text:
Post v. Pearson.

This is an action brought in an inferior court of Dakota territory by Jonh B. Pearson against Alvin W. Whitney and Morton E. Post, copartners under the name of the Keets Mining Company. Annexed to the complaint was a copy of a contract under seal, entitled 'Memorandum of an agreement made and entered into this sixteenth day of July, 1877, at Central City, Dakota, by and between A. W. Whitney, superintendent of the Keets Mining Company, parties of the first part, and J. B. Pearson, party of the second part;' and by which 'the said parties of the first part' agree to deliver at Pearson's mill in Central City gold-bearing ore from the Keets mine from time to time, in quantities sufficient to constantly supply the working capacity of the mill of about 30 tons daily; and also agree to pay the sum of nine dollars for each ton crushed and milled; and Pearson agrees to run his mill constantly upon that ore for a term of 90 days from the date of the contract; and which is signed and sealed as follows:

'A. W. WHITNEY, [Seal.]

'Supt. Keets Mining Co. [Seal.]

'JOHN B. PEARSON, [Seal.]' The complaint set forth the terms of the contract, and alleged the plaintiff's performance and readiness to perform, and the defendants' neglect and refusal to deliver ore as agreed, or to pay for crushing and milling what they did deliver. The defendant Post demurred to the complaint, because he was not shown to be a party to the contract sued on, and because sufficient facts were not stated to constitute a cause of action against him. The inferior court sustained the demurrer, and gave the plaintiff leave to amend his complaint. The plaintiff then filed an amended complaint, not alleging the contract to have been in writing, but setting forth its terms, and alleging the other facts substantially as in the original complaint. The defendants answered; Post denying all the allegations of the amended complaint, and Whitney admitting the making of the contract, and denying the other allegations.

At the trial the written contract was admitted in evidence without objection. It appeared that it was made by the parties thereto, and that Whitney, in making it, acted in behalf and for the benefit of the Keets Mining Company, of which he was the superintendent, and was understood by the plaintiff so to act; and that Whitney, as such superintendent, afterwards broke the contract to the damage of the plaintiff. The plaintiff, against the objection of Post, and for the purpose of showing that Post was one of the real parties in interest and a participant in the results of the contract, and that Whitney acted merely as the agent of himself and Post as principals, was permitted to introduce oral evidence that Post was an owner of the Keets mine, and a copartner with Whitney, under the name of the Keets Mining Company, in the business of working the mine and having the ore from it crushed, and as such copartner received a large portion of the proceeds of the contract, knowing whence they came. The court also declined to rule and instruct the jury, as Post requested, that the order sustaining his demurrer to original complaint prevented a recovery against him in this action. Post alleged exceptions to both rulings, and the jury returned a verdict for the plaintiff, upon which judgment was rendered. On appeal, that judgment was affirmed by the supreme court of the territory. See 2 Dak. 220; [S.C.. 9 N. W. Rep. 684.] Post sued out this writ of error.

R. T. Merrick and M. F. Morris, for plaintiff in error.

[Argument of Counsel from pages 420-421 intentionally omitted]

J. W. Smith, for defendant in error.

GRAY, J.

title: Post v. Pearson.


text: Talk:Post v. Pearson.

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

title: Talk:Post v. Pearson.


text:
Post v. Pearson./Opinion of the Court

It is unnecessary to consider whether, if this were to be treated as a contract under seal, it could be held to be upon its face the contract of the Keets Mining Company, and not of Whitney only, or whether the oral testimony would have been admissible to charge Post; because, by the Civil Code of Dakota, 'all distinctions between sealed and unsealed instruments are abolished,' and 'any instrument within the scope of his authority, by which an agent intends to bind his principal, does bind him, if such intent is plainly inferable from the instrument itself.' Civ. Code Dak. 1877, §§ 925, 1373.

By the subject-matter of this contract, which is the delivery and milling of ore from the Keets mine; by the description of Whitney, both in the body of the contract and in the signature, as superintendent of the Keets Mining Company; and by the use of the words 'parties of the first part,' which are applicable to a company and not to a single individual,-the contract made by the hand of Whitney clearly appears upon its face to have been intended to bind, and therefore did bind, the company; and, upon proof that Post was a partner in the company, bound him. Whitney v. Wyman, 101 U.S. 392; Hitchcock v. Buchanan, 105 U.S. 416; Goodenough v. Thayer, 132 Mass. 152.

The order sustaining Post's demurrer to the original complaint gave the plaintiff leave to amend, and did not preclude the plaintiff from renewing, nor the court from entertaining, the same question of law upon a fuller development of the facts at the trial on the amended complaint. Calder v. Haynes, 7 Allen, 387.

Judgment affirmed.

title: Post v. Pearson./Opinion of the Court


text: Talk:Post v. Pearson./Opinion of the Court


text:
Hawkins v. Blake

A. S. Merrimon and ''Thos. C. Fuller'', for appellants.

John W. Hinsdale and S. F. Phillips, for appellees.

MATTHEWS, J.

title: Hawkins v. Blake


text: Talk:Hawkins v. Blake

title: Talk:Hawkins v. Blake


text:
Hawkins v. Blake/Opinion of the Court

A former appeal in this cause was disposed of by this court by a decision reported in Blake v. Hawkins, 98 U.S. 315, to which reference is made for a full statement of the case as then presented. The final decree of the circuit court, there reviewed, was reversed, and the cause was remanded with directions to take further proceedings and enter a decree in accordance with the opinion of the court as then declared. The subsequent proceedings and decree, upon the mandate of this court, are now brought here for review, on the ground that they do not, in several particulars, conform to that mandate.

A brief statement of the case will suffice to explain and adjust the remaining controversy.

The complainants below were the appellants from the first decree, and are now appellees. They are, of the next of kin of Frances Devereux, entitled to a share of the residue of her personal estate undisposed of by her will. The object of the bill was to obtain an account of that estate from Thomas P. Devereux, as executor de son tort, including a fund, being part of a sum of $50,000 originally charged upon real estate conveyed to Thomas P. Devereux by Frances Devereux, in case she should appoint the same by will or otherwise, and which, it is claimed by the complainants, she had appointed by her will to her executors. The estate of Thomas P. Devereux passed, by his bankruptcy, to assignees and trustees, including the lands on which the fund in question, alleged to have been the subject of the appointment, had been charged. These assignees and trustees were defendants below, and are now appellants.

The charge upon the lands conveyed to Thomas P. Devereux included an annuity, during the life of Frances Devereux, payable to herself, of $3,000, being 6 per cent. on the principal sum; and as to the principal sum, the language of the deed was 'that the said Thomas P. Devereux, his heirs or assigns, shall invest for, or pay to, the said Frances, at such times, in such proportions, and in such manner and form as she shall direct and require, to and for her own sole and separate use, and subject to her own disposal by will, deed, or writings in nature thereof, or otherwise, to all intents and purposes (notwithstanding her coverture) as if she were a feme sole and unmarried, the sum of $50,000; but if the said sum of money, or any part thereof, shall remain unpaid, or shall not be invested during her life, and if the said Frances shall not by deed or will or writing in nature thereof, or by some other act, give, grant, dispose, or direct any payment, investment, or application of the same, then the said sum of money, or so much thereof as shall remain not paid, given, granted, disposed, or directed to be invested, paid, or applied, shall be considered as lapsing and the charge thereof as extinguished for the benefit of the said Thomas.' In her will, among other bequests, was one of $7,500 to Thomas P. Devereux, in trust, to apply the income on the same annually to the payment of certain annuities and charities therein specified. There was no residuary clause. Thomas P. Devereux, though named as executor in his mother's will, did not qualify as such; but, after her death, paid off the legacies mentioned and took possession of a large part of her personal estate, so as to become chargeable therefor as executor de son tort. The estate of Frances Devereux is represented by an administrator de bonis non with the will annexed.

The decree of the circuit court in 1874, which was the subject of the former appeal, declared, among other things:

(1) That Frances Devereux did not by her last will appoint     the fund of $50,000, charged upon the land, 'to be part of      her general personal estate in the hands of her executors;      nor appoint the said funds at all, except so far as it is      necessary to resort to the same to pay off the pecuniary      legacies bequeathed by her in her said will, after exhausting      for that purpose what remains of her personal assets, after      payment of her debts and general expenses and the costs of      administering her estate.'

(2) That the complainants were not entitled to any account of     the fund of $50,000, except for the purpose of determining      the amount in arrears of the annuity of $3,000 during the      life-time of Thomas Devereux, unexpended, of which unexpended      balance, and of the remainder of her personal estate which      came to the hands of Thomas P. Devereux, they are entitled to      an account.

(3) That in taking that account, the assignees in bankruptcy     are entitled to be credited with the amounts which Thomas P.      Devereux expended in purchasing the pecuniary legacies      bequeathed by Frances Devereux.

A statement of that account was agreed upon, which showed that, at the date of his bankruptcy, May 31, 1868, Thomas P. Devereux was chargeable with $41,633 of the general personal assets of his mother's estate, after payment of debts, funeral expenses, and costs of administration, including interest to that date; and that he was entitled to credit for $39,466.58, which included interest to the same date, for the amount expended by him in payment or purchase of the pecuniary legacies under the will, leaving a balance due from him of $2,166.42, of which the complainants were entitled to one-third, or $722.14, for which, accordingly, a decree was entered in their favor.

