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Barrow v. Hunton

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

On the 19th of January, 1874, Logan Hunton recovered in the Fourth District Court for the parish of Orleans, Louisiana, against F. M. Goodrich and one Pilcher, a judgment for $2,500, and interest at eight per cent per annum from May 1, 1861. On the 28th of that month, Goodrich filed a petition in said court, praying for a decree of nullity of the said judgment, and for an injunction in the mean time, setting forth as grounds for such relief that the judgment complained of was void, because it was founded on a default taken, and no lawful service of the petition and citation in the suit had ever been made on him, Goodrich; and because the partnership of Pilcher & Goodrich had been dissolved before 1866; and because he, Goodrich, had been discharged as a bankrupt in 1868. An injunction and citation were thereupon issued and served.

On Feb. 3, 1874, Hunton, the defendant in this proceeding, filed a petition for the removal of the action of nullity to the Circuit Court of the United States, alleging that he was a citizen of Missouri, and that Goodrich, the plaintiff, was a citizen of Louisiana; and after a hearing on the subject, an order of removal was made by the District Court. The plaintiff moved the Circuit Court of the United States to remand the cause; but this motion was denied, and the suit proceeded in the latter court. After various proceedings had, the plaintiff, by leave of the court, amended his petition to conform to the equity practice of the United States court, converting it into a bill in equity containing substantially the same averments, and praying the same relief as before. The defendant answered, and the parties went to proofs. Amongst the proofs adduced was an exemplification of the record and proceedings in the original suit in which the judgment was rendered, which the plaintiff in this suit sought to have declared null and void. On the 14th of February, 1876, the Circuit Court made a final decree, as follows: 'This cause came on to be heard upon the bill, answer, replication, and proofs, and was argued by counsel. On consideration whereof, it is ordered, adjudged, and decreed that the injunction herein issued by the State court was wrongfully obtained, and is therefore dissolved. And it is further ordered and decreed that the plaintiff's bill be dismissed at his costs.'

A rehearing having been refused, the decree was confirmed on the 28th of February, 1876.

From this decree the present appeal was taken; and it is sought to be reversed on two grounds, upon which errors are assigned, namely:--

1st, That the transfer was illegally made, and the Circuit Court was without jurisdiction.

2d, That it appears that the Fourth District Court, which rendered the judgment against F. M. Goodrich, was without jurisdiction, and therefore the judgment is null and void.

Goodrich having died pendente lite, Barrow, his administrator, was substituted in his stead.

Mr. George L. Bright for the appellant.

The Circuit Court had no jurisdiction of a suit seeking to annul the judgment of the State court, or to enjoin the execution thereof, and the transfer of the suit was made without authority of law. Bank v. Turnbull & Co., 16 Wall. 190; Gwin v. Breedlove, 2 How. 29; Freeman v. Howe, 24 id. 460; Dunn v. Clarke, 8 Pet. 1; Williams v. Bryne, Hempst. 472; Brooks v. Montgomery, 23 La. Ann. 450; Diggs v. Walcott, 4 Cranch, 179; Peck v. Jermes, 7 How. 623; Watson v. Jones, 13 Wall. 719; Dial et al. v. Reynolds et al., 96 U.S. 340; Ranlett v. The Collier White Lead Co., 30 La. Ann. 56; Goodrich v. Hunton, 29 id. 372; 2 Story, Const., sects. 1757, 1759; 1 Kent, Com., sect. 19, p. 451; Act 1793, 1 Stat. 334; Rev. Stat., sect. 720.

Mr. Thomas J. Durant, contra.

The question of the legality of the removal of the case to the Circuit Court cannot be first raised here. The appellant did not object to the jurisdiction of that court, but filed his bill, which was ultimately dismissed upon the merits. He ought not to be allowed to take his chances there, and, on an adverse decision, assign for error that the removal was unauthorized.

He now seems to consider that the Circuit Court was without jurisdiction of the cause, although it appears by the record that the complainant was a citizen of Louisiana, and the defendant, of Missouri. There was, therefore, no want of jurisdiction, ratione personarum.

But it is urged that the Circuit Court could not annul the judgment of the State court, and enjoin its execution.

It is perhaps a sufficient answer to this proposition to say, that the Circuit Court neither annulled nor enjoined that judgment. It is true that the appellant insisted before the lower court that it ought to do so; but the court refused so to grant the relief prayed for in his bill.

All the authorities, therefore, which have been cited in support of the first assignment of error, if they have any application, must sustain the action below.

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

title: Barrow v. Hunton


text: Talk:Barrow v. Hunton

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

title: Talk:Barrow v. Hunton


text:
Barrow v. Hunton/Opinion of the Court

The question presented with regard to the jurisdiction of the Circuit Court is, whether the proceeding to procure nullity of the former judgment in such a case as the present is or is not in its nature a separate suit, or whether it is a supplementary proceeding so connected with the original suit as to form an incident to it, and substantially a continuation of it. If the proceeding is merely tantamount to the common-law practice of moving to set aside a judgment for irregularity, or to a writ of error, or to a bill of review or an appeal, it would belong to the latter category, and the United States court could not properly entertain jurisdiction of the case. Otherwise, the Circuit Courts of the United States would become invested with power to control the proceedings in the State courts, or would have appellate jurisdiction over them in all cases where the parties are citizens of different States. Such a result would be totally inadmissible.

On the other hand, if the proceedings are tantamount to a bill in equity to set aside a decree for fraud in the obtaining thereof, then they constitute an original and independent proceeding, and according to the doctrine laid down in Gaines v. Fuentes (92 U.S. 10), the case might be within the cognizance of the Federal courts. The distinction between the two classes of cases may be somewhat nice, but it may be affirmed to exist. In the one class there would be a mere revision of errors and irregularities, or of the legality and correctness of the judgments and decrees of the State courts; and in the other class, the investigation of a new case arising upon new facts, although having relation to the validity of an actual judgment or decree, or of the party's right to claim any benefit by reason thereof.

It would seem apparent that the proceeding in the present case was one that affected the mere regularity of the original judgment. In the common-law practice, it would have been a motion to set aside the judgment for irregularity, or a writ of error coram vobis.

It will be more satisfactory, however, to take a brief view of the practice of Louisiana on this subject.

The process for procuring nullity of a judgment in that State is prescribed by the Code of Practice, in which we find the following provisions:--

'ART. 556. Definitive judgments may be revised, set aside, or reversed: 1, by a new trial; 2, by appeal; 3, by action of nullity; 4, by rescission. The last mode can only be exercised by minors, or persons who were absent when judgment was rendered against them.' 'ART. 605. The causes for which the nullity of a definitive judgment may be demanded are twofold: those that are relative to the form of proceeding, and those that appertain to the merits of the question to be tried.'

Art. 606 specifies the vices of form for which a judgment can be annulled; as, when against a minor appearing without a curator, or against a married woman appearing without the authority of her husband; where the defendant is condemned by default without being cited; where the judge was incompetent to try the suit; and where defendant has not been legally cited, and has not entered appearance, and judgment is by default.

Art. 607 specifies the grounds of nullity relating to the merits; namely, where the judgment has been obtained through fraud, bribery, forgery of documents, &c.

'ART. 608. The nullity of judgment may be demanded from the same court which has rendered the same, or from the court of appeal before which the appeal from such judgment was taken, pursuant to the provisions hereafter expressed.

'ART. 609. The nullity can be demanded on the appeal, only while the appeal is still pending, and when the nullity is apparent on the face of the records.

'ART. 610. The party praying for the nullity of a judgment before the court which has rendered the same must bring his action by means of a petition; and the adverse party must be cited to appear, as in ordinary suits.'

From these extracts it is to be inferred that the action of nullity must be brought in the same court which rendered the judgment, or in the court of appeal when an appeal is pending. And so the Supreme Court of Louisiana has decided. Hennen's Digest, art. Judgment, XI. (c), and cases there cited. In David, Adm'r, v. Calouret (1 La. Ann. 171) the court says: 'The settlement made before the notary, under the order of the judge,. . . sought to be annulled in this suit, was made the judgment of the court by a decree,. . . and before that court alone ought the action to annul the act to have been brought.' The action of rescission, which is nearly identical with that of nullity, is expressly required by art. 616 of the Code of Practice to be brought in the court that rendered the judgment.

The fact that an action of nullity can only be brought in the court which rendered the judgment, or in the court to which such judgment is appealed, is entitled to some weight in determining the question now under consideration. It shows that in the estimation of the legislature of Louisiana there is a manifest propriety in submitting the question of the validity of a judgment to the court which rendered it, or to the court which has the right to revise the judgment by way of appeal. We are not disposed, however, to allow this consideration to operate so far as to make it an invariable criterion of the want of jurisdiction in the courts of the United States. If the State legislatures could, by investing certain courts with exclusive jurisdiction over certain subjects, deprive the Federal courts of all jurisdiction, they might seriously interfere with the right of the citizen to resort to those courts. The character of the cases themselves is always open to examination for the purpose of determining whether, ratione materioe, the courts of the United States are incompetent to take jurisdiction thereof. State rules on the subject cannot deprive them of it.

The classification of the causes of nullity in the Louisiana Code into causes relative to form and those relative to the merits is nearly coincident with the classification above suggested, of cases which are, and cases which are not, cognizable in the courts of the United States. Causes of nullity relating to form would fall in that class of cases which could not be brought in these courts, or be removed thereto. The present case is one of that character. It is precisely described in the fourth division of art. 606 of the Code.

In our judgment, therefore, the case was one of which the Circuit Court could not take cognizance; and therefore the judgment must be reversed, and the record remitted with directions to remand the cause to the State court from which it was removed.

So ordered.

title: Barrow v. Hunton/Opinion of the Court


text: Talk:Barrow v. Hunton/Opinion of the Court


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Hackett v. Ottawa

ERROR to the Circuit Court of the United States for the Northern District of Illinois.

