text:
Crim v. Handley

APPEAL from the Circuit Court of the United States for the Southern District of Georgia.

Handley, on the 14th of April, 1873, brought suit in the Circuit Court of the United States for the Southern District of Georgia against Crim and Peeples, surviving partners of King, Crim, & Co., on four promissory notes, executed by the firm to Buffington & Co.

The defence was payment. Peeples also pleaded his discharge in bankruptcy.

When the case was called, no motion was made for a continuance. The evidence offered by the defendants was admitted at the trial without objection, no charge to the jury was asked, and there is, consequently, no bill of exceptions.

The defendants offered in evidence sundry receipts showing payments.

Harper, the attorney in whose hands Buffington & Co. had placed these notes, and Crim and Peeples, the defendants, were witnesses, and testified as to the alleged payments.

Upon this evidence the case was submitted, and it resulted in a verdict and a judgment for $3,154.21 against Crim. Peeples was discharged, on the plea of bankruptcy.

Crim then moved for a new trial, on grounds which do not appear. The motion was denied. He then filed his bill for an injunction and a new trial, all the allegations of which, in support of the relief prayed for, were fully answered and denied; and the case was heard in August, 1873, when the injunction was denied. No decision was made on the demurrer, which was also filed, but the bill was retained, for the purpose of being heard at the next term.

Testimony was taken by Crim to sustain his allegation that the notes had been paid, and the principal witnesses were again he, Peeples, and Harper.

The chief grounds relied on by Crim for the intervention of equity were, first, that a certain record in a proceeding on the equity side of one of the State courts, alleged to have an important bearing on the question of payment, could not be found by the clerk of that court up to the time of trial; second, that Peeples, when testifying in the common-law case, was not in a condition of mind to tell all he knew and to speak truly. In support of this latter ground, Peeples swears that, two or three days before the trial, he had been seriously ill; had not slep scarcely any for three nights; had taken opium freely; and at the time he testified was in such bad condition that he could not remember the facts in the case. He swears that in another trial he will testify to sundry payments amounting to $3,251.

Upon a final hearing the bill was dismissed, and Crim appealed to this court.

Mr. R. F. Lyon for the appellant.

Mr. Philip Phillips and Mr. W. H. Phillips for the appellee.

MR. JUSTICE CLIFFORD delivered the opinion of the court.

title: Crim v. Handley


text: Talk:Crim v. Handley

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

title: Talk:Crim v. Handley


text:
Crim v. Handley/Opinion of the Court

Courts of equity will not enjoin judgments at law, unless the complainant has an equitable defence to the cause of action of which he could not avail himself at law, because it did not amount to a legal defence; or where he had a good defence at law, of which he was prevented from availing himself by fraud or accident, unmixed with negligence of himself or his agents. Hendrickson v. Hinckley, 17 How. 443.

Where a party has failed to make a proper defence through negligence, a court of equity will not enjoin the judgment; but where it appears that such a defence has been prevented by fraud or accident, without fault of the losing party, a court of equity may grant relief, if the proofs are satisfactory. Hungerford v. Sigerson, 20 id. 161.

Sufficient appears to show that goods of great value were owned by the mercantile firm of J. W. Buffington & Co., and that they, on the first day of February, 1866, sold the same to the firm of King, Crim, & Co., William Peeples, one of the old firm, entering into the new firm which made the purchase. Payment of the price was made at the time of the purchase, less $4,591.64, for which the purchasing firm gave to the vendors four promissory notes, payable to the creditor firm or bearer, on the first days of April, May, June, and July next ensuing, with interest. Debts of the old firm were still outstanding, for which Peeples, of the new firm, was liable; an for his security the four notes given by the new firm were deposited in the hands of a third person, with the understanding that the depositary was to hold the notes for that purpose, so that, when the debts of the old firm were presented, they might be paid by Peeples or the new firm, and in that event the amounts paid were to be credited on the notes in the hands of the depositary.

Subsisting liabilities of the old firm were presented for payment, and were paid by Peeples, of the new firm; but the record shows that controversy arose respecting the same, and that the depositary of the notes refused to allow the credits to be made on the notes, pursuant to the original understanding. Instead of that, he caused one of the notes to be put in suit to enforce payment of the same. Pending that suit, the new firm brought a bill in equity against the depositary and the old firm, to compel the respondents to carry the understanding into effect. What they prayed was, that the payments thus made should be indorsed on those notes, and they also claimed a credit for worthless cotton-seed sold to them when they purchased the stock of goods of the old firm.

Litigation ensued; but, in the view taken of the case, it will not be necessary to enter very fully into those details. Suits of garnishment were also instituted in behalf of the creditors of the old firm against the depositary of the notes; and during their pendency the notes were placed in the hands of certain attorneys, with directions that the notes be put in suit in the name of the agent of the creditors prosecuting the suits of garnishment. Pursuant to those directions, the agent, James M. Handley, on the 14th of April, 1873, sued the appellant and Peeples, as surviving partners of the new firm which gave the notes, counting on those notes as indorsee against the makers.

Service was made; and the defendants appeared and set up the following defences: 1. That they never promised. 2. Payment before the suit was instituted. 3. Payment to the payees, and due notice to the indorsee and holder. 4. That the notes were given for a stock of goods, part of which consisted of a lot of cotton-seed warranted sound, which proved to be unsound and worthless. 5. Prior recovery against the defendants to the extent of their liability in the garnishment suits, and the full payment of the amount so recovered. 6. Subsequent sale of the stock of goods to another firm for an amount greatly in excess of what was due on the notes, the purchasers, with the consent of the firm, agreeing to assume and pay what was unpaid on those notes.

Peeples also filed a separate plea, in which he alleged that he had previously been adjudged a bankrupt by the District Court.

Taken as a whole, it must be admitted that the pleadings fully and clearly present every matter in issue between the parties. Both parties appeared on a subsequent day, and they went to trial, the record showing that the verdict as against the appellant was for the plaintiff in the sum of $3,154.21, and in favor of the other defendant, under his plea that he had been duly adjudged a bankrupt. Judgment was accordingly rendered for the plaintiff, and the present appellant filed a motion for new trial. Before the motion came to a hearing, the defendant, with the consent of the plaintiff, filed a statement of the evidence introduced in the case, which was also approved by the presiding justice, as exhibited in the record.

Enough appears in that statement to show that evidence was introduced in support of all the issues presented in the pleadings, and that the error, if any, must have been committed by the jury. For aught that appears to the contrary, it must be assumed that all the evidence offered by the defendant was admitted; and the record does not show that any evidence offered by the plaintiff was admitted to which the defendant objected. Nothing appears to show any irregularity in the trial; and neither party filed any exceptions to the charge of the court, or to any ruling of the court, in re using to instruct the jury as requested.

Viewed in the light of these suggestions, it is clear that the record furnishes no ground whatever to suppose that the defendant did not enjoy every right which belongs to a litigant party, without diminution or restriction. Where no exceptions are taken during the trial, the presumption must be that the rulings of the court were correct; and that presumption in this case is confirmed by the fact that no complaint in that regard is made in the statement filed as the foundation of the motion for new trial. By the allegations of the bill of complaint, it appears that such a motion was made and denied before the present bill of complaint was filed, which purports to seek relief for the complainant upon grounds 'above and beyond what was considered by the court of law in the former motion.'

Prefaced by that statement, the complainant proceeds to state the grounds for the relief, which, as he alleges, exist to support the present application for an injunction and new trial. Briefly stated, they are as follows: 1. That the verdict of the jury is unjust and inequitable, for the reasons that the credits which he claimed were not allowed. 2. That he was misled at the trial and his defence 'demoralized' by the failure of recollection on the part of his principal witness, who knew all the facts required to establish the same; that, when the witness was called to testify, he became confused, and that his recollection deserted him to such an extent that he did not know to what he was testifying; that the forgetfulness and confusion of the witness arose, as the complainant is advised, from severe pain and the effect of opiates previously taken to relieve the painful disease with which he was afflicted; and that the consequent inability of the witness to testify to the facts within his knowledge was a complete surprise to the complainant and his counsel. 3. That one of his counsel unexpectedly failed to be present at the trial. 4. That he was unable to procure, as evidence on the trial of the case, the pleadings, proceedings, and decree in an equity suit previously heard and determined in the State court, which were material to his defence, and for which he made diligent search without success.

Certain other grounds of relief are also alleged in the bill of complaint, which need not be reproduced, as they do not appear to give much additional weight to the application.

Two of the respondents appeared and filed separate answers. Most or all of the material matters alleged in the bill of complaint are denied in the answers, which renders it unnecessary to enter into any preliminary comparison of the allegations of the former with those of the latter.

Credits to considerable extent must have been allowed, as is obvious from a comparison of the verdict with the aggregate amount of the notes and interest. More was claimed by the defendants than was allowed, and all experience shows that a losing party is seldom satisfied when his demand or set-off is reduced by the tribunal appointed to determine its amount.