In reversing this decree, this court said, (98 U.S. 328:)

'Whether, if the fund which remained in the hands of Thomas     P. Devereux at the death of the testatrix had exceeded the      sum required to pay the legacies given by her will-that is to      say, the sum of $28,500-the will would have been a complete execution      of the power, covering the whole fund, or only a partial      appointment of so much as was needed to pay those legacies,      it is unnecessary for us now to decide. In the view which we     take of the other questions involved in the case, that fund      had been reduced so far that there was not more than enough      remaining subject to the power to pay the sums bequeathed by      the will. The execution was therefore complete, and it     appointed the whole fund to the executors of this will, who      took it under the appointment as part of the personal estate      of the appointor. * *  * '

There was, therefore, error in the decree of the circuit court, so far as it adjudged that the testatrix, Frances Devereux, did not appoint to her executors the fund over which she had the power of appointment, 'except so far as it is necessary to resort to the same to pay off the pecuniary legacies bequeathed by her in her said will, after exhausting for that purpose what remains of her general assets after payment of her debts and funeral expenses and the costs of administering her estate.'

After noticing and disposing of other assignments of error, not material now to be repeated, the judgment of the court concludes as follows:

'Our conclusion, therefore, is, after reviewing the whole     case, that there has been no error committed, except the      single one which we first noticed. For that, however, the     decree of the circuit court must be reversed, and the case      sent back with instructions to direct a new accounting, and      to enter a decree in conformity with this opinion.'

The mandate of this court was entered of record in the circuit court at the June term, 1879; and thereupon Louisa N. Taylor filed her petition praying to be made a party, for the purpose of asserting her right to receive the value of two annuities to which she claimed to be entitled,-one of $50 per annum out of the fund of $7,500 bequeathed to Thomas P. Devereux in trust for herself and others; and one of $150 per annum, which, by the will of Frances Devereux, was directed to be paid out of the funds arising from the sale of certain slaves and a house and lot in Chapel Hill, it being alleged in her petition that Thomas P. Devereux had sold the house and lot, received the proceeds, and converted the slaves to his own use. Service of this petition was accepted, and it was agreed that it might be heard at the same term, if practicable. The assignees in bankruptcy filed their answer to it, pleading the statute of limitations, alleging that the fund of $7,500 had been raised, and that the lands of Thomas P. Devereux were discharged from its payment, denying that the $150 annuity was a charge on those lands, but upon the house and lot in Chapel Hill, which sold for only $45, and the slaves which it is alleged were not sold by Thomas P. Devereux, but lost by the result of the war, etc. It was thereupon agreed by the parties to waive the taking of the account ordered by the mandate of this court, and that 'the balance charged on the land of Thomas P. Devereux, and which Mrs. Frances Devereux had not disposed of during her life, and which by her will she appointed to her executors, was on the third (3d) of June, 1849, the date of her death, the sum of ($21,527.67) twenty-one thousand five hundred and twenty-seven dollars and sixty-seven cents.'

The facts in regard to the legacy of $7,500 to Thomas P. Devereux in trust, and the interest therein of Louisa N. Taylor, were also agreed upon.

It was further agreed that a certain account, D, theretofore taken, of the general personal assets of Frances Devereux, filed at June term, 1874, was correct, except that the assignees in bankruptcy insisted on an exception to the extent that Thomas P. Devereux is chargeable only with one-half the value of the slaves, being $9,995.50, with interest thereon to the amount of $9,823.57, instead of with the full amount charged; while the complainants insisted that the correctness of that account had been finally agreed to and settled at the June term, 1874, but that otherwise the account was in all respects correct.

At the November term, 1879, the final decree was made, from which the present appeal is taken. The first seven of the declarations in that decree specifically follow the mandate of this court, and the agreement of the parties as to the state of the accounts, overruling the exception of the assignees in bankruptcy to the account, D, charging Thomas P. Devereux with the value of all the slaves which came to his hands after the death of Mrs. Devereux; and in this, we think, there is no error.

'(8) It is further declared that the said Thomas P. Devereux     never raised and appropriated the $7,500 appointed to him in      trust by the will of the said Frances out on his lands,      conveyed to him by the aforesaid deed of July 3, 1839, and      that all the annuitants provided for by said appointment of      $7,500 are dead or have abandoned their claims, except Louisa      N. Taylor, who is still living; and that none of said      annuities have been paid since the first day of January,      1863, except the annuity to the said Louisa N. Taylor, which      was paid by the said Thomas P. Devereux up to the first day      of January, 1867; and the court doth declare that there is a      resulting trust for one-third of said sum of $7,500, and      interest thereon from the first day of January, 1863, to the      plaintiffs, subject, however, to the said Louisa N. Taylor's      claim for the value of her annuity of $50 per annum,      one-third of which value falls upon the plaintiff's share of      said resulting trust; which said claims of the said Louisa N.      and the said plaintiffs are first liens upon the lands of the      said Thomas P. Devereux, or the proceeds thereof, in the      hands of the defendants, in the relative order in which said      claims are last herein stated, and are to be first paid in      full by the defendants with and out of the proceeds of said      lands.

'(9) It is further declared that the said Thomas P. Devereux,     before November, 1852, purchased up all the other pecuniary      legacies bequeathed by the will of the said Frances, and      after said purchase, and before the day and date last      aforesaid, converted to his own use all the general personal      assets of the said Frances specified in section 7 of this      decree as amounting, on the thirty-first day of May, 1868, to      forty-one thousand six hundred and thirty-three dollars,      ($41,633,) claiming the same to belong to him to satisfy the      said pecuniary legacies and the aforementioned sum of $7,500;      and the court doth declare that the annuity of $150 per annum bequeathed by the will of the said Frances to the      said Louisa N. Taylor was and is a first lien on said sum of      $41,633 of general assets, and ought to have been first paid      thereout, and that the plaintiffs ought to have been paid      one-third of said sum of general assets, subject to the      burden of one-third of the annuity of $150 per annum to the      said Louisa N. Taylor; and that the said pecuniary legacies      purcbased by the said Thomas P. Devereux as aforesaid, and      the aforesaid sum of $7,500, ought to have been paid out of      the fund charged and appointed by the last will and testament      of the said Frances Devereux on and out of the lands of the      said Thomas P. Devereux, and the money to satisfy the same      ought to have been raised on and out of said lands, and that      said lands were exonerated from said burden by the use by the      said Thomas P. Devereux of the general personal assets      aforesaid, whereby the plaintiffs have become entitled to      have their aforesaid one-third of said general personal      assets, burdened as aforesaid, paid out of the proceeds of      said lands in the hands of the defendants, and the said      Louisa N. Taylor has become entitled to have the value of her      aforesaid annuity of $150 per annum paid to her out of the      said proceeds of the said lands, and in preference to the      said claim of the plaintiffs; and it is declared by the court      here that the last aforesaid claim of the said Louisa N.      Taylor is a third lien upon the said proceeds of lands in the      hands of the defendants, and the last aforesaid claim of the      plaintiffs is a fourth lien on the same, and that both of      said claims are to be paid by the defendants out of said      proceeds in the relative order in which the same are next      hereinbefore stated in full, if the said proceeds shall be      sufficient to pay both of the same in full, and if not      sufficient then the claim of the said Louisa N. is to be paid      in full, and the claim of the plaintiffs shall be paid as far      as said proceeds shall extend to satisfy the same.

'(10) All the parties, plaintiff and defendant, having, at     June term, A. D. 1879, of this court, filed an agreement in      writing waiving any further account, and ascertaining the      balance charged on the lands of Thomas P. Devereux, for the      benefit of Frances Devereux at the date of her decease, in      the words and figures following, to-wit:

"In this cause the mandate from the supreme court of the     United States is filed, and to avoid the expense and delay      incident to taking the account ordered and directed herein by      the decision and decree of said court, and because from the accounts      already heretofore taken in this cause the parties are able      to ascertain by agreement all the results necessary for the      final determination of this cause, without the new accounting      directed by said decree of supreme court, by consent of all      the parties, plaintiff and defendant, herein, all further      account herein is waived, and it is agreed that the balance      charged on the land of Thomas P. Devereux, and which Mrs. F.      Devereux had not disposed of during her life, and which, by      her will, she appointed to her executors, was, on the third      day of June, 1849, the date of her death, the sum of      twenty-one thousand five hundred and twenty-seven dollars and      sixty-seven cents, ($21,527.67.)'

'(11) And the said Louisa N. Taylor having, at June term,     1879, of this court, filed a petition to be made a party to      this cause and to assert her rights in the premises, and      having at said term, by the consent of all the parties,      plaintiff and defendant, herein been made a party hereto, and      it appearing to the court that said Louisa N. Taylor, on the      twenty-sixth of March, 1869, before the register in      bankruptcy proved and filed her claim on account of the      legacy hereinbefore named against the estate of said      bankrupt, Thomas P. Devereux, as a debt secured by lien on      the lands of the said Thomas P. Devereux, to the amount of      $2,926.12, with interest, and the plaintiffs having here in      open court assented to the payment of said claim in the      manner specified and directed in this decree, the court doth      declare that there is now due to the said Louisa N. Taylor      upon the $50 annuity, the sum of $1,196.45, with interest on      $726.53 from November 24, 1879, and upon the $150 annuity,      the sum of $3,413.40, with interest on $2,179.59 from      November 24, 1879, charged as hereinbefore declared.