This action is upon certain bonds issued by the city of Ottawa, Ill., in the year 1869, and of which the testator of plaintiffs in error became the holder and owner, for value, before maturity. They are in the usual form of municipal bonds, and, besides pledging the faith of the city irrevocably for their payment, contain these recitals:--

'This is one of one hundred and twenty bonds of like amount and even date herewith, numbered one to one hundred and twenty respectively, issued by the city of Ottawa, by virtue of the charter of said city; wherein it is provided that the city council shall have power to borrow money on the credit of the city, and to issue bonds therefor, and pledge the revenue of the city for the payment thereof, provided that no sum or sums of money shall be borrowed at a greater interest than ten per cent per annum. Art. 5, sect. 3.

'No money shall be borrowed by the city council until the ordinance passed therefor shall be submitted to and voted for by a majority of the voters of said city attending an election for that purpose. Art. 10, sect. 20. And also in accordance with a certain ordinance passed by the city council of said city on the fifteenth day of June, A.D. 1869, entitled 'An ordinance to provide for a loan for municipal purposes,' which ordinance was ratified by a majority of all the qualified voters of said city at an election holden on the twentieth day of July, A.D. 1869, and in conformity with an ordinance passed by the city council of said city on the thirtieth day of July, 1869, entitled 'An ordinance to carry into effect the ordinance of June 15, 1869, entitled an ordinance to provide for a loan for municipal purposes.'

'Witness the signatures of the mayor and clerk of said city, and the corporate seal thereof, this twentieth day of August, in the year of our Lord one thousand eight hundred and sixty-nine.

[SEAL] 'HENRY A. SCHULER, Mayor.

'R. N. WATERMAN, Clerk.'

The defendant below filed two special pleas. The first, after setting forth the ordinance of June 15, 1869, and also that of July 30, 1869, and what is alleged to be the substantial privileges granted to the Ottawa Manufacturing Company, by an act of the General Assemby of Feb. 15, 1851, and an act amendatory thereof, passed Feb. 16, 1865, avers that the first act and the amendatory act were the same franchises and powers referred to in the ordinance passed July 30, 1869, as having been granted for that purpose by the legislature of the State of Illinois, under which one Cushman was authorized and directed to expend the proceeds of the bonds aforesaid; that the manufacturing company was a private corporation, not connected with or controlled by the city, and that the bonds were issued and delivered to Cushman as a donation to him, or to the company, to aid in the prosecution of a private enterprise, and were not issued for any municipal purpose whatever; that their issue was without authority of law, and that they are void.

The second plea is in all respects like the first, except it avers that Cushman has failed to comply with his contract, as provided by the ordinance of July 30, 1869.

To each of these pleas a general demurrer was filed by the plaintiffs, which was overruled by the court below; and they having elected to stand by the demurrer, judgment was rendered for the city. The plaintiffs then sued out this writ of error.

The ordinances of the city and the acts of the General Assembly of Illinois referred to in the pleas are substantially set forth in the opinion of the court.

The Illinois Constitution of 1848 declares that 'the corporate authorities of counties, townships, school districts, cities, towns, and villages may be vested with power to assess and collect taxes for corporate purposes.' Art. 9, sect. 5.

The charter of the city of Ottawa, granted in 1853, confers upon its council the power to establish hospitals; provide the city with water; open, widen, extend, and otherwise improve and repair streets and other public highways; establish, erect, and keep in repair bridges; erect market-houses; provide all needful public buildings for the use of the city; and grants various other municipal powers, the exercise of which necessarily involves the raising and disbursement of large sums of money. Laws of Ill., 1853, p. 296.

Among the powers expressly delegated to the council is the power 'to appropriate money and provide for the payment of the debts and expenses of the city,' and, with the sanction of a majority of voters attending at an election for that purpose, 'to borrow money on the credit of the city, and to issue bonds therefor, and pledge the revenue of the city for the payment thereof.'

Mr. Frank W. Hackett and Mr. G. S. Eldredge for the plaintiffs in error.

The language of the charter, 'to borrow money on the credit of the city, and to issue bonds therefor, and pledge the revenue of the city for the payment thereof,' conferred upon the corporate authorities power as ample to negotiate the bonds in this suit as if a legislative enactment had specially provided for their issue. Gelpcke v. Dubuque, 1 Wall. 220; Meyer v. The City of Muscatine, id. 384; Rogers v. Burlington, 3 id. 654; Mitchell v. Burlington, 4 id. 270.

A power to borrow money and issue bonds therefor includes the right to make a donation. ''Chicago, &c. Railroad Co. v. Smith'', 62 Ill. 268; Railroad Company v. County of Otoe, 16 Wall. 667.

The issue of the bonds in suit was not in violation of sect. 5, art. 9, of the Constitution of Illinois of 1848. Taylor v. Thompson, 42 Ill. 11; Burr v. City of Carbondale, 76 id. 455; Briscoe v. Allison, 43 id. 291; Johnson v. Campbell, 49 id. 316; Misner v. Bullard, 43 id. 470; ''Chicago, &c. Railroad Co. v. Smith, supra''.

The power conferred by that section gives the unquestionable right to the city of borrow money for any 'corporate purpose,' within the meaning of the Constitution.

Power to issue bonds for public purposes being lodged in the corporate authorities, and they having put upon the market negotiable securities which purport on their face to have been issued by a city that had charter authority to issue bonds for municipal purposes, the defendant is estopped from setting up that in point of fact the purpose was not municipal, when the bonds themselves recite that the loan is for municipal purposes, and they have come into the hands of a bona fide purchaser, who took them relying on such recitals, and without actual notice of the purpose for which they had been issued other than as disclosed on the face of the bonds. Commissioners of Knox County v. Aspinwall et al., 21 How. 539; Bissell et al. v. City of Jeffersonville, 24 id. 287; Van Hostrup v. Madison City, 1 Wall. 291; Mercer County v. Hackett, id. 83; Supervisors v. Schenck, 5 id. 772; Grand Chute v. Winegar, 15 id. 355; St. Joseph Township v. Rogers, 16 id. 644; Town of Coloma v. Eaves, 92 U.S. 484; County of Moultrie v. Savings Bank, id. 631; Marcy v. Township of Oswego, id. 637; Humboldt Township v. Long et al., id. 642; Commissioners, &c. v. January, 94 id. 202; Commissioners, &c. v. Bolles, id. 104; Cromwell v. County of Sac, 96 id. 51; San Antonio v. Mehaffy, id. 312; County of Warren v. Marcy, 97 id. 96; Mealey v. St. Clair County, 3 Dill. 163; Allen v. Cameron, id. 175; Wyatt v. City of Green Bay, 1 Biss. 292.

Mr. C. B. Lawrence, contra.

In the absence of express legislative authority, the city could not issue the bonds in suit. Town of South Ottawa v. Perkins, 94 U.S. 260; Township of Coloma v. Eaves, 92 id. 484; Pendleton County v. Amy, 13 Wall. 297; Kennicott v. The Supervisors, 16 id. 452; St. Joseph Township v. Rogers, id. 644; Bissell v. City of Kankakee, 64 Ill. 251; City of Galena v. Corwith, 48 id. 423; Trustees, &c. v. McConnel, 12 id. 138; Marshall County v. Cook, 38 id. 44; Schuyler County v. The People, 25 id. 181; Supervisors, &c. v. Clark, 27 id. 305; Rogers v. Burlington, 3 Wall. 654; Mitchell v. Burlington, 4 id. 270.

Even if express authority had been given by legislative enactment to the city to issue the bonds as a donation to the Ottawa Manufacturing Company, such enactment would have been void under the Constitution of Illinois. Loan Association v. Topeka, 20 Wall. 655; Harward v. St. Clair Drainage Co., 51 Ill. 133; The People v. Salomon, id. 48; ''The People ex rel. McCagg v. The Mayor, &c. of Chicago'', id. 17; The People v. Dupuyt, 71 id. 651; Johnson v. Campbell, 49 id. 317; Madison County v. The People, 58 id. 463.

The bonds in suit were not issued for a corporate purpose. Loan Association v. Topeka, 20 Wall. 655; Board of Supervisors v. Werder, 64 Ill. 427; Bissell v. City of Kankakee, id. 251.

There is no question in this case of innocent purchasers of negotiable paper, for two reasons: first, the bonds were issued without statutory authority, and for a purpose for which such authority would have been unavailing; and, second, the bonds showed this defect on their face. Township of East Oakland v. Skinner, 94 U.S. 255; Township of South Ottawa v. Perkins, id. 260; McClure v. Township of Oxford, id. 429; Marsh v. Fulton County, 10 Wall. 676.

MR. JUSTICE HARLAN delivered the opinion of the court.

title: Hackett v. Ottawa


text: Talk:Hackett v. Ottawa

title: Talk:Hackett v. Ottawa


text:
Hackett v. Ottawa/Opinion of the Court

The bonds in suit upon their face import: 1st, That the faith of the city is irrevocably pledged for their payment. 2d, That they were issued in pursuance of the power which the council possessed to borrow money on the credit of the city and issue bonds therefor, and also in accordance with certain ordinances which provided for a loan for municipal purposes. The recitals of the bonds, in themselves, furnish no ground whatever to suppose that the council transcended its authority, or issued them for other than such purposes. They justify the opposite conclusion.

The city, however, claims that they were not issued for municipal purposes, but as a simple donation to a private corporation, formed for business ends solely, and in no wise connected with or under the control of the city,-all of which, it is further claimed, appears from the ordinances, whose date and title are given in the face of the bonds.

