This volume was donated to LLMC
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Northwestern University School of Law
National Reporter System. United States Séries.
THE
FEDERAL REPORTER.
VOLUME 125.
CASES ARGUED AKD DETERMINED
IN THB
CIRCUIT COURTS OF APPEALS AND CIRCUIT
AND DISTRICT COURTS OF THE
UNITED STATES.
PERMANENT EDITION.
NOVEMBER, 1903~JANUAKY, 1904.
ST. PAUL:
WEST PUBLISHING CO.
1904.
COPTHIGHT, 1904
WEST PUBLISHING COMPANY.
FEDERAL REPORTER, VOLUME 125 .
JUDGES
OF THE
UNITED STATES CIRCUIT COURTS OF APPEALS AND THE
CIRCUIT AND DISTRICT COURTS.
FIRST CIRCUIT.
Hon. OLIVER WENDELL HOLMES, Circuit Justice Washington, D. C.
Hon. LE BARON B. COLT, Circuit Judge Bristol, R. I.
Hon. WILLIAM L. PUTNAM, Circuit Judge Portland, Me.
Hon. CLARENCE HALE, District Judge, Maine Portland, Mo.
Hon. EDGAR ALDRICH, District Judge, New Ilampshire Llttleton, N. H.
Hon. FRANCIS C. LOWELL, District Judge, Massachusetts Boston, Mass.
Hon. ARTHUR L. BROWN, District Judge, Rhode Island Providence, a. L
SECOND CIRCUIT.,
Hon. RUFUS W. PECKHAM, Circuit Justice Washington, D. C.
Hon. WILLIAM J. WALLACE, Circuit Judge Albany, N. T.
Hon. E. HENRY LACOMBE, Circuit Judge New York, N. Y.
Hon WILLIAM K. TOWNSBND, Circuit Judga New Haven, Conn,
Hon. ALFRED C. COXE, Circuit Judge Utica, N. Y.
Hon. GEORGE C. HOLT, District Judge, S. D. New York New York, N. Y.
Hon. JAMES P. PLATT, District Judge, Connectlout Hartford, Conn.
Hon. GEORGE W. RAY. District Judge, N. D. New York Norwich, N. Y.
Hon. GEORGE B. ADAMS, District Judge, S. D. New York New York, N. Y.
Hon. EDWARD B. THOMAS, Dlstrl'-t Judge, B. D. New York.. ..29 Liberty St., New York.
Hon. HOYT H. WHEELER, District Judge, Vermont Brattleboro, Vt.
Hon, JOHN E. HAZBL, District Judge, W. D, New York Bultalo, N. T.
THIRD CIRCUIT.
Hon. HENRY B. BROWN, Circuit Justice Washington, D. C.
Hon. MARCL'S W. ACHESON, Circuit Judge Pittsburgh, Pa.
Hon. GEORGE M. DALLAS, Circuit Judge Phlladelphla, Pa.
Hon. GEORGE GRAY, Circuit Judge Wllmlngton, Del.
Hon. EDWARD G. BRADFORD. District Judge, Delaware Wllmlngton, Del.
Hon. ANDREW KIRKPATRICK, District Judge, New Jersey Newark, N. J.
Hon. JOHN B. McPHERSON, District Judge, E. D. Pennsylvanla Phlladelphla, Pa.
Hon. ROBERT WODROW ARCHBALD, District Judge, M. D. Pennsylvanla. .Scranton, Pa.
Hou. JOSEPH BUFFINGTON, District Judge, W. D. Pennsylvanla Pittsburgh, P».
125 F. (iii)
IV 125 FEIDBBAL BBFOBTSB.
FOURTH CIRCUIT.
Hon. MBLVILLBW. VÛl,liiB,i Circuit Lrustloe. ................ ..:...;,i...'WashIngton, D. 0.
Hon. NATHAN OOFF, Circuit Judge ...Clarksburg, W. Va.
Hon. CHARLES H. SIMONTON, Circuit Judge Charleston, S. C.
Hon. THOMAS J. MORRIS, District Judge, Maryland Baltimore, Md.
Hon. THOMAS R. PURNBLL, District JudgÇ, E. D. North Caroiliia Raleigh, N. C.
Hon. JAMES B. BOYD, District Judge, W. D. North Carolina Greensboro, N. C.
Hon. WII^LIAM H. BRAWLEY, District Judge, E. and W. D. South Car. .Charleston, S. C.
Hon. EDMUND WADDILL, Jr., District Judge, E. D. Virginia Richmond, Va.
Hon. HENRY CLAY McDOWBLL, District Judge, W. D. Virginia Lynchburg, Va.
Hon. JOHN J, JACKSON, District Judge, N. D. West Virginia ...Parkersburg, W. Va.
Hon; BskjAÎÉÏN F. KELLBH, DlBtribt Judge, si D. West Virginia. .....Branwell, W. V».
FIFTH CIRCUIT.
Hon. EDWARD D. WHITE, Circuit Justice Washington, D. C.
Hon. DON A. FARDEE, Circuit Judge Atlanta, Ga.
Hon. A. P. McCORMICK, Circùtt Judge.............. , Dallas, Tex.
Hon. DAVID D. SHELBY, Circùii Judge ........: Huntsville, Ala.
Hon. THOMAS GOODB JONES, District Judge, M. and N. D. Alabaina...Montsomcry, Ala.
Hon.' 'HARRY T. tOULMIN, District Judge, S. D. Alabama ...Mobile, Ala.
Horif CHARÏ/BS SWAYNB, District Jodge, N. D. Plorlda. Pensacola, Fia.
Hon. JAMteS W. LOCKE, District Judge, S. D. Florida.. Jacksonville, Fia.
Hon. ■Ç^tttlÀM T; NEWMAN, District Judge, N. D. Georgia ,; Atlanta, Ga.
Hon. EMORY SPBER, District Judge, S. D. Georgia... Maçon, Ga.
Hon. CHARLES PaRLANGB, District Judge, B. D. Louislana New Orléans, La.
Hori.' At^KClt BOARWAN, District Jiidgô, W. D. Loulsiana Shreveport, La.
Hon. HENRY C. NILES, District Judge, N. and S. D. Mississippi Kosciusko, Miss.
Hon. DAVID E. BRYANT, District Judge, E. D. Texas Sherman, Tex.
Hon. EDWARD R. MEEK, District Judge, N. t>.! Texas. ;.... Ft. Worth, Tex.
Hon. THOMAS S. MAXEY, Bfstrict Jiidge, W. D. tëxas.... Austin, Tex.
Hon. WALLER T. BURNS, District Judge, S. D. Texas Hou.5ton, Tex.
SIXTH CIRCUIT.
Hon. JOHN M. HARLAN, Circuit Jlisticé ...;....... .Washington, D. C.
Hou. HENRY F. SEVËRBNS, Circuit ^Judge Kalamazoo, Mlch.
Hon. HORACE H. LtJRTON, Circuit JTudge Nashvlile, Tenu.
Hon. JOHN K.'EICHARDS, Circuit Judge '. Ironton, Ohio.
Hon. ANDREW M. J. COCHRAN, District Judge, E. D. Kentucky Covington, Ky.
Hon. WALTER EVANS, District Jùdge, W. D. Kentucky Louisville, Ky.
Hon. HENRY H. SWAN, District. Judge, E. D. Mlchlgan Détroit, Mlch.
HoE. GEORGE P. WANTY, District Jùdge, W. D. Mlchlgan Grand Raplds, Mlch.
Hon. AUGUSTUS J. RICKS, District Judge, N. D. Ohio Cleveland, Ohio.
Hon. FRANCIS J. WING, District Judge, N. D. Ohio Cleveland, Ohio.
Hon. ALBERT C. THOMPSON, District Judge, S. D. Ohio Cincinnati, Ohio.
Hon. CHARLES D. CLARK, District Judge, E. and M. D. Tennessee.,.. Chattanooga, Tenn.
Hon. ELI S. HAMMOND, District Judge, W. D. Tennessee Memphls, Tenn.
SEVENTH CIRCUIT.
Hoa. WILLiii.M B. DAT, Circuit Justice , Washington, D. C.
Hon. JAMES 'G. JEI^Ï^INS, Circuit J^dge, Mllwaukee, Wls.
Hon. PETER S. ÔRÔSSCUP, Circuit JÙdgie Chicago, 111.
Hèri. FRANCIS É. BAKER, Circuit Jpdgei... Indlanapolis, Ind.
Hon. CHRISTIAN C. KOHtSAAT, District Judge, N. D. Illinois Chicago, 111.
Hon. ALBERT B. ANDERSON, District JuÔga Indlanapolis, Ind.
JXJDQES OF THE C0UET8. V
Hon. J. OTIS HUMPHRBT, District Judge, S. D. Illinois Springfleld, 111.
Hon. WILLIAM H. SEAMAN, District Judge, B. D. Wisconsln Sheboygan, Wia.
Hon. EOMANZO BUNN, District Judge, W. D. Wisconsln Madison, WU.
EIGHTH CIRCUIT.
Hon. DAVID J. BREWER, Circuit Justice Washington, D. C.
Hon. WALTBR H. SANBORN, Circuit Judge St. Paul, Minn.
Hon. AMOS M. THAYBR, Circuit Judge St. Louis, Mo.
Hon. WILLIS VAN DBVANTER, Circuit Judge Cheyenne, Wyo.
Hon. WILLIAM C. HOOK, Circuit Judge Leavenworth, Kan.
Hon. JACOB TRIEBER, District Judge, B. D. Arliaiisas Little Rock, Ark.
Hon. JOHN H. ROGBRS, District Judge, W. D. Arkansas Ft. Smith, Ark.
Hon. MOSES HALLETT, District Judge, Colorado Denver, Colo.
Hon. SMITH McPHERSON, District Judge, S. D. lowa Red Oak, lowa.
Hon. JOHN C. POLLOCK, District Judge, Kansas Topeka, Kan.
Hon. WM. LOCHREN, District Judge Minncapclis, Minn.
Hon. PAGE MORRIS, District Judge Duluth, Minn.
Hon. ELMBR B. ADA.MS, District Judge, B. D. Missouri St. Louis, .Mo,
Hon. JOHN F. PHILIPS, District Judge, W. D. Missouri Kansas City, Mo.
Hon. W. H. MUNGER, District Judge, Nebraska Omaha, Neb.
Hon. CHARLES F. AMIDON, District Judge, North Dakota Fargo, N. D.
Hon. JOHN B. CARLAND, District Judge, South Dakota Sioux Falls, S. D.
Hon. JOHN A. MARSHALL, District Judge, Utah Sait Lako City, Utah.
Hon. JOHN A. RINER, District Judge, Wyomlng Chejenne, Wyo.
NINTH CIRCUIT.
Bon. JOSEPH McKENNA, Circuit Justice Washington, D. C.
Hon. WM. W. MORROW, Circuit Judge San Francisco, Cal.
Hon. WILLIAM B. GILBERT, Circuit Judge Portiand, Or.
Hon. ERSKINB M. ROSS, Circuit Judge Los Angeles, Cal.
Hon. JOHN J. DE HAVEN, District Judge, N, D. California San Francisco, Cal.
Hon. OLIN WELLBORN, District Judge, S. D. Cailtornia Los Angeles, Cal.
Hon. HIRAM KNOWLES, District Judge, Montana Helena, Mont.
Hon. CORNELIUS H. HANFORD, District Judge, Washington Seattle, Wash.
Hon. THOMAS P. HAWLEY, District Judge, Nevada Carson City, Nev.
Hon. CHARLES B. BELLINGER, District Judge, Oregon Portiand, Or.
Hon. JAMES H. BBATTY, District Judge, Idaho Boise City, Idaho.
CASES REPORTED.
Page
Abbott, Sweetser, Pembrook & Oo. r. (C.
C. A.) 1005
Actieselskabet Barfod v. Hilton & Dodge
Lumber Co. (D. O.) 137
Adams. Heublein v. (C. C.) 782
Adelina Corvaja, The (D. C.) 423
^tna Life Ins. Co., Whitfield v. (C. O.).. 269
Alton, ïhe, Merchant Banking Co. y. (D.
C.) 258
Ah Tai, In re (D. O.) 795
Ajax Forge Oo. v. Pettibone, Mulliken &
Co. (C. C. A.) 748
A. Klipstein & Oo., Badische Anilin & Soda
Fabrik v. (C. C.) 543
Alaska Mexiean Gold Min. Co. v. Burus
(C. C. A.) 1000
Alexander v. Mason (O. O.) 830
American Alkali Co. v. Bean (C. C.) 823
American Alkali Co. v. Salom (C. C.) lOOG
American Alkili Co., Campbell v. (0. C. A.) 207
American Bell Tel. Ce, Western Union
Tel. Co. V. (C. C. A.) 342
American Circular Loom Co., McLoughlin
V. (C. C. A.) 203
American Oompressed Air Oleaning Co.,
Wisconsin Compressed Air House Clean-
ing Co. V. (C. C. A.) 761
American Cotton Co., St. Louis Cotton
Compress Co. v. (C. 0. A.) 196
American Exch. Nat. Bank, Arbogast v.
(C. O. A.) 518
American Graphophone Co., Victor Talking
Mach. Oo. V. (C. C.) 30
American Salesbook Co. v. Carter-Grume
Co. (C. 0.) 499
American Steel & Wire Co. of New Jersey
V. Ware (0. C. A.) 740
American Steel & Wire Co. of. New Jersey
V. Wolfe, four cases (C. C. A.) 740
Ames Mercantile Oo. v. Kimball S. S. Co.
(D. C.) 332
Anglo-Californian Bank v. Eudey (C. C.
A.) 1000
Annie L., The (D. C.) 430
Anniston Iron & Supply Co. v. Anniston
Rolling Mill Co. (D. C.) 974
Anniston Rolling Mill Co., Anniston Iron
& Supply Co. V. (D. C.) 974
Anvil Gold Min. Oo. v. Hoxsie (O. C. A.). . 724
A. P. OIzendam Hosiery Oo. v. Luce (C. C.
A
-.)
.1000
Arbogast v. American Exch. Nat Bank (O.
C. A.) 518
Armât Moving Picture Co. v. Edison Mfg.
Co. (O. O. A.) 939
Atchison, T. & S. F. R. Co. v. Phipps (C.
0. A.) 478
Badische Anilin & Soda Fabrik v. A. Klip-
stein & Oo. (C. O.) 543
Page
Baker, Crâne Oo. v. (0. C. A.) 1
Baldwin, United States v. (C. C.) 156
Bank of British Columbia v. Moore (C.
C. A.) 84.4
Bâtes, In re (D. C.) lOOT
Bayliss, Lassen v. (C. O. A.) 744
Beach v. Macou Grocery Oo. (C. C. A.). . . . 513
Bean, American Alkali Co. v. (0.0.) 823
Beardsley v. Lampasas (O. C. A.) 1000
Beavers, In re (D. C.) 988
Beavers, United States v. (D. C.) 778
Belgian King, The (C. 0. A.) 869
Bender, Murray v. (C. O. A.) 705
Berry, Petterson v. (0. C. A.) 902
B. F. Sturtevant Co., United States Peg-
Wood, Shank & Leather Board Co. v.
(O. C. A.) 378
B. F. Sturtevant Oo., United States Peg-
Wood, Shank & Leather Board Co. v.
(C. 0. A.) 382
Bishop. United States v. (C. C. A.) 181
Blake, Kenney v. (0. O. A.) 072
Bloom & Hamlin t. Nixon (C. C.) 977
Blue Ridge Packing Co., In re (D. 0.) 619
Bouk V. United States (C. O. A.) 599
Board of Trade of City of Chicago v. L. A.
Kinsey Co. (0. C.) 72
Board of Trade of City of Chicago, Central
Grain & Stock Exch. of Hammond v. (C.
0. A.) 4&5
Bcard of Trade of City of Chicago, Ohris-
tie Grain & Stock Co. v., two cases (O.
C. A.) 161
Board of Water Com'rs of Oity of New
Tandon v. Robbins & Potter (C. O.) 656
Boeshore, In re (G. C.) 65]
Bohl, United States v. (D. C.) 625
Bolander, Saling v. (C. C. A.) 701
Bonness, United States v. (0. O. A.) 485
Boston Dry Goods Oo., In re (C. C. A.).. 226
Boston & M. Consol. Oopper & Silver Min.
Co., Farrel v. (0. O. A.) 1002
Bottsford V. Shea (C. C, A.) lOOO
Boyce v. Continental Wire Co. (0. O. A.) . . 740
Boyce, Wolfe v. (O. C. A.) 740
Boyer v. United States Health & Accident
Ins. Co. (C. C.) 623
Bradley, Hargadine-McKittrick Dry Goods
Co. V. (C. C. A.) 1002
Braun & Pitts v. Coyne (C. 0.) 331
Brenner, Swift & Oo. v. (C. C.) 826
Bridgeport Deoxidized Bronze & Métal
Oo., Johnson v. (0. 0.) 631
Briggs V. Chicago & N. W. R. Co. (Ç. 0. A.) 745
Brill V. North Jersey St. R. Co. (C. O.).. —
125 P.
(V»)
Brown v. Crâne Co. (C. C).
Brown v. Pegram (C. C. A.) . . . .
Brown, Daugherty v. (0. O. A.).
Bryce v. Southern R. Co. (C. O.) . .
Bimel V. O'Day (C. C.)
520
34
577
1001
958
303
viii
125 FE0BKAL EEPOETEB.
î'age
Burleîgh t. Foreman (C. C. A.) 217
Burns v. Burns (D. C.) 432
Burns, Alaska Mexican Gold Min. Co. v.
(O. C. A,) ....1000
Butte & Boston Oonsol. Min. Co., Montana
Ore Purchasing Oo. v. (0. O. A.) 1003
Cable V. Bngleman (0. C. A.) 1001
Oalifornia & Oriental S. S. Co. v. Dainp-
skibsselskabet Tellus (C. C. A.) 8G9
Campbell v. American Alkili Co. (C. O. A.) 207
Campbell v. H. Hackfeld & Co. (O. C. A.) 696
Cnrgo of Steamsbip Afton, Merchant Bank-
ing Co. T. (D. C.) .....258
Carpenter, In re (D. C.) 831
Carr v. Shields (O. O.). 827
Carrau v. O'CalIigan (C. C. A.) 657
OarroU, Greenwich Ins. Co. t. (C. G.) ..... 121
Carter-Crume Co., American Salesbook Co.
V. (O. C). 499
Central Grain & Stock Bxch. of Hamiftbnd
V. Board of Trade of City of Chicago (0.
0. A.) 403
Central R. & Banking Co. of Géorgia t.
Farmers' Loan & Trust Co. of New '
York (C. C. A.) ; . . . .1001
Central Virginia Iron Co., Dillard's Adm'r
V. (O. C.) 157
Chamberlain. In re (D. C.) 629
Chesapeake & O. R. Co., Korn v. (C. C. A.) 897
Chesapeake & O. S. S. Co., Morris v. (D. C.) 62
Chicago, The (0. C. A.) 712
Chicago, Treat v. (0. G.) 044
Chicago & N. W. R. Co., Briggs v. (C. O.
A.) 745
Choctaw, O. & G. R. Co., Harp v. (O. C.
A.) 445
Ohrlstie Grain & Stock Co. v. Boaird Of
Trade of City of Chicago, two cases {0.
C. A.) 161
Circuit Court of United States for District
of Montana, United States v., two cases
(C. C. A.) lOOG
Citizens' Light & Power Oo. v. Seattle Gas
& Electric Co. (C. C. A.)..... 1001
City of Augusta, The (0. C. A.) 712
City of Birmingham, The (D. C.) ........ . 506
Oity of Portsmouth, The (D. O.) 264
Glark, United States v. (C. O.) 774
Clark, United States v. (D. C.) 92
Ooco-Oola Co., Rucker v. (O. O. A.).... ..1004
Coler V. Lami>asas (C. C. A.) 1001
Coler, Waller v. (C. C.) 821
CoUin V. Kiernan (D. C.) 423
Comsto^'k Tunnel Co., Occidental Consol.
Min. Co. V. (O. C.) 244
Conried. Wagner v. (C. 0.) 798
Consolidated Gas Co., McFarland t. {C. C.) 200
Consolidated Traction Co. v. Orawfôrdsville
(O. G.) 247
Consolidated Traction Co., Indianapolis &
N. W. Traction Co. v. (0. C.) 247
Continental Ins. Co. v. Garrett (C. O. A.) 580
Continental Tobacco Go., WhitWell v. (G.
O. A.)...................;,......;... 454
Continental Wire Oo., Boycç v. (G. G. A.). . 740
"Cornwall v. J. J. Moore & Oo. (D. Oi). . . ; 646
Oorrespondence Institute of America, Unit-
ed States V. (D. C.) 94
Oorrigan Transp. Co. v. Sanitary Dist.
(D. G.) 611
Pag«
Corvaja, The Adeiîna (D. O.) 423
Oox V. State Bank of Chicago (C. C.) . . . . 654
Coyne, Braun & Fitts v. (C. C.) 331
Orandall Wedge Co.,' George Frost Co. v.
(G C. A.) 942
Crâne Co. v. Biiker (C. C. A.) 1
Orane Co., Browu v. (C. G.) 34
Orawfôrdsville, Consolidated Traction Co.
V. (0. 0.) 247
Crissey v. Merrill (C. C. A.) 87S
Cudahy Paeking Co. v. Skoumal {C. G. A.) 470
Dalton, Moore v., two cases (C. O. A.) 1004
Dampskibsselskabet Tellus. Galifornia &
Oriental S. S. Oo. v. (G. C. A.) 869
Dampskibsselskabet Tellus, Hunter v., two
cases. (G. C. A.) 869
Daugherty v, Brown (G. C. A.) .■. lOOl
Decatur Minerai & Land Go., Taylor v. (0.
G. A.) .1005
Deccco Co. V. George E. Gilchrist Co. (O. ■
C. A.) 293
^Delmar, The (D. G.)....... 130
Delta, The (D. C.) 133
■Dêmpster Shipping Co. v. l'oiippiit (C. G.
A.) 732
Dense, Northern Pac. K. Co. v. (C. C. A.). . 1004
Détroit Fish Co. v. United States (C. C.) . . 801
Difendaffer, New York Cent. & H. R. K.
(To. V. (O. O. A.). 893
Dillard's Adm'r v. Central Virginia Iron
Co. (G. G.) 157
Dimmick y. United States (C. C. A.) 1002
Driggs, United States v. (C. C.) 520
Dunn V. Train (C. C. A.) 221
Dunson v. S. Lowman & Co. (C. G. A.). . .1005
Eastern Milling & Export Co. of New Jer-
sey V. Eastern Milling & Export Oo. of
Pennsylvania (C. C.) 143
Eastern Milling & Export Co. of Pennsyl-
vania, Eastern MilUng & Export Co. of
New Jersey v. (0. G.) 143
Eaton & Prince Oo. v. Wadsworth (C. G.).. 120
Ebner v. Heid (G. C. A.) 680
Edison Mfg. Oo., Armât Moving Picture
Co. V. (C. C. A.) 939
Edison Phonograph Oo., Lambert Co. v.