'And thereupon, it being obvious to the court that a new     reference and further account in the premises is entirely      useless and unnecessary, it is finally ordered, adjudged, and      decreed that the said Louisa N. Taylor recover of the      defendants, William J. Hawkins and Walter Clark, assignees in      bankruptcy of the estate and effects of Thomas P. Devereux,      deceased, a bankrupt, and of the said Walter Clark and the      defendant John Devereux, substituted trustees for Thomas P.      Devereux, deceased, under the deed for the Pollock land of      July 3, 1839, the sum of ($1,196.45) eleven hundred and      ninety-six dollars and forty-five cents, with interest on      $726.53 thereof, from twenty-fourth November, 1879, until      paid, to be paid and satisfied out of the proceeds of the sales of      the said Pollock lands, in their hands, respectively, first,      and in preference to all other claims against said proceeds;      and that the plaintiffs, Grinfill Blake and Elizabeth J., his      wife, and John Townsend and Georgiana P., his wife, do      recover of the said defendants, Hawkins, Clark, and Devereux,      assignees and trustees, as aforesaid, the sum of ($4,569.73)      forty-five hundred and sixty-nine dollars and seventy-three      cents, with interest on $2,468.34 thereof from the      twenty-fourth November, 1879, until paid, to be paid out of      said proceeds of said sales of said Pollock lands in their      hands, respectively, and next in order of preference.

'And that the said Louisa N. Taylor do recover of the said     defendants, Hawkins, Clark, and Devereux, assignees and      trustees as aforesaid, the sum of ($3,413.40) three thousand      four hundred and thirteen dollars and forty cents, with      interest on ($2,179.59) twenty-one hundred and seventy-nine      dollars and fifty-nine cents thereof from the twenty-fourth      November, 1879, until paid, to be paid and satisfied out of      said proceeds of said sales of said Pollock lands in their      hands, respectively, and next in order of preference.

'And that the plaintiffs, Grinfill Blake and Elizabeth J.,     his wife, and John Townsend and Georgiana P., his wife, do      recover of the said defendants, Hawkins, Clark, and Devereux,      trustees and assignees as aforesaid, ($21,200.46,) twenty-one      thousand two hundred dollars and forty-six cents, with      interest on $13,877.66 thereof from the twenty-fourth day of      November, 1879, until paid, to be paid and satisfied out of      the said proceeds of the said sales of the said Pollock lands      in their hands, respectively, and in the event that said      proceeds shall prove sufficient to pay and satisfy said      last-mentioned sum in full, and if said proceeds shall not      prove sufficient, then as far as said proceeds shall extend      to satisfy the same.

'That the costs in this cause incurred, to be taxed by the     clerk, be paid by the said defendants, assignees, and      trustees as aforesaid, with and out of said proceeds of said      sales of said Pollock lands in full, and without reference to      the satisfaction of the four foregoing sums adjudged to be      paid out of such proceeds.'

It is now objected to this decree that it is not warranted by the mandate of this court, in execution of which only it could be properly made; and that if the matters decreed were open under the mandate, they were adjudged erroneously. It is said, in the first place, that it was error to permit Louisa N. Taylor to become a party and set up rights not embraced in the former decree. The obvious answer to this objection is that it was done by consent of all parties, as appears by the record. And there is no ground on which the decree in her favor can be impugned. Her annuity of $50 per annum was expressly payable out of the legacy to Thomas P. Devereux in trust, in respect to which his assignees cannot be heard to say that his land has been relieved of the charge by which the fund was to be raised, when, in point of fact, the fund never has been raised. As to the annuity of $150, although payable out of a fund expressly designated, it was a demonstrative legacy, payable, in default of that fund, out of general assets, and entitled, therefore, to the benefit of the fund of $50,000, converted by the appointment into general personal estate, and as part of that chargeable on the lands as hereafter shown. 2 Wms. Ex'rs, pt. 3, book 3, c. 2 § 3, p. [1160,] (6th Amer.Ed.) 1252.

It is next objected that the circuit court below erred in charging the amount found due to the appellees, as next of kin, entitled to share the undisposed residue of the estate of Frances Devereux, from the estate of Thomas P. Devereux, upon his real estate conveyed to him by his mother. It is claimed that this part of the decree is not justified by the mandate, and is erroneous on principle. But this view, in our opinion, cannot be sustained. The very point of our former decision was that the appellees were entitled to an account of the fund of $50,000, or so much of it as remained, as part of the personal estate of Mrs. Frances Devereux, by virtue of her will, construed as an appointment. The language of the opinion was, (98 U.S. 328:) 'We conclude, therefore, that Mrs. Devereux's will was an execution of the power and an appointment of the fund to her executors. It converted the fund into her own estate, at least to the extent of $28,500, if there was so much of it remaining.' It is conceded that the proper amount of this fund, according to the agreement of the parties, has been brought into account, and that the balance decreed in favor of the appellees is the true amount due to them from the estate of Thomas P. Devereux. This is so, because the personal estate of Mrs. Frances Devereux has been increased, in the account, by the addition of the balance of this fund, according to the mandate of this court. But that fund is still uncollected and is a lien on lands of Thomas P. Devereux in the hands of his assignees and trustees. Why should not the security go with the debt? The debt is the principal and the security an incident, which necessarily attends it. It certainly was not the intention of this court, in its former order, to separate them. And when it reversed the decree of the circuit court in order to award to the appellees the benefit of the fund appointed by the will of Mrs. Devereux, to become part of her personal estate, it meant also to give them the benefit of any security for its collection and payment that appointment furnished. And that such security existed, by way of lien and charge upon the land, in virtue of the appointment, and inures to the benefit of the appellees, as entitled to share in the general personal estate of the testatrix, is necessarily involved in the former judgment of this court. For that judgment did not proceed, as seems to be claimed, on the ground that the appointment of that fund by the will was merely to the legatees, or to the use of the legatees, under the will, so that when their legacies were satisfied, no matter by what means, the land was discharged of its lien. On the contrary, that judgment proceeded on the ground that the will was an appointment of what remained of the fund of $50,000 as a charge upon the land, to the executor of the testatrix, so as to convert that fund into part of the general personal estate of the testatrix, thereby subjecting it, as part of that estate, to the claims of all persons entitled to share in its distribution; it being the intention of the testatrix, as expressly deduced by this court from the provisions of the will, to provide a fund in the hands of her executors, in addition to the personal estate in possession, adequate to redeem the legacies given by the will, so as to exonerate that estate from their payment. That fund was not a trust, merely in aid of the general assets, to enable the latter to meet the payment of the legacies. That was the error of the circuit court in its first decree, for which it was reversed. It was, on the other hand, as declared by this court, 'an appointment of the whole fund to the executors of the will, who took it under the appointment as part of the personal estate.' And that means, just what the decree now under review declares, that it is appointed to be raised by a sale of the land on which it is charged, to be paid into the estate of the testatrix, for the purpose of being distributed to the appellees, as being the parties entitled. Not only was this fund charged upon the real estate of Thomas P. Devereux appointed to his executors, so as to become part of the general personal estate of Mrs. Frances Devereux, so that in law the whole, including the undisposed-of residue, became liable to distribution as one trust fund for creditors, legatees, and distributees, in the order of legal priority, but that order of priority was changed by the will, as declared by this court, so as to make the fund charged on the land and appointed by the will the primary fund for the payment of the legacies, so as to authorize those entitled to the general personal estate, as in this case, the next of kin entitled to the undisposed-of residue, to require that, for the purpose of paying their legacies, the specific fund charged on the land and appointed by the will should be first exhausted before resorting to the general assets of the testatrix. This court expressly so declared in its judgment on the former appeal. It said, (98 U.S. 327:)

'Turning now to the will we have before us, two things are     evident. The first is that the testatrix did not intend that     the pecuniary legacies given for charitable purposes and to      pay annuities should be satisfied out of her own personal      property.' After specifying the disposition made of her      personal estate in possession, the opinion proceeds: 'Thus it      appears that while she gave pecuniary legacies amounting in the aggregate to more than $28,500, she      carefully withdraw from any positive application to their      payment the personal estate she owned in her own right.'

Notwithstanding this, Thomas P. Devereux, acting, though wrongfully, as executor of this will, and chargeable as such, appropriates the general personal estate to his own use, to reimburse himself the amount which he had expended in paying or purchasing the legacies; and thus charges them upon the general assets, in violation of the intention of the will and the rights of the parties who by law were entitled to share in that estate. Why are not the next of kin now entitled to stand in the place of those legatees, in respect to the fund out of which they should have been paid? Upon the familiar principle of marshaling assets by means of subrogation, when a party, having a right to resort to two funds, to the detriment of another, entitled to be paid out of but one, has been satisfied out of the latter, the fund thus exonerated will in equity be subjected to the payment of the postponed claim. This is such a case. For it is immaterial that Thomas P. Devereux did not use the specific property received by him out of the estate of Frances Devereux for the purpose of paying or purchasing the legacies entitled to payment out of the fund charged on his land, because he has received credit, with the assent of the parties and by the decree of the court, in his account of the general assets of that estate, for the amount paind by him on account of the legacies. How can he say, after that, that his real estate has been discharged of the lien by his payment of the legacies? The deficiency in the general personal estate thus created by him for the purpose of exonerating his land, is, in equity, something more than a personal claim against him. It is entitled to be supplied out of the securities that attended the claims which it was created to satisfy, and these securities are in equity considered as subsisting for that purpose. As against Thomas P. Devereux himself, if he were in being and in his own right defending against this claim of the appellees, the case would be too clear for argument. What greater rights have his assignees in bankruptcy, representing his general creditors? They have come into possession of this real estate, but only with the title by which he held it, subject to the specific equity now asserted against it; and in their hands, as trustees, it must be held and applied to subserve the purposes to which in equity it is devoted. Those purposes, in our opinion, are correctly set forth in the decree of the circuit court; and it is accordingly affirmed.

title: Hawkins v. Blake/Opinion of the Court


text: Talk:Hawkins v. Blake/Opinion of the Court


text:
Clark v. Barnard

Charles Hart and ''Wm. g. Roelker'', for appellants.