Parties in suits at common law, where the value in controversy exceeds $20, are entitled to a trial by jury; but the same amendment to the Constitution provides that no fact tried by a jury shall be otherwise re-examined in any court of the United States than according to the rules of the common law. Two modes only were known to the common law for the examination of facts once tried by a jury; to wit, the granting of a new trial by the court where the issue was tried or to which the record was returnable, or by the award of a venire facias de novo from the appellate court for some error of law in the proceedings. Parsons v. Bedford, 3 Pet. 448; 2 Story, Const. (3d ed.) 584; Insurance Company v. Comstock, 16 Wall. 269.

All suits not of equity or admiralty cognizance are embraced in that provision, and subject to its control. By its terms it is applicable only to common-law suits, and, of course, does not conflict with the rule before stated that courts of equity may exercise jurisdiction to enjoin a judgment or to grant the injured party a new trial, in a case where the proof is clear, to show that it would be inequitable and against conscience to execute it; as where it appears that the injured party has an equitable defence of which he could not avail himself in the suit at law, or if it appears that the defence could be made at law, but that he was prevented from making it by fraud or unavoidable accident, unmixed with any fault or negligence in himself or his agents. Truly v. Wanzer, 5 How. 142; 2 Story, Eq. (9th ed.) sect. 887.

Difficulty would attend any attempt to prescribe a rule which will apply in all cases; but it is safe to affirm that equity may exercise jurisdiction in such a case, where the evidence clearly shows that it would be against conscience to execute the judgment, because the injured party had a just defence of which he could not avail himself in the suit at law, or of which he might have availed himself at law, but was prevented from so doing by fraud or unavoidable accident, unmixed with any fault or negligence in himself or his agents. Insurance Company v. Hodgson, 7 Cranch, 336.

On the other hand, said Marshall, C. J., it may with equal safety be laid down as a general rule that a defence cannot be set up in equity which has been fully and fairly tried at law, although it may be the opinion of the court that the defence in the suit at law ought to have been sustained. Walker v. Robbins, 14 How. 585; Creak v. Sims, 5 id. 204; Sample v. Barnes, 14 id. 73.

Where, pending a suit in the Circuit Court against a surety, judgment was recovered against him in a State court for the same cause of action, and he paid the whole amount before judgment was rendered in the Circuit Court, the judgment rendered in the Circuit Court was properly enjoined, it appearing that the surety tendered the defence of antecedent payment puis darrein continuance, and that the court refused to admit the defence. Leggett v. Humphreys, 21 How. 71; Humphreys v. Leggett, 9 id. 313.

Frequent applications to enjoin judgments were made in equity, before the practice of awarding new trials was introduced into the courts of common law. Until the practice of granting new trials in courts of law was introduced, every reason existed why equitable relief should be afforded; but as the courts of law now exercise that power very liberally, especially in case of fraud or unavoidable accident, a resort to equity is seldom necessary or successful. 3 Lead. Cas. (3d ed.) 190; Railroad v. Neal, 1 Wood's C. C. 353.

Relief in equity may be granted in case of fraud or collusion; but it will not be granted in other cases, unless it clearly appears that to allow the judgment to be executed would be contrary to equity and good conscience, and that the facts which render it inequitable were unavailable as a defence in the action in which the judgment was recovered, without any fault or negligence of the losing party. Clute v. Potter, 37 Barb. 199; Burton v. Wiley, 26 Vt. 432; Carrington v. Holabird, 17 Conn. 537; Kerr on Inj. 22; Simpson v. Hart, 1 Johns. Ch. 98.

Absence of one of the counsel employed by the party furnishes no ground for equitable relief in this case, in view of the circumstances, as it does not appear that the party, if he had been present, might not have employed another equally competent to conduct the defence. Nor does the allegation that one of his witnesses was sick during the examination, that it impaired his recollection and rendered him incapable of stating material facts within his knowledge, afford any sufficient support to the present application. Accidents of the kind occasionally occur in the course of trial; but the plain remedy for such an embarrassment is an application to the court to postpone the trial or to continue the case, as the circumstances may require. Applications of the kind, if well founded, ar seldom or never refused; but if a party elects to proceed and take his chance of success, he cannot, if the verdict and judgment are against him, go into equity, and claim to have the judgment enjoined. If a witness is too unwell to testify understandingly, the proper remedy for the party is to move for a postponement of the trial; and, if he elects to proceed and is unsuccessful, his only remedy is a motion for new trial to the court where the accident occurred.

Suppose that is so, still it is insisted by the complainant that the allegations of the bill of complaint, that he was unable to procure an exemplified copy of the record in the prior described suit, if sustained by proof, are adequate to show that the judgment here in question should be enjoined; but there are two answers to that proposition, either of which is sufficient to show that the proposition is not well founded: 1. Because the loss of the record and the inability of the clerk to find it were a good cause for a continuance, if duly presented and supported by an affidavit in due form. 2. Because it was a case where secondary evidence was properly admissible, the party first proving loss and due unsuccessful search.

Nor is it any proper answer to that suggestion to say that the counsel present could not prove the contents of the record. Both the counsel and party knew at the commencement of the suit that the record in question would be material evidence for the defendant; and, if his counsel was unable to testify as to its contents, the defendant should have attended the trial himself, or have summoned the clerk, or some other person having the requisite knowledge. Accidents of the kind usually find a remedy in an application to the discretion of the court for a postponement of the case, or parol proof of contents, or, in case the trial proceeds and a verdict follows, by a motion for new trial at common law.

Due proof of loss, unsuccessful search, and proof of contents, would have been as available for the defendant as an exemplified copy of the record; and, in the absence of any proof of proper diligence in that regard, it is clear that he shows no ground whatever for equitable interference in his behalf.

Suffice it to say, without remarking upon the other causes assigned why relief should be granted, that they must all be overruled, for some one or more of the reasons given for overruling those already specifically named.

Decree affirmed.

title: Crim v. Handley/Opinion of the Court


text: Talk:Crim v. Handley/Opinion of the Court


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County of Dallas v. Mackenzie

ERROR to the Circuit Court of the United States for the Western District of Missouri.

This is an action brought by the defendant in error to recover on certain coupons attached to bonds alleged by him to have been issued by the county of Dallas, in the State of Missouri. The pleadings upon which the question of law decided by this court arose are set forth in the opinion.

Mr. William Patrick for the plaintiff in error.

Mr. T. C. Fletcher, contra.

MR. JUSTICE HUNT delivered the opinion of the court.

title: County of Dallas v. Mackenzie


text: Talk:County of Dallas v. Mackenzie

title: Talk:County of Dallas v. Mackenzie


text:
County of Dallas v. Mackenzie/Opinion of the Court

This case comes before the court upon a demurrer to the answer.

In his complaint, the plaintiff alleged that the defendant issued certain bonds, by which it promised to pay to the Laclede and Fort Scott Railroad Company the sums named, pursuant to an order of the county court; that the bonds recited that they were issued pursuant to an order of the county court of Dallas County, made on the 18th of May, 1871, and amended on the nineteenth day of June and the twelfth day of August, of the same year, by authority granted in the charter of said company, by an act approved Jan. 11, 1860; that he is the owner for value and the bearer of certain coupons attached to said bonds, and entitled to recover the amount thereof, by reason of which he avers an indebtedness to him in the sum of $3,800 with interest from the various dates mentioned.

To this the defendant answers, denying that it promised to pay the bonds as in the complaint is alleged, denying t at by its writings or coupons it promised to pay the different sums therein specifically set forth, and denying that the plaintiff was the owner for value of the coupons sued for.

The answer, for a further defence, avers that the bonds referred to recite that they were issued pursuant to certain orders of the county court of Dallas County (which are of the dates specified in the complaint), and avers that no orders authorizing the issue of such bonds were ever made by the said county court as so recited, but that two of the justices of said court, fraudulently and corruptly, but not as a court, made a certain other order set forth, but upon conditions which were not complied with. It is further averred that said bonds were fraudulently and corruptly issued, and without authority, and that at the date of said issue the annual assessment of the county of Dallas was less than $1,500,000, and the county had already subscribed to the capital of said railroad the sum of $150,000.

To this answer the plaintiff demurred, upon the following grounds:--

1. That it did not state facts sufficient to constitute a defence.

2. That its admissions were sufficient to entitle plaintiff to recover.

3. That its denials were inconsistent with its admissions.

4. That it was not necessary to file the bonds, the coupons being filed in the court.

5. That plaintiff being the bearer of the coupons is sufficient, and ownership being immaterial.

6. That the authority of the court to issue the bonds under the special law incorporating the Laclede and Fort Scott Railroad Company is not denied.

7. That it admits their issue, and does not deny the authority to issue them, recited in them.

8. The bonds on their face import a compliance with the law, and defendant is estopped from denying the regularity of such compliance.

9. It does not charge plaintiff with knowledge of any of the alleged frauds in the issue of the bonds.

The demurrer was sustained, and judgment rendered for the plaintiff. The defendant thereupon sued out this writ of error.

The demurrer is general to the whole answer. The answer is interposed under a system of pleading which allows numerous and inconsistent defences. If, therefore, the answer contains any good defence, the demurrer must be overruled.