(0. G. A.) 922
Edwards v. Southern Bell Téléphone & Tel-
egraph Oo. (C. 0. A.) 1002
Rikrem v. New England Briquette Coal
Co. (D. C.) 987
Blder Dêmpster Shipping Co. v. Pouppirt
(O. 0. A.) 732
Eldredge, Schneider v. (G. C.) 638
Bleetric Smelting & Aluminum Co. v. Pitts-
burg Réduction Co. (C. C. A.) 926
Engleman, Cable v. (0; O. A.) 1001
Equitable Life Assur. Soc. of United States
V. Fowler (GO.) 88
Equitable Loan & Security Oo. v. R. L.
Moss & Co. (C. 0. A.) 609
Bîîidey, Anglo-Galifornian Bank v. (C. C.
A.) 1000
Eudora, The (G. G. A.). 1002
B. & T. Fairbanka & Oo., Standard Scales
& Supply Co. V. (G. C. A.) 4
Fairbanks & Co., Standard Scales & Sup-
ply Oo. V. (C. O. A.) 4
CASES RBPORTBD.
IZ
Page
Farmers' Loan & Trust Co. of New York,
Central R. & Banking Co. of Georgia v.
(C. O. A.) 1001
Farrel v. Boston & M. Consol. Copper &
Silver Min. Co. (C. C. A.) 1002
Farrell v. Security Mut. Life Ins. Oo. (C.
O. A.) 684
Fenno v. Primrose (O. C.) 635
Fentress, Jlonumental Sav. Ass'n of Balti-
more, Md., V. (C. O.) 812
Ferguson v. Providence Washington Ins.
Co. (D. C.) 141
Fidelity Trust Co. v. New York Finance
Co. (C. C. A.) 275
Fidelity & Casualty Co., Pepper v. (C. C.) 822
Filer, In re (D. C.) 261
Fishblate Clothing Co., In re (D. C.) 986
Flagg, Moody v. (C. C.) 810
Flint, ïhe AVallace B. (D. C.) 426
Foroman, Eurleigh v. (C. 0. A.) 217
Foster v. Preferred Accident Ins. Co. (0.
O.) 536
Foster, Rutherford v. (C. C. A.) 187
Fowler, Equitable Life Assur. Soc. of Unit-
ed States V. fC. C.) 88
Fraer v. Washington (C. C. A.) 280
Franklin Coal Co., Morss v. (D. O.) 998
Frédéric L. Grant Shoe Go., In re (D. O.) 576
Freedlev, Wilson v. (0. O.) 962
Fro-st Co. V. Crandall Wedge Co. (0. C.
A.) 942
Garrett, Continental Ina. Co. v. (C. C. A.) 589
Gar,side, Insley v. (C. C. A.) 1003
Genesta, The (D. C.) 423
George E. Gilchrist Co., Deceeo Co. v. (C.
C. A.) 293
George Frost Co. y. Crandall Wedge Co.
(C. C. A.) 912
Gilchrist Oo., Deceeo Co. v (0. C. A.) 293
Grant Shoe Co., In re (D. 'C.) 576
Graves v. Sanders (C. C. A.) 690
Gray v. New York Nat. Building & Loan
Ass'n (O. C.) 512
Greenwich Ins. Co. v. Carroll (C. C.) 121
Greist Mfg. Co. v. Parsons (C. G. A.) 116
Hackfeld & Co. v. United States (C. C. A.) 596
Hackfeld & Co., Campbell v. (C. C. A.). . 696
Hargadine-McKittrick Dry Goods Co. v.
Bradley (C. C. A.) 1002
Harley v. Home Ins. Co. (C. C.) 792
Harp V. Choctaw, 0. & G. R. Co. (C. C.
A.) 445
Harrison r. Hughes (C. C. A.) 860
Harrv B. HolUns. The (D. C.) 430
Hartford, The (D. 0.) 559
Hartford Fire Ins. Co. of Connecticut v.
Perkins (C. C.) 502
Hartford & N. Y. Transp. Co. v. Hughes
(D. C.) 981
Hatzel V. Moore (C. C.) 828
Hawkins, In re (D. C.) 633
Hay Foon, United States v. (D. C.) 627
H. D. Williams Oonperage Co. v. Scofield
(C. C. A.) 916
Hearn. O'Brien v. (O. C.) 95
Heid, Ebner v. (O. O. A.) 680
Helmrath v. United States (O. O.) 634
Henry Hnber Co. v. J. L. Mott Ironworks
(C, C. A.) 944
Pagi
Henvis, In re (C. 0.) 65S
Heryford. McCarty v. (0. C.) 41
Heuhlein v. Adams (C. C.) 7Sli
H. Hackfeld & Co. v. United States (C. C.
A.) 596
H. Hackfeld & Oo., Campbell v. (C. 0. A.) 696
Hilton & Dodge Lumber Co., Actieselska-
bet Barfod v. (D. C.) 137
Hiss Co., Pitcairn v. (C. C. A.) 110
Hollins, The Harry B. (D. C.) 430
Holmes v. Southern R. Co. (C. C.) SOI
Home Ins. Co., Harlev v. (C. C.) 792
Hoxsie, Anvil Gold Min. Co. v. (C. C. A.) 724
Huber Oo. v. J. L. Mott Ironworks (C. C.
A.) 944
Hughes, Harrison v. (0. C. A.) 860
Hughes, Hartford & N. Y. Transp. Oo. v.
(D. C.) 981
Hunter v. Dampskibsselskabet Tellus, two
cases (C. 0. A.) 869
Hyde v. Victoria Land Co. (O. C.) 970
Indianapolis & N. W. Traction Oo. v. Con-
solidated Traction Co. (C. C.) 247
Ingram, In re (C. C. A.) 913
Ingram v. Wilson (C. C. A.) 913
Insley v. Garside (C. C. A.) 1003
Insurance Cos., Thoruton v. (G. C.) 250
International Register Co. v. Reoording
Fare Register Co. (C. C.) 790
International Trust Co., Weeks v. (0. C.
A.) 370
lola Portland Cernent Co., Phillips v. (C.
C. A.) 593
James H. Parker & Co. v. Moore (C. C). . 807
James Tufft, The (C. C. A.) 1003
.Tewish Colonization Ass'n v. Solomon &
Germanski (C. C.) 994
.1. J. Moore & Go., Corn^vail v. (D. C.).. 646
J. h. Mott Ironworks, Henry ïïuber Oo.
V. (O. O. A.) 944
Johnson, In re (D. 0.) 838
Johnson v. Bridgeport Deoxidized Bronze
& Métal Co. (0. C.) 631
Johnston & Co., Washburn-Croshy Co. v.
(C. C. A.) 273
Jordan v. Philadelphia (C. C.) 825
Jorgensen v. Youug (C. C. A.) 1003
J. S. Patterson & Co., In re (D. 0.) 562
Kaiserine Maria Theresia, The (D. 0.) . . . . 145
Kane, In re (D. 0.) 984
Kelly, Muller v. (C. C. A.) 212
Kenney v. Blake (O. O. A.) 672
Kerber, In re (D. O.) 6,53
Kiernan, In re (D. C.) 423
Kiernan, Collin v. (D. 0.) 423
Kilpatrick y. Severain (O. C. A.) 1003
Kimball S. S. Co., Ames Mercantile Co. v.
(D. C.) 332
Kinsey Co., Board of Trade of City of
Chicago V. (0. 0.) 72
Klipstein & Co., Badische Anilin & Soda
Fabrik v. (C. C.) 543
Knight, In re (D. C.) 35
Korn V. Chesapeake & O. R. Co. (C. C.
A.) 897
Kurtz, In re (D. O.) 992
L., The Annie (D. 0.) 430
125 FEDKEA,^ BBPOETER.
Page
h. A. Klnsey Co., Board of Trade of Çity of
Chicago V. (C; C). . , 72
Lambert Oo. T. Edison Phonogiaph Co. (C.
O. A.) 922
Lambert Co., National Phonograph Co. v.
(C. C.) 388
Lambert Co., National Phonograph Co. v.
(O. O. A.) 922
Lampasas, Beardsley v. (C. C. A.) 1000
Lampasas, Coler v. (C. C. A.) 1001
Lane, In re (D. C). 772
Lassen v. Bayliss (O. 0. A.) 744
Lavin v. Le Fevre (O. C. A.) 693
Lawder & Sons v. Stone (O. G.) 809
Lederer, In re (B. C.) 96
Lé Fevre, Lavin v. (O. O. A.) 693
Le Vay Jn re (D, g.) 990
L. E. Waterman Co. t. Lockwood, two
cases (C. O. A.). 290
L. E. Waterman Co. v. Lockwood (0. C.
A.) 497
Lewis, In re (D. C.) ., 14i3
Linnier, United States v. (O. C.)..... 83
Lockwood, L. E. Waterman Co. t., two
cases (C. C. A.) n 290
Lockwood, L. B. Waterman Co. v. (C. C.
A.) 497
Long, National Surety Co. v. (O. O. A.). . . 887
Louisville & N. R. Oo. v. Memphis Gas-
light Co. (C. C. A.) 97
Louisville & N. E. Oo. v. Summers (0. C.
A.) 719
Lowman & Co., Dunson v. (C. O. A.) ..... . 1005
Luce, A. P. Olzendam Hosiery Co. v. (O.
0. A.) 1000
McAdam, Order of United Commercial
Travelers of America v. (C. O. A.) 358
McCabe Hanger Mfg. Co., Newhall v. (C.
C. A.) .....; 919
McCarty v. Heryford (C. C.) 46
McCulIoch V. Murphy (0. 0.) 147
McParland v. Consolidated Cas Co. (0. 0.) 260
McKiuney, Pacey v. (C. C. A.) 675
McLaren, In re (D. O.) 835
McLoughIin v. American Circular Loom
Oo. (O. C. A.) 203
Maçon Grocery Co,, Beach v. (C. C. A.) . . 513
Manhattan. The (D. C.) ; 559
Manville Covering Oo., United States Min-
erai Wool Co. v. (d C. A.) 770
Marthinson v. Winyah Lumber Co. (0. O.) 633
Marvel Co. v. Tullar Co. (C. C.) 829
Mason, Alexander v. (C. C.) 830
Mason, Talbot V. (C. C. A.) ,... 101
Memphis Gaslight Co., Louisville & N. K.
Oo. V. (C. C. A.).. 97
Menominee, The (D. 0.) 530
Merchant Banking Co. v. Cargo of Steam-
ship Afton (D. C.) '. 258
Mexican Cent. K. Co. v. Richmond (0.
0. A.) 1008
Meyer, In re (C. O. A.) 1003
Mèyer v. Pennsylvania B. Co. (D. C.) 428
Mihalovitch, Voight v. (C. C.) 78
Miller, United States v. (O. O.) 520
Milliken, Sullivan v. (O. O. A.).. 1005
Mobile, Mobile Transp. Co. v. (C. C. A.).. 1003
Mobile Trausp. Co. v. Mobile (C. 0. A.).. 1003
Montana Ore Purchasing Co. v. Butte &
Boston Consol. Min. Co. (C. O. A.) 1003
Vage
Monumental Sav. Ass'n of Baltimore, Md.,
V. Pentress (C. O.). 812
Moody V. Flagg (O. C.) 819
Moonlight, The (D. C.) 429
Moore v. Bank of British Columbia (C. C.
A.) 849
Moore v. Dalton, two cases (0. C. A.) 1004
Moore, Hatzel v. (C. C). 828
Moore, James H. Parker & Co. v. (O. 0.). . 807
Moore & Co., Cornwall v. (D. C.) 646
Morehead v. Striker (C. C.) lOOG
Morrill, Crissey v. (O. O. A.) 878
Morris, In re (D. G.) 841
Morris v. Ohesapeake & O. S. S. Co. (D.
C.) 62
Morris, United States v. (D. C.) 322
Morss V. Franklin Coal Co. (D. O.) 998
Moss & Co., Equitable Loan & Security
Co. V. (0. C. A.). 609
Mott Ironworks, lïenry Huber Co. v. (C.
C. A.) 944
Moy Quong Shing, In re (D. C.).. 641
Muller V. Kelly (G. C. A.) 212
Miirphy, McCuUoch v. (0. 0.) 147
Murray v. Bender (C. O. A.) 705
Musselcrag, The (D. C.) 786
National Folding Box & Paper Co. v. Rob-
ertson's Estate (C. 0.) 524
National Phonograph Co. v. Lambert Go.
(0. 0.) 388
National Phonograph Co. v. Lambert Co.
(0. C. A.) 922
National R. Co. of Mexico v. United States
(G. C. A.) 1004
National Surety Co. v. Long (C. C. A.) 887
Natioual Tube Co. v. Spang (C. C.) 22
Naylor, Terry v. (C. C.) 804
Nelson Valve Oo., Schmitt v. (C. C. A.) 754
New Brunswick, The (D. C.) 567
New Eugland Briquette Coal Co., Eikrem
V. (D. O.) 987
Newhall v. McOabe Hanger Mfg. Co. (0.
C. A.) 919
New Home Sewing Mach. Co., Parsons v.
(0. G.) 386
Npw York Baking Powder Co., Rumford
Chemical Works v. (C. C.) 231
New York Cent. & H. R. R. Go. v. Difen-
dafeer (G. G. A.) 893
New York Finance Go., Fidelity Trust Co.
V. (C. C. A.) 275
New York Nat. Building & Loan Ass'n,
Gray v. (C. G.) 512
New York & Cuba Mail S. S. Co. v. Unit-
ed States (D. C.) 320
Nixon, Bloom & Hamlin v. (O. C.) 977
Northern Pac. B. Co. v. Dense (C. C. A.). .1004
Northern Pac. R. Co. v. Palmer (C. C. A.)1004
Northern Pac. R. Oo., Weaver v. (C. OO • . 155
North Jersey St. R. Oo., Brill v. (C. C.).. 526
Northland, The (D. O.) 58
Noyés Bros., In re (O. O. A.) 226
Nye, Jenks & Go. v. Washburn (0. 0.).... 817
O'Brien v. Hearn (0. O.) 95
O'Oalligan, Carrau v. (C. O. A.) 657
Occidental' Consol. Min. Oo. v. Comstock
Tunnel Co. (C. O.) 244
Océan S. S. Co. v. Ross (D. C.) 506
O'Day, Bunel v. (C. O.) 303
CASES HBPORTED,
XI
Pags
Ohio Tool Co., Stanley Rule & Level Co.
V. (O. O. A.) 947
Olewine, In re (D. C.) 840
Olzendam Hosiery Oo. v. Luce (0. C. A.).. 1000
O'Xeal, Ex parte (C. C.) 967
Ong Liing, In re (C. O.) 813
Ong I/ung, In re (O. C.) 814
Order of United Commercial Travelers of
America v. McAdam (C. O. A.) 858
Oregon R. & Nav. Co. v. Shell (C. C.).... 979
Pacey v. JIcKinney (C. C. A.) 675
Palmer, Northern Pao. R. Oo. v. (C. C.
A.) 1004
Parker & Co. v. Moore (C. 0.) 807
Parramore v. Stein (C. 0.) 19
Parsons v. New Home Sewing Mach. Co.
(C. O.) 386
Parsons, Greist Mfg. Co. v. (C. C. A.) 116
Patria, The (D. C.) 425
Patterson & Ce, In re (D. C.) 562
Peacock v. United States (O. C. A.) 583
Pegram, Brown v. (C. O. A.) 577
Pennsvivania Oo., Western Union Tel. Co.
V (0. C.) 67
Pennsylvania R. Co., Meyer v. (D. C.) . . . 428
Pepper v. Fidelity & Casualty Co. (C. C.) 822
Perkins, Hartford Fire Ins. Oo. of Con-
necticut v. (C. C.) 502
Perkins & Co., Smeeth v. (0. 0. A.) 285
Peters, Union Biscuit Co. v. (C. 0. A.) . . . 601
Petterson v. Berry (C. C. A.) 902
Pettibone, Mulliken & Co., Ajax Forge Oo.
V. (O. O. AJ 748
Philadelphia, Jordan v. (C. C.) 825
Philadelphia & R. R. Co., Schauffele t.
(D. G.) 419
Philadelphia & R. R. Co., Welch v. (D, C.) 419
Philip Hiss Co., Pitcairn v. (C. C. A.) 110
Phillips V. lola Portland Oement Co. (C.
C. A.) 593
Phipps, Atchison, T. & S. F. R. Co. v. (C.
C. A.) 478
Pierce, Sullivan v. {C. C. A.) 104
Pitcairn v. Philip Hiss Co. (O. C. A.) 110
Pittsburg Réduction Co., Electric Smelting
& Aluminum Co. v. (C. C. A.) 926
Pouppirt, Elder Dempster Shipping Co. v.
(C. O. A.) 732
Preferred Accident Ins. Oo., Poster v. (C.
O.) 536
Primrose, Fenno v. (C. 0.) 635
Providence Washington Ins. Co., Ferguson
V. (D. C.) 141
Recording Fare Register Oo., International
Register Co. v. (G. 0.) 790
Richmond, Meiican Cent. R. Oo. v. (0.
C. A.) 1003
R. L. Moss & Co., Equitable Loan & Se-
curity Co. v. (0. C. A.) 609
Robbins, Sykes v. (C. O. A.) 433
Robbius & Potter, Board of Water Com'rs
of City of New London v. (0. C.) 656
Roberts, Westinghouse Electric & Mfg. Oo.
V. (O. 0.) 6
Robertson's Estate, National Folding Box
& Paper Co. v. (C. O.) 524
Rodgers, In re (C. 0. A.) 169
Ross, Océan S. S. Co. v. (D. C.) 506
Rucker v. Coco-Cola Co. (C. O. A.) 1004
Page
Rucker, Southern Bank of State of Geor-
gia V. (O. O. A.) 1005
Rumford Chemical Works v. New York
Baking Powder Co. (0. C.) 231
Runkle, In re (0. C.) 996
Rural ludependeut School Dist. of Allisou,
Salmon t. (C. 0.) 235
Rutherford v. Foster (0. 0. A.) 187
St. Louis Cotton Compres.s Co. v. American
Cotton Co. (O. C. A.) 196
Saling v. Bolander (C. G. A.) 701
Salmon v. Rural ludependent School Dist.
of Allison (C. G.) 235
Salom, American Alkali Oo. v. (C. 0.) 1006
Sanders, Graves v. (C. C. A.) 690
Sanitary Dist., Corrigan Transp. Co. v.
(D. 0.) 611
Saxlehner, Thackeray v. (C. C. A.) 911
Schauffele v. Philadelphia & R. R. Oo. (D.
O.) 419
Schmitt V. Nelson Valve Oo. (C. C. A.) 754
Schneider v. Eldredge (C. O.) 638
Scofield, H. D. Williams Cooperage Co. v.
(0. O. A.) 916
Seattle Gas & Electric Co., Citizens' Light
& Power Oo. v. (O. C. A.) 1001
Seay Bros., In re (0. G. A.) 1005
Security Mut. Life Ins. Co., Farrell v. (O.
C. A.) 684
Senator Sullivan, The (0, G. A.) 10O5
Severain, Kilpatrick v. (C. 0. A.) 1003
Severino, United States v. (C. O.) 949
Sharick, In re (C. C. A.) 1003
Shea, Bottsford v. (G. G. A.) 1000
Shell, Oregon R. & Nav. Oo. v. (0. G.)... 979
Shields, Carr v. (G. O.) 827
Shriver, lu re (D. C.) 511
Sing Lee, United States v. (D. C.) 627
Skoumal, Oudahy Packing Co. v. (C. O. A.) 470
S. Lowman & Co., Dunson v. (C. O. A.). . .1005
Smeeth v. Perkins & Go. (C. O. A.) 285
S. M. Lawder & Sons v. Stone (C. G.) 809
Snell, In re (D. G.) 154
Solomon & Germanski, Jewish Ooloniza-
tion Ass'n v. (C. G.) 994
Southern Bank of State of Georgia v.
Rucker (C. 0. A.) 1005
Southern lïell Téléphone & ïclegraph Co.,
Edwards v. (O. C. A.) 1002
Southern R. Co., Bryce v. (C. C.) 958
Southern R. Co., Holmes v. (G. C.) 301
Spang, National Tube Co, v. (C. C.) 22
Standard Scales & Supply Co. v. E. & T.
Fairbanks & Co. (C. O. A.) 4
Stanley Rule & Level Oo. v. Ohio Tool
Co. (G. G. A.) 947
State Bank of Chicago, Cox v. (C. G.) 654
Stein, Parramore v. (C. C.) 19
Stevenson, In re (C. C.) 843
Stinson, United States v. (O. 0. A.) 007
Stone, S. M. Lawder & Sons v. (C. O.) 800
Striker, Morehead v. (C. C.) 1006
Sturtevant Go., United States Peg-Wood,
Shank & Leather Board Co. v. (0. C. A.) 378
Sturtevaut Co., United States Peg-Wood,
Shank & Leather Board Co. v. (C. C. A.) 382
Sullivan v. Milliken (C. C. A.) 1005
Sullivan V. Pierce (C. C. A.). 104
Summers, Louisville & N. It. Co. v. (C. 0.
A.) 719
XIX
125 FBDBBAt REFOBTEB.
Page
Sweetser, Pembrook & Co. t. Abbott (C.
O. A.) • ...1005
Swift & Co. V. Brenner (O. G.). 826
Sykes v. Kobbins (C. C. A.).... 433
Talbot V. Mason (C. O. A.) ....*... , 101
Tallahassee, The (C. C. A.) 1005
Taylor v. Decatur Minerai & Land Co. (C.
C. A.) 1005
ïaylôr Gas Producer Co. v. Wood (C. G.
^\ ,,,,^ .,.,,.,, ,,.,,, 337
Terr V V. ' Naylor ' (C.' C.) !"!".!!'.!."!!!!!! I 804
Thackeray y. Saxlehuer (O. C. A.) 911
Tliornton v. Insurance Gos. (0, C.) 250
Three Packages of DistUled Spirits, Unit-
ed States V. (p. C.) ....... 52
Tip Top, The (D. C.) 430
Tonopah Min. Co. oi Nevada, Tonopah &
Sait Lake Min. Co. v. (0. C.)...^..... 389
Tonopah Min. Co. of Nevada, Tonopah &,
Sait Lakè Min. Co. v. (O. 0.) ...;.. 400
Tonopah Min. Co. of Nevada, Tonopah &
Sait Lake Min. Co. v. (C. C.) ....r...,, 408
Tonopah & Sait Lake Miu. Co. v. Tono-
pah Min. Co. of Nevada (C. C). , 389
Tonopah & Sait Lake Min. Co. v, Tono-
pah Min. Co. of Nevada (C. G.).... 400
Tonopah & Sait Lake Min. Co. y. Tono-
pah Min. Co. of Nevada (C. C). 408
Townley Shingle Co., Wilson v. (C. 0. A.). . 491
Train, Dunù ; v. (C. C. A.) 221
Transf er No. 0, The (D. C.) 428
Treat V. Chicago (C. C.) 644
Tufft, The James (C. C. A.) 1003
Tullar Co., Marvel Co. v. (O. 0.) 829
Union Biscuit Co. v. Peters (O. O. A.) . . . . 601
United States v. Baldwin (G. C.) 156
United States v. Beavers (D. C.) 7TS
United States V. Bishop (O. O. A.) 181
United States v. Bohl (D. O.) 62.5
United States v. Bonness (0. C. A.)...... 485
United States v. Circuit Court of United
States for District of Montana, two cases
(C. C. A.) .....i.aooe
United States v. Clark (C. G.) 774
United States v. Clark (D. C.) 92
Uiiited States v. Correspondenee Ihstitute
of America (D. C). ; 94
United States v. Driggs (C. C.) 520
United States v. Hay Foon (D. G.). 627
United States v. Linnier (C. C.) ^ 83
United States v. Miller (C. C.) 520
United States v. Morris (D. C.)....i.... 322
United States v. Severino (G. C.)......,. 949
United States v. Sing Lee (D. O.) 627
United States v. Stinson (0. G. A.) ....... . 007
United States v. Three Packages oJt Dis-
tilled Spirits (D. C.) , 52
United States v. West Virginia N. E. Co.