Robert R. Bishop and John C. Gray, for appellees.

[Argument of Counsel from pages 437-442 intentionally omitted]

MATTHEWS, J.

title: Clark v. Barnard


text: Talk:Clark v. Barnard

title: Talk:Clark v. Barnard


text:
Clark v. Barnard/Opinion of the Court

The appellees, who were complainants below, filed their bill in equity, as assignees in bankruptcy of the Boston, Hartford & Erie Railroad Company, against Samuel Clark, general treasurer of the state of Rhode Island, and the city of Boston and Frederick U. Tracey, its treasurer. The bill alleged-

That the Boston, Hartford & Erie Railroad Company was a     corporation created by the states of Connecticut and      Massachusetts for the purpose of building, acquiring, and      operating a railroad from Boston, in Massachusetts, to      Willimantic, in Connecticut, and from Providence, in Rhode      Island, to Willimantic, and from Willimantic through      Waterbury to the state line of Connecticut, and thence to      Fishkill, in New York; that the directors of the company,      without authority from the corporation or by law, applied to      the legislature of Rhode Island in 1869, and obtained the      passage of an act entitled 'An act in addition to an act to      ratify and confirm the sale of the Hartford, Providence &      Fishkill Railroad to the Boston, Hartford & Erie Railroad      Company,' by which the company was authorized to locate and      construct a railroad in extension of their line of railroad      purchased of the Hartford, Providence & Fishkill Railroad      Company, commencing at their depot in Providence, thence      running to the easterly line of the state in or near the      village of Valley Falls, to meet and connect with a Massachusetts      railroad extending through North Attleborough from Boston, so      as to make a continuous line of railroad in a northerly and      southerly direction between Providence and Boston; that this      act contained a provision in the following terms: 'This act      shall not go into effect unless the said Boston, Hartford &      Erie Railroad Company shall, within 90 days from the rising      of this general assembly, deposit in the office of the      general treasurer their bond, with sureties satisfactory to      the governor of this state, in the sum of $100,000, that they      will complete their said road before the first day of      January, A. D. 1872;' that this condition was not complied      with, and that the said act, therefore, never took effect and      is wholly null and void; that, after the passage of the act,      the directors and officers of the corporation, without      authority and in abuse of their trust and duty, filed with      one Samuel Parker, then the general treasurer of Rhode      Island, a paper, purporting to be the bond of the      corporation, but without sureties, and fraudulently took of      the funds of the corporation the sum of $100,000, and      deposited the same with the city treasurer of Boston in      exchange for the obligation of that city, a copy of which is      as follows:

'TEMPORARY LOANS, CITY OF BOSTON.

'$100,000.

No. 6.

'This certifies that, for value received, there will be due     from the city of Boston, payable at the office of the city      treasurer, on demand, after the first day of December next,      to the general treasurer of the state of Rhode Island, or      order, the sum of $100,000, with interest at the rate of 7      per cent. per annum, in current funds.

'This loan being authorized by an order of the city council     passed the ninth day of June, 1869, to anticipate the income      of the present financial year.

'Interest will not be allowed after this note is due.

'June 28, 1869.

ALFRED T. TURNER, Auditor.

'FRED. U. TRACEY, Treasurer.

NATH'L B. SHURTLEFF, Mayor.'

- That the directors and officers of the company, without     consideration and without authority, deposited this      certificate and obligation with the said Parker, who received      the same without warrant of law, and thereupon held the same      to the use of the railroad company; that the corporation      never accepted the act of the legislature recited; that the      railroad authorized thereby has never been built, nor any      work done thereon, nor has the state of Rhode Island, nor any      citizen thereof, suffered any damage or loss by reason      thereof; that the general assembly of Rhode Island considered      that the filing of the certificate and obligation of the city      of Boston was not a compliance with the act, and did not      ratify the taking of the same till after the bankruptcy of      the railroad company; that said bankruptcy was adjudicated on      October 21, 1870, and the complainants became assignees in      bankruptcy of said company from that date, and entitled to      the money represented by the said certificate; that Samuel      Parker having died, the respondent Clark succeeded him as      general treasurer of Rhode Island, and came into possession      of the said certificate, which, it is alleged, however, he      holds wrongfully, and in his individual and not his official      capacity, and to the use of the complainants, but which,      nevertheless, he thereatens to collect and withhold from them      the proceeds thereof.

The prayer of the bill is—

'That the said respondent Clark may be decreed to have no     right, title, or interest in or to the said paper writing A,      or in or to the said money so deposited with the said      respondent Tracey, or to any part thereof, and that he may be      decreed to assign and deliver over the said paper A to your      orators, and may be enjoined and restrained from presenting      the same to the said respondent Tracey, or to the said city      of Boston, or from receiving any money or payment whatsoever      thereon or therefor, or any part thereof, or from receiving      or holding the said sum of $100,000, or any part thereof,      from the said respondent Tracey, or the said city of Boston,      and that the said respondent Tracey and the said city of      Boston may be decreed to pay over to your orators, as      assignees as aforesaid, the said sum of $100,000, with      interest thereon, and may be enjoined and restrained from      paying the same, or any part thereof, or any money on account thereof, to the said respondent      Samuel Clark, the general treasurer of the state of Rhode      Island, and that your orators may have such other and further      relief as to your honors shall seem meet, and as the nature      and circumstances of the case shall require.'

To this bill a demurrer was filed by Clark for want of jurisdiction, on the ground that it was, in substance, a suit by citizens of one state against the state of Rhode Island. This demurrer was overruled. Clark then filed his answer, denying the material allegations of the bill, asserting that the transaction was with the state of Rhode Island, through the treasurer in his official capacity, and insisting upon the immunity of the state from suit by citizens of other states as a defense. The cause came on for hearing upon the pleadings and proofs, when an interlocutory decree was passed, April 15, 1878, ordering the payment of the money due from the city of Boston upon the loan certificate into the registry of the court, with liberty to the defendant Clark to take and file evidence in support of any claim for damages by reason of the breach of the bond of the Boston, Hartford & Erie Railroad Company to the state of Rhode Island; and further ordering that on final hearing, and upon filing in court the certificate of indebtedness, the general treasurer of the state of Rhode Island should have and recover of the said sum in the registry such portion, or the whole thereof, as should amount to the sum, if any, for which any surety might or for which the principal obligor in said bond would be liable, upon the evidence, either for any penalty or damages by reason of the non-performance and breach of the conditions of said bond.

On May 3, 1878, the city of Boston paid into court the sum of $100,000, and, in addition, the interest accrued to December 1, 1869, and subsequently, on February 25, 1880, an additional amount for interest in full. On March 17, 1880, the following claim of the state of Rhode Island was filed by the allowance of the court as of April 15, 1878, after the entry of the interlocutory decree of that date: 'And now comes the state of Rhode Island, by the undersigned, the same counsel who have appeared for the defendant Clark, general treasurer of said state, and, without prejudice to the demurrer of said general treasurer, claims the fund in the registry of the court.' This was signed by counsel. On final hearing the fund was awarded to the appellees; and from that decree Clark, general treasurer of the state of Rhode Island, and the state of Rhode Island appealed. The state itself is a party to the appeal bond, which recites that the state of Rhode Island was an intervenor and claimant of the fund in court, and that a decree was rendered against it as such.

The bond executed and delivered by the Boston, Hartford & Erie Railroad Company to the state of Rhode Island is as follows:

'Know all men by these presents that the Boston, Hartford &     Erie Railroad Company, a corporation created by the general      assembly of the state or Connecticut, is held and firmly      bound to the state of Rhode Island and Providence Plantations      in the sum of one hundred thousand dollars, to be paid to      said state of Rhode Island and Providence Plantations; to      which payment, well and truly to be made, the said      corporation doth bind itself and its successors firmly by      these presents.

'The condition of the aforewritten obligation is such that     whereas, by an act of the general assembly of said state of      Rhode Island, entitled 'An act in addition to an act entitled      an act to ratify and confirm the sale of the Hartford,      Providence & Fishkill Railroad to the Boston, Hartford & Erie      Railroad Company,' passed at the January session, 1869, said      Boston, Hart-ford & Erie Railroad Company are authorized and      empowered to locate, lay out, and construct a railroad in      extension of their line of railroad purchased of the      Hartford, Providence & Fishkill Railroad Company, commencing      at a point in their said purchased railroad at or near their      freight depot in the city of Providence; thence running      westerly and northerly by a line westerly of the state's      prison, a little easterly of the Rhode Island Locomotive      Works; and thence by nearly a straight line and crossing or      running near to Leonard's Pond; and thence passing between      the villages of Pawtucket and Lonsdale, and over and above the      Providence & Worcester Railroad; thence continuing to the      easterly line of the state, in or near the village of Valley      Falls:

'Now, therefore, if said Boston, Hartford & Erie Railroad     Company shall complete their said railroad before the first      day of January, A. D. 1872, then the aforewritten obligation      shall be void; otherwise be and remain in full force and      effect.

