

The judgment of the Superior Criminal Court was entered in conformity to this rescript, declaring the liquors forfeited to the Commonwealth, and that a warrant issue for the disposal of the same.

This is sufficient for our jurisdiction, and we are bound to consider the question which is thus raised.

As before stated, the charter of the plaintiff in error was granted in 1828, by an act of the legislature passed on the 1st of February in that year, entitled 'An Act to incorporate the Boston Beer Company.' This act consisted of two sections. By the first, it was enacted that certain persons (named), their successors and assigns, 'be, and they hereby are, made a corporation, by the name of The Boston Beer Company, for the purpose of manufacturing malt liquors in all their varieties, in the city of Boston, and for that purpose shall have all the powers and privileges, and be subject to all the duties and requirements, contained in an act passed on the third day of March, A.D. 1809, entitled 'An Act defining the general powers and duties of manufacturing corporations,' and the several acts in addition thereto.' The second section gave the company power to hold such real and personal property to certain amounts, as might be found necessary and convenient for carrying on the manufacture of malt liquors in the city of Boston.

The general manufacturing act of 1809, referred to in the charter, had this clause, as a proviso of the seventh section thereof: 'Provided always, that the legislature may from time to time, upon due notice to any corporation, make further provisions and regulations for the management of the business of the corporation and for the government thereof, or wholly to repeal any act or part thereof, establishing any corporation, as shall be deemed expedient.'

A substitute for this act was passed in 1829, which repealed the act of 1809 and all acts in addition thereto, with this qualification: 'But this repeal shall not affect the existing rights of any person, or the existing or future liabilities of any corporation, or any members of any corporation now established, until such corporation shall have adopted this act, and complied with the provisions herein contained.'

It thus appears that the charter of the company, by adopting the provisions of the act of 1809, became subject to a reserved power of the legislature to make further provisions and regulations for the management of the business of the corporation and for the government thereof, or wholly to repeal the act, or any part thereof, establishing the corporation. This reservation of the power was a part of the contract.

But it is contended by the company that the repeal of the act of 1809 by the act of 1829 was a revocation or surrender of this reserved power.

We cannot so regard it. The charter of the company adopted the provisions of the act of 1809, as a portion of itself; and those provisions remained a part of the charter, notwithstanding the subsequent repeal of the act. The act of 1829 reserved a similar power to amend or repeal that act, at the pleasure of the legislature, and declared that all corporations established under it should cease and expire at the same time when the act should be repealed. It can hardly be supposed that the legislature, when it reserved such plenary powers over the corporations to be organized under the new act, intended to relinquish all its powers over the corporations organized under or subject to the provisions of the former act. The qualification of the repeal of the act of 1809, before referred to, seems to be intended not only to continue the existence of the corporations subject to it in the enjoyment of all their privileges, but subject to all their liabilities, of which the reserved legislative control was one.

If this view is correct, the legislature of Massachusetts had reserved complete power to pass any law it saw fit, which might affect the powers of the plaintiff in error.

But there is another question in the case, which, as it seems to us, is equally decisive.

The plaintiff in error was incorporated 'for the purpose of manufacturing malt liquors in all their varieties,' it is true; and the right to manufacture, undoubtedly, as the plaintiff's counsel contends, included the incidental right to dispose of the liquors manufactured. But although this right or capacity was thus granted in the most unqualified form, it cannot be construed as conferring any greater or more sacred right than any citizen had to manufacture malt liquor; nor as exempting the corporation from any control therein to which a citizen would be subject, if the interests of the community should require it. If the public safety or the public morals require the discontinuance of any manufacture or traffic, the hand of the legislature cannot be stayed from providing for its discontinuance, by any incidental inconvenience which individuals or corporations may suffer. All rights are held subject to the police power of the State.

We do not mean to say that property actually in existence, and in which the right of the owner has become vested, may be taken for the public good without due compensation. But we infer that the liquor in this case, as in the case of Bartemeyer v. Iowa (18 Wall. 129), was not in existence when the liquor law of Massachusetts was passed. Had the plaintiff in error relied on the existence of the property prior to the law, it behooved it to show that fact. But no such fact is shown, and no such point is taken. The plaintiff in error boldly takes the ground that, being a corporation, it has a right, by contract, to manufacture and sell beer for ever, notwithstanding and in spite of any exigencies which may occur in the morals or the health of the community, requiring such manufacture to cease. We do not so understand the rights of the plaintiff. The legislature had no power to confer any such rights.

Whatever differences of opinion may exist as to the extent and boundaries of the police power, and however difficult it may be to render a satisfactory definition of it, there seems to be no doubt that it does extend to the protection of the lives, health, and property of the citizens, and to the preservation of good order and the public morals. The legislature cannot, by any contract, divest itself of the power to provide for these objects. They belong emphatically to that class of objects which demand the application of the maxim, salus populi suprema lex; and they are to be attained and provided for by such appropriate means as the legislative discretion may devise. That discretion can no more be bargained away than the power itself. Boyd v. Alabama, 94 U.S. 645.