(G. C.) 252
United States v. Whelpley (D. C.)....... 616
United States, Boak v. (C. G. A.). ...... 590
United States, Détroit Fish Co. v. (0. C.)., 801
United States, Dimmick v. (0, C. A.).... ,1002
United States, Helmrath v. (C. ;C.)i .» . . . 634
United States, H. Hackfeld & Go. v. (0.
G. A.) 596
United States, National E. Go. of Mexico
V. (C. 0. A.) .....,,..1004
Page
United States, New York & Cuba Mail S.
S. Co. V. (D. C.) 320
United States, Peacock v. (G. C. A.) 583
United States Health & Accident Ins. Co.,
Boyer v. (C. 0.) 623
United States Minerai Wool Go. v. Man-
ville Covering Co. (C. C. A.) 770
United State Peg-Wood, Shank & Leather
Board Co. v. B. F. Sturtevant Co. (C.
G. A.) 378
United States Peg-Wood, Sbauk & Leath-
er Board Co, v. B. F. Sturtevant Co.
(G. C. A.) .•.••.■•...,•«.•.. 382
Victoria Land Oo., Hyde ;y. (C. C.) 970
Victor Talking Mach. Cô. v, American
Graphophone Go, (C. G.) 30
Voight V. Mihaloviteh (G. G.) 78
Wadsworth. Eaton & Prince Co. v. (C. G.) 120
Wagner v. Conried (G. O.) 798
Wallace B. Flint, The (D. O.) 426
Waller v. Goler (C. O,). 821
Walshe, In re (G. C.) 572
Ware, American Steel & Wire Co. of New
Jersey v. (O. C. A.). 740
Washburn, Nye, Jenks & Go. v. (G. C.) 817
Washburn-Orosby Go. v. William John-
ston & Co. (0. C. A.) 273
Washington, Fraer v. (G. C. A.) 280
Waterman Go. v. Lockwood, two cases (G.
G. A.) 290
Waterman Co. v. Locktv'ood (C. C. A.)... 497
Weaver v. Northern Pac. R. Co. (O. C.) . . . 155
Weeks v. International Trust Go. (0. C.
A.) 370
Welch V. Philadelphla & K. E. Co. (D. G.) 419
Western Union Tel. Co. v. American Bell
Tel. Co. (O. C. A.) 342
Western Union Tel. Co. v. Pennsylvania
Go. (C. G.) 67
WestinghouRe Electric & Mfg. Co. v. Eob-
erts (C. C.) 6
West Virginia N. R. Co., United States
y. (0. C.) 252
Whelpley, United States y. (D. C.) 610
Whitfield y. ^tna Life Ins. Co. (C. C.) . . . 269
Whitwell y. Continental Tobacco Co. (0. O.
A.) 454
William Johnston & Co., Washbnrn-Crosby
Co. v. (C. C. A.) 273
Williams Cooperage Co. y. Scofield (0. C.
A.) 916
Wilson y. Freedley (C. G.) 962
Wilson y. Townley Shingle Co. (C. C. A.) 491
Wilson, Ingram y. (C. O. A.) 913
Winyah Luraber Co., Marthinsou v. (O. G.) 633
Wisconsin Oompressed Air House Oleaning
Co. y. American Oompressed Air Olean-
inig Co. (O. O. A.) 761
Wolfe V. Boyce (G. C. A.) 740
Wolfe, American Steel & Wire Co. of New
Jersey v., four cases (O. G. A.) 740
Wood, Taylor Gas Producer Co. y. (G. C.
A.) 337
Worrell, In re (D. G.) 159
Young, Jorgensen v. (O. C. A.) 1003
CASES
ARGUED AND DETERMINED
m THB
UNITED STATES CIRCUIT COURTS OF APPEALS AND THE
CIRCUIT AND DISTRICT COURTS.
CRANE CO. V. BAKER.»
(Circuit Court of Appeals, Seventh Circuit April 14, 1903.)
No. 940.
1. Patents— Invention— Car-Heater.
The Baker patent, No. 472,689, for a car-heatlng apparatus, was not
anticipated, and shows patentable invention, taking into account the
history of the device since the patent issued, which shows its superiority
in opération over the old devices and its displacement o( them; aiso
Mld infringed as to claim 1.
Appeal from the Circuit Court of the United States for the North-
ern Division of the Northern District of Illinois.
Paul Synnestredt and F. W. H. Clay, for appellent.
Clifford E. Dunn, for appellee.
Before JENKINS, GROSSCUP, and BAKER, Circuit Judges.
BAKER, Circuit Judge. The claim and so much of the spécifica-
tion as relates thereto are as follows :
"In ear-heating apparatus it has heretofore been usual to provide an expan-
sion-vessel above the body of the car, into which the pipes from the heating
apparatus ascend, so that the water circulâtes through the expansion-vessel
in heating the car. There is more or less leakage in the apparatus, involving
a loss of water that has to be made up from time to tlme by filling
water into sucli expansion-vessel to keep the same at the proper height;
and a supply-cock has been used with a funnel connected by a screw-
coupllng, but when the supply-funnel is left in its position for use it is liable
to become charged with cinders and dust. In my présent improvements the
supply-funnel and the screw Connecting it to the cock are constructed in such
a manner that when the funnel is turned up into position for use the screw
is tightened. The cock is screw-threaded at one end and screwed into the
* Rehearing denled October 6, 190a.
125 F.— 1
2 125 FEDERAL REPORTER.
expansion vessel at or near the water-llne, and at the outer end of the
cock is a screw-soeket, reeeivlng the serew-threaded end of the funnel, and
the parts are constructed in sucb arDjanagr^that when the collar Is screwed
up firmly against the end of tIiéiJDœ«t/tbe funnel wlU be vertical and in
position for the réception of water for the expansion-vessel, and when the
•water bas been filled in through this funnel the attendant simply gives the
funnel a half rotation, p.a,çtlally unsçre-wing it, and the funnel hangs down-
ward, and is not liahlé to bëcoMef dettcÉed and câiinot-lJecome obstructed by
clnders or dust. ♦ * * i clalm as my Invention: (1) The combination,
vclth the expansion-vessel and the oqpkvhaving a horizontal screw-threaded
socket, of the funnel having a bend and a horizontal screw-threaded connec-
tion |q thç cock, whereby the funnel is allowed to hang down when partially
uii^rew(#*aîid, held firtoly byrths ^iîjcâibfa .when' turned Up ^ol; juSe,; substah-
tiaily as specifled.'' ,,.
.' , ' ■ t. ,■ ; ''n • :. ' ; ■ ■"■■■ ' .'
The combination of an expansion-vessel, a cock, and a funnel with
bent neck attached to the cock by a screw-threaded connection, was
old. For many years preceding 1892 the parties to this suit had been
using such a combination in filling car-heaters. From the first it was
known that the funnel, jf left.upjright, wotild, become choked with cin-
ders and the cock injured^'ând consequently the construction was such
that thejfu^jfjieltGOuld be tujriied down when not in use. This was its
usual position, as it was only in use a îew minutes at a time at long
intervais. In the old filling apparatus the connection between the fun-
nel and cock was made by means of a union nut or swivel joint, the
sleeve, interiorly thrcaded, being set IqosSely upon the shôtfldered neck
of the fijnnel, ànd drawing the beveled end of thé funnel into the cor-
respontjiflgly ground opehing in th,e cock by engagement with external
threads'on the outer end of the cock.' It is évident that the funnel
could be set at any position and held firmly by tighténing the union
nut; that when the nut is tight the funnel could probably not be
turned withoût danger of breàking tmless the nut were loosened; and
that when the nut is loose the mère turning up of the funnel from its
down position could hâve no efïect iri tighténing the joint or holding
the funnel firmly in an upright position. The testimony of witnesses
who had used the old-style ; apparatus for years shows that the brine
used in filling the heating pipes corroded the threads of the union nuts ;
that the use of a wrench was necessary to loosen them when that could
be donc at ail; and that very frequently in the atterapt the nuts or
cocks or funnels were broken.
In the new, apparatus thÇi patentée joined the funnel to the cock
by threading! the funnel exteriorly and the cock interiorly, and by
putting a shoulder upon the funnel at such a point that when the fun-
nel was turned frotn a dowhward to an upright p:ositioh the shoulder
abutted against the end of the cock, making a tight joint and friction-
ally holding the funnel in place. It is évident that by this construc-
tion a tight joint can be made aiid the funnel héld in position by friction
only when the funnel is tiipright ; that when not in use the funnel
hangs loosely in the threadç ; , and that, when the attendant cornes to
use the apparatus» he finds the funnel loose; and makes a tight joint,
and fastens the -funnel in place for use by the act simply of turning the
funnel to an upright position. The testimony of witnesses who Hâve
used the new-style device shows that there is not so muCh corrosion ;
CRANE CO. V. BAKEB. 3
that the corrosion does not interfère with the successful opération of
the new device as with the old; that a wrench is unnecessary; and
that the disadvantages besetting the old device hâve been overcome.
In the patents relied upon as anticipatory, No. 288,708, November
20, 1883, to Johnson and Buerkel, and No. 461,280, October 13, 1891,
to Searle, there is no disclosure of the means by which the funnel is
connected with the cock, much less that the connection would permit
the funnel to hang down loosely in the eock, and cause a tight joint,
and hold the funnel in place for use merely by moving the funnel to
an upright position. If there is anticipation, it is in the old device
hereinabove described. And in considering that question it is neces-
sary to bear in mind also that in the art of fitting steam or water
pipes a direct screw-threaded connection and a union nut were used as
équivalents, the sélection depending upon the particular workman's
idea of convenience or suitability at the place ; that in making a direct
screw-threaded connection the fitters were accustomed to use the el-
bow, if présent, as a means of turning up the pipe, instead of taking
a wrench; and that, if desired, the limit of turning one part upon
another could be determined by ending the threads at the proper point.
If the patentée in this case has only substituted a well-known équiva-
lent for one of the éléments in an old combination, performing the
same function, the claim cannot stand. Construed as a claim for a
combination of an expension-vessel, a cock, and a funnel with bent
neck attached to the cock by a screw-threaded connection, it is bad
because it includes the old device. But the claim, limited by the
"whereby" clause and the spécification, we think is for a combination
of the expansion-vessel, the cock having a screw-threaded socket, and
the bent-necked funnel having such a screw-threaded connection with
the cock that the funnel is allowed to hang down loosely when not in
use, and the mère act of turning it up for use necessarily or auto-
matically makes a sufficiently tight joint between the shoulder of the
funnel and the end of the cock, and frictionally holds the funnel in
place. We think that the described screw-threaded connection in this
combination is not the mère équivalent of a union nut ; that in efïect
another élément, the shoulder, has been introduced, making a différent
combination; and that the new combination produces a resuit want-
ing in the old, namely, the automatic action of the shoulder of the
funnel upon the end of the cock in making a sufficiently tight joint,
and frictionally holding the funnel at the right point and at no other.
It has not been without doubt and hésitation that we hâve found
invention in this improvement, considering the case irrespective of
the history of the device since the patent issued. But, adding to the
view that history, which shows a successful overcoming of difîi-
culties and disadvantages that were known for many years to build-
ers, repairers, and users of car-heaters, an almost universal replace-
ment of the old devices, as they wear out, by the new, and the tribute
of imitation, we hâve felt that the doubt should be resolved in favor of
upholding the patent.
The claim being valid, infringement is undoubted, as appellant uses
the very structure.
4: 125 FBDBRAIrBBFOBTH!]!.
i^ppellant urges that there was such delay on the part of appellee
and her assigner, that a court of equity should not entertain this suit.
We hâve carefully read the entire record, and find nothing in it to indi-
cate that any owner of the patent has dedicated the device to the
use of the public or estopped himself from claiming the benefit of
the grant. We think the cçurt below gave appellant the full benefit
of the delay by limiting the référence as to profits and damages to
the time since January 4, 1901, when appçllee notified appellant to
cease infringing. A question is mooted by appellee whether at the
accounjting she may go back of the date named, but we think it un-
necessary to express any opinion thereon at this time.
We find no error in the court's permitting the hearing to be re-
openejl and a stipulation and certain letters to be introduced by
appellee and made a part of the record. This was within the court's
discretiotj.
The decree is affirmed.
STANDARD SCALBS & SUPPLY CO., Ltmlted, ▼. E. & T.
FAIRBANK8 & CO.
(Circuit Court of Appeals, Thlrd Circuit September 8, 1903.)
No. 30.
1 Patents— Invention— BoALB.,
The Scharle & Hlmmes patent, No. 359,636, for a rallway track «cale,
clalm 1, discloses invention, and Is valld. Àlgo held Infrlngéd.
Appeal from the Circuit Court of the United States for the Western
District of Pennsylvania.
Wm. L. Pierce, for appellant.
James Whittemore, for appellees.
Before ACHESON and DALLAS, Circuit Judges, and KIRK-
PATRICK, District Judgç.
KIRKPATRICK, District Judge. The complainants below and
appellees hère filed their bill of complaint alleging that they held by
assignment certain letters patent of the United States issued to Nich-
olas Scharle and Jacob Himmes, and known as letters patent of the
United States No. 359,636, and charging the défendants with infringe-
ment thereof, which said bill concluded with the usual prayers. The
défendants, by thèir answer, denied the validity of the patent and the
utility of the patented devicCj and allèged prior letters patent and pub-
lications and noninfringement. It appears from the record that testi-
mony was taken as to ail of thèse défenses, and that they were con-
sidered by the learned judge below. By the decree entered in said
cause, the first claim of the patent was adjudged valid, and infringed
by the défendants' device. From this decree an appeal was taken to
STANDAKI» SOAIiES <Se SUPPLY CO. V. E. & T. FAIEBANK8 & CXJ. 5
this court, and several errors alleged to hâve been made by the learned
judge. But at the hearing in this court the appellants abandoned
the défense of noninfringement, as well as that of anticipation, and
rehed solely upon the défense of noninvention, insisting that the prier
State of the art was such that in its Hght any skilled mechanic was
capable of constructing complainants' device. In support of this con-
tention the appellants insist that the fîve-section scale of the patent in
suit is but the natural évolution of the four-section scale long before
then known to the art. The argument is if, having a four-section
scale, by taking away one section you obtain a three-section scale,
then, by adding one section to a four-section scale, you must obtain a
five-section scale. This is true as an abstract proposition, but the
means necessarily employed for shortening the four-section scale and
making a three-section scale of it do not suggest the method employed
in the patent for lengthening the scale and converting it into the five-
section scale of the patent in suit. Nor will a scale lengthened on the
same principle that it is shortened be an operative one. This appears
clearly from the testimony of the witness Sargent, when read as a
whole, upon a part of which appellants chiefly, if not entirely, rely.
It appears from the record that prior to the granting of the patent
in suit there had been manufactured by the complainants what was
known as the four-section track scale, which might be varied in length
from 24 to 22 feet ; that there was a large and growing demand for
a longer scale ; and, while the complainants had one upon the market,
it was not satisfactory, though, with the aid of experts and skilled me-
chanics, they had been endeavoring to make it so. Under thèse cir-
cumstances we are unable to conclude that the resuit so long and un-
successfully sought for was apparent, and did not need more than
mechanical skill to construct.
We concur in the conclusion of the learned judge below that claim
I of the complainants' patent in suit is valid. The decree must be
affirmed.
6 . ,. 1JJ5 FEDERAL EEP0BTÏ3B.
WESTÏNGHOUSB BLECTKIC & MFG. CO. v. EOBERTS et aL
(Oiréuit Court, B. D. Pennsylvanla. September 10, 1903.)
Nô. 47.
1. PATENTS-t-SuiT FOR INFRINGEMKNT— EVIDENCE.
A pateAtee Is not entltled to use a décision o( the patent office In inter-
férence proceedihgs in his favor, nor the évidence on which it was based,
as évidence in a subséquent suit for infrlngement of lils patent, against
a défendant who had no relation to such interférence proceedings.
a. Samb—Pbiobiïy OF Invention— DiscLOsuHE.
Where an inv«i}tor fiommunicates his ideas to one who Is thoroughly
compétent to understand and perpetuate them in case of his death, hav-
ing efCectively given his invention to the' world in thls vsrày, he Is en-
tltled to brihg forward the disclosure to maintain the asserted priority of
his invention. i:
8. SamE— PBIOKITSr— BURDBN OF PhOOF.
While the burden ofshçwlng priority is no doubt upon the inventer,
and the courts are calte^ upon to serutinize the évidence closely, they are
not required to go Oiil bf the way to discrédit it, coming from a reliable
source. '
i. Same— Date of iNVBNTïoàir-^lirFKiNGKMBNT— Blkctbical Motobs.
The invention embodled in the Tesla patents, Nos. 511,559 and 511,560,
issued December 26, 1893, on applications filed December 8, 1888, the
former covering a certaiu method, and the latter certain means of operat-
• ing electric motors by a dlvlded and déphased alternatlng current, de-
rlved from a single source, being an adaptation of what Is known as the
"spllt phase system," ftpWj under the évidence, to hâve been made prior to
April 22, 1888, the date pf the publication in an Itallan electrical journal
published at Milan of a report of à lecture by Prof. Galileo Ferraris
describing the same systein, and therefore not antlclpated by such pub-
lication. Sald patents were not antlclpated, and are valid, and entitled
to a libéral application Of the doctrine of équivalents. Claims 1 and 2
of each patent also Ueld infringed.
B. Same — Infringembnt.
A patent for an electrical mdtor may be infringed by an electrical
meter where it is the^ame in mechanical construction and princlple of
opération, being no more than an adapted motor with meter attachment.
In Equity. Suit for infringement of letters patent Nos. 511, S 59
and 511,560, for electrical transmission of power and an electrical
motor, granted to Nikola Tesla, December 26, 1893. On final hearing.
Kerr, Page & Cooper, for complainant.
Fred. J. Knaus, Seward Davis, and Charles A. Brown, for respond-
ents.
ARCHBAL,D, District Judge.* The patents in suit and those on
which they are based, or which are kindred to them, hâve been so fully
considered in previous cases, which until recently hâve also been uni-
formly in their favor, that little that is new is left to be brought for-
ward with regard to them. In an admirable opinion by Ta#isend, J.,
in Westinghouse Electric & Mfg. Company v. New Englaiid Granité
Company (C. C.) 103 Fed. 951, the fundamental patents were reviewed
and expounded, and the right of the patentée to stand as an inventor
of great merit in the use of alternating electric currents for the trans-
♦ Speclally assigned.
WE8TINGHOTJSE ELECTRIC & MFG. 00. V. ROBERTS. 7
mission of power was fully established, The alleged disclosures of
Siemens (1878), Baily (1879), Deprez (1880-84), and Bradley (1887)
were discussed, and the claims advanced for them as anticipations held
to be unfounded — conclusions whicli were affîrmed on appeal. iio
Fed. 753, 49 C. C. A. 151. Tlie essence of the invention was declared
by Judge Townsend to be "the production of a continuously rotating
or whirling field of magnetic forces for power purposes by generating
two or more displaced or differing phases of the alternating current,
transmitting such phases, with their independence preserved, to the
motor, and utilizing the displaced phases as such" therein.
The same patents oame up before Brown, J., in Westinghouse Elec-
tric & Mfg. Company v. The Royal Weaving Company (C. C.) 115
Fed. 733, and a similar resuit was reached. The Dumesnil (1884) and
the Cabanellas (1885), two French patents, which had not been
brought forward before, were particularly relied on as anticipations,
but were distinguished from those in suit in a carefully expressed and
convincing opinion. Thèse French patents, however, according to
Judge Brown, established that Tesla was not the fïrst to employ alter-
nating currents out of phase with each other for power purposes, so
that the expressions in previous cases which attributed this to him
would hâve, as he thought, to be qualified, if not recalled. But it was
at the same time pointed out that in neither the Dumesnil nor the
Cabanellas was there a résultant magnetic force, the distinctive feature
of the Tesla invention, each of the others named providing for the in-
dependent action of separate alternating currents operating on dififer-
ent ends of the motor armature, without any play of the magnetic
and electric forces in between. As it stands, the Cabanellas patent
is unintelligible to me ; but taking it as it is explained by the défend-
ants' experts and illustrated by the exhibit in évidence, of the correct-
ness of which, however, I hâve much doubt, there is nothing more,
at the best, than a mechanical combination of the two operative de-
vices, hke the opposite cranks on the same axle of a locomotive driv-
ing wheel. There is no conjoint opération, as in a Tesla motor, of
the two energizing circuits by means of a combined magnetic influence
to produce a common resuit. It is important, however, to observe
that, while in no sensé anticipations, the Dumesnil and the Cabanellas
serve to limit the invention of Tesla — if not, indeed, so limited in his
patents themselves — to a device in which a magnetic résultant of de-
phased alternating currents exists; the mère use of alternating cur-
rents out of phase with each other, made otherwise effective, being
something aside and difïferent.
The derivative patents in suit — Nos. 5il,S59 and 511,560 — ^were
first considered in the Dayton Fan & Motor Case (C. C.) 106 Fed.
724, afïirmed in 118 Fed. 562, 55 C. C. A. 390, and a décision ren-
dered in substantial accord with those which had preceded it. One
défense there, as hère, attempted to be made was that it involved no
inventive skill, when once the practicable use of alternating currents
of différent phase was established, to substitute a dephased split cur-
rent, which was a well-recognized équivalent. But it was not so held,
nor can it be hère. This question was practically put at rest in this
court by the décision of Judge McPherson in the Tesla Electric Co.
8 126 FEDERAL EBPOETBB.
V. Scott & Janney (G. C.) 97 Fed. 588, where two of the çarliest Tesla
s^tili'^ase patèhts were sustained. But aside from thajt, and upon an
eniirely independent considération of it, the same conclusion must be
reâched.
A Serious doubt as to the économie value of the. polyphasé Tesla
motôr was that it required independently generated currents, and, as
so limited, lacked commercial adaptability, the alternating current in
ordinary use, such as thaton electric light wires, being single. Ac-
cording to Mr; Brown, who was asked to become interested, he raised
this question at once ; and it was the criticism made of it by Swinburne
in the Electrician of Jiily 20, 1888, and by Richard in L,a Ljumière
Electrique, of January 19, 1889. Tesla, if he is to be believed, im-
mediately addressed himself to this problem, and it is successfuUy
solved in the patents in suit and others applied for about the same time.
It does not detract from the inventive skill involved that he appro-
priated the experiments of Oberbeck with regard to the splitting and
dephasing of alternating currents derived from a single source, nor
yet that others took up the subject independently and worked eut
similar ideas. AU who are thus brought forward— rFerraris, Shallen-
berger, Borel, Professors Anthony and Jackson — were electricians
of the highest professional training, and the fact that with study they
attained the same resuit by no means proves that the adaptation and
successful substitution of a split phase alternating current in place
of two or more independently generated was obvious to a person of
ordinary skill. It is always difficult to "décide where inventive genius
ends, and this is particularly the case in an art at best but little under-
stood. As is well said by Judge Severens in the case last cited, 118
Fed. 562, 55 ce. A. 390:
"The Bubject Is one of the most abstruse and subtle of ail the practîcal
flciences, and Its pursult tovolves the exercise of the keenest Intelligence
and most patient research that gifted men can bestow. Wè ought, there-
f ore, to be cautlous, wheu a distinct and practical improvement Is made in
80 useful an art, In dënylng to the author the reward which the law gives
to merltorlous inventora."