The complaint gives no copy of the bonds. It simply says that they were issued to a railroad company named, and that they recited that they were issued pursuant to an order of the county court of Dallas County, made on the eighteenth day of May, 1871, and amended on the nineteenth day of June and on the 12th of August, of the same year, and that this was by authority granted in the charter of the railroad mentioned. In this statement are involved two fundamental propositions: 1st, That the charter of the company gave authority to the county to subscribe; and, 2d, that the county exercised that authority. Both of these averments are jurisdictional, and if either does not exist, no bonds can legally issue. The first is a question of law to be ascertained by a reference to the statute. The second is a matter of fact to be determined upon the pleadings or the proofs. 'It shall be lawful for the county court of any county in the State to subscribe to the capital stock of said company.' Acts of Mo., 1859, 1860, p. 434, sect. 14. This is not a self-executing power. It is an authority to the county, and, until affirmatively acted upon, possesses no more force than if it did not exist. The defendant in its answer denies that this authority was exercised by the county at the dates mentioned, or at any time. We think the plaintiff erred in demurring to the answer and thus admitting that the county court had never exercised its power. Smith v. Sac County, 11 Wall. 139.

The plaintiff's case is not aided by the allegation that he is a holder for value of the coupons. A holder for value is not affected by any irregularities or frauds or unfounded assumption of authority on the part of the agents of the town or county. But ood faith is unavailing where there is an entire want of authority in those who profess to act. If A. forge the name of B. to a promissory note, or without any authority A. sign a note as his agent, and there be no ratification, no amount of good faith in the holder will enable him to recover upon it. Good faith to the person who does not authorize the use of his name requires that he should be protected against a holder who pays his money for a forged or unauthorized note.

And again, the answer expressly denies that the plaintiff is a holder for value of the coupons. The language is, that it 'denies that plaintiff was at the institution of this action, or now is, the owner for value of any of the bonds or coupons in said petition declared on.' Instead of meeting this allegation by an issue of fact, the plaintiff by demurring admits its truth; and we do not see how, upon the pleadings, he can be deemed a holder for value. There are other questions in the case, on which we do not think it necessary to pass.

The judgment must be reversed, and the cause remanded to the Circuit Court with directions to enter judgment upon the demurrer for the defendant below, unless the plaintiff below shall withdraw his demurrer and proceed to trial, within such time and upon such terms as the Circuit Court may direct; and it is

So ordered.


text: Talk:County of Dallas v. Mackenzie/Opinion of the Court


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Gunn v. Plant

APPEAL from the Circuit Court of the United States for the Southern District of Georgia.

This is a bill in equity, filed Jan. 12, 1872, by I. C. Plant & Son, against Joseph E. Murray, trustee in bankruptcy of James H. Woolfolk, bankrupt, and Daniel F. Gunn, guardian, to restrain Murray, the trustee, from applying money in his hands arising from the sale of certain lands of the bankrupt to the payment of a judgment in favor of Gunn, and asking that a debt in their favor, secured by a mortgage upon the lands sold, and for which they had obtained a decree of foreclosure and sale at the October Term, 1869, of the Jones County Superior Court, be paid in preference. The bill also asks, that, if the judgment of Gunn is found to be valid, and a lien upon the property superior to their mortgage, he may be compelled to exhaust other lands bound for the payment of the judgment before resorting to the fund.

The bill, after stating the mortgage to the complainants, bearing date Dec. 7, 1868, and the sale of the property by the trustee, proceeds as follows:--

'And your orators state that the said Daniel F. Gunn, guardian, claims that the moneys. . . should be applied toward the payment of a judgment obtained by him at the November Term, 1866, of the Superior Court of Bibb County, in said State, for the principal sum of $11,212.38, against Thomas J. Woolfolk and James H. Woolfolk, as principals, and John W. Woolfolk, as surety. Your orators further state that said judgment in favor of said Gunn, guardian, was entered on what purports to be a verdict rendered by a jury at the term of the court at which said judgment was entered as aforesaid, but which alleged verdict was not entered on the minutes of that court at the said term, as your orators are advised and believe; nor was the same entered on the minutes of the court at all until the April Term, 1871, of said court, when it was ordered to be entered, nunc pro tunc, on the minutes thereof, to which order a bill of exceptions was filed, and is now pending in the Supreme Court of the State.'

And among the interrogatories which the defendants were required to answer was one as follows:--

'Whether the judgment of said Gunn, guardian as aforesaid, was not entered on what purports to be a verdict which was not entered on the minutes of the court until the April Term, 1871, thereof, and whether a bill of exceptions is not now pending for allowing it to be then entered on the minutes.'

The answer of Gunn states that, 'at the November Term, 1866, a verdict was regularly rendered, by a jury empanelled and sworn in the case o the original declaration filed therein, and signed by the foreman of the jury, in favor of said Gunn, guardian, against said defendants as aforesaid, for the sum aforesaid, and which verdict was regularly returned into court, and filed in the clerk's office at said term, and entered upon the judge's docket, in the handwriting of the then presiding judge, and, at the same term, a judgment was regularly entered on said verdict; but, afterwards, by omission of the clerk, respondent admits the same was not entered on the minutes of the court, and respondent avers the validity of the verdict was perfect; and respondent admits that, at a subsequent term, to wit, the April Term, 1871, said omission having been discovered, the presiding judge, on motion, ordered said verdict to be entered on the minutes nunc pro tunc, and which was accordingly done.'

And again, in answer to the interrogatory, he admitted that the judgment 'was entered on a verdict, which verdict was not entered on the minutes of the court until the April Term, 1871, thereof.'

Murray, in his answer, says the facts in relation to the judgment are correctly stated in the bill.

The 'transcript of the record from Bibb Superior Court' shows a judgment at the November Term, 1866, as follows:--

'Principal, $11,212 38/100; interest to

'Whereupon, it is considered by the court that the plaintiff do recover of defendants, Thomas J. Woolfolk, James H. Woolfolk, and John W. Woolfolk, the sum of eleven thousand two hundred and twelve (11,212) dollars and thirty-eight cents, for principal debt, and _____ dollars and _____ cents, for interest to _____, and the sum of _____ dollars and _____ cents, for costs in this behalf expended, and the defendant be in mercy.

'Judgment signed this twenty-first day of November, 1866.

'N. H. BASS, Plaintiff's Attorney.'

Upon this judgment an execution was issued, Nov. 28, 1866, upon which are indorsed payments, Dec. 7, 1868, $600; Jan. 20, 1869, $2,200; Feb. 1, 1869, $2,400; Fed. 15, 1869, $1,500.

At the April Term, 1877, the following entries appear upon the minutes:--

'DANIEL F. GUNN

v.

THOS. J. WOOLFOLK, JAMES H. WOOLFOLK, JOHN W. WOOLFOLK, Security.

Complaint in Bibb Superior Court, May Term, 1866, and verdict to November Term, 1866.

'It appearing to the court that the plaintiff failed to enter his judgment for the interest, as contemplated by the verdict, it is, therefore, ordered, upon motion of plaintiff's counsel, that plaintiff have leave to amend said judgment, so far as the interest is concerned, nunc pro tunc.

'JEMISON & NISBET, Plaintiff's Attorneys.'

'DANIEL F. GUNN

v.

THOS. J. WOOLFOLK, JAMES H. WOOLFOLK, JOHN W. WOOLFOLK, Security.}

Complaint in Bibb Superior Court, May Term, 1866, and verdict to November Term, 1866.

'It appearing to the court, from the entry upon the benchdocket, and from the original papers of file in the above-stated case, that a verdict was rendered by the jury at the November Term, 1866, of this court, and that the clerk of this court failed to enter said verdict upon the minutes of the court, upon motion of counsel for plaintiff, it is ordered that said verdict be entered nunc pro tunc.

'HUNTER, JEMISON, & NISBET, 'Plaintiff's Attorneys.'

May 1, 1871, the defendants in the judgment moved the court to set aside the ''fi. fa., 'and the judgment on which it claims to be founded, because the same, or either of the same, is not founded on any legal verdict, or other legal authority, because said fi. fa.'' and judgment are without legal authority, and cannot be found on the minutes of the court.' In support of this motion, they filed a paper, in which they stated 'that no verdict was ever rendered in the cause, and deny that the entry on the declaration in said case of what purported to be a verdict was in fact the verdict of any jury duly rendered in said case.' These objections were overruled, and the following entry then made on the minutes:

'Whereupon, it is considered by the court that plaintiff do recover of the defendants, T. J. Woolfolk, J. H. Woolfolk, and J. W. Woolfolk, security, in addition to the sum of $11,212 principal, interest on said sum of $11,212.38, from the fourteenth day of April, eighteen hundred and sixty (A.D. 1860), until paid. This judgment for interest to take effect now for then.

'JEMISON & NISBET, Plaintiff's Attorneys.'

After the filing of the bill in this case, the Supreme Court, March 12, 1872, entered the following judgment upon the bill of exceptions:--

'THOMAS J. WOOLFOLK et al., Plaintiffs in Error,

v.

DANIEL F. GUNN, Defendant in Error.

'This case came before the court upon a transcript of the record from the Superior Court of Bibb County, and, after argument had, it is considered and adjudged by the court that the judgment of the court below be affirmed, provided that the defendant in error shall, upon entering the remitter in his case upon the minutes of the Superior Court, as the judgment thereof, file thereon an agreement that nothing in the judgment allowing these amendments shall interfere with the rights of the security hereafter to plead any release or discharge of himself which the law may impose, growing out of any damages coming to him from the failure of the plaintiff in the suit to have his verdict entered at the proper time.'