Since we have already held, in the case of Bartemeyer v. Iowa, that as a measure of police regulation, looking to the preservation of public morals, a State law prohibiting the manufacture and sale of intoxicating liquors is not repugnant to any clause of the Constitution of the United States, we see nothing in the present case that can afford any sufficient ground for disturbing the decision of the Supreme Court of Massachusetts.

Of couse, we do not mean to lay down any rule at variance with what this court has decided with regard to the paramount authority of the Constitution and laws of the United States, relating to the regulation of commerce with foreign nations and among the several States, or otherwise. Brown v. Maryland, 12 Wheat. 419; License Cases, 5 How. 504; Passenger Cases, 7 id. 283; Henderson v. Mayor of New York, 92 U.S. 259; Chy Lung v. Freeman, id. 275; Railroad Company v. Husen, 95 id. 465. That question does not arise in this case.

Judgment affirmed.


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Noyes v. Hall

APPEAL from the Circuit Court of the United States for the Northern District of Illinois.

In April, 1858, Luther Hall, tenant in fee of certain lands in Illinois, mortgaged them to Lauren A. Noyes, to secure the payment of $1,075, and on June 4, 1859, made a contract, in writing, to sell them to Hollis S. Hall, for $3,000, payable in instalments. In February, 1860, the latter sold his interest in the lands to Wright C. Hall, who paid him $300, and assumed the conditions of his contract by making a new one with said Luther, of the same date and tenor. In March, 1860, said Wright enclosed the lands, and from that date has had open, continuous, and visible possession of them. His contract with said Luther was never recorded. Feb. 10, 1864, by deed recorded on the 19th of that month, Luther, having received all the instalments of the purchase-money for the lands, conveyed them to said Wright.

In May, 1861, Woodward, assignee of said Noyes, brought suit in the Circuit Court of the United States for the Northern District of Illinois, to foreclose the mortgage, but failed to make said Wright a party. A decree by default was entered, under which the lands were sold in October, 1861, by a master of the court, and purchased for $400, by one Pickering. The balance of the mortgage debt was satisfied by sales of other property. Sept. 1, 1871, Pickering duly conveyed the lands to said Noyes, who, in October, 1872, brought ejectment against said Wright. The latter, on December 14, following, filed this bill, praying that the further prosecution of that action be restrained, and that he be allowed to redeem the lands.

The court decreed that said Wright was the owner in fee of the premises, and was entitled to redeem by paying $400, the amount bid at the master's sale, with interest thereon from the date of said sale, at the rate prescribed by the mortgage, amounting in all to the sum of $933.33. From that decree Noyes appealed to this court.

Mr. Elliott Anthony for the appellant.

Mr. H. D. Beam, contra.

MR. JUSTICE CLIFFORD delivered the opinion of the court.

title: Noyes v. Hall


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title: Talk:Noyes v. Hall


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Noyes v. Hall/Opinion of the Court

Antecedent to the claim of the respondent, the unincumbered fee-simple title of the premises was in the father of the complainant. On the 26th of April, 1858, the owner of the tract, consisting of a farm of eighty acres, being indebted to the respondent in the sum of $1,075, mortgaged the farm to him to secure the payment of that sum.

Sufficient also appears to show that the fee-simple owner of the premises, on the 4th of June, 1859, contracted in writing with the brother of the complainant to convey the same to the other contracting party for the sum of $3,000, payments to be made as therein specified; and that the brother, eight months later, sold out his interest thus acquired to the complainant, the new contract being made by consent to bear the same date as that previously given to the brother, the complainant giving his notes in the place of those given by the brother, except for $300, which he paid in cash. Payments, except for that amount, were to be made as in the previous arrangement; and the complainant alleges that prior to the commencement of the next year he entered into the possession of the premises, and that he has continued in the possession of the same from that time to the present.

By the terms of the agreement, the premises were to be conveyed to the complainant by a good and sufficient deed; and he alleges that the covenantor and his wife, on the 10th of February, 1864, by deed duly executed and acknowledged, conveyed the same to him; and it appears that the deed, on the 19th of the same month, was duly recorded.

Process was served; and the respondent appeared and filed an answer, in which he sets up the mortgage given by the original owner, the foreclosure of the same, the sale of the premises by the master, and his title to the same by virtue of the master's deed to the purchaser from whom he acquired the title to the premises. Proofs were taken, the parties heard, and the court entered a decree in favor of the complainant.