The ordinance of June 15, 1869, authorizes the mayor to borrow, in the name, for the use, and upon the bonds of the city, the sum of $60,000, 'to be expended in developing the natural advantages of the city for manufacturing purposes, and provides 'that no application shall be made of the proceeds of the said bonds except for the purpose aforesaid, and in pursuance of an ordinance to be duly passed for that purpose by the city council, nor until the faithful application of the proceeds of such bonds to the purpose aforesaid shall be fully secured to the city.' It further provides that a sufficient sum to pay interest on the loan should be annually provided by taxation, and set apart as a separate fund, to be applied solely to the payment of the interest on the bonds. That ordinance was ratified at an election held on the 20th of July, 1869, by a majority of all the legal voters of the city. The ordinance of July 30, 1869, was to carry into effect that of June 15, 1869. It directed the mayor to deliver the bonds to one Cushman, 'to be used by him in developing the natural resources of the surroundings of the city, and that the said Cushman is authorized and directed to expend the sum in the improvement of the water-power upon the Illinois and Fox Rivers within the city and in the immediate vicinity thereof, under the franchises and powers which have been granted for that purpose, in the manner which, in his judgment, shall best secure the practical and permanent use of said water-power in the city and its immediate vicinity.' It provided that Cushman should execute and deliver to the mayor his obligation that he would, without unreasonable delay, and by proper appliances, bring into use all the available water of the two rivers at Ottawa, as fast as it might be required for actual use, and as fast as it could be leased at fair and reasonable rates,-'the intent of this ordinance being to secure the improvement and development of said water-power in this city by appropriating the loan obtained under the ordinance aforesaid for that purpose, or pro rata so far as said water-power shall be made available for practical use.' The ordinance of July 30, 1869, further provided that Cushman should bind himself to return the bonds, and save the city harmless from all loss if the work should not be constructed.

The city avers that the franchises and powers referred to in the ordinance of July 30, 1869, were those granted to the Ottawa Manufacturing Company by an act approved Feb. 15, 1851, and by an act amendatory thereof, approved Feb. 16, 1865. The first act created certain persons therein named a corporation under the style of 'The Ottawa Manufacturing Company,' with authority to erect a dam across Fox River at a designated point, 'for the purpose of creating a water-power,' and to 'use, lease, or otherwise dispose of the same, and construct such other works, buildings, and machinery as may be deemed necessary or proper to use such water-power to promote the interests and objects of the company.' The second act conferred the additional right to build a dam across the Illinois River, and to construct races so as to introduce the water into the pool of the dam authorized to be erected across the Fox River. And for all the purposes indicated in the original and amendatory act the company was authorized to 'take and use such portion of any highway, street, alley, or public ground as may be deemed necessary.' But neither of the ordinances, it will be observed, designates, by name, that or any other private company. Nor is it distinctly alleged by the city, nor asserted in argument, that the testator of the plaintiffs understood the ordinances as referring to that company, or that he read them or had any actual knowledge of their terms at the time of his purchase. If the council intended the general public and, particularly, purchasers of its bonds to know that the proposed development of the natural advantages of the city for manufacturing purposes was to be made under the franchises and powers, or for the benefit, of that or any other private corporation, common fairness required that it should have so declared in the ordinances, and thereby distinctly informed all who should examine them, of what it now avows was its real purpose; namely, by a simple donation to give aid to a particular private corporation, established for business ends exclusively. If, by reason of the general reference, in the bonds, to the two ordinances of June and July, 1869, the purchaser is chargeable with notice of their provisions (a proposition to be hereafter examined), the utmost which the city, in view of the indefinite language of the ordinances, can claim is that he had notice that the bonds were issued for the purpose of 'developing the natural resources of the city for manufacturing purposes.' Nothing more. This brings us to a question which counsel have discussed with some elaboration in their printed arguments.

We have seen that the charter of the city confers upon the council power to borrow money, upon the credit of the city, and to issue bonds therefor. No limitation is prescribed as to the amount which may be borrowed. Nor is any express restriction imposed as to the objects or purposes for which bonds may be issued. It is clear, therefore, that the council, having secured the assent of the requisite majority of voters, might rightfully borrow money upon bonds of the city for every purpose which could fairly be deemed municipal or corporate. But the specific contention of the city is that the development of the natural resources of the city for manufacturing purposes is not, upon principle or within the meaning of the Illinois Constitution of 1848, a corporate purpose. After a careful examination of the decisions of the Supreme Court of Illinois to which our attention has been called, we find this question by no means free from difficulty. The leading case, Taylor v. Thompson (42 Ill. 9), involved the question whether a tax levied, under the authority of an act of the legislature, passed in 1865, upon the property of a township, to pay bounties to persons who should thereafter enlist or be drafted into the army of the United States, was for a corporate purpose, within the meaning of the State Constitution. The person who complained of the tax, in that case, was a non-resident of the township, but he owned taxable property within its limits. The Supreme Court of Illinois, through Judge Lawrence, in an opinion of marked ability, sustained the validity of the tax, defining the phrase 'corporate purposes' to mean 'a tax to be expended in a manner which shall promote the general prosperity and welfare of the municipality which levies it.' It is suggested, by learned counsel for the city, that that and similar decisions, rendered during the late civil war, were exceptional, and were made almost ex necessitate, because the courts were unwilling to cripple the power of the government to raise troops by denying to counties, cities, and towns the right to offer bounties when authorized by the legislature. An answer to this suggestion is found in the fact that the same court reaffirmed the doctrine of Taylor v. Thompson in the cases of Briscoe et al. v. Allison et al., 43 id. 293; Misner v. Bullard, id. 470; and Johnson v. Campbell, 49 id. 317. In the subsequent case of ''Chicago, &c. Railroad Co. v. Smith (62 id. 268), decided in 1871, the court, referring to the definition of corporate purpose as given in Taylor v. Thompson'', announced their acceptance of it. In People v. Dupuyt (71 id. 651) the same definition was referred to without disapproval. The court, declaring that it had gone far enough in upholding that tax, said: 'It may be difficult to determine with precision what is a corporate purpose, in the sense of the Constitution, but it is less difficult to determine what is not such a purpose. The true doctrine is, such purposes, and such only, as are germane to the objects of the welfare of the municipality, at least such as have a legitimate connection with these objects, and a manifest relation thereto.' Again, in Burr v. The City of Carbondale (76 id. 455), the court sustained a tax imposed by the city in support of the Southern Illinois Normal University, to which the people of that city had voted a tax, and, referring to Taylor v. Thompson, said that a corporate purpose was there 'held to mean a tax to be expended in a manner which should promote the general prosperity and welfare of the municipality which levied it. But in that case a vote of the people authorizing the tax was first to be taken, and the people in fact voted the tax. This was an important fact in determining that case. We thought it difficult to determine with precision what was a 'corporate purpose,' in the sense of the Constitution, but came to the conclusion that it was such a purpose, and such only, as might have a legitimate connection with objects and purposes promotive of the welfare of the municipality, and a manifest relation thereto.'

In view of the course of decisions in Illinois, we should hesitate to declare that money borrowed by the City of Ottawa and expended in developing its natural resources for manufacturing purposes, was not, in the sense of the Illinois Constitution of 1848, as interpreted by the Supreme Court of that State, expended 'to promote the general prosperity and welfare of the municipality.' But a direct decision of that question does not seem to be essential to the disposition of this case. We content ourselves with stating the propositions which counsel have urged upon our consideration, and without expressing any settled opinion as to what are corporate purposes within the meaning of the Illinois constitution, we pass to another point, which, in our judgment, is fatal to the defence. It is consistent with the pleas filed by the city that the testator of plaintiffs in error purchased the bonds before maturity for a valuable consideration, without any notice of want of authority in the city to issue them, and without any information as to the objects to which their proceeds were to be applied, beyond that furnished by the recited titles of the ordinances. For all corporate purposes, as we have seen, the council, if so instructed by a majority of voters attending at an election for that purpose, had undoubted authority, under the charter of the city, to borrow money upon its credit and to issue bonds therefor. The bonds in suit, by their recital of the titles of the ordinances under which they were issued, in effect, assured the purchaser that they were to be used for municipal purposes, with the previous sanction, duly given, of a majority of the legal voters of the city. If he would have been bound, under some circumstances, to take notice, at his peril, of the provisions of the ordinances, he was relieved from any responsibility or duty in that regard by reason of the representation, upon the face of the bonds, that the ordinances under which they were issued were ordinances 'providing for a loan for municipal purposes.' Such a representation by the constituted authorities of the city, under its corporate seal, would naturally avert suspicion of bad faith upon their part, and induce the purchaser to omit an examination of the ordinances themselves. It was, substantially, a declaration by the city, with the consent of a majority of its legal voters, that purchasers need not examine the ordinances, since their title indicated a loan for municipal purposes. The city is therefore estopped, by its own representations, to say, as against a bona fide holder of the bonds, that they were not issued or used for municipal or corporate purposes. It cannot now be heard, as against him, to dispute their validity. Had the bonds, upon their face, made no reference whatever to the charter of the city, or recited only those provisions which empowered the council to borrow money upon the credit of the city and to issue bonds therefor, the liability of the city to him could not be questioned. Much less can it be questioned, in view of the additional recital in the bonds, that they were issued in pursuance of an ordinance providing for a loan for municipal purposes; that is, for purposes authorized by its charter. Supervisors v. Schenck, 5 Wall. 772. It would be the grossest injustice, and in conflict with all the past utterances of this court, to permit the city, having power under some circumstances to issue negotiable securities, to escape liability upon the ground of the falsity of its own representations, made through official agents and under its corporate seal, as to the purposes with which these bonds were issued. Whether such representations were made inadvertently, or with the intention, by the use of inaccurate titles of ordinances, to avert inquiry as to the real object in issuing the bonds, and thereby facilitate their negotiation in the money markets of the country, in either case, the city, both upon principle and authority, is cut off from any such defence. What this court declared, through Mr. Justice Campbell, in Zabriskie v. Cleveland, Columbus, & Cincinnati Railroad Co. et al. (23 How. 381), as to a private corporation, and repeated, through Mr. Justice Clifford, in Bissell et al. v. City of Jeffersonville (24 id. 287), as to a municipal corporation, may be reiterated as peculiarly applicable to this case: 'A corporation, quite as much as an individual, is held to a careful adherence to truth in their dealings with mankind; and cannot, by their representations or silence, involve others in onerous engagements, and then defeat the calculations and claims their own conduct had superinduced.'