The patents in suit were also before Judge Lacombe in Westing-
house Electric & Mfg. Co. v. The Catskill Illuminating & Power Ce.
(C. C.) iio Fed. 377. In addition to the attack made upon them in
other cases, it was further urged that, in a paper read by Professer
Ferraris before the Royal j\cademy of Sciences of Turin, Italy, March
18, 1888, a portion of which was published on April 22d following, at
Milan, in L'Elettricita, a journal devoted to electrical subjects, not
only was there a full discjosure of the transmission of electric power
by means of alternating currents of différent phase, but also the use
for the same purpose of a dephased split current derived from a single
source, the same as in the patents in suit. Upon a due considération
of the opposing proofs, the invention of Tesla was held ta be carried
back of this publication; but, on appeal, the décision was reversed,
the évidence b|rought forward by the complainants nôt being consid-
ered sufïïciént for that purpdse — (C. C. A.) 121 Fed. 831 — a conclusion
which was foUowed by Judge Coït in a case by the same plaintiffs
against the Stanley Instrument Co. in the First Circuit, 129 Fed. 140.
WESTtNOHOUSO BUBCTSIO * KFO. OO. T. BOBEBT& 9
Thîs, and the matter of infringement, are the overshadowing ques-
tions in the présent case.
Before proceeding to a discussion of the proofs, it is necessary to
détermine what portions, if any, to which objections hâve been made,
are to be excluded. The complainants hâve brought in from the pat-
ent office the record of interférence proceedings between Tesla and
Ferraris with regard to the first of the two patents in suit, in which
the right of the former to priority was sustained. The good faith of
this contest is questioned, but, whether adversely conducted or not,
it is évident, upon the most cursory considération, that, as against the
défendants, the complainants are entitled neither to the resuit nor the
évidence by which it was obtained. The controversy was between
parties with whom the défendants are in no privity, and they cannot,
therefore, be aiïected thereby. Edward Barr Co. v. Sprinkler Co.
(C. C.) 32 Fed. 79 ; Western Electric Co. v. Williams-Abbott Electric
Co. (C. C.) 83 Fed. 842.
The défendants hâve also moved to strike out — or, as we should say,
suppress — certain dépositions taken by the complainants subséquent
to the argument on final hearing. The défendants at that argument
asked to hâve the case reopened for the purpose of taking the déposi-
tion of Frederick Darlington, which was granted, leave being given to
the complainants at the same time to take évidence in reply. The
testimony of Darlington was directed to his relations with Tesla in
the summer and fall of 1888, when the latter was experimenting in the
Westinghouse laboratory at Pittsburgh, with regard to polyphasé
motors, the purpose being to show that up to that time Tesla had not
evolved his split phase method. In answer to this the complainants
introduced the testimony of several witnesses, including Tesla himself,
a considérable portion of which, it is claimed, was not confined to a
strict reply. So far as a reply to Darlington is concerned this may be
true, but it is not of a reply generally. It ail, directly or indirectly,
bears on the issue raised by the introduction of the Ferraris publica-
tion, on which the life of the patent dépends, and is too important to
be lightly set aside. So far as Tesla was called to contradict Darling-
ton, no exception can be taken. But in going further, and examining
him with regard to the date of his invention, the complainants hâve
appropriately supplied a gap in the proofs, which was the subject of
serious criticism by the opposing counsel at the argument, and the
lack of which in the Catskill Case, according to the opinion of the
court, contributed not a little to the adverse resuit there reached. It
is to be regretted that Tesla was not cross-examined, but after Con-
sulting the record made by the examiner, and hearing what counsel
hâve to say upon the subject, I am not persuaded that a fair oppor-
tunity for it was not given. The motion to strike out, the disposition
of which was reserved until this time, must therefore be refused.
The Ferraris publication, as we hâve seen, was April 22, 1888, and
the patents in suit were not applied for until December 8th following.
To relieve from this apparent priority, the invention has therefore
to be carried back of the earlier date by compétent and convincing
évidence. Of necessity a high character of proof is required in such
cases, and that which was before the court in the Catskill Case was not
='10 £.,:.... .iij.t 125 ffBDftBlI. 'ÔBI><>BTÈBi --ri'-îv.
upon appeal considérée up to the standard, It is mote ample hère,
however, warranting a re-examination of the question. That Tesla,
early in May, 1888, had a complète grasp of the split phase idea is
: established byhis application of -May iSth for patents, numbers 511,-
915 and 555,190, which embody it, the same that were before Judge
McPhefson in the Scott & Janney Case (C. C.) 97 Fed. 588, already
alluded to. This is important évidence, which cannot be contra-
dicted, and I therefore start with it. Not only is the invention beyond
question carfied back by it to the date named, which is within 23 days
of the Eerraris publication, but from the known order of events — a
patent not being able to be worked out in a day — ground is thus
persuasively laid for an earlier date, if 'Ihef e is any fair évidence to
warrant it. In the face of it, I hardly see how we can doubt the ac-
curacy of Mr. Page's statement that Tesla disclosed to him the princi-
ples of the invention somewhere in the ist part of April of that year.
His testimony on this point is spécifie and convmcing. Iii the fall
of 1887 and spring of 1888, as he says, he was engaged in developing
in the patent office a number of Tesla's inventions, and among them
the polyphasé motors and transformers, which were patented May i,
1888. Thèse were prosecuted to an allowance in tîie early part of
April, the final fées, as shown by the books of the firm of which he
was a member, having been forwarded to Washington on April 6th.
After having secured the allowance of this group, and màde arrange-
ments for similar applications in a number of foreign countries for
patents to issue simultàneously therewith, Tesla gave him the material
for an application, one feature of which was the inducihg of one cur-
rent from another in thè opération or 'construction of a motor, and in
this connection disclosed to him his plan for operàting his polyphasé
motors by means of a single split phase circuit; Startled by this
révélation, and questioning whether the claims which he had drawn in
the pending cases would protect this new improvement, he had a long
conférence with Tesla, getting fi*om him ail that he could as to the
dififerent ways he pr'oposed to opérate this two-wire system. He also
discussed with his pai?tners, Gen. Duncan, now dead, and Mr. L,. E.
Curtis, of Denver, whether the applications on which patents were
■aboùt to issue had not better be stopped and amended, ànd soon after-
wards went to Washington to cônsult with Major Bailey, who had
charge of them there. The disclosure of Tesla, which brought about
this action, is fixedby Mr: Page as very shortly after the fées in the
polyphasé motor patents wèrë paid, which, as wë hâve seen, was April
6th. The visit to Washington, àccording to charges made for it
in the books of the firm, was April 27th. Between thèse dates, on
April i8th, is a charge for the application for the invention, in con-
Tiection with whiCh, as he testifies, Tesla told him of the improvement;
and following this, on May 7th, is a charge for the drawings to be used
Sn connection with the application for the first of the split phase pat-
ents, filed May I5th, the application itself being chàrged for May loth.
Mr. Page says that the work on the application was complète when
this lattef' charge was made, and that he must hâve been engaged on
it at least three Avéeks; which carries it back of the Ferraris date. On
jwhat basis thiS testiihony can be passed over or explained awày I
WESTINQH0TJ8E ELEOTKIC & MFG. CO. V. E0BEET3. 11
do not see. While the interval which has elapsed is considérable, the
transactions in their nature were such as were likely to impress them-
selves on his trained professional mind, and his memory has been kept
fresh by being called upon to testify on several occasions, beginning
with the interférence proceedings, which were soon afterwards. The
dates are also substantiated by référence to the billbook of the firm,
to which no objection was made. It seems to me, therefore, con-
vincingly estabhshed that prior to April 22d, the date of the Ferraris
pubHcation, Tesla had disclosed to Mr. Page, his soUcitor, the principle
of his spht phase adaptation. We may not be able to assign the ex-
act date, but it must evidently hâve been somewhere, as Mr. Page says,
between the 8th and the l8th of April, the reason why thèse dates are
seiected appearing in what has already been said. The only question,
then, is as to the extent of the disclosure, and whether it embraced
the patents in suit. Mr. Page is sufificiently cautious upon this, not
to the point of doubt, but of conviction. "I cannot state now from
my recollection," he says, "how many of the spécifie ways of operating
thèse motors Tesla told me of at that time, but my recollection is
entirely clear as to the point that at the conférence which I had with
him in the early part of April, 1888, and as the resuit of my closely
questioning him, he described to me so that I fully understood the
gênerai plan of construction and mode of opération of the three forms
of motor to which I hâve referred. That is to say, the two-wire in-
duction motor, as we then called it, in which the currents in one
energizing circuit are induced by the currents which pass through the
other energizing circuit ; secondly, the dérivation motor, in which the
two circuits hâve différent electrical character — that is to say, one
circuit has a higher self-induction than the other circuit ; and, thirdly,
the long and short core motor, in which the différence of phase in the
magnetic effect of the energizing current is obtained by making one
set of cores longer or of greater mass than the other set of cores."
The two-wire induction motor — that is, the one covered by the ap-
plication of May I5th — was considered at the time, as he says, of more
importance than the other — a circumstance which explains why it was
first put into shape ; and the other two forms, which he describes, are
those of the patent in suit. Communicating his ideas in this way, as
he did, to one who was thoroughly compétent to understand and per-
petuate them in case of his death, the inventer effectively gave his
invention to the world, and by ail the authorities he is entitled to bring
forward this disclosure now to maintain the priority which he asserts.
Walker on Patents, § 70. The burden is, no doubt, upon him, and
the courts are called upon to scrutinize the évidence closely, but they
are not required to go out of their way to discrédit it coming from
a reliable source. Where an inventor has gone on and developed his
invention and secured a patent, there is in fact a certain equity which
ought to operate in his favor. It seeras to me that the testimony of
Mr. Page, uncontradicted and unshaken as it is, and materially cor-
roborated at points, is sufïîcient in itself to sustain the priority
claimed. It is said, however, that if Tesla had perfected this invention
in the fall of 1887, as he testifies, it is impossible to believe that he
would hâve kept it back from Page until the next April, as he con-
12 125 FEDERAL BEPORTBBi ;
fessedly did, having already revealed it in the meantîme, as it is
claimed,, to Mr. Brown. But the idiosyncrasies of inventors, which do
notiSeeni' to lessen with their genius, are not to be so reckoned with.
Mr. Page says the only explanation he could ever get from Tesla why
he did so was that he was afraid if he (Page) knew that the polyphasé
motors could be run on a single circuit he would not believe the in-
vention amounted to anything, and might not in conséquence draw as
good daims. This may seem a peculiar, if not an unsatisfactory, rea-
son, but what we are concerned with is that an explanation was de-
manded and given, and it hardly discrédits Mr. Page because it may
not be altogether up to the marie.
But the testimony of Mr. Page is by no means ail there is upon this
subject. Mr. A. S. Brown, who has already been alluded to, an
electrical engineer of expérience, formerly connected with the Western
Union Telegraph Company, became interested in the summer or fall of
1887 in bringing out the original Tesla motor; and he testifies that
at once, when it was first brought to his notice, it occurred to him
as a great objection that it required two separate currents, not long
after which Tesla showed him how it could be operated on a single
main Une from the generator. The means proposed, as he says, was
to put an injunction résistance in one of the circuits derived from the
main line, thereby causing ;a retarda tjon, and producing a différence of
phase ; another way bçing to haye alternate pôle pièces differently
wound, one with a finer wire than the other. He further identifies an
old expérimental motor which hesaw operated by Tesla, with derived
circuits, one çf which was : retarded in the way suggested ; and he
recognizes a ; photograph of another similarly run, the original of
which, it is saîd, was de^troyed in 1895, when the Tesla laboratory was
burned,, I£ piatters not whçther thèse motors, in and of themselves,
hâve a split phase construction, although I am cOnvinced that one at
least has; itwas a suificient disclosure of the system if they were run
by that method, as he afïîrms. The only question as to this witness
is one of tirae. He fixeS;the occurrence at one place ih the summer
of 1887, and at another in the sxujimer or fall, and as Tesla, as it is
claimed, did' not make the discoyery until September, doubt is sup-
posed to be thrpwn on hig, testimony,. ànd the idea advanced that the
information could not have!bee:n given him until the next year. But
that is not what he says, and wh^tesytef) be the uncertainty as to the
season pf the disclosure it cannot; consistently be put over a whole
year. He, unqugstionably bepame interested in the summer or fall of
1887, and,.jtor reasons which he gives.Soon after this, itiiorder to re-
move an impôj^ant objeGtiQn^, Tesla disclosed to him how it could be
overcome,;,vXbis is t,he significantippint in his testimbny, rather than
whether it wa^if,ummer!Q;r fall. ,The.prbbability ÎS that it was thelat-
ter, as he saysit may ha^e:bç.$qjiand, if so, it wasstill earlier than
the disclosurie to Page, and '-anticipâtes by monthsthe Ferraris publi-
cation of the next spring, j r i
It is urged, however, that the testimony of thèse witnesses cannot
be reconciled with that of Prof. Anthony and Mr. Darlington without
assigning to th.e invention a lat<er date than they give. It seenis that
early in i.8i§8; the Tesla motor inventions were subraitted to Prof. An-.
WESTINGH0U3B BLECTBIC & MFG. CO. V. EOBERTS. 13
thony as expert adviser of the Mather Electric Company, to whom they
had been offered, and as nothing, as it is said, was disclosed by Tesla
in that connection about a split phase method of operating his motors,
the conclusion is that it had not then been devised. This might be
true if the two were brought together under such circumstances that
Tesla would be expected to communicate ail his ideas on the subject,
and did not do so, but neither assertion is sustained by the proofs:
The only patents pending at that time were those of May i, 1888,
covering the original polyphasé invention, and there is nothing to
show — to say nothing of the probabilities — that the negotiations with
the Mather Electric Company, which soon fell off, extended to any-
thing else. It is true that Mr. Brown says he présumes it was intended
to hâve that company fuUy informed with regard to ail the Tesla pat-
ents and inventions, but this, without more, can hardly be accepted as
a fact. Even more conclusive of the matter, however, is it that there
is nothing in the record to show that Tesla did not disclose to Prof.
Anthony ail that could be expected or asked. What Prof. Anthony
says is that he never suggested any other mode of opération than such
as involved a magnetic résultant, shifting in position as the phases of
the alternating currents changed. This is an entirely dififerent matter,
bearing on another branch of the case, and is of no significance hère.
I ani aware that he testified otherwise in the Catskill Case, but
whether he has had occasion to reconsider and recast his statements,
we must take them as they now appear, and they leave the défendants
nothing on which to build.
Neither do I see that the testimony of Mr. Darlington is of any ma-
terial aid. He states that from some time in May to the last of Octo-
ber, 1888, he was intimately associated with Mr. Tesla in the Westing-
house laboratory at Pittsburgh, where the latter was conducting ex-
periments for the purpose of perfecting his alternating current motors
and adapting them to commercial use, and that during this period
several split phase devices were tried and failed, the argument sought
to be dravvn being that up to this time Tesla had not advanced with
them beyond the expérimental stage. This is absolutely refuted by
the Uncontrovertible faCt that as early as May I5th Tesla applied for
the first of his split phase patents; but, passing this by, there is noth-
ing of serious conséquence in what he has to say. Only two experi-
ments are mentioned, one of which was successful, and developed into
patent No. 390,820. The other, as he says, was an attempt to use a
single phase current dephased by means of a greatly elongated pair of
coils and extra amouUt of iron in the transformer core, and did not
succeed. Tesla dénies the close intimacy asserted, and states that
Darlington did not understand the nature of the experiment, and that
from the size and character of the test device it was impossible for it
to hâve been used for the purpose which he supposed. Be that, how-
ever, as it may, it merely proves, if true, that the one experiment
failed ; but it at the same time substantiates that Tesla was fully alive
at the time, whenever it wâs, to the possible adaptation of the split
phase System to the opération of his motor, and for ail that Darhngton
knew he might hâve already worked out ail the -devices that are now
claimed. That he said nothing about them is entirely without conse-
14 .125 FEDERAL iBHPQBTEB. : ;r,'
queijce. iHe was nqt called upon to do so, and that is ail that needs
to bé said. Inventors are notoriously. réticent about their inventions,
as they haye to be to protect. them, and it afïords no occasion for
comment that Tesla ■vyas not mqre communicative th&n he seems to
hâve been. . ■
So far I hâve considered only the prqofs, about which no question
canbe raisçd, and, basing my décision solely upon.thejm, I am satisfied
that the patents should be sustained. The testimony of Tesla outside
of this.to which objection is made, goes raainly to, the date of his
invention, 3vhich he fixes as some time in the summer or early fall
of 18S7, : and his disclosures to Mr. Brown soon after , that, whose
statements he entirely confirms. Py calling him, the complainants
hâve no doubt strengthened their case as already pointed out, ahhough
they do not hâve to dépend on it ; but in the combined évidence thus
secured there can be no reasonable doubt as to the clear priority over
the Ferraris publication for which they contend. There is other testi-
mony which might profitably be alluded to in this connection, such
as that of V. S. Beam, with regard to the inhérent split phase char-
acter of the old expérimental motor (pictured at page ^73 of com-
plainants' record), of which Tarn conyinced. But the length to which
this opinion has already extended precludes it, and that to which I
hâve ref erred must suffice.:
The question of infringement still; remains. At the time suit was
brought the défendant Roberts was engaged at Philadelphia in the sale
of Gutmann recording watt meters, as agent for the Sangamo Electric
Company, of Springfield, lU., by whom they were made. There was
some controversy at the oûtstart as to whether sufEcient évidence of
an infringing sale by him had been produced ; but the complainants, by
permission, having taken supplementary proofs upon this point, it
was abandoned, and the Sangamo Electric Company, at their own
request, hâve now been made parties défendant, with ail the responsi-
bility which that entails.
It is contended that a metér is not a motor, and that on this ground,
of itself, no infringement can be charged. But, as pointed out by
Judge Lacombe in the Catskill Case {C. G.) iio Fed. 377, while the
Tesla patents contemplate the production of power, they are silent as
to the amount of it; and as a meter armature rotâtes against the
action of à permanent magnet, and turns a spindle which opérâtes the
registering devices, the production of some power is necessarily in-
volved. It is somewhat aside from the question, but still it is a circum-
stance that Gutmann himself, in accordarice with whose patents the
meters in question are constructed, recognizes and claims therein that
his device may be used for power purposes also. No doubt the strict
object of a meter of this dass is to tneasure and record the élément
which paàses through or actuates it, gas, water, the electric current,
or whatever it may be ; but where, as hère, it is, in mechanical con-
struction, nothing more than an adapted motor with meter attaeh-
mcnts, ît cannot escape infringement on that plea. There is nothing
in conflict with this* when rightly coiisidered, in what is said in the
National Meter Co. v. Thé Neptune Meter Gô. (C. G.) 122 Fed. 75.
The attempt there made was to defeat a spécial safety appliançe of a
WESTINGHOnSE ELECTEIO * MFG. CO. V. BOBSBTS.
15
water meter by références drawn from the gênerai motor art, and it
was in that connection tliat it was held that the two were net the same.
The meter manufactured by the défendant company is portrayed
in the accompanying figure, and is described as foUows : AA are two
coils of fine wire, wound upon laminated iron cores, whose pôles are
presented to the lower part of an aluminum armature, D, and embrace
the rear half of it, the raagnetic circuit between the pôles being con-
tinued by a crescent shaped laminated core within the cylinder. BB
are coils of coarse wire on opposite sides of the upper part of the arma-
ture, above and in a plane parallel with the pôles of the cores, CC.
The armature, D, is cylindrical, and is mounted on a vertical shaft,
capable of rotation, to which a registering device, R, is attached. By
diagonal slots sawed in its surface and slanting upwards to the left at
considérable of an angle, the exterior of the cylinder is divided up into
predetermined circuits. To the bottom of the cylinder is attached a
disk or ring, E, which rotâtes with the armature, and is located be-
16 ,. .Si 135 FBDBBAL BBÎPOBTÏÏB.
tween Éie pôles of a permanent magnet, M, thereby furiiishing a load
for the meter which varies with the speedof the rotations ofthe arma-
ture, causing such rotations to be proportionate to the energy passed
through it, and furnishing a basis for measuring the same théreby.
The two sets of coils, itwill be noted, aredifferently constructed, BB
being composed of airelatively small number of turns of coarse wire
without a core, the recagnized construction where a relatively low
self-induction, which will not déphasé the alternating carrent, is de-
sired; wHile the coils, AAVon the other hand, are made up ,of a large
number of tùrns of fine wire wound about an iron core, a well-known
way for bringing about a large self-inductibn, with the efïect of greatly
delaying or dephasing the current. The current which severally ener-
gizes the two circuits proceeds from a single source, but is divided be-
fore it reàches them, one part passing- through the coarse coils, BB,
and thence through the lamps to be measured, and so back into circuit,
while the other fiows through the coils; AA, to the same point. The
former is spoken of as being in séries, and the latter as in shunt,
the connection with the shunt windings being preferably taken off
from the circuit fîrst, and that of the séries coils afterwards, or on the
load side, by which arrangement everything is measured except the
inconsiderable current passing through the shunt coils. The construc-
tion so described is, in eiïect, ja motor in which the armati|re is operat-
ed upon by two independeat energizing circuits, produced by passing
through them a divided and dephased alternating current derived from
a single source, thus apparèntly realizing the patents in suit.
Before defînitely reaching this conclusion, however, some further
observation of them is required The two claims of No. Sii>559 ^^^
as follows :
"(1) The metbod of opéra ting motors ha^lng independent energizing cir-
cuits, as herein set forth, which consista in passing alternating currents
through both of the sald circuits, and retardlng the phases of the current in
one circuit to a greater or less extent tMn în the other. (2) The method of
operatlng motors havlng independent energizing circuits, as herein set forth,
which oonsistB in directlng an alternating current from à single source
through both circuits of the motor, and varying or modifylng the relative
résistance or self-Induction of the motor circuits, and thereby produclng lu
the currents différences of phase, as set forth."
The following are the first two claims of No. 511,560, which also
are relied on:
"(1) The combination with a. source of alternating currents, and a circuit
from the same, of a motor havlng Independent energizing clfcuits connected
with the sald circuit, and means for rendering the magnetlc effects due to
sald energizing circuits of différent phase, and an armature within the in-
fluence of sald energizing circuits. (2) The combination with a source of
alternating currents and a circuit from the same of a motor havlng inde-
pendent energizing circuits conmected in dérivation or multiple arc with the
sald circuit, the motor or energizing circuits being of différent electrical
character, whereby the alternating currents thereln wlU bave a différence
of phase, as set forth."