Pursuant to this order, Gunn filed the required agreement, and judgment was entered upon the minutes of the Superior Court accordingly.

The Circuit Court having given a decree directing the payment of the mortgage of Plant & Son, in preference to the judgment in favor of Gunn, and ordering that the balance of the fund in the hands of the trustee be distributed by the court in bankruptcy according to the legal priorities of the creditors, Gunn brought the case here by appeal.

Mr. Thomas M. Norwood for the appellant.

Mr. Clifford Anderson, contra.

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

title: Gunn v. Plant


text: Talk:Gunn v. Plant

title: Talk:Gunn v. Plant


text:
Gunn v. Plant/Opinion of the Court

The facts in this case, as they are presented to us by the pleadings and proof, are as follows:--

In the suit of Gunn v. Woolfolks, a verdict was rendered in due form by a jury, but, through the omission of the clerk, it was not spread upon the minutes of the court. Notwithstanding this, however, a judgment was regularly entered. That is expressly stated in the bill, and shown by the transcript of the record of the Superior Court. Such a judgment was also recognized by the court as actually existing in due form, when, at the subsequent term, an entry of the verdict upon the minutes, nunc pro tunc, was allowed, and a judgment given for the interest. The statement in the answer of Gunn, that 'at the same term a judgment was regularly entered upon the verdict,' but admitting 'that afterwards, by omission of the clerk, the same was not entered on the minutes,' while, taken by itself, perhaps implying that the judgment was not entered, was evidently intended to apply only to the verdict; for it is expressly averred that the judgment was regularly entered upon the verdict, and that the only omission complained of was supplied by the subsequent record of the verdict. This, too, is in accordance with the theory of the bill, which is, that, at the time the mortgage was executed to the complainants, the judgment was not a lien, for want of a verdict appearing on the minutes to support it. The learned circuit judge, who decided the case below, says in his opinion that 'the only evidence of any verdict or judgment. . . is in the verdict of the jury indorsed on the declaration, and a judgment for the principal sum due, also written upon the back of the declaration by the plaintiff's attorney, and signed by him;' but there is no such evidence before us. Here the record shows a judgment duly entered, with nothing to indicate that it was only a 'memorandum of counsel.' Our decision must be upon the case as it comes to us, and not upon what it may have been b low.

No question is raised as to the right of Gunn to assert his lien for the interest on his debt, under the amendment to the judgment as entered in April, 1871, because the amount of money in the hands of the trustee is not enough to discharge the balance of principal due. When the second entry was made, the original judgment was not set aside, or amended even, but a new judgment was entered for the interest.

Upon this state of facts, the question presented for our determination is, whether a judgment otherwise duly entered is void, if the verdict on which it was rendered had not been recorded in the minutes; for, if voidable only, it is good until reversed by a direct proceeding for that purpose, and cannot be impeached collaterally.

It is very clear that a decision of a court is not technically a judgment, until in some form it has been entered of record. If entered in the course of judicial proceedings, of which the court has jurisdiction, it is binding until reversed or set aside, no matter how irregular it may be as to matters of form. Cooper v. Reynolds, 10 Wall. 316. In this case a judgment was entered in due form. As a judgment, it was complete. There had been a verdict, and that appeared among the files in the cause. It was within the power of the court, therefore, to enter the judgment. The only defect in the proceedings is an omission to properly record the verdict. That seems to us an irregularity only. The court had jurisdiction of the cause and of the parties, and in due course of proceeding had the power to enter the judgment, and did so. This the record shows. A person interested in the question would, upon application at the clerk's office, have found a judgment recorded in the proper place. In the form it was entered, it was a lien upon the lands of the defendant. This was the essential fact. It matters not that the record also disclosed an irregularity, for which, unless it could be cured, the judgment as recorded might, upon proper application, be set aside; for, until set aside, it continued in force as a subsisting lien.

In this particular the case is different from that of Administrators of Liger v. Rogers, 12 Ga. 289. There the judgment as entered did not create the lien. The amendment subsequently made was necessary to give it that effect, and between the date of the original entry and the amendment a purchaser without notice had intervened. Here the lien is complete if the judgment stands. The only question is whether it can stand. The amendment to the record is not to give the judgment additional effect, but to sustain the effect it already has. Finding it recorded, a purchaser would be put upon inquiry for the verdict, and such an inquiry would have discovered it on the files. True, it should have been entered on the minutes. That was the duty of the clerk, and, if he fails in this, 'the court may at any time have the misprision corrected.' Pearce v. Bruce, 38 id. 451.

We think, too, the case is distinguishable from that of Lea v. Yates, 40 id. 56. There, in a suit pending, 'the counsel for the defendant made the following confession, which was entered on the minutes as made: 'We confess judgment to the plaintiff for the sum of $_____, with interest and costs, reserving the right of appeal.' Upon this confession, the counsel for the plaintiff entered up judgment for $224.58 principal, and $4.71 of interest.' At a subsequent term of the court an order was passed filling the blank in the confession to correspond with the judgment; but in the mean time the judgment debtor had sold the lands which were the subject-matter of the controversy, and the question was, whether the lien of the judgment took effect as against this purchaser at the date of the original entry, or not until the amendment was made. The court held that it did not take effect until the amendment, and in the opinion uses this language: 'Till this amendment was made, we think this judgment had no validity. It rested upon neither the verdict f a jury nor a confession by the defendants for any thing but costs of suit. The amount of principal for which it was rendered had never been agreed upon by the parties; and, as there was no definite sum of principal, there could be no calculation of interest.' In that case there was no authority for the judgment, and the record disclosed that fact. Here there was in the files of the cause the evidence of complete authority to render the judgment for all that was given and more. There is no necessity for supplying any defect in the authority as it actually existed. All that is required is to correct a 'misprision' of the clerk, and record the verdict as it appeared in the files. It was in writing and signed by the foreman, in accordance with the practice in Georgia. The subsequent entry of the judgment is complete evidence of its acceptance by the court. The case of Dornick v. Reichenback, 10 S. & R. 90, is not an authority against this position; for in Pennsylvania the practice is, as appears in that case, not to take verdicts in writing, but to receive them 'from the lips of the foreman, and record them in the usual way.' In Georgia, however, they are delivered in writing, and kept with the files. In this way the evidence of what the verdict actually was can be preserved without an entry on the minutes.

We think, therefore, that, upon the case as it is presented to us, the court erred in deciding that the lien of the mortgage to the complainants was superior to that of the judgment of Gunn. In our opinion the judgment was valid, and a lien upon the property from the time of its rendition at the November Term, 1866.

The Circuit Court did not pass upon the other branch of the case; and, as the facts appearing in the record are not sufficient to enable us to decree affirmative relief in this particular, the decree of the Circuit Court will be reversed, and the cause remanded, with instructions to proceed in accordance with this opinion, as equity and justice may seem to require; and it is

So ordered.

title: Gunn v. Plant/Opinion of the Court


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Goddard v. Ordway (94 U.S. 672)

APPEAL from the Supreme Court of the District of Columbia.

On motion for a writ of supersedeas.

Mr. E. L. Stanton in support of the motion.

Mr. R. T. Merrick and Mr. George F. Appleby, contra.

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

title: Goddard v. Ordway (94 U.S. 672)


text: Talk:Goddard v. Ordway (94 U.S. 672)

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Goddard v. Ordway (94 U.S. 672)/Opinion of the Court

This was a suit in equity prosecuted by the appellant to subject to the payment of a debt a portion of the profits, as they accrued to the defendant in the performance of a contract between himself and the United States. In the progress of the cause in the court below a receiver was appointed to collect from the United States a part of the moneys payable to the defendant under his contract, as they fell due, and retain them to await the result of the suit. Upon the final hearing below the bill was dismissed, and from that decree this appeal, which operates as a supersedeas, was taken. When the supersedeas was perfected, the receiver had in his hands about $25,000, invested in United States bonds, which he had collected under the order of the court and held subject to its disposal. The appellant fearing, as he alleges, that an order is about to be made, directing the receiver to pay the money in his hands to the defendant, notwithstanding the appeal, asks the interference of this court for his protection.

A supersedeas upon the appeal of a suit in equity operates to stay the execution of the decree appealed from. When this appeal was taken, the only execution there could be of the decree below was the collection of the cost and the delivery to the defendant of the fund in court, which is the subject-matter of the litigation. To that end, a further order of the court was asked; but such an order would be in aid of the execution of the decree which has been stayed, and consequently beyond the power of the court to make until the appeal is disposed of. While the court below may make the necessar orders to preserve the fund, and direct its receiver to that extent, it cannot place the money beyond the control of any decree that may be made here, for that would be to defeat our jurisdiction.

A supersedeas is not obtained by virtue of any process issued by this court, but it follows as a matter of law from a compliance by the appellant with the provisions of the act of Congress in that behalf. We are not required, therefore, to issue any writ to perfect the right of a party to that which the law has given him; but if the court below is proceeding, through mistake or otherwise, to execute its judgment or decree notwithstanding the supersedeas, we may, under sect. 716, Rev. Stat., issue an appropriate writ to restrain that action, for it would be 'a writ necessary for the exercise of our jurisdiction.' The precise form of the writ to be issued, or relief to be granted, must necessarily depend upon the particular circumstances of any case that may arise. In this case, a rule has been already entered and served upon the court below and its receiver, restraining them from paying over any portion of the fund to the defendant until the further order of this court. That rule is now in force, and we suppose no further writ will be necessary to give it effect.