What we have said disposes of the second plea filed by the city. As to the third plea, it is scarcely necessary to say that it does not present a defence to the action. The questions raised by that plea have not been alluded to or discussed in the printed arguments of counsel.

The judgment will be reversed, with directions to sustain the demurrer to the second and third pleas, and for such further proceedings as may be consistent with this opinion; and it is

So ordered.

title: Hackett v. Ottawa/Opinion of the Court


text: Talk:Hackett v. Ottawa/Opinion of the Court


text:
Canal and Banking Company v. New Orleans

ERROR to the Supreme Court of the State of Louisiana.

The facts are stated in the opinion of the court.

Mr. John Finney for the plaintiff in error.

Mr. Samuel P. Blanc, contra.

MR. JUSTICE BRADLEY delivered the opinion of the court.


text: Talk:Canal and Banking Company v. New Orleans


text:
Canal and Banking Company v. New Orleans/Opinion of the Court

This is a writ of error to the Supreme Court of Louisiana, brought to reverse a judgment of that court, affirming the judgment of the Superior District Court for the Parish of Orleans. The judgment of the latter court, which was thus affirmed, was a judgment for $10,500, and interest, being for taxes alleged to be due from the New Orleans Canal and Banking Company, the plaintiffs in error, to the city of New Orleans. In assessing the taxes of the city for the year 1876, the bank had been assessed, in addition to its real estate, for the sum of $700,000, as its capital, or money at interest; and the rate of assessment being one and a half per cent, the tax amounted to $10,500. This the bank refused to pay, on the ground that its capital, not invested in real estate, consisted of United States legaltender notes. Whether this was so or not was the question in the cause; for it was not contended, on the part of the city, that it would be lawful to tax United States securities in the hands in the bank. The question, therefore, was really one of fact; but as the bank alleges that, under pretence of deciding the question of fact, the State courts have really sustained a taxation of its legal-tender notes, it becomes our duty to examine the case.

It seems, from a statement which was admitted in evidence, that from Feb. 1, 1875, to July 1, 1875, the period during which the assessment roll was made up, the bank did, in fact, have on hand an amount of currency in the form of legal-tender notes, varying from $1,500,000 to $762,000; the latter being the amount on hand on the 30th of June, 1875; but there was no proof in the cause to establish the fact that these notes constituted the capital of the bank, any more than that any other equal portion of its assets constituted such capital.

The nominal capital of the bank was $1,000,000, and estimating its real estate at $200,000, the assessment was still $100,000 less than the balance of the nominal capital; and it was conceded that the bank had a large amount of assets independent of the currency in its possession. By a statement put into the case by the bank, with consent of counsel, it appeared that on the 28th of June, 1875, its affairs stood as follows:--

ASSETS.

Foreign and domestic bills protested. 26,949.

City seven per cent gold bonds ($50,000). 25,750.

--

---

$4,248,716.

LIABILITIES.

---

$4,248,716.

An inspection of this statement shows that the bank had over $4,000,000 of assets, and that the assets were sufficient to pay all its debts, and leave enough balance to return to the stockholders all their capital. Now, does it lie with the bank to put its finger on a particular item of the assets,-its money on hand, for example (which appears to have consisted of legal tenders),-and say that this item, and no other item, constituted its capital at that time? Does this depend on the mere option of the bank? Why was not its cash on hand just as applicable to its deposits and other obligations as to its capital? Not a particle of proof was offered, and it is difficult to see how any proof could have been offered, to show that the cash exclusively constituted the capital.

The bank had probably been in operation for years. It is to be presumed that its original capital, not invested in real estate, had been loaned out to its customers, and was rather represented by its discounted bills than by the cash in its drawer. Can it be pretended that the cash on hand was the simple and only representative of that capital? Suppose that this cash had come to the bank from its depositors,-and it is not shown to the contrary,-would it be admissible then to say that it constituted the capital? In this suit the burden of proof is on the bank to show that it has been unlawfully taxed. The decision of the assessor must stand, unless it can be affirmatively controverted.

We cannot perceive that the judgment of the Supreme Court of Louisiana invades any right of the plaintiff in error secured to it by the Constitution or laws of the United States, and, therefore, it must be affirmed.

Judgment affirmed.


text: Talk:Canal and Banking Company v. New Orleans/Opinion of the Court


text:
Grafton v. Cummings

ERROR to the Circuit Court of the United States for the Southern District of New York.

On the sixteenth day of May, 1871, the hotel known as the Glen House, at the foot of the White Mountains in New Hampshire, together with its furniture, was bid off at an auction sale by Grafton at the price of $90,000. At the end of the ten days allowed by the terms of the sale for examination of the title, three deeds were tendered him which were supposed to convey the title. He refused to accept them, or pay the purchase-money, or otherwise complete the contract of purchase. The property was again advertised for sale, and sold for $61,000; and the present suit was brought against him to recover the difference in the amounts for which the property sold at these two sales, as damages for failure to perform the first contract.

The Statute of Frauds of New Hampshire is in these words: 'No action shall be maintained upon a contract for the sale of land, unless the agreement upon which it is brought, or some memorandum thereof, is in writing, and signed by the party to be charged, or by some person by him thereto authorized by writing.' The agreement given in evidence on the trial by Cummings, the sole plaintiff, consisted of a paper writing signed by Grafton, certain printed matter on the margin of that writing, and the advertisement mentioned in the writing so signed. They are as follows:--

'I, the subscriber, do hereby acknowledge myself to be the purchaser of the estate known as the Glen House, with furniture belonging to it, in Green's grant, New Hampshire, and sold at auction Tuesday, May 16, 1871, at 11 o'clock A.M., and for the sum of $90,000, the said property being more particularly described in the advertisement hereunto affixed; and I hereby bind myself, my heirs and assigns, to comply with the terms and conditions of the sale, as declared by the auctioneer at the time and place of sale.

'JOSEPH GRAFTON.'

Upon the margin of said agreement were written and printed the following:--

'TERMS OF SALE.

'Ten days will be allowed to examine the title, within which time the property must be settled for. Five thousand dollars will be required of the purchaser on the spot, which will be forfeited to the seller if the terms and conditions are not complied with; but the forfeiture of said money does not release the purchaser from his obligation to take the property. Fifteen thousand dollars to be paid on the delivery of the deed, and one-half of the purchase-money to be paid Sept. 1, 1871, the remaining balance to be paid Sept. 1, 1872.

'The property is sold subject to the conditions of the sale of the stage-route, stages, &c., which are, that the proprietors of the route shall have the exclusive business of the house.'

The advertisement referred to in the foregoing paper as being thereunto affixed was as follows:--

'GLEN HOUSE AT AUCTION.

'The famous summer resort at the foot of Mount Washington, known as the Glen House, together with the land, furniture, mill, and out-buildings, will be sold at public auction at Gorham, N. H., Tuesday, May 16, 1871, at 11 o'clock A.M.

'May 2, 1871.

'The favorite summer resort known as the Glen House, situated at the foot of Mount Washington and at the commencement of the carriage road to the summit, will be offered for sale, together with the land containing about one thousand acres (well timbered), all the out-buildings, stables, and mill on the same, also the furniture, staging, mountain carriages, horses, &c. The house contains some two hundred and twenty-five rooms, capable of accommodating between four and five hundred guests. The whole property, if not disposed of at private sale previous to the 1st of May, will be sold at public auction to close the estate of the late J. M. Thompson. Notice of the time and place of sale will be given hereafter. Any person desirous of seeing the property, which is in thorough repair, or wishing to make any inquiries, can do so by applying to J. W. Weeks, administrator, Lancaster, N. H., or S. H. Cummings, Falmouth Hotel, Portland, Me.'

The bill of exceptions adds, that when this paper was put in evidence it was indorsed 'A. R. Walker, auctioneer and agent for both parties.' It was not fully shown when this indorsement was made, and there was some evidence that it was not there at the time when the deeds which Grafton refused to accept were tendered. The court, however, instructed the jury, that if it was done at any time before the commencement of this action it was sufficient.

Evidence was admitted to show that at the time of the sale another paper was read by the auctioneer affecting the terms of the sale, but it was not among the papers subscribed by defendant.

The following letter was, notwithstanding the objection of the defendant, read in evidence by the plaintiff:--

'DEAR SIR,-I came up to-day hoping to confer with you in regard to the purchase of the Glen House. I don's know but what Lindsay and Barron intend to take it. Some things they said indicated as much, and Grafton offered to let them take it at his bid, and let them have their own time to pay him his claim. But I find Mrs. Thompson is strongly attached to the place. The judge of the Probate Court will make her an allowance. It occurred to me that the purchase might be made in this way. One-tenth would be $9,000:--

-

$90,

'This would relieve you from most of the care. It would give Mrs. Thompson an interest in it. The $9,000 due Grafton is as much as her share, and I will agree to let it be until she has time to pay it from the profits. I go home to-morrow, but I wanted to propose this to you, as Grafton really don't want any thing to do with the property, though he thinks Stearns, or some one of their leading hotel men, may have some young man that they would like to put into the house. He will try to dispose of it in that way, but hopes that before doing it I shall be able to write to him that it will be taken up here.

'Very truly yours,

'WOODBURY DAVIS.

'S. H. CUMMINGS, Esq.'

There was a judgment for the plaintiff, whereupon Grafton sued out this writ of error.

Mr. A. J. Vanderpoel and Mr. James W. Gerard for the plaintiff in error.