'In testimony whereof, said Boston, Hartford & Erie Railroad     Company have caused this instrument to be signed by John S.      Eldredge, its president, and its corporate seal to be thereto      affixed, this twenty-third day of June, 1869.

[L. S.]

'BOSTON, HARTFORD & ERIE R. R. Co.,

'By JOHN S. ELDREDGE, President.

'Executed in presence of-

'SAMUEL CURREY.

'H. S. BARRY.'

The testimony taken in the cause pursuant to the interlocutory decree, it is admitted, failed to prove any damage or loss occasioned to the state of Rhode Island, or to any of its citizens or inhabitants, by reason of the failure of the railroad company to comply with the conditions of this bond.

The first question for determination on this appeal is that of jurisdiction, raised first by the demurrer and afterwards by the answer of Clark, general treasurer of the state of Rhode Island, on the ground that the suit was in effect brought against a state by citizens of another state, contrary to the eleventh amendment to the constitution of the United States. We are relieved, however, from its consideration by the voluntary appearance of the state in intervening as a claimant of the fund in court. The immunity from suit belonging to a state, which is respected and protected by the constitution within the limits of the judicial power of the United States, is a personal privilege which it may waive at pleasure; so that in a suit, otherwise well brought, in which a state had sufficient interest to entitle it to become a party defendant, its appearance in a court of the United States would be a voluntary submission to its jurisdiction. while, of course, those courts are always open to it as a suitor in controversies between it and citizens of other states. In the present case the state of Rhode Island appeared in the cause and presented and prosecuted a claim to the fund in controversy, and thereby made itself a party to the litigation to the full extent required for its complete determination. It became an actor as well as defendant, as by its intervention the proceeding became one in the nature of an interpleader, in which it became necessary to adjudicate the adverse rights of the state and the appellees to the fund, to which both claimed title. The case differs from that of Georgia v. Jesup, 106 U.S. 462, [1 SUP. CT. REP. 363,] where the state expressly declined to become a party to the suit, and appeared only to protest against the exercise of jurisdiction by the court. The circumstance that the appearance of the state was entered without prejudice to the demurrer of Clark, the general treasurer, does not affect the result. For that demurrer could not reach beyond the question of the right to sue Clark by reason of his official character, which became insignificant when the state made itself a party; and in point of fact the bill was framed to avoid the objection, by charging Clark as a wrong-doer in his individual capacity. For the groundwork of the bill, whether it be regarded as directed against the officer or the state, is that the transaction throughout was void, as ultra vires the corporation. And this presents the next question to be considered. That question arises and is to be determined upon the following statement of facts.

The Boston, Hartford & Erie Railroad Company was originally created a corporation by the laws of Connecticut. Its charter conferred authority upon it in these terms:

'Said Boston, Hartford & Erie Railroad Company may purchase *     *  * the franchise, the whole or any part of the railway or      railway property of any railroad company located in whole or      in this state, whose line or a portion of whose line of      railway, constructed or chartered, now forms part of a      railway line from the harbor of Boston, passing through      Thompson to Willimantic, and from Providence through      Willimantic to Hartford, Waterbury, and thence towards the      North river, the purpose of reaching a point at or near Fishkill, in the      state of New York; *  *  * and said Boston, Hartford & Erie      Railroad Company may make any lawful contract with any other      railway company with which the track of said railroad may      connect, in relation to the business or property of the same;      and may take lease of any railroad, or may lease their      railway to, or may make joint stock with, any connecting      railway company in the line of, and forming a necessary part      of, and running in the same general direction as, their said      route, and between its terminal points.'

In pursuance of this authority the Boston, Hartford & Erie Railroad Company purchased the franchises and railroad of the Hartford, Providence & Fishkill Railroad Company. This latter company was a consolidated corporation, deriving its existence and powers from the laws, both of Connecticut and Rhode Island, whose road, as defined in the acts of incorporation, constituted a line within the general description contained in the section from the charter of the Boston, Hartford & Erie Railroad Company, already quoted. By a subsequent act of the legislature of Rhode Island the sale and transfer of the Hartford, Providence & Fishkill Railroad, its property and franchises, to the Boston, Hartford & Erie Railroad Company was ratified and confirmed, so far as said railroad was situated in that state; and it was thereupon further enacted that the 'said Boston, Hartford & Erie Railroad Company, by that name, shall and may have, use, exercise, and enjoy all the rights, privileges, and powers heretofore granted and belonging to said Hartford, Providence & Fishkill Railroad Company and be subject to all the duties and liabilities imposed upon the same by its charter and the general laws of this state.'

The Hartford, Providence & Fishkill Railroad Company was, without question, so far as it owned and operated a railroad within the state of Rhode Island, a corporation in and of that state; and the Boston, Hartford & Erie Railroad Company became its legal successor in that state, as owner of its property, and exercising its franchises therein, and became, therefore, in respect to its railroad in Rhode Island, a corporation in and of that state.

Thereafter, in January, 1869, the legislature of Rhode Island passed the act out of which the present litigation has grown, entitled 'An act in addition to an act entitled 'An act to ratify and confirm the sale of the Hartford, Providence & Fishkill Railroad to the Boston, Hartford & Erie Railroad Company." In its first section it is enacted as follows:

'The Boston, Hartford & Erie Railroad Company, a corporation     created by the general assembly of the state of Connecticut,      are hereby authorized and empowered to locate, lay out, and      construct a railroad in extension of their line of railroad      by them purchased of the Hartford, Providence & Fishkill      Railroad Company, commencing at a point in their said      purchased railroad at or near their freight depot in the city      of Providence; thence running westerly and northerly by a      line westerly of the state prison, a little easterly of the      Rhode Island Locomotive Works; and thence by nearly a      straight line, and crossing or running near to Leonard's      Pond, (so called;) and thence passing between the villages of      Pawtucket and Lonsdale, and over and above the Providence &      Worcester Railroad; thence continuing to the easterly line of      the state in or near the village of Valley Falls, there to      meet and connect with a railroad extending westerly through      North Attleborough, from the direction of Boston, authorized      by the common wealth of Massachusetts.'

The eighth section of the act is as follows:

'Said railroad, when the same shall have been constructed,     shall be managed and protected in all respects according to      the provisions of, and be subject to, an act entitled 'An act      to incorporate the Providence & Plainfield Railroad Company,'      and the several acts in addition to and amendment thereof,      and the general laws of the state.'

The act thus referred to as the 'Act to incorporate the Providence & Plainfield Railroad Company,' was the charter of the corporation by that name, in the state of Rhode Island, that, by consolidation with a Connecticut company, formed the Hartford, Providence & Fishkill Railroad Company.

The twelfth section of the act, recited in the complainant's bill, is as follows:

'This act shall not go into effect unless the said Boston,     Hartford & Erie Railroad Company shall, within 90 days from      the rising of this general assembly, deposit in the office of      the general treasurer their bond, with sureties satisfactory      to the governor of this state, in the sum of $100,000, that      they will complete their said road before the first day of      January, A. D. 1872.'

This act of the legislature of Rhode Island was duly accepted by the stockholders of the Boston, Hartford & Erie Railroad Company; the bond required by the twelfth section, as already set out, was executed and delivered; and the certificate of indebtedness, in lieu of sureties, was given by the company and accepted by the state.

It is now argued by counsel for the appellees that the party which, in all these transactions, was dealing with the state of Rhode Island, was the Boston, Hartford & Erie Railroad Company, in its character as a corporation of the state of Connecticut; that, as such, it had no power, under the charter granted by that state, to build or own a railroad directly connecting Boston and Providence, nor had it, as such, any capacity to receive a grant of such a franchise; that, consequently, everything done or attempted in that behalf was ultra vires and void.

But the Boston, Hartford & Erie Railroad Company was also a corporation of Rhode Island. As such, it owned and operated a railroad within that state, and had received and exercised franchises under its laws, to which it was in all respects subject. It was the assignee of the road and rights connected therewith, formerly belonging to the Hartford, Providence & Fishkill Railroad Company; and it was this corporation, dwelling and acting in Rhode Island, that the legislature, by the act in question, authorized to exercise the additional powers it conferred.

If it had had no previous existence as a corporation under the laws of Rhode Island, it would have become such by virtue of the act in question. For although, as a Connecticut corporation, it may have had no capacity to act or exist in Rhode Island for these purposes, and no capacity by virtue of its Connecticut charter to accept and exercise any franchises not contemplated by it, yet the natural persons, who were corporators, might as well be a corporation in Rhode Island as in Connecticut; and, by accepting charters from both states, could well become a corporate body, by the same name and acting through the same organization, officers, and agencies, in each, with such faculties in the two jurisdictions as they might severally confer. The same association of natural persons would thus be constituted into two distinct corporate entities in the two states, acting in each according to the powers locally bestowed, as distinctly as though they had nothing in common either as to name, capital, or membership. Such was in fact the case in regard to this company, so that in Rhode Island it was exclusively a corporation of that state, subject to its laws and competent to do within its territory whatever its legislation might authorize. 'Nor do we see any reason,' as was said by this court, Mr. Justice SWAYNE delivering its opinion, in Railroad Co. v. Harris, 12 Wall. 65-82, 'why one state may not make a corporation of another state, as there organized and conducted, a corporation of its own, quo ad hoc any property within its territorial jurisdiction. That this may be done was distinctly held in Ohio & M. R. Co. v. Wheeler, 1 Black, 297.' The same view was taken in Railway Co. v. Whitton, 13 Wall. 270; in Railroad Co. v. Vance, 96 U.S. 459; and in Memphis & C. R. Co. v. Alabama, ante, 432, decided at the present term. The question of the powers of the Boston, Hartford & Erie Railroad Company, as a corporation in Rhode Island, and of the legal effect of its acts and transactions performed in that state, is to be determined exclusively by the laws of that state, and not by those of Connecticut, which have no force beyond its own territory. It results, therefore, that the doctrine of ultra vires, as here urged by the appellees, has no place in this controversy.