By the fîrst of thèse the method or System was patented, and by the
last certain spécial forms devîsèd for carrying it out. Both adopt as
a necessary foundation the "Tesla effect," exemplified in his original
invention, to which they are merely an adaptation of the split phase
WE8TINGHOU8E ELECTKIC & MFG. 00. V. ROBERTS. 17
idea. To realize either there must, therefore, exist, in any infringing
device, a résultant action of the two energizing circuits. This, as held
by Judge Brown in the Royal Weaving Case (C. C.) 115 Fed. 733, be-
fore referred to, is the limitation imposed by the Duraesnil and Cab-
anellas patents, and is in fact ail that is claimed by Tesla in describing
his invention in this and other patents. But it is conceded, or, if not
conceded, satisfactorily proved, that the eddy currents formed in the
armature under the field pôles, AA, at one end, are deflected by the
slots in the cylinder so as to come under the influence of the field
pôles, BB, of difïering phase at the other, and that it is the résultant
raagnetic efïect of the two that causes the rotation of the armature.
That it is this résultant efïect that is sought and obtained is manifest,
else why the deflecting slots, the only function of which is to extend
the eddy currents from one to the other? Cut this oiï, or dispense
with one set of pôles, and you hâve no rotation, or only a most feeble
one, explainable on other principles. Or if the slots are made parallel
to the axis of rotation, or, if with their angularity retained, the two
sets of pôles are set at an angle exactly opposite thereto, there is the
same lack of resuit. The angularity of the pôles when in the same
horizontal plane must be retained when they are in independent planes,
or it must be made up by an équivalent angularity of the slots, so that
each set of pôles shall always operate on the same armature bars.
Reversing the angle of the slots reverses the relative position and
action of the pôles, causing the armature to turn in the opposite direc-
tion. The action which is thus secured is theoretically produced in
each instance by the rotary progression of an idéal pôle, the résultant
of the two sets of pôles acting independently. That this is dépendent
on the intermediate eddy currents being deflected along the armature,
from one set of pôles to the other, does not afïect the character of the
action or the resuit ; or, in other words, it is no less a résultant because
one set of pôles acts in one plane and the other in another. The sup-
posed mechanical résultant of a parallelogram of forces is a convenient
diagrammatic fiction to illustrate a physical efïect, and may exist
whether the co-operating forces act in the same plane or in planes that
are parallel, and there is nothing to impose any stricter limit on that
which is relied upon hère. The action of the two energizing circuits
has been spoken of graphically as a whirling field of force, and com-
pared to that of a magnet rotated about the armature, which no doubt
conceives of the résultant as moving in a single plane at right angles
to the axis. But the inventor himself simply speaks of it as a rotary
progression of the pôles or points of magnetic efïect, and this, as
already stated, is satisfied, although the energizing pôles act in inde-
pendent planes, provided only there is a conjoint magnetic influence to
produce a rotary efïect. The Tesla motor as an invention was first
in its own peculiar field, and is entitled in conséquence to a libéral
application of the doctrine of équivalents, and of the substantial
equivalency of the défendants' device I am fuUy convinced. The funda-
mental idea is appropriated, whatever improvement or adaptation
there may be besides. Nor can I see that there is any diflference
whether we consider the eddy currents, which are carried by means of
the slots from the lower to the upper part 01 the armature, as there
125 F.— 2
là
125 B'QDffiRAL REPÔâTBB.
ëtftràcted or l'epelled ; that is to say, as di-àwn tangentially br pushed
tangeiitially by the field pôles under. whose influence they are so
brought.-The significant thing in each is the conjoint or résultant
action of the two opposite sets of pôles, the magnetic influencé, wheth-
er of attraction or repulsion, waxing and waning, and shifting pro-
gressively about the armature, of the existence of which there can be
little doubt.
It is persuasive of the equivalency of opération which is so con-
tended for, although by rio means conclusive of it, that Tesla, in a pat-
ent appHed for May 20, ârid granted December 3, 1889, suggests that
where the two main or primary sets of energizing pôles there em-
ployed are at right angles, and a single armature core is used, it is to
be wound în closed circuit from end to end, but that if the pôles are
in line— that is, in vertical plane with each othèr, as in the présent
meter— there should be an angular displàcement of the armature coils.
This equivalency is assumed without explanation, as being within the
terms of the invention. So, in atiother patent appHed for March 26,
1890, and granted August Sth following, the two sets of field pôles
there found are located at either end of the armature, out of line with
each other, forming practically two fields of force, as it is said, al-
ternately disposed, with the pôles of one sét or field opposite the
spaces éî the other. Much in the same way Gutmann, in the patent
under which the meters in controversy are cdnstructed, shôws an
armature with straight slbts and pôles out of line, interchangeably
with slanting slots and pôles in Une. Other confirmations of the
equivalency of the two arrangements with that of a Tesla motor, as
well as with each other, could be drawn from this record, but thèse
must suflicé. They establish to my satisfaction the gênerai infringing
character of the défendants' meter as is charged.
A spécial défense of nôninfringement is made, how-ever^ as to the sec-
ond claim of patent No. 511,560, on thé ground that the energizing
circuits in thèse metèrs are not in dérivation or multiple arc with the
circuit from the source df supply; and the décision of Judge La combe
in the Catskill Case is relied Upon, where it was held that the Scheefer
meter did not infringe, both energizing circuits not being connected
in multiple arc with the main circuit. This décision is said to be the
resuit of a mistake as to thç exact character of the circuit connection,
but of that I shall not undeirtake to speak. In the case before me,
which is illustrated by thè 'accompanying diagram, the circuit from
JMt.
:jl.
CCZEC
PAERAMOEE T. STEIN. 19
the generator is divîded, one branch being taken off to go to one set of
pôles and the other to the other, both uniting again after the latter has
passed through the lamps to be measured. This would seem to make
each of the branches which constitute the energizing circuits to be in
dérivation or multiple arc with that from the source of supply, realizing
the terms of the patent. While the so-called séries coils, DD, may be
in séries with the lamps, LL, the lamps are certainly in multiple with
the circuit from the generator, and so of necessity also are the coils.
The distinction attempted by Prof. Jackson, and particularly the sug-
gestion that the insertion in one of the branch circuits of a set of
incandescent lamps destroys the derivative relation, is too refined, as
it seems to me, to stand.
Finding, therefore, that the patents in suit are vahd and hâve been
infringed, a decree is directed in favor of the complainants in the usual
form, with costs.
PARRAMORE et al. v. STEIN et al.
(Circuit Court, N. D. Illinois, N. D. July 15, 1903.)
No. 25,373.
1. Patbnts— Anticipation — Stockiks Supporters.
ïhe Parramore patent, No. 629,391, clalms 1, 2, and 3, for a stoeking
supporter, eonsisting of duplicate suspension tapes and a single hanger
adapted to be detachably fastened to the front of the corset, are void
for anticipation in the prior art, and especially by the Banfleld patent.
No. 197,587, and the Andrews patent. No. 550,551.
In Equity. Suit for infringement of letters patent No. 629,391 for
a stoeking supporter, granted to Reddin W. Parramore, July 25, 1899.
On final hearing.
Louis C. Raegener and Wm. O. Belt, for complainants.
Pierce & Fisher, for défendants.
KOHLSAAT, District Judge. The bill in this case was filed No-
vember 17, 1899, to restrain infringement of claims i, 2, and 3 of pat-
ent No. 629,391, issued July 25, 1899. Claim i is for a stoeking sup-
porter having a single hanger which is provided with an eye or loop,
adapted to be detachably engaged with the stud of a corset clasp,
together with duplicate suspension tapes which are connected at the
upper end with the hanger. Claim 2 is substantially the same as claim
I, except that it is not limited to an engagement with a corset clasp,
but does provide that such engagement shall be at the point where the
sections of the corset meet. Claim 3 provides that the means for Con-
necting the tapes to the corset shall consist of a fabric body and a
metallic hanger pièce united to said body, and having a central loop
prolonged beyond the fabric body, which engages with the stud of the
corset. The patent was involved in Parramore v. Taylor (C. C. A.,
2d Circuit) 114 Fed. 97, 52 C. C. A. 45, and sustained. In a later suit
by Parramore v. Cohn (C. C.) 116 Fed. 1022, in the Southern Dis-
trict of New York, an injunction was obtained, but the suit was
20 123 FÉDÉRAL KBtOBi?EB.
settledbefore final heârihg. Ordiharily thèse dÉtfrees would be
deemed very persuasive by this Goutt in this case, since inïringement
is not seriously denied. Practically the only feature of the patent in
suit not employed in défendants' device is the metallic hanger pièce,
the latter having only an eye and a slot used in conne'cting the fabric
body therewith. ■'
Défendants insist, fifst, that the fînding of the Second Circuit Court
was not fairly sustained by the évidence ; secondly, that the case
was not well presented to the court ; thirdly, that new évidence found in
the prior art and elsewhere, now presented, places the matter in a
différent light. The patent is for a hose supporter, and nothing more.
The requirement that it shall be adapted to be detachably engaged with
the corset stud, or with tlïe corset at the point where the corset sec-
tions meet, is merely descriptive. Evidently, from the claims, a sup-
porter, described as adapted to be detachably engaged with any part
of the corset, if a duplicate of complainant's device, would be just as
much of an infringement as is now claimed. Therefore we must, for
the purpose of this inquiry, entirely disassociate the question of the
place of use or application of the supporter of complainant from the
article iself. À change in location or use cannot be patënted. Walker
on Patents, § 38.
The case of Parramore v. Cohn was decided upon the authority of
Parramore v. Taylor. Certain additional alleged anticipating patents
were cited, but were, it is claimed, not fully cOnsidered. ■ Among those
then before the court was the Andfews patent, No. 550,551 (1895),
for an underwaist. The spécifications and drawings disçlosed. a sup-
porter detachably fitted upon a stud placed upon the side of a corset.
The eye at the place of contact with the stud is practically identical
with that of défendants' device, and adapted to be attached to a corset
or any other stud. It has duplicate "stocking engaged members,"
and means for uniting theçe at their upper ends, and a , fabric body,
which is not iike complainant's' fabric, body in shape. .As .in défend-
ants' device, there is nothing, except perhaps the eye, corresponding
to complainant's metallic hanger. In the Çohn Case there was no
proof of actual use of supporter^ ipf ttîe Andrews type at tlie front of
the corset, wheréas in this, ca^e sevefal witnesses haye'testified that
they hâve wom sùpportéfs ' Iike those ëhoWn in, Andrews' patent at-
tached to the front studspfthéircorsfetsîàtldhaye foiind thèm sàtis-
façtory. "■ "■' ' .' :'}'' [ ■ '''" '"\ , . ,''■•',,,,'-, '' ', "'
There was alsô tëforé the court in the Cohn Casé the Banfîe,ld pat-
en't No. 197,587 (1877), for a sfocking 'supporter cdhsistihg, of duplicate
sù'spiënsidn tafiés 'arid a hanger pièce in the shape of a Ibôp for permà-
nerifly uniting 'the two, tapes :^their upper end, and havjng an ,eye or
ring adapted to engage in hdôk or button on any partof, the wa!ist.
Complainants' exp'ert (X-^. 25) says that tf the fabric body were omit-
tèd from complàînânts' supporter, iànd if the ta|3és were in a single
pièce, and mefely run thrdugh the slot at the: bottom pf the métal eye,
there still rénjàining duplicate sîtdcking supporters, he should r&gard
such construction as falling within claims i ahd 2 of the p.atéritV It is
difficult to s.ee inwhat mahner the supporter described in- X-Q. 25,
above, difïers from that of the Andrews & Banfield patêfits. If it
PAREAMOKE V. 8TEIN. 21
does not differ, of course daims i and 2 hâve been anticipated in tlie
prior art. To divide the supporters from their upper to their lower
ends is not new, but is shown in Harvey patent No. 463,050 (1891)
and Sythes patent No. 512,670 (1894). Thèse were not before the
court in the Taylor suit.
The George patent, No. 208,387, for a stocking supporter, was also
not cited to the Second Circuit Courts. This device shows triangular
fabric pièces, from which the tape or strap supporters hang. It is
not, however, adapted to be detachably fixed to a corset stud. The
Gray patent, No. 224,899 (1880), for a shoulder and back brace, dis-
closes a supporter which evidently is adapted to be detachably con-
nected with a corset stud. The tapes are not, however, divided so
near the upper end as to make them available for a single hanger front
device for use on both stockings. The métal eye and its connection
with the hanger are similar to défendants'. The Arthur & Gray patent,
No. 369,678 (1887), includes a similar device for an eye and hanger and
their means of attachment to each other. The Harvey patent. No.
463,050 (1892), covers a supporter the tapes of which are divided at
a point near their upper end. This would permit of free leg action,
but does not appear to be détachable from the waist pièce. The
Lennon patent. No. 606,064 (1898), for a combined retainer and stock-
ing supporter, was considered by the Second Circuit Court in the cases
above cited. It discloses a pair of supporters, depending from stud
and loop clasps upon the front of the corset, thereby, as the inventer
says, holding in the abdomen while supporting the hose. There is na
single hanger, nor are the straps, though jointed by a crosspiece at the
top, équivalent to a single hanger, as the bearing is from two points on
the corset. The E. F. Young patent, No. 638,540 (1899), was before
the Court of Appeals in the Taylor Case. It discloses an abdominal
pad for suppressing the stomach from which the supporters dépend.
From the foregoing citations, and other patents in évidence in the
prior art, I find several matérial facts to be established : (i) That a
stocking supporter adapted to be detachably connected with a stud
on the corset is not new; (2) that such a supporter, with a single
hanger, and adapted to such détachable use upon a fastened stud upon
the corset, is not new ; (3) that a supporter adapted to be detachably
connected with the stud on any part of a corset is also adapted to be
detachably connected with the fastener or stud of a corset at the place
where the two sections of a corset meet ; (4) that any hanger attached
to the front of a corset will serve the purpose of depressing the ab-
domen ; (5) that the hangers of the Gray, Andrews, Banfîeld, Shelby,
No. 267,943 (1882), Arthur & Gray, Washburn, No. 561,460 (1896), are
adapted to be so detachably connected with the corset ; (6) that stock-
ing engaged members of supporters with a hanger uniting same at
their upper ends are not new; (7) that défendants' eye and slot con-
nection with the hanger is old in the art ; (8) that duplicate suspension
tapes are also old in the art; (9) that, if complainants' device has
patentable novelty, it must be found in their fabric body and metallic
hanger pièce and eye.
Complainants' design, as shown by the drawings, calls for a fabric
body and hanger in which. the upper ends of the tapes are separated
22 125 FpDmpAL BUPORO^IIIB.
from each other, while having a common bearing. Patentée, How-
ever, reserves the right to change the proportion, size, etc., leaving
hini at liberty to duplicate the fabric hanger of the Andrews & Banfield
patents. The metallic hanger pièce or yoke of complainants' patent
serves to hold the tapes apart. No advantage is claimed in the
spécifications for this feature. If, as claimed by complainants' expert
in answer to X-Q. 25, the fabric body of complainants' patent is not
essential to their claim, and if the duplicate supporting tapes might be
found in a single pièce and brought close together at the slpt below the
eye and still be within the patent, then, in my judgment, the Banfield
& Andrews patents are , clear anticipations. And such I am con-
strained to hold they are.
In the case of Parramore v. Taylor (C. C.) 105 Fed. 965, Judge
Townsend found that the defendant's device did not infringe. On
appeal to the Court of Appeals this finding was reyersed. 114 Fed
97, 52 C. C. A. 45. The court, having before it a record far less com-
plète than that now presented, says :
"The patented device was 'the flrst to design a complète détachable device,
whlch sustalned both stockings from a single exlstlng point of support on the
corset,' and, notwithstanding the apparent slmpllclty of the improvement, the
record discloises the labor and experlments requlred to produce a patentable
supporter fastened to the front of the corset by a single point of support on
the corset, and the Inventive character of the device Is made apparent despltc
first impressions as to trlvlallty. Its novelty and utillty 'In its limlted fleids'
are manifest"
As the record now stands, I cannot agrée with this statement of the
case. The court seems to décide the case upon the use to which the
supporter was put rather than upon the device itself. That a sup-
porter was never before used to support both stockings from the front
of the corset does not, in my judgment, enter into this case. As
shown above, there were prior patents which were and are capable of
being detachably connected with a stud upon the front of the corset,
and which complainants by their expert insist corne within the terms
of their patent in suit.
The bill must be dismissed for want of equity, and it is so ordered.
NATIONAL TUBE CO. T. SPANG et aL
(Carcult Court, W. D. Pennsylvanla. September 21, 1903.)
No. 25.
Patents— Invention— MANTJFACT0BB of Tobin».
The Pàtterson patent, No. 681,251* for the manufacture of tublng, cover-
Ing the methpd of matlng butt-weld pipe by charging the plates into the
furnace from the rear, and wlthdrawing them from the front by meaas
of tongs or otbier suitable device, whlch also draws them through the
weldlng bell, is vold for lact of patentable Invention. The advantagea
of back charging In the mèmufacture of such pipe, as was practlced in
maklng lap-weld pipe, were prevlously known, and It was practlced by
at least one method. It was merely a part of the steady évolution and
developmènt of the art In méchanlcial means, not involvlng invention.
NATIONAL TUBE CO. V. SPANG. 23
In Equity. Suit for infringement of letters patent No. 581,251 for
the manufacture of tubing, granted to Peter Patterson, April 20, 1897.
On final hearing.
Kay & Totten, for complainant.
Wm. L. Pierce and Bakewell & Byrnes, for défendants.
BUFFINGTON, District Judge. This is a bill filed against Spang,
Chalfant & Co. by the National Tube Company, assignée of patent
No. 581,251, granted April 20, 1897, to Peter Patterson, for manufac-
turing tubing. Infringement of ail claims is charged. The défenses
are invalidity of the patent and noninfringement. The patent con-
cerns pipe-making. In that art long strips of wrought iron or steel
of suitable width are brought to a proper welding beat. In one meth-
od the strips are drawn through a flared or bell-mouthed ring, which
gradually rounds the strip into diminishing circular form, as it passes
through its lessening diameter, and the bell at its outer and smallest
opening forces the edges to abut and weld. This method is called
butt-welding ; its product, butt-weld pipe. In the other method the
sides of the strip are first skived or beveled, and then passed over a
mandrel, and through roUs, whereby the edges are made to overlap
and weld. This is called lap-welding, and the product lap-weld pipe.
Butt-weld pipes were successfully made prior to the patent in suit,
which was for an improvement in one step of the process, and did not,
it will be observed, create a new article of manufacture. The product
of the patented, as well as the former process, continues to be styled
butt-weld pipe. In the art antedating the patent the high beat re-
quired to bring the strips to a butt-welding point was secured by the
use of réversible reverberatory furnaces which ran to approximately
3,000°. Under such bigh beat the strips required rapid handling, since
if not withdrawn at the melting point the iron was burned. As thèse
strips were fed in at the front of the furnace, and the ends first sub-
jected to beat were last withdrawn, it was manifest that when a weld-
ing beat was reached at the end last introduced the other end might
by the time it was withdrawn be burned. This danger was lessened by
furnace construction, by which through graduated valves the beat was
in a measure, if not indeed wholly, controUed; for, as Mr. Converse,
complainant's président, said : "My ôwn impression is that the difïer-
ent exposures — that the différence of time of exposure of front char-
ging — was compensated by beat distribution in the furnace." It was
also known that to, successfully weld a strip its center should not
reach as high beat as the edges, for a stiff center maintained the form
or contour of the pipe under the strain of welding the abutting edges.
In securing this resuit it was recognized that it was préférable to allow
the strips to remain in the position in which tbey were originally
charged, and withdraw them from that point, rather than to shift them
to the common withdrawing one. The advantage of this stationary
or quiescent position of charging is due to the fact that when the cold
strip is introduced it speedily absorbs beat from beneath, and as this
absorbed beat is added to by the heat from the furnace arch or body
above it the strip soon becomea superheated, and returns. its beat
24 125 FBQQBAI^ BKFOBTEB.
to the strip of the furnace flopr beneath if. This absorption of beat
from the strip by the floor tends tp keep the central line of the strip
relatively cooler, and give it that stifï body which aids in welding the
abutting edges. If, however, the strip were moved from its original
position to one which was and had beéil subjected to the beat radiating
from the fUfnace arch, the strip instead of losing beat to the floor at
this point of the process would absorb more from it. The advantage
of quieScent heating was known aftd appreciated, and its advantages
sought for thf ôugh the agency of a shifting or movable working
bench. An example of this is seen in the table of Patterson himself,
shown in patent No. 416,374, whereby he sought to "overcome the
necessity of hahdling the plates after they are placed in the furnace,
and so provide for the more regular and even heating of the plates,"
through the agency of a movable Work bench. Another practice in
the prior art which deserves careftJl considération in forming a just
estimate of the patent in suit was the means used to draw the strips
from the furnace and through the welding bell. The prior practice,
until a short time before the patent in suit, was by means of a draw
bench and a "tang" or drawing rod, and is described by Patterson in
bis patent No. 416,374, above referrêd to, as follows :
"The most approved method of makjng this butt-weld tubing heretoforfi
practiced bas been to weld a rod to the end of the plate from which the tube
is to be fonned, and bringing this plate to a welding beat In a sulfable
furnace, and draw the plate by means of said rod through a bell-shaped die,
generally termed a 'bell,' the sides of the plate being turned over so as to
bring It to tubular form, and the edges of the plate being butted and com-
pressed together within the die and so welded. In welding tubing la this
manner, a long draw bench has heretofore been employed, the draw bench
being mounted statlonary before the mputh of the welding furnace, and the
draw bench having at its forward end a holder to support the welding die or
bell, and a chaIn traveling in said draw bench, and a buggy running on a
traclî on the draw bench, and adting td draw tfie blank through the die by
flrst engaging with the 'tang' or drawing rod secured to the tube blanli, and
then engaging with the traveling chain, and so drawing the blank through
the welding die or bell."
Moreover, prior to the patent in suit the gênerai principles and ad-
vantages of charging métal at the rear of a furnace were known
and appreciated. It was seen that it prevented congestion at the fur-
nace front, and that the gênerai benefits naturally incident to a con-
tinuons, straightaway process foUowed. Front charging of billets and
slabs was the common practice, but about 1870, when the use of
Siemens regenerative furnaces in pipe making eliminated coal smoke
from such furnaces, rear-charging was and has since been followed in
heating skelp for lap-welding. With the exception, however, of the
crâne practice referred to later, no step toward rear charging was
taken in butt-weld furnaces. The reason for this seems apparent in
the limitations imposed by the use of "tangs," sirice it was impracti-
cable, if not, indeed, impossible, to charge a strip from the rear of a
furnace with a "tang" welded to its nose. In the first place, the
"tang" end could not be slid along the furnace floor, and, even if it
could hâve been, it would hâve been so bot it could not be handled
to shift the strip or to pass it through the welding bell and attach it
to the draw buggy. Not only was the "tang" an impediment to back-
NATIONAL TUBE CO. V. SPANG. 25
charging, but it was an expensive factor, in tliat it requîred a pre-
liminary heating and the labor of welding it on and shearing it off.
The desirability of iising tongs instead of "tangs" was appreciated,
but the conditions under which tongs had to be used were such that ii
was a difficult thing to devise them. In the first place, they had to
operate at long range ; second, their size must be such ihat the grip-
ping end could pass through the welding bell; and, third, their grip
must be such that they could stand the jerk or strain of instantaneous
engagement to a chain moving at the rate of several hundred feet a
minute, and at that rate grip and start a strip of iron 25 feet long, and
draw it at a rapid rate through the welding bell. From thèse condi-
tions and difîîculties it will be apparent that the use of "tangs" and the
lack of tongs would completely prevent any attempt at back-charging.