Motion denied.


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Casey v. Galli

THIS was an action at law, brought in this court by the receiver of the New Orleans National Banking Association, to enforce the individual liability of the defendant as a stockholder of that institution.

The defendant is a subject of the Kingdom of Italy, and its vice-consul at the city of Philadelphia.

By agreement, and in order to to present for the consideration of the court several of the grounds of defence, the defendant filed a demurrer to the declaration, and also pleas in abatement, without reference to the order of pleading them, and subject to the future direction of the court in disposing of them. The plaintiff joined in demurrer to the declaration, and demurred to the pleas in abatement, and the defendant joined in demurrer.

The questions thus presented by defendant's demurrer are,--

1. Whether the proceeding to enforce the liability of the defendant should not be in equity and not at law.

2. Whether to sustain the action at law it is sufficient to aver the necessity of enforcing the liability, and that such necessity has been declared by the comptroller of the currency without stating facts from which the court can determine the necessity.

3. Whether the order by the comptroller to collect from each stockholder the entire amount for which he is liable, is conclusive upon the defendant, without the allegation of any facts showing the amount which he is liable to contribute.

The questions raised by the plea in abatement are,--

4. Whether a majority of the directors, with the authority of the owners of two-thirds of the stock of a State bank, can change its organization into that of a national banking association without any authority given by the State law in its charter or otherwise to make the change.

5. Whether the certificate of the comptroller is conclusive as to the organization and existence of the association.

The pleadings are set out in the opinion of the court.

Mr. J. D. McPherson for the defendant.

1. The State corporation never became a national bank, notwithstanding the assent of the owners of two-thirds of the stock. No number less than the whole could accept a charter from the United States, nor even then without an enabling act. Green's Brice on Ultra Vires, p. 539, note, and cases cited; Head v. Providence Insurance Co., 2 Cranch, 127, 166; Manufacturers' and Merchants' Bank v. Commonwealth, 72 Penn. 70. See Enabling Acts of Massachusetts, New York, Pennsylvania, Vermont, and other States.

2. The remedy of the plaintiff is in equity. As shareholders 'are only conditionally liable for those debts after all the ordina y resources of the bank have been exhausted,' Bank v. Kennedy, 17 Wall. 19, 22, and as the assets here have not been exhausted, an account must be taken of debts and assets in order to ascertain the deficiency; and as for such deficiency the shareholders are only 'equally and ratably' liable, the ascertainment of the proportion calls for the exercise of equity powers. Pollard v. Bailey, 20 id. 520.

3. The declaration only avers that the comptroller has determined that shareholders must pay the par value of their stock to pay he debts of the bank. The special plea avers that among the debts so intended to be paid by the comptroller are certain disputed claims, which are not debts of the bank.

Congress cannot withdraw from judicial cognizance any matter which, from its nature, is the subject of a suit either at law, in equity, or in admiralty. Murray's Lessee v. Hoboken Co., 18 How. 284.

Whether the claim be a valid demand against the shareholder is in its nature a judicial question, The Empire Bank, 18 N. Y. 199, and must be open to contest by the shareholder in a suit to enforce his liability. Id.; Slee v. Bloom, 20 Johns. (N. Y.) 669. Any amount exacted from him in this suit can never be reclaimed, but must go to the creditor. It is not assets of the bank. Dutcher v. National Marine Bank, 12 Blatchf. 435.

Mr. Charles Case, contra.

MR. JUSTICE SWAYNE delivered the opinion of the court.

title: Casey v. Galli


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Casey v. Galli/Opinion of the Court

The declaration avers as follows: On and before the third day of June, 1864, the Bank of New Orleans was a banking corporation organized under the laws of the State of Louisiana, and as such carried on the business of banking until about the first day of July, 1871, when the bank, by due proceedings under the act of Congress, entitled 'An Act to provide a national currency, secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof,' approved June 3, 1864, became a national banking association under said act of Congress, and as such took the name and style of the 'New Orleans National Banking Association,' and carried on the business of banking until the fourth day of October, 1873, when it failed and suspended payment.

Thereupon, the comptroller of the currency, after due proceedings had, appointed a receiver for the association, and it was put in liquidation under the act of Congress before mentioned and the acts amending it, and the plaintiff is such receiver, being lawfully appointed under the said act. By the conversion of the Bank of New Orleans into such banking association every holder of the shares of the capital stock of said Bank of New Orleans became a shareholder of the capital stock of said New Orleans Banking Association to the amount of his shares, and as such subject to the liabilities imposed by said act of Congress on such shareholders. There is owing by the association to its creditors large sums of money. Its assets are insufficient to pay its debts. It has become necessary, in order to pay the debts, to enforce the liability of the shareholders. The comptroller has decided that this shall be done. On the seventh day of June, 1875, by his order in writing, he required the plaintiff, as such receiver, to enforce such liability against each stockholder to the amount of the par value of his stock held at the time of the failure of the association. The capital stock of the association was $600,000, divided into twenty thousand shares of the par value of $30 each.

The defendant is an alien, a subject of the kingdom of Italy, and vice-consul, &c. At the date of the failure of the association he was the owner of fifty shares of the capital stock of the par value of $30 for each share. By reason thereof he is liable to pay the sum of $1,500. He has been specially requested to pay that sum, and has refused to do so. The plaintiff is, therefore, entitled by force of the statute to recover the said sum of $1,500, with interest at the rate of five per cent p r annum.

It was agreed by the parties that demurrers, pleas, replications, and other pleadings might be filed without reference to the order in which they were properly pleadable.

The defendant demurred to the declaration, and assigned the following causes:--

1. That the defendant is bound to contribute ratably, and that the proper amount can be ascertained only in equity.

2. That the defendant is bound to contribute ratably to pay a large sum; that this sum is not stated in the declaration, and hence what would be ratable and proper does not appear.

3. That the obligation of the defendant is to pay into the hands of the comptroller of the currency a ratable portion of the debts of the association proved before him, and that the declaration does not show that any debts had been so proved.

4. That the declaration demands a larger sum than the defendant is required by the statute to pay, and also an additional sum by way of interest.

In regard to the first three of these objections, it is sufficient to say that Kennedy v. Gibson and Others, 8 Wall. 498, is conclusive against them. It is there said that the amount to be paid rests in the judgment and discretion of the comptroller; that his determination cannot be controverted by the stockholders in suits against them; and that, when the order is to collect the full amount of the par of the stock, the suit must be at law. It is unnecessary to reproduce the reasoning of the court in support of these propositions. The sum to be paid being liquidated, and due and payable when the comptroller's order was made, it follows that the amount bears interest from the date of the order. Otherwise there would be no motive to pay promptly, and no equality between those who should pay then and those who should pay at the end of a protracted litigation. The defendant filed three pleas in abatement:--

1. Nul tiel corporation.

2. That there was not then, nor when the plaintiff was appointed such supposed receiver of said New Orleans Banking Association, nor before nor since that time, any such corporation in existence, because the Bank of New Orleans had no power by its charter, nor authority otherwise from the State of Louisiana, to change its organization to that of a national banking association under the laws of the United States; wherefore it was prayed that the declaration be quashed.

3. That there was not then, nor when the plaintiff was appointed such supposed receiver of the New Orleans Banking Association, nor before nor since that time, any such corporation in existence, because the owners of two-thirds of the capital stock of the Bank of New Orleans did not authorize the bank to be converted into a national banking association under the laws of the United States, nor to accept an organization certificate as such banking association; wherefore it was prayed that the declaration be quashed.

The plaintiff filed a joint demurrer to all these pleas. At the argument the first plea was abandoned. The other two remain to be considered.

The pleas were properly framed in abatement, and not in bar. Jones v. The Bank of Tennessee, 8 B. Mon. (Ky.) 122; Woodson v. The Bank of Gallipolis, 4 id. 203.

The second plea is clearly bad. No authority from the State was necessary to enable the bank so to change its organization. The option to do that was given by the forty-fourth section of the Banking Act of Congress. 13 Stat. 112. The power there conferred was ample, and its validity cannot be doubted. The act is silent as to any assent or permission by the State. It was as competent for Congress to authorize the transmutation as to create such institutions originally.

The third plea is also bad.

The eighteenth section of the act requires the comptroller to make a careful examination in all cases of original applications, and, if he found the association was 'lawfully entitled to commence the business of banking,' he was to give a certificate to that effect; and it is declared that the association shall transact no business except such as is incidental to its organization, and necessarily preliminary, until authorized by the comptroller of the currency to commence the business of banking.' 13 Stat. 101. A like examination and certificate are required by the forty-fourth section, where an existing bank organizes under the act. That section provides 'that when the comptroller shall give to such association a certificate, under his hand and official seal, that the provisions of this act have been complied with, and that it is authorized to commence the business of banking under it, the association shall have the same powers and privileges and shall be subject to the same duties, responsibilities, and rules, in all respects, as are provided in this act for associations organized under it.' 13 Stat. 113.