Due appeal was taken by the respondent to this court; and he assigns, among others, the following errors: 1. That the complainant has not made such a case as to warrant a court of equity in granting him relief. 2. That the bill of complaint does not allege any sufficient reason why it was not commenced at an earlier date. 3. That the bill of complaint does not allege that any tender of the amount required to redeem the mortgage was ever made before the commencement of the present suit. 4. That the contract to convey the land to the complainant was subsequent to the execution of the mortgage.

Both of the notes secured by the mortgage were transferred, and it appears that the assignee instituted the suit for foreclosure. When the foreclosure suit was commenced, the present complainant was in possession of the premises, having previously paid $1,000 towards the purchase of the same under his contract; and the record shows that he was not notified of the commencement or pendency of the suit.

Though in the sole possession of the premises, the complainant alleges that he was not served with process; and that no answer having been filed in the case, the bill of complaint was taken as confessed, and that a decree of foreclosure was entered, under which the premises were sold by the master for the sum of $400.

None of these matters are controverted; and it is also alleged that conveyance of the premises in due form was made by the master to the bidder, and that he conveyed the same to the respondent. Since that time, as the complainant alleges, the respondent has commenced a suit against him to recover the possession of the premises.

All of these matters are formally set forth in the bill of complaint; and the complainant alleges that the respondent neither claims nor has any other or further interest or title to the premises than that derived by purchase under the decree of foreclosure, and he avers that such title is subject to his right to redeem the premises described in the bill of complaint. Appropriate allegations are also made to show that he is entitled to such relief, upon the ground that he has been at all times since the sale of the premises ready and anxious to redeem the same from the sale and purchase; that he has offered to redeem the premises of the respondent by the payment of the said sum of $400, with interest at the rate of ten per cent from the date of the sale to the time of such tender of redemption, and that the respondent refused and still refuses to accept such payment and to release the claim and title to the premises by him so acquired; wherefore he prays that he may be declared entitled to redeem the premises by the payment of the amount of the purchase-money, with interest to the date of the decree, and that the respondent, upon the payment of such amount, may be decreed to convey to the complainant all the title and interest in the premises which he acquired by such purchase.

Deeds, mortgages, and other instruments of writing which are authorized to be recorded, take effect, by the law of that State, from and after the time of filing the same for record, and operate as notice to creditors and subsequent purchasers. Rev. Stat. of Illinois, 1874, 278, sect. 30.

Argument to show that the respondent had due notice of the claim of the complainant is quite unnecessary; as the case shows, beyond controversy, that the deed under which he acquired the title to the premises was duly recorded, and that he was, before that time, in the open, visible, and exclusive possession of the same, which, by the settled law of that State, is constructive notice to creditors and subsequent purchasers. Truesdale v. Ford, 37 Ill. 210.

Record evidence of a conveyance operates as notice, and so may open possession: the rule being that actual, visible, and open possession is equivalent to registry. Cabeen v. Breokenridge, 48 id. 91; Dunlap v. Wilson, 32 id. 517; Bradley v. Snyder, 14 id. 263.

Viewed in the light of these authorities and the allegations in the bill of complaint, it is clear that the first assignment of error must be overruled.

Nor is it necessary to enter into any discussion of the second error assigned, as it appears that the complainant filed the bill of complaint to redeem the premises as soon as it became necessary to vindicate his title and possession against the ejectment suit instituted by the respondent.

Beyond all doubt, the contract under which the complainant claims the right to purchase the premises is subject to the mortgage held by the respondent; but it is a sufficient answer to the third and fourth assignments of error to say that the decree sustains the validity of the mortgage, and makes ample provision to secure to the respondent all the rights which he acquired by virtue of the sale and purchase under the foreclosure. Parties interested in the premises who were not served with process are not bound by that decree, and it follows that the respondent took his title subject to the rights of the complainant acquired under the deed, just the same as if no such decree had ever been made.

Suppose that is so, then it only remains to examine the decree, and ascertain whether it makes due provision to preserve all the rights of the respondent.

Coming to the proofs, it will be sufficient to say that the finding of the court below shows that all the material allegations of the bill of complaint are fully sustained, which is all that need be said in support of the theory of fact embodied in the decree. Such being the fact, the court decreed that the complainant was entitled to relief, he paying to the respondent, within one hundred days from the date of the decree, the sum of $913.33, with costs of suit; and that in default of such payment the bill of complaint shall stand dismissed; and that the respondent, if the payment be made, shall, within thirty days thereafter, execute to the complainant a good and sufficient deed, as prayed in the bill of complaint.

Examined in the light of these suggestions, as the case should be, it is clear that the decree is correct, and we are all of the opinion that there is no error in the record.

title: Noyes v. Hall/Opinion of the Court


text: Talk:Noyes v. Hall/Opinion of the Court

title: Talk:Noyes v. Hall/Opinion of the Court