It is, however, urged on behalf of the appellees-and this was the ground on which the decree below proceeded-that the obligation required by the statute and given by the company was a bond, in the penal sum of $100,000, conditioned that the company would completely build its road within the period limited, upon which no recovery can be had, except for such damages as may be shown to have resulted to the state of Rhode Island from the breach of its condition; that no damage on that account is proven, it being in fact admitted that none actually resulted; that the certificate of indebtedness and the fund which has arisen from its payment were pledged merely, in lieu of sureties, as collateral security for the satisfaction of the bond; and that, consequently, the claim of the stae of Rhode Island against it having thus failed, that fund reverts to the appellees.

The proposition of counsel for the appellees, as stated by them, is that 'from a period at least as early the year 1650 down to the present time, bonds have constituted a distinct class of instruments, the effect of which is always the same, in the same sense that the effect of a conveyance to A. and his heirs is always the same. Such is the rule of equity. Such was the effect of the statutes. Consequently, if in a particular case parties have expressed their obligation in the form of a bond, their liability is thereby determined to be an obligation to perform the condition or pay the damages actually sustained from non-performance thereof;' and, as a statement of the rule, they cite the following passage, 2 Sedgw. Meas. Dam. (7th Ed.) 259, note:

'Of course, in this class of agreements, as in all others,     when the contract takes the ordinary form of a penal bond,      the sum fixed will invariably be regarded as a penalty; and      this might well be put, at the present day, on the ground of      intention, as derived from the writing itself, for this form      of instrument is in such common use that persons who resort      to it must be held to have in view its legal consequences.'

While this may be accepted as a sufficiently accurate statement of the general rule, as to bonds with conditions, designed as an indemnity between private persons for non-performance of a collateral agreement, yet, in respect to such cases, it cannot be considered as universally true. 'It is often a doubtful question,' said the supreme judicial court of Massachusetts in Hodges v. King, 7 Metc. 583-587, 'whether the sum stipulated to be paid on the non-performance of a condition is in the nature of a penalty, or is the amount settled by the parties for the purpose of making that certain which would be otherwise uncertain. * *  * The bond has indeed a condition; but that is a matter of form and cannot turn that into a penalty which, but for the form, is an agreement to pay a precise sum under certain circumstances.' So that it cannot correctly be said to be true, in all such cases, that the intention to treat the sum named in the bond as a penalty to secure the performance of the condition, and to be discharged on payment of damages arising from non-performance, can be inferred as a rule of law, or a conclusive presumption, from the mere form of the obligation.

Originally, at law, in case of breach of the condition of a bond, the amount recoverable was that named in the obligation. So that, if the condition is impossible either in itself or in law, the obligation remains absolute. As, 'if a man be bound in an obligation, etc., with condition that if the obligor do go from the church of St. Peter in Westminster to the church of St. Peter in Rome within three hours, that then the obligation shall be void. The condition is void and impossible, and the obligation standeth good.' So, again, if the condition is against a maxim or rule in law, as, 'if a man be bound with a condition to enfeoff his wife, the condition is void and against law, because it is against the maxim in law; and yet the bond is good.' Co. Lit. 206b. So, where the condition is possible at the date of the instrument and becomes impossible subsequently, the obligation does not become thereby discharged, unless the impossibility of performance was the act of God, or of the law, or of the obligee. Accordingly, it was held by this court in Taylor v. Taintor, 16 Wall. 366, that when a person arrested in one state on a criminal charge, and released under his own and his bail's recognizance that he will appear on a day fixed and abide the order and judgment of the court on process from which he has been arrested, goes into another state, and, while there, is, on the requisition of the governor of a third state, for a crime committed in it, delivered up, and is convicted and imprisoned in such third state, the condition of the recognizance has not become impossible by act of law so as to discharge the bail; 'the law which renders the performance impossible, and therefore excuses failure, must be a law operative in the state when the obligation was assumed, and obligatory in its effects upon her authorities.'

The ground, nature, and limits of the jurisdiction of courts of equity to relieve against penalties in such instruments is well stated by Mr. Justice STORY, in this language:

'In short, the general principle now adopted is that,     wherever a penalty is inserted merely to secure the      performance or enjoyment of a collateral object, the latter      is considered as the principal intent of the instrument, and      the penalty is deemed only as accessory, and therefore as      intended only to secure the due performance thereof or the      damage really incurred by the non-performance. In every such     case the true test generally, if not universally, by which to      ascertain whether relief can or cannot be had in equity, is      to consider whether compensation can be made or not. If it     cannot be made, then courts of equity will not interfere. If     it can be made, then, if the penalty is to secure the mere      payment of money, courts of equity will relieve the party      upon paying the principal and interest. If it is to secure     the performance of some collateral act or undertaking, then      courts of equity will retain the bill, and will direct an      issue of quantum damnificatus; and when the amount of the      damages is ascertained by a jury, upon the trial of such an      issue, they will grant relief upon payment of such damages.'      Eq. Jur. § 1314.

And Mr. Adams, in his Treatise on Equity, (6th Am. Ed.) 107, says, on the same subject:

'The equity for relief against enforcement of penalties     originates in the rule which formerly prevailed at law, that,      on breach of a contract secured by penalty, the full penalty      might be enforced, without regard to the damage sustained. The court of chancery, in treating contracts as matters for specific     performance, was naturally led to the conclusion that the      annexation of a penalty did not alter their character; and,      in accordance with this view, would not, on the one hand,      permit the contracting party to evade performace by paying      the penalty; and, on the other hand, would restrain      proceedings to enforce the penalty on a subsequent      performance of the contract itself, viz., in the case of a      debt, on payment of principal, interest, and costs; or in      that of any other contract, on reimbursement of the actual      damage sustained.'

It has accordingly been uniformly held, in cases too numerous for citation, that courts of equity will not interfere in cases of forfeiture for the breach of covenants and conditions where there cannot be any just compensation decreed for the breach; for, as was said by Lord Chancellor MACCLESFIELD, in Peachy v. Duke of Somerset, 1 Strange, 447; S.C.. Prec. Ch. 568; 2 Eq. Cas. Abr. 227, 'it is the recompense that gives this court a handle to grant relief.'

The application of this principle becomes more manifest in cases where a public interest or policy supervenes, as where, for non-compliance by stockholders in corporations engaged in undertakings of a public nature, with the terms of payment of installments due on account of their shares, by which a forfeiture of the stock and of all previous payments thereon has been incurred and declared, the courts refuse to grant relief. Sparks v. Proprietors of Liverpool Water-works, 13 Ves. 428; Prendergast v. Turton, 1 Younge & C. Ch. 98; Naylor v. ''South Devon Ry. Co. 1 De G. & S. 32; Sudlow v. Dutch Rhenish Ry. Co.'' 21 Beav. 43.

In the case of Sparks v. Proprietors of Liverpool Water-works, 13 Ves. 433, Sir WM. GRANT, M. R., said:

'The parties might contract upon any terms thought fit, and     might impose terms as arbitrary as they pleased. It is     essential to such transactions. This struck me as not like     the case of individuals. If this species of equity is open to     parties engaged in these undertakings, they could not be car      reid on. * *  * Why is not this equity open to contractors for      government loans? Why may not they come here to be relieved when     they have failed in making their deposit? And if they could     have relief, how could gov ernment go on? It would be just as     difficult for these undertakings to go on. If compensation     cannot be effectually made, it ought not to be attempted.'

Accordingly, where any penalty or forfeiture is imposed by statute upon the doing or omission of a certain act, there courts of equity will not interfere to mitigate the penalty or forfeiture, if incurred, for it would be in contravention of the direct expression of the legislative will. Story, Eq. Jur. § 1326. Lord Chancellor MACCLESFIELD said, in Peachy v. Duke of Somerset, 1 Strange, 477: 'Cases of agreements and conditions of the party and of the law are certainly to be distinguished. You can never say the law has determined hardly, but you may that the party has made a hard bargain.'

In Powell v. Redfield, 4 Blatchf. C.C. 45, an application was made in equity to restrain suits upon a bond given in pursuance of the revenue laws of the United States, which was denied on the ground that a court of equity had no right to interfere, and, by injunction or decree, to virtually repeal the express provisions of a positive statute. or defeat their operation in the particular case.

In Benson v. Gibson, 3 Atk. 395, Lord HARDWICK said: 'Nor is it like the case of bonds given as a security not to defraud the revenue, because there, where a person is guilty of a breach, it is considered in law as a crime, and this court will not relieve for that reason.'