The declaration avers that the association became such by due and regular proceedings under the act. The plea denies the regularity of the proceedings in the single particular that the owners of two-thirds of the capital stock of the bank did not authorize the directors of said bank to convert it into a national banking association, nor to accept an organization certificate as such banking association. According to the law of pleading, what is not denied is conceded. The giving of the comptroller's certificate is covered by the averment in the declaration, is not denied by the plea, and is, therefore, to be taken as admitted. The plea proposes to go behind the certificate, and contradict it. This cannot be done. The comptroller was clothed with jurisdiction to decide as to the completeness of the organization, and his certificate is conclusive upon the subject for all the purposes of this litigation.

It has the same effect, and for the same reason, as his determination and order with respect to the amount to be collected from each stockholder in the event of the failure of the association. No question can be raised in this collateral way as to either.

In Thacher v. The West River National Bank, 19 Mich. 196, it was held that whether there was any defect in the process of organization was a question for the comptroller to decide, and that 'his certificate of compliance with the act of Congress removes any objection which might otherwise have been made to the evidence upon which he acted.'

In this we concur.

There is another ground upon which both pleas must be held bad. Where a shareholder of a corporation is called upon to respond to a liability as such, and where a party has contracted with a corporation, and is sued upon the contract, neither is permitted to deny the existence or the legal validity of such corporation. To hold otherwise would be contrary to the plainest principles of reason and of good faith, and involve a mockery of justice. Parties must take the consequences of the position they assume. They are estopped to deny the reality of the state of things which they have made appear to exist, and upon which others have been led to rely. Sound ethics require that the apparent, in its effects and consequences, should be as if it were real, and the law properly so regards it. Eaton et al. v. Aspinwall, 19 N. Y. 119; s. c. 6 Duer (N. Y.), 176; Cooper v. Shaver et al., 41 Barb. (N. Y.) 151; Camp v. Burne, 41 Mo. 525; Danbury & N. Railroad Co. v. Wilson, 22 Conn. 435; Ellis v. Schmock & Thomas, Bing. 521; McFarlan v. ''The Triton Ins. Co., 4 Denio (N. Y.), 392; Rector & Co. v. Lovett, 1 Hall (N. Y.), 191; Topping v. Beckford, 4 Allen (Mass.), 121; Dooley v. Wolcott'', id. 407; Eppes v. Railroad Company, 35 Ala. 33; Hamtramack v. Bank of Edwardsville, 2 Mo. 169; Jones v. Cincinnati Type Foundry, 14 Ind. 88; ''Worcester Med. Ins. v. Harding'', 11 Cush. (Mass.) 285; Hughes v. Bank of Somerset, 5 Litt. (Ky.) 47; ''Tar River Nav. Co. v. Neal'', 3 Hawks (N. C.), 520.

Demurrer sustained.

At a subsequent day of the term, pursuant to leave granted, three pleas were f led. The questions arising upon demurrers to the special pleas were argued by the same counsel.

MR. JUSTICE SWAYNE delivered the opinion of the court.

Since the opinion of the court was delivered in this case, the defendant obtained leave to plead further, and has filed three pleas. They are:--

First, Nil debet, upon which the plaintiff has taken issue.

Second, That the comptroller of the currency has 'determined and decided to exact from the defendant, and from a number of stockholders of said National Banking Association less than the whole, such sums of money as would suffice to pay all the debts and liabilities of the said National Banking Association, with the intent and purpose to compel this defendant and others of said shareholders who may be solvent to contribute the entire sum necessary to pay the debts and liabilities of the said National Banking Association, without any contribution from those who are insolvent.'

It is a sufficient objection to this plea that the comptroller has ordered that each stockholder shall pay to the receiver the par of his stock. This order cannot be controverted in a suit against the stockholder. It is conclusive upon him, and makes it his duty to pay. Kennedy v. Gibson and Others, 8 Wall. 498. What may be done or intended with respect to other stockholders is immaterial in his case.

The plea is, also, manifestly bad for vagueness and uncertainty.

Third, That the comptroller has decided to pay a large amount of claims against the bank for which the bank is not responsible, and that, aside from these claims, there are means enough already in his hands to meet the liabilities of the bank.

The same objection lies to this plea as to the preceding one, and the same authority applies. If the receiver intends to violate, or shall violate, his duty in discharging the trust confided to him, the remedy must be sought in another proceeding. It cannot avail the defendant in this action.

Both demurrers are sustained.

The parties have filed a written stipulation submitting the issues raised upon the first plea to the court and waiving the intervention of a jury.

With respect to this issue, we find the proofs in the record amply sufficient to sustain the plaintiff's case.

Judgment must, therefore, be rendered against the defendant for the par of his stock, with interest, as claimed in the declaration, and costs; and it is

So ordered.

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County of Scotland v. Thomas

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

This was a suit brought upon certain coupons attached to bonds, purporting to have been issued by the county of Scotland, in the State of Missouri.

The bonds were in the words and figures following, except that each bond had a separate number:--

'$1,000.] UNITED STATES OF AMERICA. [No. 65. 'Eight-per-cent Railroad Bond.

'County of Scotland.]

[Twenty-five years.

'Know all men by these presents, that the county of Scotland, in the State of Missouri, acknowledges itself indebted to the Missouri, Iowa, and Nebraska Railway Company, a corporation existing under and by virtue of the laws of the States of Missouri and Iowa, formed by consolidation of the Alexandria and Nebraska City Railroad Company (formerly Alexandria and Bloomfield Railroad Company) of the State of Missouri, and the Iowa Southern Railway Company of the State of Iowa, in the sum of $1,000, which sum the said county hereby promises to pay to the said Missouri, Iowa, and Nebraska Railway Company, or bearer, at the Farmers' Loan and Trust Company in New York, on the thirty-first day of December, A.D. 1895, together with interest thereon from the thirty-first day of December, 1870, at the rate of eight per cent per annum, which interest shall be payable annually, in the city of New York, on the thirty-first day of December in each year, as the same shall become due, on the presentation of the coupons hereto annexed This bond being issued under and pursuant to an order of the county court of said Scotland County, for subscription to the stock of the Missouri, Iowa, and Nebraska Railway Company, as authorized by an act of the general assembly of the State of Missouri, entitled 'An Act to incorporate the Alexandria and Bloomfield Railroad Company,' approved Feb. 9, 1857.

'In testimony whereof, the said county of Scotland has executed this bond by the presiding justice of the county court of said county, under the order of said court, signing his name hereto, and the clerk of said court, under the order thereof, attesting the same, and affixing thereto the seal of said court. This done at the town of Memphis, in the county of Scotland, in the State of Missouri, this first day of September, A.D. 1870.

'WILLIAM DAWSON,

'Presiding Justice of the County Court of Scotland County, Mo.

'Attest:

{ SCOTLAND COUNTY COURT,} 'STERLING McDONOLD,

{  MISSOURI, SEAL.'     } Clerk of the County Court of Scotland County, Mo.'

To each of which bonds were annexed twenty-five interest coupons, each for the sum of $80, maturing annually for the interest thereon. These bonds were delivered, before the 21st of December, 1871, to the 'Missouri, Iowa, and Nebraska Railway Company,' with the interest coupons attached, in payment of the subscription to the capital stock of the company; and such of them as had attached to them the coupons sued on were, before the maturity of the second maturing coupons, together with all the coupons except the ones first maturing, sold for value, and transferred by delivery to the plaintiff, who is the holder and owner thereof. The plaintiff caused the coupons sued on to be presented for payment at maturity, and payment was not made.

The petition alleged, in addition to the foregoing facts, that by an act of the general assembly of Missouri, entitled 'An Act to incorporate the Alexandria and Bloomfield Railroad Company,' approved Feb. 9, 1857, the said company was incorporated, and thereafter was duly organized under said act of incorporation; that the tenth section of said act of incorporation provides as follows:--

'The said company shall in all things be subject to the same restrictions, and entitled to all the privileges, rights, and immunities which were granted to the North Missouri Railroad Company, by an act entitled 'An Act to incorporate the North Missouri Railroad Company,' approved March 3, 1851, so far as the same are applicable to the company hereby created, as fully and completely as if the same were herein re-enacted.'

The fourteenth section of the said act of March 3, 1851, contains the following provision, to wit:--

'It shall be lawful for the county court of any county, in which any part of the route of said railroad may be, to subscribe to the stock of said company (North Missouri Railroad Company), and it may invest its funds in the stock of said company, and issue the bonds of such county to raise funds to pay the stock thus subscribed, and to take proper steps to protect the interest and credit of the county.'

That a part of the route of the road of the 'Alexandria and Bloomfield Railroad Company' was within the county of Scotland, as designated in the act of incorporation.

That in pursuance of an act of the general assembly of Missouri, entitled 'An Act to amend an act entitled 'An Act to incorporate the Alexandria and Bloomfield Railroad Company, approved Feb. 9, 1857,' approved Feb. 19, 1866,' authorizing the Alexandria and Bloomfield Railroad Company to change its name, and to extend its road from Luray, in Clark County, Mo., to Nebraska City, in Nebraska Territory, the said company did change its corporate name to that of the 'Alexandria and Nebraska City Railroad Company.'The defendant demurred; but, before the demurrer was submitted, it was stipulated between the parties that the question of subscribing to the stock of the 'Missouri, Iowa, and Nebraska Railway Company' had never been submitted to a vote of the qualified vote § of Scotland County; and that, in determining the questions raised by the demurrer, the court might consider this fact as if it had been averred in the complaint.