The action cannot be maintained. No vendor is named in the paper relied on as the agreement. It is therefore invalid on its face. Sherburne et al. v. Shaw, 1 N. H. 157; Boyce v. Green, Batt. 608; Williams v. Lake, 2 El. & El. 349; Williams v. Byrnes, 9 Jur. N. S. 363; Potter v. Duffield, Law Rep. 18 Eq. 4; Champion v. Plummer, 1 New Rep. 252; Wain v. Warlters, 5 East, 10.

The indorsement by the auctioneer, in which no vendor is named, did not make the agreement sufficient under the Statute of Frauds. Potter v. Duffield, supra; Rossiter v. Miller, 48 L. J. N. S. 17; Browne, Stat. Frauds, sect. 374.

In the matters put in evidence, the only agreement of Grafton which, if any, the jury could consider was that signed by him, referring to the terms and conditions of sale. The connection between it and some other paper not so signed by him cannot be shown by parol evidence, but must appear by internal evidence derived from the signed memorandum itself. The declarations of the auctioneer were not admissible. Johnson v. Miller, 35 N. J. L. 344; Boydell v. Drummond, 11 East, 142; Coles v. Trecothick, 9 Ves. 250; Clunan v. Cooke, 1 Sch. & Lef. 22; Parkhurst v. Van Cortlandt, 1 Johns. (N. Y.) Ch. 273; Dobell v. Hutchinson, 3 Ad. & E. 355; First Baptist Church v. Bigelow, 16 Wend. (N. Y.) 28; O'Donnell v. Leeman, 43 Me. 158; Knox v. King, 36 Ala. 367; 1 Smith, Lead. Cas. 465, notes to Birckmyr v. Darnell.

No support to the argument of Cummings can be derived from Beckwith v. Talbot, 95 U.S. 289.

Conditions of sale read before the biddings commenced, but not annexed to the catalogue on which the purchasers' names were entered, nor referred to therein, cannot supply the terms of sale omitted in the catalogue. Hinde v. Whitehouse, 7 East, 558; Kenworthy v. Scofield, 2 Barn. & Cress. 945. Nor, where the signed memorandum contains no reference to them, are handbills and newspaper notices admissible, although published at the time of sale and there circulated. O'Donnell v. Leeman, supra; First Baptist Church v. Bigelow, supra; Wright v. Weeks, 25 N. Y. 153; Riley v. Farnsworth, 116 Mass. 223.

Cummings claims that the declarations of the auctioneer were admissible, because he is the agent of seller and purchaser, so that his acts and declarations are competent. He is not the agent of the purchaser until the premises are struck down, and his agency is limited to then and there signing the contract.

A contract, as originally entered into, cannot at law be altered by evidence of a parol variation in favor of either the plaintiff or the defendant. Dart, Vend. and P. 451; Sugden, Vend. and P. 171; Goss v. Nugent, 2 Nev. & M. 33; Blood v. Goodrich, 9 Wend. (N. Y.) 68; Sanderson v. Graves, Law Rep. 10 Eq. 234.

A parol waiver of the whole contract is sometimes allowed, but never where the effect of the waiver is to substitute a new contract for the original one. Goss v. Nugent, 5 Barn. & Adol. 58; Sanderson v. Graves, supra.

Mr. Thomas H. Hubbard and Mr. Henry Heywood, contra.

There was a sufficient memorandum of the contract in writing to satisfy the requirements of the Statute of Frauds. Walker v. Whitehand, 16 Wall. 314; Browne, Stat. Frauds, sect. 373; Allen v. Bennett, 3 Taunt. 169; Beckwith v. Talbot, 95 U.S. 289. The objection that the memorandum which Grafton signed does not show who was the vendor, is answered by the letter written to Cummings by Davis, and also by the printed advertisement pasted to, and thus forming a part of, the memorandum. It is, in substance, a statement that Cummings was prepared to treat with purchasers, and to give them all desired information about the property. It thus designated him either as the seller, or the agent of the seller. Either designation complies with the statute. No formality is requisite in this respect. The memorandum is sufficient, if, in addition to the signature of the party to be charged, it appear with reasonable certainty who the other party is, and parol evidence is admissible to show that the person whose name appears on the memorandum acted as agent for one of the contracting parties. Gowen v. Klous, 101 Mass. 449; Browne, Stat. Frauds, sect. 373; Dykers v. Townsend, 24 N. Y. 57; Salmon Falls Manufacturing Co. v. Goddard, 14 How. 446.

The indorsement written upon the memorandum sufficiently indicates the other contracting party; and the auctioneer who made it being the agent of both parties at the time of the sale, and of the seller afterwards until the duties of his agency were accomplished, he could bind them by his signature. Mews v. Carr, 1 Hurlst. & Nor. 484; Kenworthy, v. Schofield, 2 Barn. & Cress. 945; Rice v. Grove, 22 Pick. (Mass.) 158; Lerned v. Wannemacher, 9 Allen (Mass.), 412; Learned v. Jones, id. 419; Williams v. Bacon, 2 Gray (Mass.), 387; Coddington v. Goddard, 16 id. 436; Sanborn v. Chamberlin, 101 Mass. 416; Gowen v. Klouse, id. 449; Hunter v. Geddings, 97 id. 41; Sievewright v. Archibald, 1 Langdell, Select Cases, 452; 17 Q. B. 103; Browne, Stat. Frauds, sects. 352 a, 353, 353 a, 364, 369.

The memorandum consists of all writings connected, physically, or by distinct reference made in one to the other. Browne, Stat. Frauds, sects. 346-349; Salmon Falls Manufacturing Co. v. Goddard, supra.

Inasmuch as it was a memorandum, and not the contract itself, parol evidence was admissible to show that as put in evidence it conformed to the contract and expressed its essential terms. Sievewright v. Archibald, 17 Q. B. 103; Parton v. Crofts, 33 Law Jour. 189; McLean v. Nicoll, 7 Jur. N. S. 999; Lerned v. Wannemacher, supra; 1 Langdell, Select Cases, 1032 et seq., and cases there cited.

Parol evidence was also admissible, to the same extent that it would have been to explain ambiguities, to identify the subject-matter to which the writing referred; to show the situation of the parties at the time the writing was made, and the circumstances under which the parties executed it. Benjamin, Sales, 156, 157; Browne, Stat. Frauds, sects. 409, 409 a; Blossom v. Griffin, 13 N. Y. 569; Springsteen v. Samson, 32 id. 703.

Somewhat greater latitude than is permitted in the case of written contracts should be allowed in proving by parol the details of such a contract as this, since the memorandum is required to contain only the essential elements, and not every individual incident in the contract. McLean v. Nicoll, supra; Salmon Falls Manufacturing Co. v. Goddard, supra; Linsley v. Tibbals, 40 Conn. 522.

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

title: Grafton v. Cummings


text: Talk:Grafton v. Cummings

title: Talk:Grafton v. Cummings


text:
Grafton v. Cummings/Opinion of the Court

The bill of exceptions in this case is voluminous, containing, apparently, every thing said and done on the trial. Sixty-one errors are assigned to this court.

We shall confine ourselves to the examination of one of them. That one presents the question, as it occurs in various forms in the record, whether there was a sufficient memorandum of the contract in writing, under the Statute of Frauds of New Hampshire, to sustain the action.

It is proper to observe that the objection to the papers is not that they were not signed by Grafton, the party charged, for he signed himself the principal instrument. The reference to the others, and their annexation to that, are sufficient to make them a part of the paper which he did sign. We shall, also, for the purpose of this inquiry, take it that Walker was the auctioneer, and that his name indorsed on the instrument gives it all the value which it could have if signed at any time necessary for that purpose.

The distinct objection to the instrument, as so presented, is that the other party to the contract of sale is not named in it, and can only be supplied by parol testimony.

The statute not only requires that the agreement on which the action is brought, or some memorandum thereof, shall be signed by the party to be charged, but that the agreement or memorandum shall be in writing. In an agreement of sale there can be no contract without both a vendor and a vendee. There can be no purchase without a seller. There must be a sufficient description of the thing sold and of the price to be paid for it. It is, therefore, an essential element of a contract in writing that it shall contain within itself a description of the thing sold by which it can be known or identified, of the price to be paid for it, of the party who sells it, and the party who buys it. There is a defect in this memorandum in giving no indication of the party who sells. If Grafton was bound to purchase, it was because somebody was bound to sell. If he was bound to pay, somebody was bound to receive the money and deliver the consideration for the price so paid.

There can be no bargain without two parties. There can be no valid agreement in writing without these parties are named in such manner that some one whom he can reach is known to the other to be bound also. No one is bound in this paper to sell the Glen House, or to convey it. No one is mentioned as the owner, or the other party to this contract. Let it be understood that we are not discussing the question of mutuality in the obligation, for it may be true that if a vendor was named in this paper, the offer to perform on his part would bind the party who did sign. But Grafton did not agree to buy this property of anybody who might be found able and willing to furnish him a title. He was making a contract which required a vendor and a vendee at the time it was made, and he is liable only to that vendor. The name of that vendor, or some designation of him which could be recognized without parol proof extraneous to the instrument, was an essential part of that instrument to its validity.

It is alleged that Stephen H. Cummings, the plaintiff in this action, was the vendor, and that this sufficiently appears in the papers annexed to the memorandum and incorporated into the statement of this case.

The first ground on which it is sought to maintain this proposition is that Walker's indorsement is sufficient for that purpose.

It is very clear that Walker did not intend to hold himself out as the vendor in this case, because he describes himself as auctioneer and agent for both parties. If he had been sued on this contract by Grafton for failing to tender sufficient deeds of conveyance, it would have been a good answer to the action that he describes himself in the paper on which he was sued as merely an auctioneer in the matter, and in that sense as agent, and not principal. He could not in the act of signing that paper be the agent of Grafton, for Grafton signed it for himself. The statement, therefore, did not mean that he signed for both parties, because he did not, and could not, sign as agent for Grafton.