This is clearly and forcibly shown in the afEdavit of Saunders, filed
in the Patent Office, in the application for the présent patent, and the
testimopy of Simpson in the présent case. Saunders' affidavit was :
"Up until within a short time of the invention made by Mr. Patterson, the
almost universal custom In maklng butt-weld tubing or drawn tubing was to
cmploy what were termed 'drawing tags,' whlch were secured to the front
end of flat plates, the plates being pushed Into the furnace from the same
oikI as that from whlch they were withdrawn. • * * It would hâve been
itiiliiiieticable to introduee them from the other end for two or three good
reasoiis, the principal one being that the tag would hâve become heated in
passing through the furnace so that the welder could not grasp the tag end
aiid so manipulate the plate in the furnace, and, furthermore, that the tag
would be liable to catch on the bottom of the furnace and tear up the bottom,
or direct the plate out of its proper course. I hâve never known It to be at-
tempted. • » • The use of tongs for drawing the plate from the furnace
was practically only expérimental up untU within a short time of Mr. Patter-
son's maklng the invention, as it was difflcult to provide tongs which would
hold suflSciently well to the plate and yet pass through the welding bell."
/ The testimony of Simpson was :
"Q. 12. How long did you continue to use the bell and the tag-welded plate
fls a means of hanclliiis tlie plate and drawing it through the bell as the prin-
<i]ni! way of makius' jour pipe? A. Up to about 1893; that is, up to the time
I iett in 1893. Q. 13. Up to that time had you known of any better way in
practical use of making butt-weld pipe than by welding the tag ou to It, as
you hâve described. A. No."
The difiiculty in devising such tongs is stated by Doyle :
"The difflculty in devising such tongs lies in the fact that they must be
slender enough to allow their passage through the bell, and at the same time
hâve sufficient strength for the required drawing of the plate through the
bell."
A careful examination of the proofs in this case — and in that aspect
we may say they are practically unquestioned — satisfies us that the
absence of such tongs was a prohibitive step to the use of back-
charging methods, and, in our judgment, the conclusions drawn by
Dr. Sellers, an expert, and Henderson, a practical superintendent, are
justified by the proofs in this case. The former Says :
"A. The chief, and I might almost say the only, impediment lu the way of
back-charging was the noninvention of any means of drawing the plate out
of and through the bell, except by means of a tag welded to the bar ready for
the opération of passing this tag and the pipe through the bell, and is now
2|:; n;i35:FEDEEAL:fB?OETEE.
doue ,by the. |t)|gej;jnp;U8 tengi^ that hâve Ibeen gradually evo]yed to take the
pladè'qr tnë'V>'eli^e(i or Otherwise attachëd tag.tbe use of whicli necessitated
thè f rdat^îial'giHg Eiethodi" ■' '
The lattjéir says :
"A. The reason for not charglng skelp Into the rear end ot butt-welding
fumaces was the; absence of a sultable devlce with whlch to wlthdraw the
flat sheet from thë frpnt en^ o£ the furnacé; In other words, wç were unable
to secure a pair of tongs ov^ whlch -vt^e eould slip the welding bell, and whlch
would be at the same time Mender enoughand having suflaclent tçnacity when
gripplng jthe sheet of Iron topvH, the same through the welding bell wlthout
sùpping off and allowing the shèet to pema^p Jn the furnace, thus causmg
what we ■Would'term a oobble. The whole question of back-chàrglèg hinged
on the queistioh of a sultable appUancé fbrfwltbdrawlng the >heet from the
front end of the furnace, and untU this was ac'cômplished we usçd what is
commonly: knpwn as the 'tang' method of making butt-weld pipe."
Indeedi the fact that nO tong has yet been devisëd for handling
small-sized pipe, say an eighth to a quarter inch, and that they continue
to bemade by the front-éharge method, is illustrativeof what for a
time restrieted the larger sized pipes ,to front-charge furnaces. And
that the toiigs were the lackiflg factOr is shôwn by the practice in lap-
weld fûrnaçes. There tpnp had been devised by which the skelp
could be satisfactorily gripped, and back-charging was therefore
practiced. But the tongs that were suited to that practice and to the
relatively môderate cherry red beat there employed would not meet
thé reqtlireiiiënt of graspirjç sttips iraîsèd to the melting point required
in butt-w|^ldiiig. The difiference is set fp,rth by the witness Hender-
son, who says; - ■:■'■' ■• ■ .'..iu ' , .;
"A. The cbfldltion of the tftft sheet or strlp of métal when drawn through
the skelplrig box'fi'pm the front end'df 'thë skelping furnaèe was what was
commonly knbwn as cherry red hèa;t. Thé Bkelplhg tongs whlch grasped this
plate had an entirely différent work to perform, as compared wlth a pair of
tongs suitable for grasplng a flat sheet or strip of métal heated to a hlgh
welding beat, which were to be drawn through a small welding bell. In
the flrst instance the tongs were équité short, and were mounted on a buggy.
Sufflclent pressure could be put on thèse tongs by the use of a puUey hook,
which would make them grasp the, plates tenaelously enough to allow them
to be drawn through the skelplng die, while in the welding tongs, which of
necessity had to be long and- slender, great trouble was experienced in secur-
Ing tongs which would retain fts hold on the plate when puUed through the
welding bell."
But, in spite of this drawback, the art was not without its develop-
ment in bâck-charging of strips for bùtt-welding. What is known as
the Crâne method was in use previous; tp the patent, and is still used
as a successful method of butt-welding by back-charging. In this
practice the furnace was open at the frpnt, the welder and front slider
worked from that point, and together mpved the plates from the sec-
ond position forw^rd to the final wôrkihg point. At one side it had
a stationary work bench prpvided \ifith bell, buggy, and movable
chain, and the strips were charged by a stationary mechanical charger
placed at the diagonal coriier from the work bench. Instead of a
réversible furnace, oiie in which the beat was generated on one side
and thé exit flue on the othèr was ased. A picker man or rear slider
was stationed at the reâr op,ening, who moved the plate from its fîrst
to its second position, from which point they were moved to the third
NATIONAL TUBE 00. V. 8PANG. 27
and fourth position by the front slider, and to the fifth or final position
by the welder. This device showed the apphcation of the gênerai
principle of back-charging to the butt-weld art. As an incident to
that method it showed the uniformity of heating obtained by opening
the rear end, and thus avoiding the heat nonuniformity, which neces-
sarily came from a closed rear furnace section; it also incidentally
showed equality of time of heat subjection. Not only was the end
of the strip fîrst introduced first withdrawn, but the whole strip, as
it was shifting toward the hotter working side, was uniformly sub-
jected to the higher heat zones horizontally.
In this State of the art the idea occurred to Patterson, the patentée,
to dispense with tangs, charge the strips at the back of a butt-weld
furnace, allow them to remain in such initial position, grip them with
tongs, and withdraw them therefrom at the front of the furnace
by means of his shifting draw bench. This constitutes his process.
It was embodied in a furnace built at McKeesport in October, 1894.
That furnace difïers from the Crâne method in this : that the plates
are initially charged in the position from which they are finally drawn.
In that respect Patterson himself says:
"My understanding of tlie Crâne apparatus is that a flat plate or strip of
métal is charged in between a plate and the bridge wall, and when so charged
into the furnace they are moved laterally to the place of withdrawal. With
this exception, the Crâne apparatus is practically the same as the apparatus
at McKeesport."
Subsequently, to wit, on March 18, 1896, the National Tube Works
Company, as assignée of Patterson, made application for the patent in
suit, which was granted April 20, 1897. Did this device involve pat-
entable novelty? In considering that question we naturally inquire
of the steps or means through which an invention is reached. A long
séries of futile expérimental efforts, resulting in a solution in some
unthought of way, sometimes serves to aid in showing inventive char-
acter. The présent case is singularly free from any efïort of that
kind. The plan of rear-charging simply occurred to Patterson several
years before he reduced it to practice. It seems to hâve come to him
and been suggested by the use of his movable draw bench as a means
of increasing production. He says :
"A. On December 3, 1889, I was granted a patent No. 416,374, for an ap-
X)aratus for welding. This invention covers the movable draw bench, and it
■was when we put this draw bench in opération, and were experimenting
with it to Increase our production in butt-weld tubing, that the thought
of charging the plates into the rear of the furnace occurred to me. It was
not more than a thought at the time, and as time went on it would retum to
my mind, especially when we were struggling with the difficulties of getting
uniform heat on the plates for the making of butt-weld tubing. I hâve a
distinct recollection of telling Mr. Pierce In 1893, who was the manager of
the pipe mills of our Company at that time, of my idea of making pipe by
charging the plates from the rear of the furnace; but Mr. Pierce did not give
me very much encouragement, and time went on, and It was not until the
f ail of 1894 that I was permitted to hâve a furnace built in which to carry
out my idea of back charging."
Referring to his talk with Mr. Pierce, he says :
"A. My conception was to charge the plates into the furnace on certain
Unes, and I disclosed it to Mr. Pierce. I also stated that If allowed to build
28 125 PEDEEAX. REPORTER.
« f urnace of that klnd that I would use my jnovable draw bench, so as not
to move tïe plates In the fùmace, as /was the custom in front charging."
The conception, whatever its character, was then complète. There
were reasons why it remained unused so long. The tang method
prevented its use, and Mr. Converse objected to the heavy expendi-
ture involved in furnace reconstruction and in the adoption of a pro-
cess which involved dividing the responsibility for furnace control be-
tween the charger and the welder. This latter objection proved un-
founded, and when permission was received to construct a back-
charging furnace complète plans were drawn, the furnace constructed
according to them, and at once put in opération without any expéri-
mental work. Mr. Converse says :
"I remember ordering the charge of thls furnace and seeing the work done,
and af terwards hearlng froii» Patterson other ideas he had which Included thla
back-charging. I do not recall; any other objections than our heavy expendi-
tnre which would be Incurred by such a radical change, other than the taking
away from the old welder to a great estent the control of charging bis
furnace. I refer more partleularly not to means of charging, but to the
quantitles and tlme."
In view of thèse facts and statements, it seems to us that the idea
of back-charging simply and naturally occurred to Patterson as a
means of using his patented movable draw bench, and thereby in-
creasing production. This is strengthened by Mr. Converse's esti-
mate of the invention. He says :
"My own Impression Is that ♦ • • the great advantage derlved from
the back-charging methods as against front-charging methods were far better
facllities for charging without interrupting the, welder or interferlng wlth his
work — contlnulty of présentation — and, as I haVe before stated, the enormous
Inerease in production for beat and labor unit."
■ As confirmatory of the view that the improvement in method hère in-
volved was mechanical and commercial, and did not call into exercise
inventive genius, it will be noted that near this same time other per-
sons had thought of back-charging for butt-welding, and that they
were seeking tO: devise tongs as a means of securing it. The dififî-
culty was not in the lack of conception of back-charging, but in the
lack of tongs to make its adoption possible. Thèse facts are to be
regarded not as anticipations or prior conceptions to Patterson, but
simply as evidencing the fact that the back-charging of a butt-weld
furnace v,'as a mechanical conception, which naturally occurred to
other persons near the same timei and without knowledge of the
others' actions. Thus Doyle, the itianager of the respondent's works,
says:
"When I went to Spang, Ohalfant & Co. the condition of thelr butt-weld
plate making was so very far behlnd the method used In other mllls, we
started in at once to make Improvements In the method of manufacture. I
reduced the number of heatings requlred to make a complète tube from 7
to 5; agaln from 5 to 3, still making the tube by the old common tag-weldlng
process; It beingstlll unsatlsfactory, ia 1894, we put in a bell-weldlng furnace.
It being f ound unsatlsfactory, on account of thC' expansé of making and weld-
ing on the tangs, I began work on devlslng sultable tongs to take the place
of the tang, knowing that when we Wer'è able tô get satîsfactory tongs we
would then haye to charge from the rear of the furnace, as that would be a
more eonvenient waj of working.. Along in 1895 I succeeded in devlslng satls-
NATIONAL ÏUBE CO. V. SPANG, 29
lactory tongs, showed the tongs In opération to Mr. George A. Chalfant,
gênerai manager of the -works, and explained the ad vanta ges of the tongs in
charglng from the rear over the tang method then in use."
George A. Chalfant, one of the respondents, testified as follows :
"Q. 22. In April, 1896, when you began to charge your butt-weld f urnace
at the rear, had you ever heard of the Patterson patent in suit, or of its in-
troduction at the complainant's works at McKeesport or elsewhere? A. I most
certainly did not. * * * Q. 7. When dld you first hear of eharging butt-
weld furnaces at the rear and drawing them at the front? A. It was in the
fall of 1888. Mr. Doyle said to me we ought to make pipe by eharging the
akelp or plates in at the back of the furnace and drawing them out welded
pipe at the front of the furnace. The only thing that would be necessary
would be suitable tongs to draw out the hot skelp. * * * Mr. Doyle came
to the office one day in the fall of 189.5, and asked me to corne up to the mill,
that he had something he wanted to show me. I went up to the mill. He
showed me a pair of tongs that he had made for drawing skelp out of the
front o( the furnace. He had made an opening in the back of the welding
furnace, and charged some plates in the back of the furnace for making incli
and a quarter pipe. When they were heated to a welding beat he drew them
through the bell at the front of the furnace with thèse tongs that he had
shown me, and made Inch and a quarter pipe. I said, 'You bave succeeded;
get ready to make pipe by baek-charging.' "
The significance of facts of like gênerai character was referred to in
Haslem v. Pittsburg Plate-GIass Co. (C. C.) 68 Fed. 481, where it was
said, citing Atlantic Works v. Brady, 107 U. S. 192, 2 Sup. Ct. 225,
27 L. Ed. 438:
"As confirmatory of the view that this improvement did not call into exer-
cise inventive genius, référence may be made to the fact that, even if priority
of conception could be accorded to Haslem, at or about the same time three
skillful mechanics— namely, Haslem, Sleeper and Edward Ford— acting inde-
pendently of each other, suggested the duplication of the orbicular beam in
the Belglan machine at the Jeffersonville Works, and the application of the
reverse crank movement to the beam. This circumstance fumishes per-
suasive évidence that the change was obvions to the skillful mechanic."
A vast amount of testimony has been taken to show the value of
the back-charging practice and its advantages over former methods.
We so regard it. It is a natural, continuons, straightaway method,
and, like ail such improved methods of continuons handling, it avoids
congestion of workmen ; allows steady, as compared with intermittent,
work; it utilizes the same heat and labor to produce a larger product.
We are also satisfied that by a quiescent eharging better heat results
are obtained and less scrap made. We are also satisfied that further
use of the practice has developed advantages additional to the two
which alone the patentée had in mind and referred to in the applica-
tion, viz., even longitudinal heating and séparation of the working
force. But, conceding such différence and progress, the fact still re-
mains that the step hère made was one of graduai, and to be expected,
progress which marks every great, and therefore progressive, in-
dustry. In that advance the tongs and movable draw bench afïorded
scope for inventive genius, and presumably hâve secured protection
to those who devised them. The principle of back-charging was not
Patterson's invention. Now, why should the gênerai principle and
practice of back-charging which tongs hâve made available for butt-
weld heating be monopolized to prevent their use for that purpose?
30 125 FEDERAL RKPOBTER.
Nor was fhé' prindplé of qùiescent charging his. He simply ùtilized
theise principles by emplq^ing them in the only way they could be used
by means of improved tongs and shifting draw bench, and in a way
tiae draw bench naturally suggested. That this use disclosed new
and unexpected advantages may be conqeded, but it is not everything
that is novel and useful that is patentable; Many processes and meth-
ods haVe proved exceedingly valuable,in mânufacturing that hâve not
been patentable. To use, with some changes, the language of another
(Atlantic Works v. Brady, 107 U. S. 192, 2 Sup. Ct. 225, 27 L. Ed.
438), we may say that the development of this as of every great in-
dustry develops a constant (J.emand for new methods, which the ordi-
nary.skill of those versed in'.such brarich has generally been adéquate
to devise, and which dçvising.is the natural outgrowth of such de-
velopment. Each forward step prépares the way for another, and to
burden a great industry with a mbnopoly to each improver for every
step thus made, except where marked tiy an advance greater than
mère progressive skill, is unjust in prineîple and hostile to progress.
In reaching the conclusion of the invalidity of this patent we are
not unmindful of the prima faciès to which its issue entitles it. But
the prirna faciès is necessarily aflfected by, the fact that the record
discloses neither in the spécification of the patent npr in the action
of the examiner any référence to the Crâne practicCi Indeed, the
proofs show it vras not known to Patterson. His spécification con-
tains no référence to it. Indeed, it is conçeded that if Ijterally con-
strued, and not restricted to the spécifie method disclosed, Crane's
method would infringe at least one claim.
In conclusion, vre remark that while the testimony of the experts
in this case shows the thermal and operative advantages of back-
charging, a conclusion to ;which we agrée, and while the process is
simple, efifective, and économie, we are nevertheless satisfied it in*
volved no invention. In our judgment, it was but the steady évolu-
tion and development of advance incident to an industry where com-
pétition pushes progress to' constant change. In this advance the
movable bench and the successful tongs wèrë material factors. Back-
charging was the natural step iii advance when thèse factors were pro-
vided.
So holding, we are oî opinion the patent is invalid, and the bill
must be dismissed.
VICTOR TjtLKING MACH. 00. v. AMBEIOAN GEARHOPHONE CO.
(Circuit Court, D.Connectlcut July 13, 1903.)
No. 1,093.
1. Patents— InFringément-'Talkikg Machines.
The Johnson patent, No. 679,896, for an improvement In sound-bôxes
for talblng: machines, the essentlal featùre.of which is a spring-mounting
for the çtyliis-baj:, comprlsing a thin pièce of tempered steel having ita
ends twisted In opposite directions, construed, and held not infringed.
In Equity. On final hearing.
VICTOR TALKING MACH. CO. V. AMEBICAN GEAPHOPHONE CO. 31
Horace Petit, for complainant.
Philip Mauro, for défendant.
PLATT, District Judge. This is a bill in equity seeking to re-
strain défendant from an alleged infringement of letters patent No.
679,896, issued August 6, 1901, tô Eldridge R. Jolinson, and sub-
sequently assigned to the plaintiflf, for an "improvement in sound-
boxes for talking machines." The claims sued upon are as follows :
"(1) In a sound-box, a spring-mounting for the stylus-bar, comprlsing a
thin pièce of tempered steel haying its ends twlsted in opposite directions,
and secTired to the sound-box casing, and its intennedlate portion secured
to the stylns-bar.
"(2) In a sound-box, a spring-mounting for the stylus-bar, Comprising a
strip of tempered steel havlng screw holes provided in each end, and the said
ends twisted or sprung in opposite directions, so as to render the intermedi-
ate portion extremely sensltlve, the sald intermediate portion being rlgidly
secured to the stylus-bar and the end portions to the sound-box casing,
thereby rendering the stylus-bar sensltlve, for the purpose described.
"(3) The combina tion with the sound-box casing, a diaphragm mounted
therein, a stylus-bar mounted In, an openlng formed in the lower wall of the
casing, a tempered steel spring secured to the said stylus-bar, having its ends
twisted In opposite directions, and secured to the sound-box casing on each
side of the stylus-bar.
• * • *• * « • • *
"(5) In a sound-box for talking machines, a spring-mounting for the stylus-
bar, comprising small tempered steel Angers extending from each side of the
stylus-bar transversely thereto, each of said fingers being twisted or sprung
in opposite directions and havlng thelr f ree ends rlgidly secured to the sound-
box casing.
"(6) In a sound-box for talking machines, an annular casing having a
radially-disposed aperture provided in its wall, a stylus-holder adapted to
pass through said aperture, small tempered steel fingers extending from the
said stylus-bar on each side thereof, each of sald Angers being bent or
sprung in opposite directions, and havlng thelr free ends secured to the sound-
box casing, for the purpose described.
"(7) The comblnatlon vfith the sound-box casing, a diaphragm mounted
therein, à stylus-bar mounted in an openlng formed in the lovcer vcall of the
casing, a wlre connection rigid in the direction of Its length secured to the
diaphragm and to the stylus-bar, a tempered steel spring secured to the said
stylus-bar having its ends twisted In opposite directions, and secured to the
sound-box casing on each side of the stylus-bar.
"(8) The comblnatlon with the sound-box casing, a diaphragm mounted
therein, a stylus-bar mounted in the casing, a wire connection rigld in the
direction of its length secured at one end to the stylus-bar, a head formed
on the other end of said wire adapted to an openlng in the diaphragm, means
for securing said head to the diaphragm, and a tempered steel spring secured
to the stylus-bar having twisted ends, the sald twisted ends being secured
to the sound-box casing on each side of the said stylus-bar.
"(9) The comblnatlon with the sound-box casing, a diaphragm mounted
therein, a stylus-bar mounted In the casing, a wire connection rigid In the
direction of Its length secured at one end to the stylus-bar, a head formed
on the other end of said wire adapted to an openlng in the diaphragm, means
for securing said head to the diaphragm, a film or seal of wax applled over
the said connection and a tempered steel spring secured to the stylus-bar
having twisted ends, the sald twisted ends being secured to the sound-box
casing on each side of the said stylus-bar.
"(10) The comblnatlon with the sound-box casing, a diaphragm mounted
therein, a stylus-bar mounted in the casing, a wire connection rigid In the
direction of its length secured at one end to the stylus-bar, a head formed
on the other end of sald wire adapted to an openlng In the diaphragm, a
flange formed on the outer end of sald head, a washer secured on sald head
32 ■..:."] 125 FERBIBAL EBPOETEB.
adapted to bear agalnst the opposite (ace of the dlap.hragm, a film or seal of
wax appUed over the sald connection (or pi^eventing the same (rom rattling,
and a tempered-steel spring secured to the stylus-bar having twlsted ends,
the said twlsted ends being gecured to the sound-box casing on each side o(
the sald gtyius-bar. ' '
"(11) The combina tloB with the sound-box casing, a dlaphragm mounted
therein 60 as to be free to moTie throughout its entlre area, a stylus-bar
loosely mounted Withln the casing, a wire connection rlgld In the direction
of its length secured to the stylus-bar, a head formed on the opposite end
o( said Wire, meana for posltivély Connecting tfils heàd to the dlaphragm, a
sealip( wa? applied over said çonijectlon, and a thin twlsted spring secured
at Its middle portion to the stylus-bar and bavlng its twlsted ends secured
to the ,£ound-b9X. casing on each side of said stylus-bar, for the purpose de-
scribed."
"(16) iÀ sound-box for talkiiig machines comprlsing a casing made in two
sections : adat)ted . to fit one wlthin the ' othet^ ; the said two sections being
driven orahrunk together, a dla-phiragm conflned at its periphery between the
two sections, yielding gaskets proTlded on each side of the said dlaphragm;
the said parts being adjusted so as to preventthe said dlaphragm from rat-
tling, yet leaTlng it (ree to vibrate throughoTlt its entire area; a stylus-bar
mounted withln the casing; a tempered-stpel spring having twlsted ends,
which are: secured to the casing on each side of the diaphragm, and having its
intermedlatè part secured to the étylus-bar; a wire connection permanently
secured to the stylus-bar at one end and to the diaphragm at its other, and
a wax seal applied over the connection to the diaphragm, substantially as
described."
: The défense is noninfringement.