The case of Treasurer v. Patten, 1 Root, 260, was an action for the penalty of a bond given to oblige the defendant to observe the laws respecting excise, in which there was a verdict for the plaintiff and the £200 penalty. Defendant moved the court, says the report, to chancer said bond. 'By the Court. There is no power short of the legislature can do it; for it is the sum prescribed by an act of the legislature.' So in Keating v. Sparrow, 1 Ball & B. 367, the Lord Chancellor MANNERS said: 'It has been argued on the part of the plaintiff that this court leans against forfeiture, if the party can be compensated; and that he can in this case, where interest and septennial fines may be given to the landlord. That principle is applicable to cases of contract between the parties, but not to the provisions of an act of parliament or conditions in law.'

The fact that the obligation is in the form of a bond to the state does not make its penalty less a statutory forfeiture, and so outside the jurisdiction of a court of equity. In the case of U.S. v. Montell, Taney, C. C. 47, it was held that the sum secured by a bond with sureties, under the act of congress of December 31, 1792, c. 45, § 7, conditioned that the registry of a vessel should be used solely for the vessel for which it is granted, and should not be disposed of to any person whatsoever; and if the vessel be lost, or prevented by disaster from returning to the port, and the registry shall be preserved, or if the vessel be sold, that the registry shall be delivered up to the collector, is a penalty or forfeiture inflicted by the sovereign power for a breach of its laws, not a liquidated amount of damages due under a contract, but a fixed and certain punishment for an offense, and not the less so because security is taken before the offense is committed in order to secure the payment of the fine if the law should be vio lated. Chief Justice TANEY, in his opinion, said:

'Penalties and forfeitures imposed by statute are not usually     provided for by bond and security given in advance. The sum     recovered from Montell is recovered upon a contract; the      action was brought upon a contract; and was not and could not      have been brought in any of those forms which are usually      necessary for the recovery of fines or forfeitures imposed by      law. Yet this sum was, in truth, forfeited by Montell, by     reason of his violation of a duty imposed by the act of      congress; it was a specific penalty upon the owner and      master, for the commission of a particular offense against      the policy of that law. And although the amount was secured     by bond given for the performance of the duty, yet this duty was a part of the same policy with other      duties mentioned in the act and for which other penalties are      inflicted. * *  *

'It certainly is not to be regarded as a bond with a     collateral condition, in which the jury are to assess the      damages which the United States shall prove that they have      sustained; for, according to that construction, the amount of      damages would not depend upon the amount of the penalty      described in the section, which is graduated according to the      size of the vessel, but would depend upon the discretion of      different juries, and larger damages might be given where the      penalty was only $400, than in a case where the penalty was      $2,000.

'This, obviously, is not the intention of the law; and the     United States are entitled to recover the whole sum, for      which the party is bound, if any one of the conditions are      broken. Besides, how could the United States prove any     particular amount of damages to have been sustained by them      in a suit on this bond? What do they lose? It would be     difficult, we think, by any course of proof or any process of      reasoning, to show that the United States had sustained any      particular amount of damages in a case of this description,      or to adopt any rule by which the damages could be measured      by a jury, or be liquidated by agreement between the parties.

'The sum, for which the parties are to become bound, is,     manifestly, a penalty or forfeiture, inflicted by the      sovereign power for a breach of its laws.

'It is not a liquidated amount of damages due upon a     contract, but a fixed and certain punishment for an offense. And it is not the less a penalty and a punishment because     security is taken before the offense is committed, in order      to secure the payment of the fine if the law should be      violated.'

Recurring now to the particular circumstances of the present case, with a view to the application of these principles and decisions, we are satisfied that the proper solution of the question now under examination is to be found in two principal considerations.

The first of these is that it was not intended by the parties, the state of Rhode Island on the one hand, and the Boston, Hartford & Erie Railroad Company on the other, that the obligation given and accepted should be for an indemnity against any loss or damage expected to be suffered by the state, in the event that the railroad company should fail to build the railroad as required. It is found as a fact that no such loss or damage has in fact ensued. It is equally plain that none could possibly have arisen. The security is not to be extended to any supposed damage to private interests legally affected by the process of constructing the work. All damage of this kind to private persons was carefully provided for in other parts of the act. As to the state itself, the real party to the arrangement and contract, it could gain nothing in its political and sovereign character by the construction of the road; it could lose nothing by the default. If it could be supposed as possible that the state had in view the public interests of commerce and trade in the construction of the proposed railroad, and meant to provide for loss and damage to them by reason of its failure, the obvious answer is that no computation and assessment of actual damages on that account would be practicable, leaving as the alternative that the state, in fixing the penalty of the bond in the statute, had established its own measure of the public loss. The question of damages and compensation was not, because it could not have been, in contemplation of the parties. There was no room for supposing that there could be any. To assume that the statute required this bond and security in this sense, in full view of the legal conclusion which it is said necessarily flows from its form, and that in the event contemplated, of the failure to build the road, all that remained to be done was that the state should hand back canceled the obligation and security it had been at such pains to exact, is to put upon the transaction an interpretation altogether inadmissible. It would have been, upon such an assumption, a vain and senseless thing, and however private persons may be sometimes supposed to act improvidently, we are not to put such constructions, when it is legally possible to avoid them, upon the deliberate and solemn acts and transactions of a sovereign power, acting through the forms of legislation.

The conclusion, in our opinion, cannot be resisted that the intention of the parties in the transaction in question was that if the railroad should not be built within the time limited, the corporation should pay to the state, absolutely and for its own use, the sum named in the bond and secured by the deposited certificate of indebtedness. The supposition is not open that the penalty was prescribed merely in terrorem, to secure punctuality in performance, with the reserved intention of permitting subsequent performance to condone the default, for a distinct section of the statute (section 9) declares that in case of failure to complete the road within the time limited, the act itself should be void and of no effect.

In the second place, we think that the sum named in the statute is imposed by it as a statutory penalty for the non-performance of a statutory duty. The obligation required is that the railroad company shall give a bond, with satisfactory security, that they will obey the law; that they will complete their road as required by it. The language evidently means that, in case they fail to do so, they shall forfeit and pay the sum named; and, in order to insure its payment, additional parties to the bond, as sureties, are required. It is admitted that if it does not mean this it does not mean anything, and we have already said that we are not at liberty to adopt that alternative. We must construe it ut res magis valeat quam pereat; and the rule of strictness, in the construction of penal statutes, does not require an interpretation which defeats the very object of the law. The state of Rhode Island was dealing with one of its own corporations, and it had perfect right to act upon its own policy and prescribe its own terms, as conditions of powers and privileges sought from its authority.

For these reasons the decree of the circuit court is reversed, and the cause is remanded, with instructions to enter a decree in favor of the state of Rhode Island for the sum of $100,000, payable out of the fund in court, with so much interest thereon, if any, as has accrued on that sum since the first day of January, 1872, which is the date when the amount became due. And it is accordingly so ordered.

title: Clark v. Barnard/Opinion of the Court


text: Talk:Clark v. Barnard/Opinion of the Court


text: Manning v. Cape Ann Isinglass Glue Company


text: Talk:Manning v. Cape Ann Isinglass Glue Company


text:
Manning v. Cape Ann Isinglass Glue Company/Opinion of the Court

This was a suit brought by the appellants, John J. Manning and Caleb J. Norwood, to restrain the infringement by the appellees of letters patent dated January 7, 1873, issued to the appellants and W. N. Manning, as assignees of the inventor, James Manning. By the subsequent assignment of W. N. Manning the appellants became vested with the title to the entire patent. It is well known that the swimming bladders or sounds of certain fishes are largely composed of that variety of gelatin called isinglass. The sounds are usually found in the market in a dry and hard state. They are manufactured into insinglass by a mechanical operation, which consists in passing the macerated sound successively between several sets of rollers, the first set kneading the sounds into a homogeneous sheet, and the subsequent sets squeezing and elongating the sheets into the ribbons of isinglass known to commerce. The invention covered by the patent sued on was for 'an improvement in the manufacture of isinglass from fish-sounds.' The specification of the patent declared as follows:

'In the manufacture of ribbon isinglass from fish-sounds it is customary to feed the softened and moist or macerated sounds to and between feed and compressing rollers, by which the viscid substance is compressed and joined and formed into a continuous sheet. Notwithstanding the constant application of cold water into the rolls, the substance adheres tenaciously to the roll and accumulates thereupon, and has to be cut away therefrom; an operation which is very slow and laborious, and productive of imperfect sheets.

'My invention is designed to obviate the return of the adhering gelatinous substance to the action of the rolls before it is stripped therefrom, and to so strip it that the rolls may work continuously or without stoppage; the ribbon, as it is stopped, being again fed or guided by the operator into and between the rolls until sufficiently reduced or elongated for removal or for the action of other rolls set nearer together to produce a thinner ribbon.

'To effect this result I place at the side of each roll a scraper extending the whole length of the roll, and having an edge set up to the roll, so that the roll shall run just clear of it, which scraper or cleaner strips from the whole surface of the roll the adhering gelatine in the form of a sheet.

'The invention consists in this method of passing the isinglass between hollow rolls, cooled by water thrown into the rolls, and then stripping the gelatinous matter from the rollers and returning it to the hopper to be again treated, the rollers being adjustable.'

'The herein described method of converting isinglass into sheets of any desired thickness by running it between hollow rolls into which cold water is thrown to cool the compressing surfaces, such rolls being preferably made adjustable to graduate the degree of compression, and the adhering sheets being removed from the rolls by stationary scrapers or clearers and returned to the hopper as required.'