What did he mean by putting his name there? It can have no other fair meaning than simply to say, as he does, I was the auctioneer who struck off this property.

But concede that he meant to represent the other party in that contract, a contract in which he takes care not to bind himself, who is that other party? What light does the writing of his name as auctioneer and agent throw on that question? Literally none. An anxious reader of the whole paper and its attachments would know as little who sold, or for whom Walker was selling, after his signature as he did before. To say agent for both parties may show he was agent for the one party whose name is not there, but it does not show who was that party. The paper without Walker's indorsement shows who was the purchaser, but neither with nor without it does it show who was the seller.

It is next argued that the reference to Cummings's name in the advertisement annexed to the paper signed by defendant is sufficient for this. The statement is that the sale is made to close out the estate of the late Mr. Thompson; and 'any person desirous of seeing the property, which is in thorough repair, or wishing to make any inquiries, can do so by applying to J. W. Weeks, administrator, Lancaster, N. H., or S. H. Cummings, Falmouth Hotel, Portland, Me.' Three persons are here mentioned. One, Mr. Thompson, was dead and could not be the vendor. Another, Mr. Weeks, though not mentioned as a party selling, it may be inferred had some interest in the sale as administrator of Thompson. But Weeks does not sue, and if his name had been inserted in the contract as vendor, it would not have sustained the present action. But the true intent of that advertisement was not to describe the vendors, or even the owners of the land, but to designate persons who might give any information about the property, which one thinking of purchasing would need. This did not require that the person referred to should be the owner of the land or the party selling it. Such inquiries could as well be answered by a lawyer, a real-estate agent, the latest keeper of the hotel, or one who had been his clerk, as by the owner. There did not arise, therefore, any implication from the reference to Cummings that he was owner, or even part owner, or that he was holding himself out as the party selling.

The next effort to sustain the instrument sued on as valid may be said to be a vague effort to show, by the verbal history of the transaction, that defendant recognized Cummings as vendor by subsequent interviews and negotiations with him on the subject of the sale. And special importance in this part of the case is attached to a letter written by Davis, a lawyer, to Cummings.

The letter is liable to three objections, as a recognition by defendant of Cummings as the party of whom he had purchased.

1. No such recognition is to be found in the letter. It consists of suggestions on the part of Davis of what had better be done with the property; that Cummings, Mrs. Thompson, and Grafton ought to take it; and that Grafton really don't wish to have any thing to do with it. It is not even a recognition of the validity of the purchase, and nowhere speaks of Cummings as the vendor, but he might rather be supposed to be a purchaser with Grafton.

2. Davis does not profess to be speaking or acting for Grafton. He writes in his own name. It is shown by other evidence that, either as attorney or for himself, he controlled the larger part of the debts against Thompson's estate, which made the sale necessary, and it may be fairly inferred that it was in this character he spoke.

3. There is no satisfactory evidence that he was authorized to act for Grafton in that transaction, and none whatever that he was authorized by him to write that letter. The New Hampshire statute requires that the authority of an agent to charge a party shall be in writing, and there is no pretence that Davis had any such authority from Grafton.

These views of the proper construction of the statute are amply sustained by authority.

In the leading case of Wain v. Warlters (5 East, 10), decided by Lord Ellenborough under the English statute, the same as that of New Hampshire on the point in question, that eminent judge said: 'The question is whether that word (agreement) is to be understood in a loose, incorrect sense in which it may be sometimes used as synonymous to promise or understanding, or in its more correct sense of signifying a mutual contract on consideration between two or more parties.' He held the latter to be the true construction, and that all its essential elements must appear in the memorandum, including the consideration, which in that case was absent. This has been held to be the law in England ever since.

In Williams v. Byrnes, before the Privy Council, reported in 9 Jur. N. S. 363, decided in 1863, the defendant had in a letter to one Hardy told him that he would furnish the funds to pay for a steam-engine if the latter would find and purchase a suitable one. Hardy made a verbal contract for the engine, and the vendor sued defendant on this memorandum. Coleridge, J., in delivering the judgment of the Privy Council, said: 'This language' (the language of the statute) 'cannot be satisfied unless the existence of a bargain or contract appear evidenced in writing; and a bargain cannot so appear unless the parties to it are specified, either nominally or by description or reference;' and the ruling of the Chief Justice that this could be done by extrinsic proof as to who was the vendor was reversed. The case is precisely in point with the one before us.

Sale v. Lambert (Law Rep. 18 Eq. 1) was a sale of real estate in which the party charged was the vendor. The memorandum was signed by Sale, the purchaser, for himself, and by George Jackson, the auctioneer, for the vendor. This memorandum was indorsed on a bill of particulars of the conditions of the sale, in which it was said that the property was sold by the proprietor. The Master of the Rolls held that the word 'proprietor' sufficiently described the vendor, and ascertained who was the party for whom the auctioneer signed. But in Potter v. Duffield (id. 4), he held that the words 'confirmed on the part of the vendor,' and signed 'Beadels,' who were the auctioneers, did not sufficiently designate who the vendor was, and that a suit against the owner could not be sustained on the memorandum. He said: 'If you could go into the evidence as to the person who is described as vendor by Mr. Beadel, the answer would be that Polley was that person. But that is exactly what the act says shall not be decided by parol evidence.'

In the case before us, Walker, the auctioneer, does not even say the he signed for the vendor, as Beadel did in the last case cited.

But the case which should have most weight in informing our judgment is Sherburne et al. v. Shaw (1 N. H. 157), because it is an authoritative construction of the statute of the State where this contract was made and the land is situated, to which the contract relates, made by the highest court of that State sixty years ago and never overruled. The case is so perfectly parallel to the one under consideration that its circumstances need not be repeated. It is sufficient to say that the want of the vendor's name in the memorandum was held fatal to any right of action, though the auctioneer's name was signed to a memorandum otherwise sufficient. The concluding language of the court is, that 'the written evidence which hath been offered to prove the contract declared on, as it fails to give any intimation that plaintiffs were one of the parties to that contract, must itself be considered fatally defective and inadmissible.'

The same doctrine is laid down in the excellent work of Mr. Browne on the Statute of Frauds, sects. 372 to 375, and the authorities fully cited. He also speaks of the case of Salmon Falls Manufacturing Co. v. Goddard (14 How. 446) as one which might be saved from conflict with the general rule, on the ground that a bill of parcels detailing the purchase was made out and sent to the purchaser, and accepted by him as such. In that case Mr. Justice Curtis delivered an able dissenting opinion in which Mr. Justice Catron and Mr. Justice Daniel concurred. It may be doubted whether the opinion of the majority in all it says in reference to the use of parol proof in aid of even mercantile sales of goods by brokers is sound law. It certainly furnishes no rule to govern us in the exposition of the statutes of New Hampshire, concerning contracts of sale of real estate within its own borders, where it conflicts with the decisions of the courts of that State on the subject.

Defendant in error relies mainly on that case and the later one of Beckwith v. Talbot, 95 U.S. 289. The latter case, however, affords no support to the argument of counsel. The defendant in that action was charged, it is true, on a memorandum in which his name was not found. But he produced that memorandum from his own possession on the trial, and letters of his written to the plaintiff while the agreement was so in his possession were given in evidence, which referred to the agreement and acknowledged its obligatory force on himself, in terms that required no parol proof to identify it as the agreement to which he referred. This was within all the cases a sufficient signing of the memorandum, though found in another paper, written by the party to be charged, to comply with the Statute of Frauds, and so this court held.

We are of opinion that there was no sufficient memorandum in writing of the agreement on which this suit was brought to sustain the verdict of the jury.

The judgment of the Circuit Court will, therefore, be reversed, and the case remanded to that court with instructions to set aside the verdict; and it is

So ordered.

MR. JUSTICE BRADLEY took no part in the decision of this case.


text: Talk:Grafton v. Cummings/Opinion of the Court


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Town of Weyauwega v. Ayling

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

This was an action by Charles H. Ayling, a citizen of Massachusetts, against the town of Weyauwega, Wisconsin, to recover the amount of overdue and unpaid interest coupons detached from certain bonds issued by that town in aid of the construction of the Wisconsin Central Railroad.

Upon the trial the following facts appeared:--

1. That under and by virtue of chapter 126 of the General Laws of the State of Wisconsin for the year 1869 the legal voters of the town of Weyauwega voted to issue negotiable bonds to the amount of $40,000, to aid in the construction of the Wisconsin Central Railroad.

2. That June 1, 1871, C. M. Fenelon was chairman of the board of supervisors of the town of Weyauwega, and C. A. Verke was the clerk of the said town.

3. That said Verke resigned his office of clerk of said town June 17, 1871; that his resignation was accepted; and on the same day one Francis W. Sackett was elected and duly qualified as such clerk, and entered upon his duties.

4. That Verke, after his resignation as town clerk as aforesaid, changed his residence to Peshtigo, and ceased to be a resident of Weyauwega.

5. That July 13, 1871, Verke signed in Peshtigo, where he then resided, the bonds mentioned in the complaint; that the date in them at the time he so signed them was June 1, 1871.

6. That he did not in fact sign the coupons mentioned in the complaint, or any of them, but that his signature to them, as well as that of Fenelon, the chairman of said town, was lithographed from genuine signatures of Verke and Fenelon.

7. That at the time Verke signed the bonds he was not clerk of the town of Weyauwega, and had not been clerk thereof since June 17, 1871.

8. That July 13, 1871, the date when Verke signed said bonds, said Sackett was the duly and legally qualified clerk of the town.

9. That Fenelon, who signed the said bonds, was at the date he signed the same the chairman of the town of Weyauwega, and as such signed the same.