It is well at the outset to make a few gênerai observations. A
serious contention is on foot between thèse parties and in the court
for this district as to theîr respective rights in and to a certain type
df talking machine which rtiakes use of tl^e disk record and a so-called
"zig-zag movenlent." It cannot be expected that at the présent
juncture Iwillinvade the darkened recesses for light upon that con-
troversy. Consequently, it is not persuasive to charge the défendant
with producing a "Chinese copy" of the plaintifï's construction. It
is a somewhat (pecuHar method of attaining a coveted position to at-
tack the défendant with .a contention which, if successful, could only
resuit in lopping off an unimportant branche while the ax is withheld
frQm performing its function in a prOcess which might resuit in
Seyëfing the very trunk of the tree itself.
In the case at bar the contention of the parties, as 1 gather it from
the oral and written arguments, is chiefly confined to the question
as tb whether in fact the défendant uses a spring-mounting for a
stylus-bar, which embôdies in its constriiçtion "a thip pièce of tem-
pered steel having its ends twisted in opposite directions." The
quotation is tafcenf from claim i. Ail manner of changes are rung
upon the languâge in the làter claims, but through them ail the m^in
idea which thèse words exfiress can be traced. To find out what
the inventer meant, we must go to his spécifications. In one place
he says that the pièce shall be of "finely tempered steel," and that
he finds it necessary to provide an "extremely sensitive mounting for
the stylus-bar." High tension and extrême sensitiveness is the bur-
den of his song. In the patent in suit, as in ail like patents, the in-
ventor is searching for a perfect reproduction of the human voice.
The effort would seem to be hopelêss, but every approach toward
TIOXOE TALKINO MACH. OO. T. AMERICAN aEAPHOPHONE 00. 33
the desired haven is laudable and worthy of protection. The point
to be discussed is whether the attempted approach actually approaches.
In the case at bar the patentee's Hne of thought is this : I wiU first
take a spring of finely tempered steel. I will then put a reverse tor-
sional twist in it, so that one end will twist in one direction, and the
other in the opposite direction. I will then fasten down the two
ends by riveting the eyes at the two ends down fiât. The opposing
twists, furnishing power in opposite directions, and with practically
equal force, will so act upon the spring as to produce at or near the
center a state of rest, a suspension of motion, a normal point at which
motion ceases, but which can, however, be stirred by an almost in-
finitésimal vibration. To obtain the acme of responsiveness, it was
indispensable that the spring should be of exceedingly fine temper.
The higher the tension, the finer the resuit. This was the thought,
as I conceive it; and now to haggle about low-grade tool steel,
sheet tin, or any other substance which could only bring a minimum
of tension, as being within the patent, is to dégrade the high pur-
pose, the lofty ambition, which must hâve quickened the puise of the
inventor when the possibility which the thought carried with it ex-
panded upon his mental horizon.
Under this construction it is certain that no infringement has been
shown by the évidence. In truth, a very much narrower construc-
tion might be evolved, and again the facts would not sustain the plain-
tifï's contention. In a business carried on under the circumstances
and in the way testifîed to by the defendant's witnesses, a single in-
fringing spring device out of a mass would even then be an accident,
if not a miracle.
It is unnecessary to say more in explanation of my order, but I can-
not refrain from touching lightly upon the diaphragm and the gaskets.
In claim i6 an additional élément in the combination appears. The
pressure of the rubber gaskets on the edge of the diaphragm is to be
such "as to prevent the said diaphragm from rattling, yet leaving
it free to vibrate throughout its entire area." It had long been the
practice to hold the diaphragm tightly between the gaskets so as to
make it solid at the edges, and in patents lately prior to the one in
suit Mr. Johnson had suggested that it was better to hold the dia-
phragm loosely, so that the vibrations might reach the very edge.
Now he says, let the gaskets neither overdo nor underdo their ap-
pointed task. Let them hold just tight enough so that there wilî
be no clamping, and yet loosely enough so that vibrations may reach
the extrême periphery. The thought that lay back of this was of the
very essence of dream life. It came from the ineffable, the uncertain,
and is too impractical to be granted a monopoly.
Let the bill be dismissed, with costs.
125 F.— 3
SA .'..^ ■:■.■.'.-..:; i:.'i aaS'-ï'HDHRÀIi REPOKTHB,' ■
BROWN T. ORANB CO.
(Circuit Oourt, N. D. riliuols, N. D. October 13, 19C».).
No, 26,236.
L PAtb»*8— Antioipàtioh nr AmIiogous Akt— Cobe-Makino Machines.
■Thtt Orant patent^ No. 613,998, for a machine for maklng cores, is TOld
for antiolipatlon by machines for. maklng tlles; tlle maklng and core
maklng being so closely analogous tbat the mère adaptation of a machine
for one purpose to the other.by the enlarglng or dimlnishing of some
of the pàtta, does not constituée patentable inyention.
In Equity. Suit for infringement of letters patent No. 513,998 for
a machine for making cores, grânted to Edward Grant February 6,
1894. On final hearing.
Walter H. Chamberlin, for complainaht.
Banning'&Banning, for défendant.
KOHLSAAT, District Judge. The bill hereîn was filed to enjoin
the infringement of claim 3 of patent No. 513,998, which reads as fol-
lows:
"A core-njaklng machine, conslsting of a hopper, F, located adjacent to,
and BUpplylng material to, a tube, D, having within It a worm, È, for forcing
materlal oùt thrcugh tube, D, an àperture, H, within sald worm, and a wire,
A, held In aflxed position, passing through sald àperture, H, and termlnating
beyond the end of saîd worm, E, for the purpose of f ormlng a hole in the body
of the core for the escape of thie gas."
There is no attempt on the part of défendant to deny the infringe-
ment. The défense rests wholly upon the invalidity of the complain-
ant's patent by reason of the'state of the prior art. Several earlier
patents are shown in the record which deal with devices of an an-
alogous character, such as tile making. Thèse hâve the hopper, a
tube with a worm or screw in it for advancing the material, a wire, or
its équivalent, for the purpose offorming a hole in the tile or article
manufactured. For some reasoft or other, cores for molding pur-
poses hâve, prior to complainant's device, beçn made in two sections,
and then fastened together by hand — a tedious and uncertain method.
It appears that cores shôuld be constructed with a longitudinal length-
wise opening through them, in order that gases and vapor may escape
therefrom. The Sault patent' (1862), No. 37,112, is for a device for
covering wire with gutta-percha and other substances, and for manu-
facturing other articles thereirbm. The coating substance is forced
upon the wire by means of a sérew. The tube in which the screw
Works is tapered ofï at the coating end. Rubber tubing, it is claimed,
can be formed by this device.. Défendant insists- that the converging
of the feeding tube makes this device inefifective in the manufacture of
cores. Whether such is the case or not is a disputed fact. The
iWoodcock patent (1867), No. 62,914, is a tile machine. It, too, has
the hopper and the cylinder, in which a screw revolves, forcing the ma-
terial into a die, as required. The patentée claims as new a revolving
core shaft. Hère, too, the die forming the tile is smaller than the
çvUnder or tube in which the screw works. The McKenzie patent
IN BE KNIGHT. 36
(1869), No. 89,878, covers a device for making tfle. It Kas a Hopper,
a cylinder in which a screw forces the material forward into a die,
and a mandrel or bore-forming projection upon the screw, the cylinder
and screw tapering towards the die. The same is substantially true
of the Hotchkiss patent (1870), No. 105,335, ^or making tubes, etc. ;
also, the McKenzie patent (1880), No. 233,535, ^or a brick and tile
machine ; also, the Clark patent (1881), No. 242,884, for covering wire,
etc.; also, Harris patent (1884), No. 298,850, for making tile. The
Tiffany patent (1859), No. '25,687, for a tile machine, has a hopper, a
tube in which a screw or worm which fills the tube, and forces the
material upon a die, an extension of the screw shaft for the purpose
of forming a bore, and an unrestricted discharge. The die is of equal
diameter with the tube and screw.
It is thus évident that the only feature of complainant's device, if
any, which can be urged as new must be its adaptation to the manufac-
ture of cores. The materials from which thèse are made are sand,
flour, and perhaps some kind of oil or lubricator. The fact that cores
were never made by machinery before is very persuasive as to the
novelty of the device, but it cannot be deemed conclusive. If the
device be old, its use is unimportant. It seems fair to say that the
only différence between the tile machine of Tiffany and the Grant ma-
chine is the différence in size of the article manufactured, and the
lengthwise aperture through the same. Can it be said that title mak-
ing and core making are différent arts in the sensé in which the
courts deal with the term "arts" ? Is it patentable novelty to reduce
th« size of the tile, as well as the relative size of the bore therethrough,
so as to produce a smaller article with a relatively smaller bore?
This involves simply a reducing of the die and the mandrel. Indeed,
the die may or may not be reduced in size. Certainly, the différence
in material used for tile making and that used for core making is
not important for the purposes of this hearing.
In my judgment tile making and core making are so closely analo-
gous that any one having in mind the making of cores by machinery
would at once, and without thought of invention, adapt the old art
devices to the article required. It involves simply the enlarging or
decreasing of some of the parts. No new princple is involved, and
complainant's patent must therefore be held to be anticipated ia the
prior art, and invalid.
The biîl is dismissed for want of equity.
In re KNIGHT.
^District Court, W. D. Kentucky. September 15, 1903.}
No. 830.
L Banketjptct— JnitisDicTiON op Courts op Baîtkrdptct.
Wben a gênerai asslgnment for the beneflt of creditors \s made t)y a
debtor, the same belng an act of bankruptey, the right Immedlately arlses
In bis creditors to hâve hls estate admlnlstered under the bankruptey law;
and, where the enforcement of this rlght la demanded by a proper pro-
ceedlns -wlthin four months after its Inceptlon, uo action by any court
36 125 FEDERAL BEp5bTËU.
In any suit brought after the commission of the act of bankruptcy can
defeat It, without the consent of the bankruptcy court, whose jurisdiction
Is exclusive, and, on the making of the adjudication, relates back to the
act of bankruptcy.
a SaMb— Peioritt of Jurisdiction of Statb Court— Appoihtmbnt of Re-
CBIVBK.
Under Bankr. Act July 1, 1898, c. 541, § 3a, subd. 4, 30 Stat. 546 [U. S.
Comp. St. 1901, p. 3422], as amended by Act Feb. 5, 1S03, c. 487, 32 Stat.
797, whicB makes the appolntment of a receiver because of insolvency
an act of bankruptcy, a state court eannot, by the appolntment of a re-
ceiver on such ground, obtaln priority of jurisdiction to adminlater the
prpperty of a debtor, to the exclusion of a court of bankruptcy.
8. Samb— tProceeding bt Trustée to Rbcoveb Pbopertt.
Under Bankr. Act July 1, 1898, c. 541, § 67e, 30 Stat. 664 [U. S. Comp.
St. 1901, p. 3449], as âtaended by Act Feb. 5, 1903, c. 487, 32 Stat. 800,
a court of bankruptcy bas jurisdiction of a proceedlng by a trustée to
recover property from an assignée to vrhom it was conveyed by the
bankrupt, for the beneflt' of creditors, within four months prier to the
bankruptcy.
4. Same— Pbiobitt of Jueisdiction of Statb Court— Suit Commenced
■WITHIN POUB MoNTHS.
m général, an adjudication of bankruptcy vests the bankruptcy court
■with exclusive jurisdiction to admlnister the property of the bankrupt,
as against any state court whlch may hâve obtalned possession of such
property through proceedlngs instituted wlthln four months prier to the
adjudication, and it Is immatèrial that the proceedlngs In the state court
were for the enforcement of valld liens not affected by the bankruptcy
act '
5. Same— Saie of Property ht Assignmbnt.
A sale of property by an assignée for the beneflt of creditors vests the
purçhaser with no title as against the trustée in bankruptcy of the as-
signer subsequently appointed on an adjudication based on the assign-
ment, where such purchasér has made no payment for the property.
In Bankruptcy. On rule to rèquire the surrender of property to the
trustée.
Wheeler &, Hughes and W. M. Smith, for petitioning creditors and
trustée.
Robbins & Thomas and Thos. W, Bullitt, for R. M. Chowning,
receiver.
EVANS, District Judge. Upon hearing the testimony and con-
sidering the record so far as applicable td the pending rule, the court
finds the facts to be as follows: On IMarch 21, 1903, Henry Knight,
of Fulton, Ky., owning property probably worth $45,000, made a gên-
erai assignment for the benefit of his creditors to R. M. Chowning,
who then was and now is the cashier of the First National Bank of
Fulton. That on the same,,day, in writing at the foot of the deed of
assignment, Chowning accépted the trust, though he did not qualify
as assignée in thé county court of Fulton county, as required by sec-
tion 76 of the Kentucky Statutes of 1899, until March 26, 1903, when,
at an early hour in the morning, with W. W. Morris, then vice prési-
dent of said bank, and J. E, Robbins and Gus Thomas, ifs attorneys, as
sureties thereon, he did so by executing the bond required by law.
That the assignée was thenceforward subject to the . orders of the
county court under section 82 of the Kentucky Statutes of 1899.
That while, under section 96, this would not prevent an action for a
IN EE KNIGHT. 37
settlement of the trust, yet otherwise the trust was to be executed and
the assets administered pursuant to the provisions of what constitutes
a portion of the insolvency laws of the state, embraced in chapter 7
of the Kentucky Statutes of 1899, and covering sections 74 to 96,
inclusive, though it is not understood that this qualification of the
assignée would prevent the appointment of a receiver in the bank's
action, if otherwise admissible. That on the same day, to wit, on
March 26, 1903, the First National Bank of Fulton, by its attorneys,
J. E. Robbins and Gus Thomas, brought a suit in equity in the Fulton
circuit court against Henry Knight and others upon certain prom-
issory notes for large sums, and which had more than four months
before March 21, 1903, been secured by a mortgage upon certain real
estate — ^principally a large hôtel belonging to the bankrupt — the relief
sought being a personal judgment upon the indebtedness, and a forc-
closure of the mortgage given to secure its payment. That certain
other persons, who also had liens upon the same property, mostly
if not altogether prior to that of the bank, were made défendants
to the action, and required to set up their claims. That subsequently
they did this by cross-petitions filed in the action. That on May 14,
1903, upon the claim in the pétition and otherwise that Knight was
insolvent (which fact at the hearing of the rule was admitted to hâve
been true at the time), and upon the further claim that the mortgaged
property was probably insufïicient to pay the mortgage debts, the
Fulton circuit court, in the action referred to, appointed the same
R. M. Chowning as its receiver therein, with directions to take pos-
session of the mortgaged premises, rent the same, etc., and to do cer-
tain other things in the way of operating the hotel, which constituted
the major part of the mortgaged premises. That said Chowning at
once gave bond as receiver, and entered upon the discharge of his
duties as such. That no suit was ever brought in the circuit court for
a settlement of the assignee's trust, under section 96 of the statutes,
nor did the county court make any orders in the premises under sec-
tion 82, nor was any order taken in either court concerning the duties
of the assignée in the premises. That on June 9, 1903, Chowning sold
certain personal property of the bankrupt, to wit, a building on leased
premises, used as a restaurant, and certain appurtenances thereto,
to one J. A. Milner. That the considération therefor was the full
amount of the debt due by Knight to Chowning, and which Milner
assumed and agreed to pay, but no part of which has yet been paid.
That Chowning claimed to hâve a mortgage on this last-named prop-
erty for a debt due to himself for $2,700, and made the sale as assignée
without orders from any court. That before this sale, namely, on
June I, 1903, three or more creditors of Knight, whose claims aggre-
gated $500 in amount, filed a pétition in this court, wherein they
showed that on May 21, 1903, Knight had made a gênerai assignment
for the benefit of his creditors, and upon that ground prayed that he
might be adjudged a bankrupt, within the meaning of the law. That
pending that proceeding, and when it was about ready for détermina-
tion, the said Knight, on June 22, 1903, filed his own volimtary péti-
tion in this court, praying for thé same relief. That the two proceed-
ings were Consolidated by the orders of this court, and on June 23,
38 125 FEDEEAL EBPOBTBB.
1903, the said Knight was accordingly adjudged a bankrupt. That
on the 8th day of August, 1903, H. F. Oliver was duly appointed
trustée of the bankrupt, and shortly thereafter entered upon the dis-
charge ôf his duties as such, and that on September 5th he filed here-
in his affidavit, wherein he stated, in substance, that the said Chown-
ing had possession of the property of the bankrupt, and refused, upon
demand, to surrender it to the trustée, and prayed for a rule against
said Chowning to show cause why he should not be required to sur-
render the assets of the bankrupt to the trustée. The court further
finds as a fact established by the testimony that the mortgaged prop-
erty exceeds in value the amount of the liens upon it, including the sev-
eral mortgages and the vendor's lien. Another point was raised, and
upon it the court, under the rtjle established in Mueller v. Nugent, 184
U. S. 15, 22 Sup. Ct. 269; 46 L. Ed. 405, heard évidence, to wit, the
question whether the receiver's possession of the property, under the
facts found, was adverse to the trustée. The court concluded that
such possession of the receiver was not adverse, but, as that may be
a question involving considérations both of law and of fact, it may be
better disposed of by what may be hereafter said. At the close of the
testimony the court, without disposing of the questions arising upon
the rule, was clearly of opinion that there ought to be at least a tempo-
rary stay of proceedings in the case pending in the state court; and
under section 11 of the bankruptcy law (Act July i, 1898, c. 541, 30
Stat. 549 [U. S. Comp. gt- 1901, p. 3426]), and upon the admission in
open court that, at the time of the appointment of the receiver, Henry
Knight was insolvent, an order was entered accordingly.
In the response of Chowning, and by the argument of counsel,
four contentions are madè. The first is that the property of the bank-
rupt having been taken into the custody of the state court, through
its receivership, before the adjudication in bankruptcy, and in an
action of which the state court had jurisdiction, the case is one to be
decided upon the . well-known principle that that one of two courts
of co-ordinate jurisdiction which first gets its grasp upon property
is entitled to hold it for subjection to its judgment ; and the case of
Peck V. Jenness, 7 How. 612, 12 L,. Ed. 841, is principally relied upon
to support this contention; The second contention is that the re-
spondent, as receiver, holds the assets adversely to the trustée in bank-
ruptcy, and that a summary proceeding for its recovery is not admissi-
ble. The third is that the mortgage and vendor's liens sought to be
enforced in the state court were ail created more than four months
before the making of the gênerai assignment, and this circumstance
is supposed, per se, to be sufficient to defeat the jurisdiction of this
court, although the suit for the enforcement of those liens was com-
menced after the commission of the act of bankruptcy, and within four
months before the adjudication. And the fourth contention is that
Chowning having sold the restaurant before the adjudication to Milner,
to whom possession was delivered, that portion of the estate is also
held adversely to the trustée. We need not discuss thèse propositions
separatély, though it may be admitted that, if the bankruptcy court has
only co-ordinate jurisdiction with the courts of the state in bank-
ruptcy matters, the rule should be discharged. Knott v. Evening
IN BE KNIGHT. 39
Post Co., 124 Fed. 342. On the contrary, a différent resuit must
follow if the bankruptcy court, within the powers bestowed upon it
for bankruptcy purposes, is one of exclusive jurisdiction. Doubtless,
that court, while it may, under section 11 of the statute, stay pro-
ceedings in actions in a state court in certain cases, can décline to
exercise its jurisdiction and power in that respect. But this dépends
entirely upon its own discrétion — a discrétion which cannot be con-
trolled otherwise than by appellate proceedings in a higher court.
This discrétion has been exercised by this court in several instances
— among them, in the Case of Holloway, 93 Fed. 639, and in the
Case of Porter, 109 Fed. m. Doing this did not dépend upon any
want of power in such cases, but because it was disci-eet not to exer-
cise the power, inasmuch as no benefit could corne to the gênerai
creditors by staying a suit in the state court, the entire avails of which
must go to the plaintifif in the action there pending. Hère, however,
the évidence shows that the property exceeds in value the amount of
the liens upon it ; and the court's discrétion will move in the other di-
rection, if, indeed, it be a matter of discrétion at ail. It must be a
matter of discrétion if the law gives the bankruptcy court superior
or exclusive power in such cases, but the application of the trustée
must be denied if the rights of the state court in the premises are su-
perior to those of this court. We must endeavor, therefore, to ascer-
tain what the law is.
By the décisions in Bryan v. Bernheimer, 181 U. S. 188, 21 Sup.
Ct. 557, 45 L,. Ed. 814, Leidigh Carriage Co. v. Stengel, 95 Fed. 645,
37 C. C. A. 210, and other cases, it is the established doctrine in bank-
ruptcy that an assignée, under a deed of gênerai assignment, and the
exécution of which deed is the act of bankruptcy upon which the ad-
judication is niade, although he has qualified in the county court and
is acting under its orders, does not hold the estate of the bankrupt
adversely to the trustée in bankruptcy. It thence logically and neces-
sarily follows that the assignée holds the property subject to the right
of the requisite number of creditors having debts amounting in the ag-
gregate to the sum of $500 to avail themselves of the act of bank-
ruptcy and secure an adjudication, and that when this is donc the
rights of the creditors relate back to the act of bankruptcy, and over-
ride ail intermediate or intervening attempts by the assignée to over-
reach or defeat the results of the act of bankruptcy, or the rights of
creditors arising out of it. The gênerai principle which underlies the
subject, and which cannot be ignored, must be this : When a gênerai
assignment for the benefît of creditors is made by a debtor, eo instanti
there is generated by the statute a right in his creditors to hâve his
afifairs wound up and his estate administered in the bankruptcy court
pursuant to the bankrupt law, which has suspended the opération of
ail state insolvency laws ; and, if the enforcement of this right is de-
manded by a proper proceeding within four months after its inception,
no action in any court in any suit brought after the commission of the
act of bankruptcy can defeat it without the consent of the bankrupt
court. Quoad hoc, the jurisdiction of the bankruptcy court is neces-
sarily exclusive and suprême. In re Watts & Sachs, 190 U. S. i, 23
Sup. Ct. 718, 47 L. Ed. ; Mueller v. Nugent, 184 U. S. i, 22 Sup.
40 125 FEDERAL REPORTER.
Ct. 269, 46 L. Ed. 405; Bryan y, Bernheimer, 181 U. S. 188, 21 Sup.
Ct. 557, 45 L. Ed. 814; Tri re l^engert Wagon Co. (D. C.) iio Fed.
927; Leidigh Carriage Co, v. Stengel, 95 Fed. 645, 37 C, C A. 210.
In other words, the rights o{ creditors, inchoate from the making of
the assignaient, ripen into maturity when the adjudication is made.
If it were otherwise the bankruptcy law could be eyaded with the ut-
most facility. When Henry Knight, in this instance, committed an
act of bankruptcy by making the deed of gênerai assignaient to
Chowning, the First Natiooal Bank of Fulton, of which Chowning
was cashier, and of the Utigation of which he was an active manager,
must be regarded as , havihg had full notice of the act of bankruptcy,
and of the conséquences likely to follow, especially as the vice prési-
dent of the bank and its attorneys were the sureties of Chowning on
his bond as assignée, executed çarly in the morning of the same day
on which the bank's suit was brought. With this knowledge, and
under thèse circumstances— or, indeed, under any circumstances — can
the rights of the creditors to hâve the bankrupt's estate administered
in the bankruptcy court and under the bankruptcy law be defeated by
the expédient of thereafter hurriedly bringing a suit in the state
court, in which, upon an allégation of insolvency, a receiver is appoint-
ed and put in charge of the debtor's property — things which, of them-
selves, under the amendment of 1903 (Act Feb. 5, 1903, c. 487, 32 Stat.