It was further agreed that the articles of consolidation between the Iowa Southern Railway Company and the Alexandria and Nebraska City Railroad Company, entered into March 26, 1870, and the orders of the county court of Scotland County, should be taken and considered by the court, as facts admitted in determining the questions raised by the demurrer.

By those articles, it was provided that the consolidated company should bear the name of the Missouri, Iowa, and Nebraska Railway Company; that its capital stock should be $13,000,000, to be divided into one hundred and thirty thousand shares of $100 each; that the directors might increase it when necessary, upon the approveal of a majority of the stockholders; that the line of the railway should extend from the city of Alexandria, in Missouri, on the Mississippi River, to Centreville, Iowa, thence west to the Missouri River; and that the company should assume and pay all debts owing, and all contracts or agreements entered into, by either of the companies. The company was also authorized to borrow money to an amount not exceeding two-thirds of its capital stock, issue bonds, and secure their payment by mortgage on all the property of both companies.

The material parts of the act of March 2, 1869, under which the 'Alexandria and Nebraska City Railroad Company.' and the 'Iowa Southern Railway Company,' a corporation created under the laws of Iowa, entered into articles of consolidation are as follows:--

'SECTION 1. That any railroad company organized under the general or special laws of this State, whose track shall, at the line of the State, connect with the track of the railroad of any company organized under the general or special laws of any adjoining State, is hereby authorized to make and enter into any agreement with such connecting company, for the consolidation of the stock of the respective companies whose tracks shall be so connected, making one company of the two, whose stock shall be so consolidated, upon such terms and conditions and stipulations as may be mutually agreed between then, in accordance with the laws of the adjoining State in which the road is located with which connection is thus formed.'

Sect. 2 requires that the consolidation shall be approved by the holders of a majority of the stock in each of the old companies.

Sect. 3 provides, that when the terms of consolidation shall have been agreed upon, &c., 'it shall be competent for the boards of directors in each of said connecting companies to carry the same into effect, and adopt by a resolution a new corporate name for the company, which shall be formed by the consolidaton; and to call in the certificates of stock then outstanding in each company, and exchange them for stock in the new company, as may have been agreed by the terms of the consolidation; and a copy of the said consolidation agreement, and the resolutions of consolidation, and the name adopted for the new company, shall be filed with the secretary of State,' &c.

'SECT. 4. Any such consolidated company shall be subject to all the liabilities and bound by all the obligations of the company within this State which may be thus consolidated with one in the adjacent State, as fully as if such consolidation had not taken place; and shall be subject to the same duties and obligations to the State, and be entitled to the same franchises and privileges under the laws of this State, as if the consolidation had not taken place.'

The demurrer was overruled, and judgment rendered for the plaintiff; whereupon the county suded out this writ of error.

Mr. George W. McCrary and Mr. J. O. Broadhead for the plaintiff in error.

1. The plaintiff below is not an innocent purchaser of the bonds used on, without notice.

(a.) Because the defect complained of is a want of power, and not an irregular exercise of an a mitted power.

(b.) Because the acts under which the right to issue the bonds in suit is claimed is set out in the bonds themselves, and the purchaser was put upon inquiry, and had notice of all the facts.

2. The validity of the bonds can only be sustained by showing that the county was authorized by the law as it stood prior to July, 1865, when the constitutional prohibition took effect, to subscribe to the stock of the Alexandria and Bloomfield Railroad Company, and to the stock of any company that might be formed by consolidation with it.

3. Whatever might be claimed if the old company, by its charter or the law in force prior to that date, had been vested with the power to consolidate, it is clear that, in the absence of that power, the right of the county thereafter to subscribe was a right to subscribe to the original corporation, and no other. Harshman v. Bates County, 92 U.S. 569.

4. If the intent of the act of 1869 was, as claimed, to authorize a new company to be formed by consolidation of the Alexandria and Nebraska City Railroad Company, and the Iowa Southern Railway Company, and to empower Scotland County to subscribe, without a vote of the people, to the stock of this new company, then that act is so far unconstitutional and void.

5. The consolidation effected by changing the Alexandria and Bloomfield Railroad Company into the Alexandria and Nebraska City Railroad Company, and consolidating the latter with the Iowa Southern Railway Company, by which was formed the Missouri, Iowa, and Nebraska Railway Company, was a fundamental alteration of the charter of the first-named company, not provided for or contemplated by either the charter itself or the general laws of the State, as they stood when the Constitution of 1865 was adopted.

Mr. A. J. Baker and Mr. F. T. Hughes, contra.

MR. JUSTICE BRADLEY delivered the opinion of the court.

title: County of Scotland v. Thomas


text: Talk:County of Scotland v. Thomas

title: Talk:County of Scotland v. Thomas


text:
County of Scotland v. Thomas/Opinion of the Court

This action was brought by plaintiff below (the defendant in error) to recover the amount of certain interest coupons attached to certain bonds issued by order of the county court of Scotland County, Mo. (the defendant below), on behalf of the county, to pay for a subscription of stock of the Missouri, Iowa, and Nebraska Railway Company. The county contests the validity of the bonds, on the ground that the question of subscribing to the stock was never submitted to a vote of the qualified voters of the county, as required by the Constitution of the State adopted in 1865, the subscription being voted and the bonds being issued in 1870. The plaintiff answers this objection by showing that the power to make the subscription was conferred in 1857, in the charter of a company called the Alexandria and Bloomfield Railroad Company, before the Constitution was adopted, and that this company, by consolidation with other companies, formed the Missouri, Iowa, and Nebraska Railway Company, and brought to it all its own privileges and powers,-and, amongst others, that of receiving county subscriptions to its capital stock. The county replies to this argument, that however valid it may be to sustain subscriptions made to the Alexandria and Bloomfield Railroad Company itself, had that company remained distinct, as originally chartered, it cannot avail to support a subscription to the stock of a new and different company, having a much greater amount of capital stock, and a much longer and different route of railroad, running into another State. The question was raised in the court below by demurrer to the petition, and judgment was given for the plaintiff.

The clause of the Constitution on which the defendant relies is the fourteenth section of art. 11, and is as follows: 'The general assembly shall not authorize any county, city, or town to become a stockholder in, or to loan its credit to, any company, association, or corporation, unless two-thirds of the qualified voters of such county, city, or town, at a regular or special election to be held therein, shall assent thereto.' This prohibition, it will be observed, is against the legislature's authorizing municipal subscriptions or aid to private corporations: it does not purport to take away any authority already granted. It only limits the power of the legislature in granting such authority for the time to come. This has been settled by the Supreme Court of Missouri in several well-considered decisions. See The State v. Sullivan County, 51 Mo. 522; The State v. Greene County, 54 id. 540. In the former case, the court say: 'Power conferred on counties to take and subscribe stock without a submission to a vote of the people, before the Constitution went into operation, remained unaffected by that instrument.' The same view was taken by this court in the recent case of County of Callaway v. Foster, 93 U.S. 567. See also State v. Maysville & Lexington Railroad Co., 13 B. Mon. (Ky.) 1.

The specific question in the present case, therefore, is, whether the authority given to counties and towns in 1857 to subscribe to the capital stock of the Alexandria and Bloomfield Railroad Company has become extinguished by the subsequent consolidation of that company with other companies, irrespective of the constitutional provision referred to. The Constitution does not itself, as we have seen, interfere with authority given previous to its adoption.

That simple consolidation with another company does not extinguish the power of the counties to subscribe, or the privilege of the company to receive subscriptions, was decided in the case of The State v. Greene County, 54 Mo. 540. In that case, the Kansas City, Galveston, and Lake Superior Railroad Company was chartered in 1857, with power to construct a branch road from Kansas City to the southern boundary of the State; and power was given to the county courts of any county through which the road or any of its branches might run, to subscribe to the stock of the company, and issue its bonds therefor. The company afterwards changed its name, and, in 1870, consolidated with the Hannibal and St. Joseph Railroad Company; and the latter company continued the work of constructing the branch road referred to, which had been begun by the Kansas City company. The branch was built under a separate organization created by the parent company, called the Kansas City and Memphis Railroad Company, but under the control and with the aid of the parent company. The county court of Greene County, in 1870, subscribed to the capital stock of the Hannibal and St. Joseph Railroad Company, issued to aid in building and equipping the branch road, which ran through the county. The Supreme Court of Missouri decided that the subscription was valid, and that the power to subscribe, originally given, still subsisted, unaffected by the consolidation. The cases decided by this court of The Philadelphia & Wilmington Railroad Co. v. Maryland, 10 How. 376, and Tomlinson v. Branch, 15 Wall. 460, were cited and relied on, for the purpose of showing that where a consolidation is effected between two railroad companies, and nothing to the contrary is indicated, the rights and privileges, as well as the duties and liabilities, of each continue to exist as before in the hands of the new organization. It seems to us that this decision in the Greene County case governs the present case. It is true the court laid considerable strees on the fact that the branch road in that case was a distinct interest from that of the main line, and was not liable for its obligations or liabilities, and the holders of the stock in the branch road had the right to control its affairs; and this feature was not changed by the consolidation. This fact, undoubtedly, prevents the case from being an exact precedent for the present one. But the close and intimate relations which in other respects connected the branch with the main line in that case give to the decision a good deal of importance. The principles adopted were substantially the same as those involved in the present case. The facts are not ve y fully stated in the report; but it would appear from the statement of the dissenting judge, p. 557, that the stock subscribed for in that case was the stock of the Hannibal and St. Joseph Railroad Company. As such, though it may have been special stock applicable to the branch road, it made the holder a member of the parent company, entitled to vote for its directors, and no doubt in other ways connected with its fortunes.