10. That after the bonds were so signed, they, with the coupons annexed, were issued and delivered by Fenelon, chairman of the town of Weyauwega, to the Wisconsin Central Railroad Company, and came to the hands of the plaintiff, who, prior to their maturity, purchased and paid a full and valuable consideration for them, in good faith, and without notice of any defect in them or the coupons, or the signatures thereto.

The judges were opposed in opinion upon the following questions:--

1. Whether the town of Weyauwega was estopped from showing the true date the bonds were in fact signed by Verke.

2. Whether the bonds, having been in fact signed by him after he had ceased to be the clerk of the town, and had removed therefrom his place of residence, and become a resident of Peshtigo, in law were or could be valid or legal bonds of the town of Weyauwega.

3. Whether the fact that the bonds bear upon their face the date of June 1, 1871, and purport to be signed on that day by Fenelon, chairman, and Verke, clerk, estops or prevents the town from showing that the bonds were not in fact signed until July 13, 1871, and that on that day Verke was not the clerk of the town of Weyauwega; and if it does not, whether in law the said bonds and coupons are invalid in the hands of a bona fide holder of the same.

Judgment having been rendered in favor of the plaintiff in accordance with the opinion of the presiding justice, the town sued out this writ of error.

The act of 1869 provides as follows:--

'SECT. 4. . . . It shall be the duty of the proper officers in every such. . . town. . . to cause said. . . bonds so voted to be. . . issued and to be paid over or delivered to the said railroad company. . ..

SECT. 5. For the purpose of giving effect to the provisions of this act, the proper officers of every. . . town. . . mentioned in this act are hereby declared to be. . . the chairman of the board of supervisors and the town clerk in each town.'

Mr. William P. Lynde for the plaintiff in error.

The town was not estopped from showing the true date at which the bonds were in fact signed by Verke.

The enabling act authorized the chairman of the board of supervisors and the town clerk to execute bonds which should bind the town. Neither one of them could do it alone. The power was conferred upon them in their official capacity, and they were constituted the agents of the town for a special purpose. There can be no doubt that the town has a right to show that the person who signs as town clerk was not such when he executed the bonds, and had no authority to bind the town. The Floyd Acceptances, 7 Wall. 666; Lee v. Monroe & Thornton, 7 Cranch, 366; Whiteside et al. v. United States, 93 U.S. 247; Mayor v. Eschback, 17 Md. 282; Chisolm v. City of Montgomery, 2 Woods, 594; Story, Agency, sect. 307.

The act authorized the 'proper officers' of the town to issue the bonds; and those officers are declared to be the chairman of the board of supervisors and the town clerk. Verke, when the bonds were signed, was neither. He occupied no official position whatever, and his signature could have no greater force or effect than that of any other private citizen. He certainly could not bind the town, of which he was neither an officer nor a resident. 2 Coler, Municipal Bonds, 136; Head v. Providence Insurance Co., 2 Cranch, 127; Freud v. Dennett, 4 Sco. N. R. 583; McSpeden v. ''The Mayor, &c. of New York'', 7 Bosw. (N. Y.) 606; Zottman v. San Francisco, 20 Cal. 103.

The power of the town to issue its bonds to aid in the construction of this road being derived entirely from an act of the legislature which declares that they shall be issued by the chairman of the board of supervisors and the town clerk, the mode prescribed is essential to the validity of the bonds,-indeed, there is no power to issue them in any other way,-therefore, having been in fact signed by Verke, after he had ceased to be the clerk, and removed his residence to Peshtigo, the bonds are invalid and do not bind the town.

There is nothing in this record to show that the town or its officers, except the chairman of the board of supervisors, who is one of the wrong-doers, ever knew of the execution of these bonds until this suit was brought, nor to show that the town received any stock or any other consideration for the bonds. It would seem that they were given to the company as a gratuity. What has the town done or said that should estop it from telling the truth? There is a class of cases in which it has been held that when a power is given to be exercised by certain persons upon conditions precedent, the existence of which they are authorized to ascertain and declare, and they exercise the power, a holder for value of negotiable securities issued thereunder need not go behind the authority; but in all of them there was express legislative authority to issue the bonds upon those conditions. Of this class are the following cases: Commissioners of Knox County v. Aspinwall et al., 21 How. 539; Bissell et al. v. City of Jeffersonville, 24 Id. 287; Moran v. Commissioners of Miami County, 2 Black, 722; Mercer County v. Hackett, 1 Wall. 83; Gelpcke v. City of Dubuque, id. 175; Von Hostrop v. Madison City, id. 291; Rogers v. Burlington, 3 id. 654; Supervisors v. Schenck, 5 id. 772; Lee County v. Rogers, 7 id. 181.

The distinction between those cases and that now before the court is, that these bonds were not 'issued by the body intrusted to do so.'

Mr. Edwin H. Abbot, contra.

The recital in the bonds estops the town from setting up any defect of execution which does not destroy their genuineness.

Verke's signature as clerk nunc pro tunc was a purely ministerial act, which speaks truly from and at the date of the bond. It lacks every essential element of forgery. He was clerk at the date of the bonds. The coupons bore his genuine fac-simile, affixed while he was clerk, and accepted by the town as his signature before his resignation. No one else could have completed, according to commercial usage, the formal certification of them as the obligations of the town.

Yet even if Verke's signing, under the circumstances stated, amounted to forgery, the delivery of the bonds by the proper chief executive officer of the town was such an adoption of the signature as genuine, as ever afterwards estopped the town from impeaching it. Beaman v. Duck, 11 Mee. & W. 251; Levy v. Bank of United States, 4 Dall 234; Bank of the United States v. Bank of Georgia, 10 Wheat. 332; 2 Daniel, Negotiable Instruments, sect. 1351; Woodruff v. Munroe, 33 Md. 146; Casco Bank v. Keene, 53 Me. 104; Leach v. Buchanan, 4 Esp. 226; Greenfield Bank v. Crafts, 4 Allen (Mass), 447; Union Bank v. Middlebrook, 33 Conn. 95; Howard v. Duncan, 3 Lans. (N. Y.) 174; Brook v. Hook, Law Rep. 6 Ex. 89; Williams v. Bayley, Law Rep. 1 H. L. 200, 221; Wilkinson v. Stoney, 1 Jebb & S. 509; Robarts v. Tucker, 16 Q. B. 577; Arnold v. Cheque Bank, Law Rep. 1 C. P. D. 578; Meacher v. Fort, 3 Hill (S.C..), 227; Hortsman v. Henshaw, 11 How. 177; Price v. Neal, 3 Burr. 1354; Cooper v. Meyer, 10 Barn. & Cress. 468; S.C.. 5 Mann. & R. 387; Young v. Grote, 4 Bing. 253; Ingham v. Primrose, 7 C. B. N. S. 82; Greenfield Bank v. Stowell, 123 Mass. 196; Bigelow, Estoppel, 397; Baxendale v. Bennett, Law Rep. 3 Q. B. D. 525, 530.

The directions of the Wisconsin statute are mandatory. The town cannot set up its own neglect to comply with them, in order to defeat its just debt by denying the obligation.

The acts of a municipal officer within the scope of his authority in delivering a bond, ministerially defective in its execution, estop the municipal corporation from setting up mere defects in execution when his authority extended to the delivering of a valid obligation of substantially the same form. The same rule of agency applies to towns and individuals.

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

title: Town of Weyauwega v. Ayling


text: Talk:Town of Weyauwega v. Ayling

title: Talk:Town of Weyauwega v. Ayling


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Town of Weyauwega v. Ayling/Opinion of the Court

The first question certified in this case is answered in the affirmative. The legal voters of the town, by a vote duly taken pursuant to statutory authority for that purpose, directed the issue of the negotiable bonds in controversy. As soon as this vote was given, it became the duty of the chairman of the board of supervisors and the clerk of the town to cause the bonds to be made out and delivered to the railroad company. Such was the requirement of the statute under which the vote of the town was taken. The designated officers had no discretion in the premises.

After the vote, an appropriate form of bond and coupons was lithographed and printed, with blanks in the bond for the signatures of the chairman and clerk. As printed, the bonds bore date June 1, 1871. At that time Fenelon was chairman and Verke clerk. The signatures of these officers were lithographed and printed on the coupons. Before the bonds were actually signed by Verke, he had resigned his office and moved out of the town. Another clerk had been appointed and qualified in his place. Apparently to save the expense of a new lithograph and another printing of the bonds, Verke, after going out of office, affixed his signature to those which had been printed. These bonds so signed by Verke and by Fenelon, who actually was chairman at the time, were taken by Fenelon and delivered to the railroad company. This having been done, Ayling, the defendant in error, purchased the bonds to which the coupons sued on were attached, and paid their full value without notice of any claim of defence to their due execution. Under these circumstances, we think the town is estopped from proving that Verke in fact signed the bonds after he went out of office. If Ayling had put himself on inquiry when he made his purchase he would have found, 1, that the town had authority to vote the bonds; 2, that the necessary vote had been given; 3, that at the date of the bonds Verke was clerk and Fenelon chairman; 4, that their signatures were genuine; and, 5, that the bonds had actually been delivered to the railroad company by Fenelon, who was at the time chairman. If a bank puts out a note for circulation bearing the signature of one who was in fact president of the bank when the note bore date, no one will pretend that it could be shown as a defence to the note when sued upon by a bona fide holder, that the signature of the person purporting to be president was affixed after he went out of office. So if one puts out a note purporting to be signed by himself, but which was in fact signed by another having at the time no authority from him, he cannot prove the forgery or want of authority in the signer as against a bona fide holder. The reason is obvious. The bank by issuing the note, and the individual by delivering the paper which purported to be his obligation, adopted what they thus put out as their own, and became bound accordingly.