One of the defenses set up in the answer and relied on was that the improvement described in the patent had been in public use for more than two years before the patent was applied for. The circuit court dismissed the bill on that ground. From its decree this appeal is prosecuted by the complainants.

''Thos. Wm. Clarke'', for appellants.

''Geo. L. Roberts'', for appellees.

WOODS. J.

We think that the defense, that the improvement described in the patent had been in public use for more than two years prior to the application therefor, is established by the testimony.

The appellants contend that the patent covers an improvement in the process of making isinglass. It is not contended that the patent covers the rolls between which the fish-sounds are passed, or the keeping of the rolls cool by making them hollow and injecting a stream of cold water into the cavity, nor the automatic scrapers, but in the use of automatic scrapers applied to such rolls to prevent the isinglass from being carried through the rolls a second time without aeration.

The testimony shows that as early as the year 1860, James Manning, the inventor, was engaged in the manufacture of isinglass at Ipswich, Massachusetts, in copartnership with his brother-in-law Caleb Norwood, under the name of Norwood & Manning. In that year Oliver C. Smith, a machinist at Salem, constructed for the firm a machine containing adjustable hollow water-cooled rolls, with stationary scrapers, substantially such as are described in the patent, for converting isinglass into sheets in the manner therein set forth. The use of this machine was continued down to the year 1867, when the firm of Norwood & Manning was dissolved. In the division of the assets of the firm between the partners, the machine with the scraper, made by Smith, fell to Norwood. He took into the business with him as a partner his son, Caleb J. Norwood, and continued it in the same factory from 1867 to 1870, using the machine with the stationary scraper which had been made by Smith.

James Manning, after the dissolution of the firm of Norwood & Manning, established an isinglass factory at Rockport, Massachusetts, and procured to be constructed two machines similar to that disclosed in the patent. With this factory and machinery he set up in business his two sons, John J. Manning and William N. Manning, and they carried on the business of manufacturing isinglass, under the name of J. J. Manning & Brother, from the year 1868 until the testimony in this case was taken in 1877, using the two machines with scrapers above mentioned. James Manning, the inventor, had no interest in the business carried on by Norwood and his son after the dissolution of the firm of Norwood & Manning in 1867, nor in the business of J. J. Manning & Brother, carried on from 1868 until after the issue of the patent.

Some attempt is made to show that the use of the machines in the factory of Caleb Norwood, from 1867 to 1870, was a secret and not a public use. But we think the testimony shows a use open to the public generally. But whether this be so or not is immaterial, for Norwood and his son were allowed by the inventor the unrestricted use of the patent during the period mentioned, without injunction of secrecy or other condition. This is sufficient to constitute a public use. Egbert v. Lippman, 104 U.S. 333.

The decided weight of the evidence shows that there was also a public use of the invention in the factories of J. J. Manning & Brother for more than four years prior to the application for the patent; namely, from 1868 to 1873.

It is also made clear by the testimony, not only that the machinery but the process used by Norwood & Manning from 1860 to 1867, by Norwood & Son from 1867 to 1870, and by J. J. Manning & Brother from 1868 to 1873, and after that year, was substantially the same as that described in the patent. During all these years there was no material change, either in the machinery or the process. The use of the machinery and process was not, therefore, an experimental use. These conclusions of fact are fatal to the complainant's case.

It is the policy of the patent laws to forbid the issue of a patent for an invention which has been in public use before the application therefor. The statute of 1836 (5 St. 117, § 6) did not allow the issue of a patent when the invention had been in public use or on sale for any period, however short, with the consent or allowance of the inventor; and the statute of 1870 (16 St. 201, § 24; Rev. St. § 4886) does not allow the issue, when the invention had been in public use for more than two years prior to the application, either with or without the consent or allowance of the inventor. Under either of these statutes the patent relied on in this case was improvidently issued, for there was a public use, with the consent of the inventor, for more than two years prior to the application. The patent is therefore void. McClurg v. Kingsland, 1 How. 202; Egbert v. Lippman, ubi supra; Consolidated Fruit-jar Co. v. Wright, 94 U.S. 92; Worley v. Tobacco Co. 104 U.S. 340.

The decree of the circuit court was therefore right, and must be affirmed.


text: Talk:Manning v. Cape Ann Isinglass Glue Company/Opinion of the Court


text:
Downton v. Yaeger Milling Company

The appellant was the complainant in the circuit court. He filed his bill to restrain the infringement by the appellee of certain letters patent, for which he made an application on March 20, 1875, and which were issued to him on April 20th following, for an 'improvement in processes of manufacturing middlings flour.'

The state of the art, and the purpose of the improvement which the patent was intended to cover, are set forth in the specification, as follows:

'This invention has for its aim the better working or manipulating of grain particles known as middlings, for their reduction into meal or flour.

'To fully set forth the advantages that this process possesses over any of the various processes previously known and in use, it will be necessary to briefly describe the manufacture as now practiced.

'It is customary, under the ordinary mode of milling, to separate and purify the middlings by the action of the air alone, or air and bolting-cloth combined; then to convey the purified product to millstones to be ground to a sufficient fineness to admit of the passage of the middlings flour through the meshes of the bolting-cloth, which is used as a finishing preparer between the stones and the flour barrels or sacks receiving the finished product. In some cases the middlings that are not sufficiently reduced to go through the meshes of the cloth, pass through the ends of the flour-bolts, and are brought back onto some of the various purifiers, and subjected to repurification. This process requires much careful manipulation, and even then the yellow germ and pellicle of the grain will be so torn and pulverized by the stones that loose portions of the same will pass through the meshes of the bolting-cloth into the flour with injurious effect. The reason why the germ and pellicle is so torn is that millstones are composed of two disks-one revolving, the other stationary- receiving the material to be ground at the eye or center of the stones, and compelling it by centrifugal force to escape at the skirt or periphery of the stones, passing alternately over face and furrow until it reaches the periphery, where it is discharged. Such action comminutes the germs and forms specks that cannot be removed by the purifiers, and are, therefore, ground in with the flour.

'In the manufacture of middlings flour the action of stones on the middlings is not different from their action on grain, but in the wheat-stones the germ ends and bran are not sufficiently comminuted by one grinding to pass through the meshes of the cloth used for the flour known to the trade as 'first run.' I propose to arrest and remove such germ matter and bran particles by my improved process before they reach the second grind on the middling stones, by placing between the purifiers or separators and middling stones one or more sets of rolls, which will operate to reduce the large middlings by a bruising or crushing action, while they simply flatten out the intermixed germs and bran. Any of the various purifiers or separators in public use may be employed. A second important advantage or result of this improved process is the production of a large yield of high-grade flour. The large middlings or glutinous particles of the grain require more grinding than do the finer and more starchy particles removed at the head or first part of the purifiers; and when ground together, as is generally the case with small mills, and frequently the case with large mills, the meal is considerably heated in the grinding, owing to the miller's requiring the middlings meal to be of uniform fineness. The disposition and fineness of the small middlings cause them to 'flour' quicker than the large middlings, therefore the grinding is unequal, as, in order for the large glutinous middlings to be ground enough, the small starch middlings must be ground too much. This impairs the quality of the flour by deadening it, as well as by reducing the germs and bran to such an extent as to cause them to pass through the cloth. Some mills, therefore, run the coarsest middlings to a lower grade of flour.

'It is plain that with an intermediate reduction, by the flattening-rolls working on the large middlings as above set forth, the comminution of the middlings under the stones is rendered more equal, and a larger percentage of high-grade flour can be made.

'I will now describe briefly my mode of milling, referring, for illustrations, to the accompanying drawing, in which—

'Figure 1 is a general side view, partly in section, showing an apparatus, or a series of machines, comprising a section of my purifier, A; and fig. 2 is a like view of the same apparatus, in part, illustrating the employment of any other purifier, A2.

'Naturally the germs and bran are kept with the large and valuable middlings or particles of grain by the bolting-cloth of the purifying machines or flour-bolts till they reach certain parts, where the middlings are subjected to strong currents of air to remove light bran-flakes and fuzzy matter. The partially freed middlings are now passed from the purifier, A, or A2, between rolls or uniformly rotating surfaces, B, where the good middlings particles, being more brittle, are reduced to small granules, or to flour, while the germ and heavy bran matter, being of a soft, plastic nature, is flattened out, so that on passing it into a reciprocating or revolving bolt, C, clothed with suitable cloth, the flouring matter is thoroughly removed through the meshes of the cloth in a fit state of purity to pass to the stones, D, to be reground as usual, and the injurious germs and refuse matter are arrested, so as to be run off into suitable receptacles.' The claim was stated as follows:

'The following is claimed as new, namely:

'The herein-described process of manufacturing middlings flour by passing the middlings, after their discharge from a purifier, through or between rolls, and subsequently bolting and grinding the same for the purposes set forth.'

The answer of defendant set up, among other things, as matter of defense, want of novelty, and vagueness and uncertainty in the specifications and drawings filed by the patentee to describe his invention.

The circuit court sustained both these defenses, and dismissed the bill. The appeal of complainant has brought up this decree for review.

''Geo. Harding and W. G. Rainey'', for appellant.

F. W. Cotzhausen and ''Robt. H. Parkinson'', for appellee.

WOODS, J.

title: Downton v. Yaeger Milling Company


text: Talk:Downton v. Yaeger Milling Company

title: Talk:Downton v. Yaeger Milling Company