In that case, as in this, the power to consolidate was given after the original charter was granted, and after the Constitution went into effect. But that was no regarded as affecting the power. By general laws of the State, in force when the original charter was granted, the legislature had reserved the power to alter, suspend, and repeal all charters of incorporation, and had specially reserved this power in the general railroad act. See Rev. Stat. of Mo., 1855, pp. 371, 438. It would seem clear, therefore, that alterations of the charter were admissible, and would not affect rights of the company untouched thereby, nor a power to subscribe to its stock previously existing. See County of Callaway v. Foster, 93 U.S. 567.

The power to amend thus existing, the amending acts in this case do not subvert the original purposes of the charter, but rather carry them out and perfect them. The railroad authorized by it was 'a railroad from the city of Alexandria, in the county of Clark, in the direction of Bloomfield, in the State of Iowa, to such point on the northern boundary line of the State of Missouri as shall be agreed upon by said company, and a company authorized on the part of the State of Iowa, to construct a railroad to intersect the road authorized to be constructed by the provisions of this act, at the most practicable point on said State line.' Bloomfield was a small town in Iowa, evidently not intended as the final objective point of the proposed line, which is only required to be 'in the direction of Bloomfield.' A connection with a continuous road in Iowa was the declared object of the road proposed. It was evidently the purpose to bring Alexandria, a port of Missouri on the Mississippi River, in connection with the rich region of southern and western Iowa, by means of the road then being chartered, and a road to connect therewith, running into the State of Iowa. This purpose will be most effectually attained by the construction of the continuous line contemplated by the consolidated companies. The general direction of the road is not changed. It does not pass through Bloomfield, it is true; but it does not pass it by so far as to be a substantial departure from the route originally indicated. The amending act, therefore, which authorized a consolidation with the Iowa Southern Railway Company, and thereby constituted the Missouri, Iowa, and Nebraska Railway Company, was in perfect accord with the general purpose of the original charter of the Alexandria and Bloomfield Railroad Company; and, if the other rights and privileges of the latter company passed over to the consolidated company, we do not see why the privilege in question should not do so, nor why the power given to the county to subscribe to the stock should not continue in force.

The decision of this court in the case of Harshman v. Bates County, 92 U.S. 569, is urged against this view of the case; but we do not think it applicable. In that case, the question was, whether authority given to the county court by the electors of a township to subscribe in its behalf for stock in a certain railroad company, continued to exist after the company had ceased to exist, by being absorbed in another company by consolidation? We held that it did not. The county court was regarded as being the mere agent of the township, having no discretion to act beyond the precise terms of the power given. The powers of an agent or attorney, authorized to act for another, are very different from those possessed by a person acting in his own behalf. Had the charter of the Alexandria and Bloomfield Railroad Company authorized foreign corporations to subscribe to its stock (supposing that by the general law of Missouri they had no such power), they would undoubtedly have retained that power after the consolidation; it being in their discretion to exercise it or not. But if any such foreign corporation had, before the consolidation, sent an order to a firm in St. Louis to subscribe stock for it in the original company, the firm could not have made the subscription after the consolidation, without consulting their principals. Such a material change of circumstances would have rendered the subscription an excess of the power given to them. Authority given to a person, to be exercised for his own benefit and at his own discretion, may be exercised by him under changes of circumstances that would amount to a revocation of a power given to an attorney, unless it expressly conferred discretion. A recurrence to the opinion in the Harshman case will show that this distinction underlies the reasons given for the judgment in that case. The county court of Scotland County, in the present case, acted as the representative authority of the county itself, officially invested with all the discretion necessary to be exercised under the change of circumstances brought about by the consolidation in question. For, as before remarked, the county courts, in reference to the subscription in question, represented the counties themselves, as their officially constituted authorities. This is distinctly stated by the Supreme Court of Missouri in the case of ''The Hannibal & St. Jo. Railroad Co. v. Marion County'', 36 Mo. 303. The power given to the county courts intersected by the Alexandria and Bloomfield Railroad to subscribe to its stock, was given to them as representing the counties. When they subscribed for the stock, it was the county that subscribed. It was discretionary with them whether to subscribe or not, and (within the limits imposed by the act) how much they should subscribe.

But the case has other aspects, which it is necessary to take into consideration. If we look at the subject in a broad and general view, it will be still more manifest that the power in question was intended to exist, notwithstanding the consolidation. The project of the railroad promised a great public improvement, conductive to the interests of Alexandria and the counties through which it would pass. Its construction, however, would greatly depend upon the local aid and encouragement it might receive. The interests of its projectors and of the county it was to traverse were regarded as mutual. The power of the adjacent counties and towns to subscribe to its stock, as a means of securing its construction, was desired not only by the company, but by the inhabitants. Whether the policy was a wise one or not is not now the question. It was in accordance with the public sentiment of that period. The power was sought at the hands of the legislature, and was given. It was relied on by those who subscribed their private funds to the enterprise. It was involved in the general scheme as an integral part of it, and as much contributory and necessary to its success as the prospective right to take tolls. Why it should not still attach to this portion of the road, as one of the rights and privileges belonging to it, into whose hands soever it comes, by consolidation or otherwise, it is difficult to see. The principles laid down in the case of the Philadelphia, Wilmington, & Baltimore Railroad Co. v. Maryland, 10 How. 376, and Tomlinson v. Branch, 15 Wall. 460, and recently reaffirmed in Branch v. City of Charleston, 92 U.S. 677, seem to us directly applicable. Subscription to the stock was not only a power of the county, but a privilege of the company,-being a portion of the rights and privileges which it obtained by translation from the charter of the North Missouri Railroad Company. It was expressly so held by the Supreme Court of Missouri in the case of Smith v. County of Clark, 54 Mo. 58; and the same pr nciple had been adopted in the earlier case of ''The Hannibal & St. Jo. Railroad Co. v. Marion County'', 36 id. 294, 304. The latter company was by its charter 'entitled to all the privileges, rights, and immunities which were granted to the Louisiana and Columbia Railroad Company, so far as applicable,' &c. The right to receive county subscriptions was held to be one of these privileges, rights, and immunities. The court said:--

'It was under this section that the [county] court proceeded when the stock was first taken and the notes issued. The legislature gives the company all the rights, privileges, and immunities contained therein, the same as if it had been re-enacted. The language seems broad enough, by reasonable construction, to fully sustaine the acts of the county court.' 36 id. 304.

In Smith v. County of Clark, the same views were held with regard to the charter now in question. The court say:--

'The power thus conceded to the courts or other municipal bodies may well be termed a privilege to the corporations, and we see no substantial objection to a transfer of such a privilege by simply, in general terms, embodying the section of the original act which granted it into the new law. That such was the intention of the legislature and of the railroad company is clear; and, if the word 'privilege' admits of the narrow construction claimed, the practical construction it has received in this State, as may be seen by reference to the decisions of our courts, would preclude any inquiry into the subject now. These provisions were the principal means by which this and other roads were built, and without them the charters would have been of no value.' 54 id. 67.

The power of the counties to subscribe being thus held to be a right and privilege of the company, in our opinion, passed with its other rights and privileges into the new conditions of existence which the company assumed under the consolidation.

The argument sought to be drawn from the distinction, that the company with which the consolidation was effected belonged to another State, we fail to appreciate. If the legislature of Missouri authorized it, what difference can it make whether the connecting company belongs to Missouri or to Iowa? There is no difference in principle. The Philadelphia, Wilmington, and Baltimore Railroad Company, in its consolidated form, combined the roads and charters of three different States; and yet it was held to be invested with the rights and privileges of each, as applicable to the several parts of the line. See also, to the same purport, the case of Hanna v. The Cincinnati, Fort Wayne, & Chicago Railroad Co., 20 Ind. 30.

Other points were raised on the argument, which it is unnecessary to discuss, as this was the principal one relied on, and presented the only serious difficulty in the case.

Judgment affirmed.

MR. JUSTICE MILLER dissented.

MR. JUSTICE FIELD did not sit in this case, nor take any part in the decision.


text: Talk:County of Scotland v. Thomas/Opinion of the Court


text:
Cawood Patent

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

The facts are stated in the opinion of the court.

Argued by Mr. George Gifford, Mr. John B. Niles, and Mr. George Payson, and submitted on printed argument by Mr. R. Biddle Roberts, for the appellants.

Mr. E. W. Stoughton, contra.

MR. JUSTICE STRONG delivered the opinion of the court.

title: Cawood Patent


text: Talk:Cawood Patent

title: Talk:Cawood Patent