The same principle applies in this case. There is no pretence that the obligation of these bonds is other or different from that authorized by the voters. So far as the record shows, the town has received and retains the consideration for which they were voted. No bad faith is imputed to any one. It is true the chairman alone made the actual delivery to the railroad company; but the presumption is, that what he did was assented to by the clerk in office at the time. Certainly it could not have been contemplated that, to make a binding obligation, both the chairman and clerk must have been present when the delivery to the railroad company was made; and as the presumption always is, in the absence of any thing to the contrary, that a public officer while acting in his official capacity is performing his duty, it must be assumed for all the purposes of this case that the bonds were delivered to the railroad company by the chairman with the assent of the clerk, and, therefore, that they were issued as negotiable instruments by the proper officers of the town. It the fact was otherwise, it was incumbent on the town to make the necessary proof.

It is unnecessary to answer any of the other questions certified, further than has already been done. The answer to the first question is decisive of the case.

Judgment affirmed.


text: Talk:Town of Weyauwega v. Ayling/Opinion of the Court


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Case v. Beauregard (99 U.S. 119)

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

This suit was brought July 10, 1869, by Frank F. Case, receiver of the First National Bank of New Orleans, against Gustave T. Beauregard, Thomas P. May, Augustus C. Graham, George Binder, Alexander Bonneval, Joseph Hernandez, the New Orleans and Carrollton Railroad Company, and the Fourth National Bank of New York, to recover a debt of $237,000.89, which he claimed was due from, and had been contracted by, Beauregard, May, and Graham, while they were partners, and carrying on business as such; and to have certain transfers of partnership property set aside and subjected to the payment of the debt. Beauregard leased, April 12, 1866, from that company its railroad tracks, its rolling-stock, and corporate privileges for twenty-five years. The lease, although made to him individually, was entered into on his part in view of a partnership to conduct the enterprise, which on the first of that month was formed between him, May, and Graham, for operating under that lease the road. By the terms of the partnership, which was to continue for twenty-five years from the date of the lease, he was charged with the management of the road, was to receive only a salary for his services, and when the capital furnished by May and Graham was reimbursed to them with eight per cent interest, the partners were to share the profits equally, and all losses were to be equally borne by them. On their part, May and Graham were to furnish the requisite capital, fixed at $300,000. Locomotives had been used on the road, but after the date of the lease the tracks were adapted to horse-cars, important changes effected, and large purchases of property made, for the uses and better equipment of the road, all of which involved a heavy expenditure of money.

May 16, 1867, May assigned his interest to the United States. Graham, on the 8th of that month, assigned his interest to the Fourth National Bank of New York. The bank failed in that month, and was a creditor of the partnership. The latter had overdrawn, between Sept. 6, 1866, and May 1, 1867, the account kept in that institution in the name of Beauregard, as such lessee. At that time, May was president of the bank. He directed the treasurer of the partnership to draw upon the bank without regard to the state of the accounts, and instructed the paying teller to honor the checks, promising to make good the deficit. It amounted to the sum for which this suit was brought. No part of it has ever been paid to the bank. At one time, May deposited with it, as cash, a demand note for $40,000, drawn by him as attorney for Beauregard. At another time, he drew a draft upon Graham for $125,000, which was also credited upon the account as cash. Neither the draft nor the note was paid. Both were held by the bank, and were overdue at the time of its failure.

May had obtained from the assistant treasurer of the United States at New Orleans public moneys, he knowing them to be such, for his individual uses. In part payment of this indebtedness he assigned, with other property, the balance to his credit on the books of the bank, amounting to $315,779.10, and his interest in the railroad company, its property and appurtenances, and bound himself to execute any further acts or instruments necessary to give a complete title to the property transferred. A few days thereafter, May 16, 1867, he, claiming to act under a power of attorney from Graham, conveyed, by an act passed before a notary public of New Orleans, to the United States 'all and singular the right, title, interest, share, property, claim, and demand of every nature and kind whatsoever, of them, the said May and Graham, and each of them, in and to the New Orleans and Carrollton Railroad, the lease and other franchises thereof, and the railroad tracks, rolling-stock, engines, cars, live-stock, and other appurtenances thereunto belonging or in any wise appertaining;' the same having been acquired under the lease and the articles of partnership aforesaid. The United States was to give him credit for all that should be received from the proceeds of the sale or other disposition of the interest conveyed.

The United States, Oct. 31, 1867, in consideration of $228,000, conveyed the property so acquired by said act to Binder, Bonneval, and Hernandez, and further stipulated to save them harmless from any claim that might be set up by the bank for $112,009.09, apparently standing to the debit of Beauregard, as lessee of the road, but which the act declares was due by May, and to defend the transferees from an assignment of Graham's interest to the Fourth National Bank of the City of New York. The transferees assumed the liabilities due and owing by Graham and May, as lessees, on account of the railroad, as set out in a schedule of direct debt, amounting to $122,852.58, and of prospective debt for additions, $40,000,-making $162,852.58.

Oct. 15, 1867, Binder, Bonneval, and Hernadez joined Beauregard in an agreement or act of fusion with the railroad company, whereby they surrendered to the latter all interest they had in the lease of the road and property of the partnership; and the company, being thus restored to the property and franchises with which it had parted, entered into the possession thereof. May, Graham, and Beauregard are insolvent.

An act of the legislature was passed, by which the company was authorized to scale its present stock, issue additional shares of its capital stock to the extent of the value of the improvements placed on the road during the partnership, and to consolidate its interests with the other parties. Accordingly the company increased its stock so as to make it $800,000, of which one equal moiety, or $400,000, was awarded to Binder, Hernandez, Bonneval, and Beauregard, as representing in their right the value of the improvements put on the road by the late partnership, whose interests to the extent of two-thirds had passed to the purchasers from the United States, the other one-third being owned by Beauregard; and for and in consideration of the $400,000 of its capital stock, the New Orleans and Carrollton Railroad Company acquired and was put into possession of all the real estate and other property acquired by the late partnership of May, Graham, and Beauregard.

For the amount mentioned in his assignment, as standing to his individual credit, May gave a 'certified' check, of which the United States is the present holder and owner. Of the amount transferred from the bank to the sub-treasury in New Orleans, enough was applied to take up a check drawn by May on the bank, dated Feb. 15, 1867, and forming part of the assets of the assistant treasurer at New Orleans, and the remainder, $10,378.28, was credited on his check for $315,779.10.

The complainant charges that the First National Bank, being the creditor of the partnership, had a lien or privilege on its effects, and was entitled to be paid therefrom to the exclusion of the creditors of any member of the partnership; that the partnership was insolvent; that none of its members was able to pay his individual debts, or authorized to dispose of the partnership property for the payment of such debts; that the deed to the United States, its deed to Binder, Bonneval, and Hernandez, and the deed of the latter parties and Beauregard to the railroad company, are in fraud of the rights of the bank as a creditor of the partnership, and that the same should be cancelled and the partnership property sold to satisfy the prior and privileged claim of the bank. He prays that Binder, Bonneval, Hernandez, and Beauregard be enjoined from transferring or incumbering their stock in the company, and that the latter be enjoined from recognizing or permitting such transfer, and for engeral relief.

Bonneval, Binder, Hernandez, and the Carrollton Railroad Company answered, and pleaded the existence of the debt due from the bank to May as a bar to any claim upon them under the allegations of the bill.

The Fourth National Bank also answered.

The bill was dismissed on a final hearing, and the complainant appealed here.

Mr. J. D. Rouse and Mr. Charles Case for the appellant.

The object of the bill is to subject partnership assets to the payment of a partnership debt. Such assets belong to the partnership. Each partner is entitled only to a share of what remains after payment of partnership debts and a settlement of accounts. Bank v. Carrollton Railroad, 11 Wall. 628, and the authorities there cited.

The Code of Louisiana gives a statutory protection to the rights of a creditor of the partnership, recognizing those which the courts of chancery have elsewhere established, and adding thereto in his favor a privilege upon partnership assets. The latter are a trust fund, or the common pledge of the partnership creditors, who must be paid out of it before the creditors of the respective partners; and the transfer by one of the latter in payment of his separate debts is a fraudulent conversion of the assets, and his creditors take as against those of the firm no title thereto. Hagan et al. v. Scott, 10 La. 345; Gardiner et al. v. Smith, 12 id. 370; Claiborne et al. v. Creditors, 13 id. 279; Bank of Tennessee v. McKeage, 11 Rob. (La.) 130; Moore v. Hampton et al., 3 La. Ann. 192; Smith v. McMicken, id. 319; Saloy v. Albrecht, 17 id. 75; Succession of Beer, 12 id. 698; Dwight v. Simon, 4 id. 496.

At the time of the transfer by May of the property in question, in part payment of his individual indebtedness, his creditor knew that the partnership was indebted to the bank. All subsequent purchasers, when they acquired their respective interests, were cognizant of the same fact. The partnership and all of its members are insolvent, and its only creditor is the bank. The partnership property being largely in esse, and in possession of one of the defendants, is accessible only by the aid of a court of chancery. The bank has no remedy at law, and it is not necessary that the claim be established by judgment. The complainant is, therefore, entitled to relief in equity. Russell v. Clark's Executors, 7 Cranch, 69; Thurmond v. Reese, 3 Ga. 449; Croone v. Bivens, 2 Head (Tenn.), 339; Cornell v. Radway, 22 Wis. 260; Sanderson v. Stockdale, 11 Md. 563; Innes v. Lansing, 7 Paige (N. Y.), 583; O'Brien et al. v. Coulter et al., 2 Blackf. (Ind.) 421.

Mr. John A. Campbell and Mr. Henry C. Miller for the appellee.

Mr. Assistant Attorney-General Smith for the United States.

MR. JUSTICE STRONG delivered the opinion of the court.

title: Case v. Beauregard (99 U.S. 119)


text: Talk:Case v. Beauregard (99 U.S. 119)

title: Talk:Case v. Beauregard (99 U.S. 119)