797), constitute a further act of bankruptcy, upon which alone an
adjudication could hâve been secured? And just at this point we
may well inquire whether, if an adjudication in bankruptcy had been
made upon a creditor's pétition alleging, in the language of the amend-
ment of February 5, 1903, that because of insolvency a receiver had
been put in charge of Knight's property by the state court, that court,
under the doctrine and rule of comity, and the supposed teachings of
the case of Peck v. Jenness, would be still entitled to administer the
assets, notwithstanding the bankruptcy law? This inquiry would seem
to reach the kernel of the matter, for if a state court could thus do
the very thing which constitutes an act of bankruptcy, and at the
same time defeat it on the doctrine of comity and priority of jurisdic-
tion, the new ground of bankruptcy is a manifest delusion. Thèse
suggestions seem to me to show that the expédient resorted to in
this case, under the facts and circumstances surrounding it, cannot
.defeat the rights of the gênerai creditors, which related back to the
doing of the thing upon which the adjudication in bankruptcy was
made. Section 70 of the bankrupt law (30 Stat. 565 [U. S. Comp. St.
1901, p. 3451]), it is true, provides that the title of the trustée shall
relate back to the adjudication, but it is obvions that cases like Bryan
V. Bernheimer and Leidigh Carriage Co. v. Stengel proceed upon the
view that that provision in no way affects the point decided. Besides,
it is important to remember that, whether so in fact or not, a deed
of gênerai assignment is constructively fraudulent, and, in légal con-
templation, its purpose is to hinder and delay creditors, within the
meaning of section 67e of the statute of 1898 (30 Stat. 564 [U. S.
Comp. St. 1901, p. 3449]), and consequently that under that section
the assigned property, if the deed was made within four months before
the filing of the pétition in bankruptcy, belongs to the trustée, and by
IN BE KKIGHT. éi
the express terms of the section it is made his duty to recover and
redaim it. Brandenburg on Bankruptcy, §§ iioo, 1097, and cases
cited. This duty and this right, we hold, cannot be defeated by any
proceeding brought within the four months in any other court. And
such recovery may be enforced by proceedings in the bankruptcy court,
under the express provisions of section 67, cl. "e," as amended by Act
Feb. s, 1903, c. 487, 32 Stat. 800, wholly independently of section 23
of the act of July i, 1898, c. 541, 30 Stat. 552 [U. S. Comp. St. 1901,
p. 3431], which is thereby limited to suits in controversies of a différent
nature.
It seems to me to admit of no doubt, under the provisions of section
3, cl. "b," 30 Stat. 546 [U. S. Comp. St. 1901, p. 3422], that the
period of four months is clearly and definitely fixed in the présent
bankruptcy law (though possibly not so in the act in force when Peck
V. Jenness was tried) as limiting the time within which creditors shall
hâve an opportunity to obtain knowledge of the commission of acts of
bankruptcy, and to consider and détermine whether to avail themselves
of the rights afïorded by the bankruptcy law for their benefit, as the
conséquence of those acts of their debtor. The rights of the gênerai
creditors should not be easily defeated by the acts of secured creditors
whose debts are much more certain of payment. The acts of others
within the four-months period referred to cannot defeat the rights
given to the gênerai creditors by the law. If an act of bankruptcy is
made the basis of an adjudication, such adjudication, when made, dis-
solves and avoids every intermediate step respecting the bankrupt's
estate taken anywhere outside of the bankruptcy court, subject, possi-
bly, to certain équitable considérations, such as may arise out of inno-
cent acts, but the existence and effect of which considérations must
be adjudged by the bankruptcy court alone. Examples of the con-
sidérations referred to are those which relate to expenses incurred,
the fées, etc., of assignées, and the doing of certain innocent things
after the act of bankruptcy, but before the adjudication. So, again, it
seems to me to admit of no doubt that the receiver of the state court,
in this instance, having been appointed after the commission of the
act of bankruptcy upon which the adjudication was made, and long
within the period of four months referred to, is precisely in the position
of the assignée in Bryan v. Bernheimer, and holds subject to the rights
of the gênerai creditors, which relate back to the deed of assignment,
and for whose use and benefit the assignée held the assets, precisely
as a receiver would hâve done in case a debtor's property had been put
in his charge because of the insolvency of the debtor under the amend-
ment of 1903, if that act of bankruptcy had been the basis of the ad-
judication. There can be no différence in principle between the two
cases, and when they are coupled their force is irrésistible. And if this
resuit does not follow, then the commission of the act of bankruptcy
would defeat the object of the law in making it such, which it would
be absurd to suppose was intended by Congress. Ex necessitate rei
Ifhis must be so, for, if the property in the hands of the receiver or as-
signée must still remain there, the adjudication in either case would
be a mère barren abstraction, and utterly useless to the petitioning
creditors. Thèse observations may be emphasized in this case by the
, 42 125 , PSDERAIi REPORTER.
factSi fir^tjthat.the receiver ;does not daim to hold otherwise than in a
repre^ent^tiiye or officiai capacityior the benefit of the secured credit-
ors, and makes no pretense of personal and individual ownership of
the property (Muellçr v. Nugent, 184 U. S. 16-17, 22 Sup. Ct. 269,
46 h. Ed. 405); second, that his appointment, and the delivery of the
possession of the property to him as receiver, were by a process and
upon grounds which per se constituted an act of bankruptcy; third,
that his constituents at the time had full notice of the original act of
bankruptcy, to wit, the gênerai assignment to Chowning, the présent
receiver, upon which act the adjudication in bankruptcy was made;
and, fourth, because, holding the property as assignée, and under lia-
bilities fixed by the décision in Bryan v. Bernheimer, Chowning could
not change or évade those liabilities by silently abdicating his trust
as assignée, and as suming those of a receivership which he had pro-
moted, and in a suit to which the gênerai creditors were not parties,
and the judgment in which was not binding upon them. In other
words, when the assignment was made, and when Chowning qualified
as assignée, at that moment, under the ruling in Bryan v. Bernheimer,
he came under a certain obligation to the creditors, namely, the
obligation to hold the assets for the trustée if the bankruptcy law
should be invoked by a proper proceeding;' and that obligation, once
arising, cannot be destroyed by the action of the state court, taken
most probably at his instance in a proceeding commenced after the
obligation arose, and to which the petitioning creditors were not
parties.
Thèse propositions take the case entirely out of the doctrine of Peck
v. Jenness, and of judicial comity generally, and bring it within those
cases which show that upon transactions which are acts of bankruptcy,
and which may be made the basis of adjudications as such in the
bankruptcy courts, the latter courts hâve the exclusive power, under
the suprême law of the land,, and that as to acts done within four
months of the commencement of bankruptcy proceedings there are
no courts with powers co-ordinate with the bankruptcy courts. In re
Watts & Sachs. If thèse were not sustainable propositions, the bank-
ruptcy law, would be a vain thing. If, by going into a state court after
one act of bankruptcy had been committed, and committing another
act of bankruptcy there, by putting the property of an insolvent
person into the hands of a receiver, the rights of creditors under the
gênerai bankruptcy law could be defeated, proceedings under that law
would be made ridiculous. Such results cannot be possible, especially
since the amendment of 1903. If, within four months after its com-
mission, creditors avail themselves of the provisions of the law re-
specting anactof bankruptcy, the bankruptcy proceeding must draw
to itself the wbole power, and override everything done in the mean-
time, thougjh; as to things done in other courts in actions brought more
than four months bef ore the act of bankruptcy was committed the doc-
trine of comity, and of cases like Peck v. Jenness, and Metcalf v.
Barker, 187 U. S. 165, 23 Sup. Ct. 67, 47 L. Ed. 122, will apply. In
short, under the statute, as construed by the courts, the Une of démar-
cation is plain, and the established rule is this : Whenever, in a suit
in a state court, the property of a debtor has corne into the custody
IN EE KNIGHT. 43
of that court, îfs right to control and administer it for the purposes of
that suit is superior to that of the bankruptcy court, provided such suit
was commenced and the seîzure made before the beginning of the
four-months period referred to; but, if the suit was begun and the
seizure made within that period, the right of the bankruptcy court
over the property is not only superior, but after the adjudication is
exclusive, regardless of what has been donc in the state court, whose
jurisdiction in such cases is divested by the bankruptcy proceedings.
By this rule we must test the case now before us, and the resuit is
obvious.
My attention has not been called to any décision of the Suprême
Court nor of any Circuif Court of Appeals in any case precisely like
the one before me. In Metcalf v. Barker and in Pickens v. Roy, 187
U. S. 177, 23 Sup. Ct. 78, 47 h. Ed. 128, and in Frazier v. Southern
Loan & Trust Co., 99 Fed. 707, 40 G. C. A. 76, and in many other
cases, the suits in the state courts had been instituted more than four
months before the commission of the acts of bankruptcy, and conse-
quently the state courts were not deprived of jurisdiction over the
property. But it will be observed that in ail of them the courts are
careful to put their décisions upon that very ground. In Pickens v.
Roy, 187 U. S. 180, 23 Sup. Ct. 79, 47 L,. Ed. 128, the court, in re-
ferring to the rules governing cases of priority of jurisdiction, imputes
to Judge Gofif the following language, which is approved:
"The bankruptcy act of 1898 does not in the least modlfy this rule, but
with unusual earefulness guards it in ail of its détails, provided the suit
pending in the state court was instituted more than four months before the
District Court of the United States had adjudicated the bankruptcy of the
party entitled to or Interested in the subject-matter of such controversy."
Though there is error in the citation, as Judge Gofï did not sit in
Frazier v. Southern Loan & Trust Co., 99 Fed. 707, 40 C. C. A. 76,
the language is found in Pickens y. Dent, 106 Fed. 657, 45 C. C. A.
522, the décision in which was under review in Pickens v. Roy, and
there afïirmed. The Frazier Case, however, does very strongly state
the rule that the bankrupt court can only maintain its jurisdiction
where the suit in the state court was brought within four months be-
fore the adjudication, and because the suit there was brought in the
state court more than four months before the adjudication the applica-
tion of the trustée to hâve the property delivered to him by the state
court receiver was denied. I hâve preferred to use the words "com-
mission of the act of bankruptcy," rather than the word "adjudication,"
as being more accurate, inasmuch as from many causes, especially
where there are vigorous contests, the adjudication may be delayed;
and it seems to me that the entire reason of the thing points to the
date of the commission of the act of bankruptcy as the starting point
for estimating the four months, except in cases where the plain lan-
guage of the statute otherwise requires. But whether one or the
other is most accurate is not material in this case. The essential mat-
ter is that the authorities, though in cases the converse of the one be-
fore us, plainly establish the proposition that this court's jurisdiction
over the bankrupt's assets is exclusive, except as to such portions
thereof as may hâve been seized in some suit in a state court more
44 125 FEDEEAIi REPOETEK.
than four months before the adjudication in bankruptcy. This rule
can in no way injure or impair the rights of secured creditors, whose
liens are fuUy prèserved by section 67, Cl. "d," and will be perfectly
protected in the bankruptcy proceedings. In plain terms, that clause
provides that such "liens" as those appear to be which are asserted in
the cause pending in the Fulton circuit court "shall not be afïected by
Ihis act." It will be observed that it is the "lien" which shall not be
afïected, and not the suit brought for its enforcement. By other pro-
visions — especially section dy, cls. "e," "f," 30 Stat. 564, 565 [U. S.
Comp. St. 1901, pp. 3449, 3450] — certain clearly designated liens
created within four months are made null and void ; and it is to those
liens and not to such as are prèserved by cla<use "d" of the section, 30
Stat. 564 [U. S. Comp. St. 1901, p. 3449], that the four-months period
applies. As it is not now a question of "liens," but only a question
as to what court shall enforce one which is assumed to be valid, it
seems manifest that the provisions referred to in no way support the
contention of counsel that, in ail cases where a lien is created more
than four months before the commission of the act of bankruptcy, that
mère fact entitles the state courts in. ail such cases to enforce it, re-
gardless of whether the bankruptcy proceedings were instituted be-
fore or after the suit was brought in the state court, and whether or
not the latter suit was begun within the four months next preceding
the bankruptcy.
It seems to the court to admit of no doubt, under niany provisions,
and particularly section 3, cl, "b," of the bankruptcy law, when con-
strued with référence to its principal object, to wit, the marshaling
and distributing of a debtor's assets among his creditors upon just
and uniforni principles, that it was the intention of Congress to bring
the whole matter, including both secured and unsecured claims, into
the bankruptcy court, except in cases where the suit in the state court
was brought more than four months before the commission of the act
of bankruptcy. In cases of the class just mentioned, as we hâve seen,
the jurisdiction of the bankruptcy court must yield to that of the state
court, upon the principle stated iniPeck v. Jenness, while, on the other
hand, if the four-months period had not elapsed when the suit was
brought, the state court should yield jurisdiction to the bankruptcy
court. In re Watts & Sachs. Congress, which has, under the Consti-
tution, full pp\yer, has decided to fix this as the limitation. Being
the suprême law, it is equally binding upon ail courts, state and na-
tional. So we see that the, question does not affect the Hen, which is
fully prèserved, and which, if valjd, may be the basis of proof of a
secured debt, and promptly enforcçd in the bankruptcy proceeding, to
which ail creditqrs are parties, but does aflfect the question of which
tribunal shall enforce the lien, under the circumstance. And indeed,
subject to the limitation referred to, it is most important that this
should be the rule, if a unifoçru System of bankruptcy is désirable at
ail, for otherwise much discord might ensue, and greatly contribute to
defeat the purposes of the bankruptcy statute, which, we repeat, is to
hâve ail the debtor's afifairs, as far as practicable, adjusted and settled
in one harmonious proceeding, wherein the rights of ail claimants can
be viewed comprehensively by one court.
IN EE KNIGHT. 45
Jaquith v. Rowley, i88 U. S. 620, 23 Sitp. Ct. 369, 47 L. Ed. 620,
has been cited by counsel for the respondent. There, much more than
four months before the act of bankruptcy was committed, the debtor
had been required to give and did give bail in two civil suits pending
in a Massachusetts state court. In order to induce one Silsby to be-
come his surety, the debtor at the time placed in his possession $421
in money for bis indemnity. Afterwards the debtor was adjudicated
a bankrupt, and the trustée instituted in the fédéral court a proceed-
ing to recover the money. But the court held, under section 23 of the
bankruptcy law, as construed in Bardes v. Hawarden Bank, 178 U. S.,
524, 20 Sup. Ct. 1000, 44 L. Ed. 117s, that the fédéral court had no
jurisdiction, because Silsby, who had the money in his possession as
indemnity against his liability as surety, was an adverse claimant there-
of, — a proposition not afïecting the question now before me. While
it is not necessary to express any decided opinion upon the question,
it may well be doubted whether a mortgagee of real estate in Ken-
tucky is, as between himself and the trustée in bankruptcy, an adverse
holder of the property. He does not hâve possession, and can hardly
be said to hold it at ail. He is, at last, only a créditer — a person to
whom a debt is due — though one who has a better position than hâve
those creditors whose debts are not secured. But this advantage
does not arise out of possession given simultaneously as a security
against a liability which otherwise would not hâve been incurred, as
in the Jaquith Case, but is a mère equity, which can only be made
effective by a judicial proceeding.
Touching the sale to Milner, it need only be remarked that it ob-
viously comes within the ruling in Bryan v. Bernheimer, and the
proposition is, if possible, emphasized by the facts not only that Milner
appears not to hâve paid any part of the considération, but also that
Chowning, who made the sale, was not only assignée and vendor but
also creditor. Indeed, the multitude of parts played by Chowning
cannot escape attention.
We hâve, upon a careful considération of the whole case, concluded
that none of the contentions of the respondents can be maintained,
and, although we hold that the receiver's refusai to surrender the as-
sets to the trustée does not create an adverse claim, in the légal sensé,
yet in what has been said I hâve carefully abstained from any ex-
pression of opinion as to the right of the trustée to enforce his claims
by a summary proceeding. It is hoped that, whether such right
exists or not, it will not be necessary to exercise it. It seems so clear,
from the bankruptcy law, as construed by the highest courts, that the
rights of the receiver, acquired under the circumstances shown by the
testimony, are subordinate to those of the trustée and to those of the
bankruptcy court, that it is not doubted that the Fulton circuit court
will acquiesce in that view, and, upon proper application made to it,
will prder the receiver to turn over to the trustée the property in his
hands. To the end that an application for that purpose may be made,
further proceedings upon the rule will for the présent be held in abey-
ance. It would not only be unseemly, but altogether disagreeable
to this court, to pursue any course which would be wanting in the
utmost respect and courtesy to the state tribunal, and orders will be
é6 125 FfflDBBÂL BBFORTEB.
made dkecting the trustée to apply to that court for Ifeave to enter a
spécial 'a'|)p€arance in the case there pending, styled "First National
Bank of ■Fulton v. Henry Knight and others," fôr the purpose of
filing a copy of this opinion, the orders made in pursuance thereof ,
a copy of the adjudication in bankruptcy, and an accompanying ap-
plication for an order of that court directing its receiver to turn over
to the tt-ustee in bankruptcy the property of the bankrûpt held by the
receiver. For the purpose of giving ample opportunity for doing this,
the rule will be respited until the I2th day of October, 1903, at which
time the trustée will report what hâs been done in the premises.
NOTE. The state court took the same view of the law, and on October
ist ordered Its receiver to turn over to the trustée in bankruptcy ail the
property Jn his bands.
McCARTY V. HBRYFORD.
(Circuit Court, D. Oregon. August 18, 1903.)
No. 2,732,
1. Breach of Mabbiaob PRpMisK— Damages— Excessive Verdict.
A verdict for $22,500 damages for breach of a promise of marrlage,
against a man shown to owh property of the value of $70,000, Incumbered
by mortgage for $20,000, is ëo excessive as to Indlcate passion or préju-
dice OA the part of the juryj where the offer of marriage was renewed
by défendant in good faith after commencement of the action, and when
the marrlage would hâve been equally as advantageous to plaintiff, and
where the clalm of séduction, which was the only matter of aggravation
set up by plaIntifC, was not lUade until after such renewal ofCer, was
denied by (Refendant, and not sustalned by a prépondérance of the évi-
dence.
2, Samb— Evidence in Mitigation or Damages— Renewai. of Offer.
An offer of marrlage by a défendant In an action for breach of promise
after the commencement of the^tilt Is admissible in évidence in mitiga-
tion of damages, If made in good faith, the jury, however, being entltled
to conslder any change In the character, habits, or condition of défendant
between the time of the breach of the contract and the renewal of the
offer which would be to plaintiff 's dlsadvantage, or justlfy her in reject-
Ing the offer.
At Law. On motion to set aside the verdict and for a new trial.
O'Day & Tarpley and Robert^on, Miller & Rosenhaupt, for plain-
tiff.
Dolph, Mallory, Simon & Gearin, for défendant.
BELIrINGER, District Judge; About December 25, 1900, the
défendant made a proposai of marriage to the plaintifï, which was ac-
cepted four or five days later. It was agreed that the marriage
should take place on December 25th of the following year, at the plain-
tifï's home in Wayne, Mich. This engagement was made in Lake
county, Or., where defendant's home was, and where plaintifï was
temporarily residing. About the ist of May, 1901, plaintifï went to
Ashland, where her sister resided, and thereafter returned to her home
If 2. See Breach of Marrlage Promise, vol. 8, Cent. Dig. §§ 13, 44.
m'oAETT V. HBRTFOBD. 47
in Michigan, The parties corresponded regularly until the loth of
October of that year, when the défendant wrote to the plaintifï that
he had changed his mind, and was not coming back to marry her.
Further correspondence took place between the parties, the last letter.
being one from the défendant dated December 28th, in which he
adhères to his décision not to marry the plaintifï. The plaintifï in
the meantirae ofïered to release the défendant from his promise to
corne to Michigan to be married, and to meet him at Reno for that
purpose. On the 8th of September, 1902, this action was begun for
breach of promise, for damages in the sum of $70,000. In her com-
plaint plaintifï allèges that, "confiding in defendant's promise, she has
always since remained and continued, and still is, sole and unmarried,
and has been for and during the time aforesaid, and now is, ready and
willing to marry the said défendant." When service of the summons
and complaint was made upon the défendant he wrote to the plaintifï
ofïering to marry her, and requesting her to meet him at Reno for that
purpose. He inclosed in his letter a draft on New York for $200 to
pay her expenses to Reno, and requested her to wire him the probable
date of her arrivai there, so that he could meet her. To this letter
and ofïer no response was made. Plaintifï cashed the draft, and
deposited the money in a local bank, taking a certifîcate of deposit
therefor in her own name, which she has since retained. On February
24, 1903, an amended complaint was filed, from which the allégation
of plaintifï's readiness and willingness to marry the défendant was
omitted, and in which it was alleged that plaintifï, as the resuit of de-
fendant's breach, was greatly humiliated and suffered great anguish
of body and mind, to her damage in the sum of $68,100. Spécial dam-
ages were alleged for loss of earnings, amounting to $1,200, as school-
teacher, and for expenditures in preparing for her marriage in the sum
of $700, making the total amount claimed $70,000, the amount claimed
in the original complaint. The plaintifï testifies that the claim of
$700 was a mistake of her attorney. The amount claimed on this ac-
.count is stated in her last amended complaint at $200.
On the morning of the day of trial application was made in plaintifï's
behalf for leave to file a second amended complaint, for the purpose of
alleging séduction in aggravation of damages, and upon the représenta-
tion of plaintifï's attorney, made in explanation of the lateness of the
application, that the fact of séduction had only come to the knowledge
of plaintifï's attorneys within a few days preceding, leave was granted
as requested, and the second amended complaint was filed. In this
complaint it is alleged that défendant, under promise of marriage,
seduced the plaintifï, and it is alleged, for the first time, that plaintifï
has been greatly injured in health, both of body and mind, by reason
of defendant's conduct. Spécial damages in the sum of $1,200 are
alleged on account of loss of employment as school-teacher, and for
expenditures in preparing for marriage, $200. The prayer is for a
judgment in the sum of $60,000, and the further sum of $1,400 for
costs and disbursements in the action, in ail $61,400. The jury found
for the plaintifï, and assessed her damages in the sum of $22,500.
Défendant moves for a new trial because of errors which he claims
were committed by the court during the trial, and upon the ground
48 125 FBDEEAIi KEPOBTEB.
that tlie damages àssessed are excessive, and appear to hâve been
given under the influence of passion or préjudice.
Plaintiff was at the time of her engagement to the défendant 30
years of âge, and a school-teacher by occupation. She seems to hâve
taught school frequently not far from the neighborhood where she
lived, aïid during one summer in the state of Indiana, and at différent
periods of her life she had worked in, or had charge of, three or four
différent post offices. The défendant was 46 years of âge, and was
reputed to be worth $200,(300. He was a widower with children, one
of whom was an invaHd. It was shown by the testimony of an attor-
ney who had spécial opportunities for knowledge on the subject that
the défendant was worth about $70,000, consisting of an interest in
certain stock ranches in southeastern Oregon, and that he was in-
debted in the sum of $20,000, secured by mortgage.
A verdict in so large a sum in such a case is unusual, and I believe
it to be unprecedented. Among the cases cited in plaintiff's brief
on this motion, there is but one where thé verdict was as large as this.
That is the case of Campbell v. Arbuckle, where the verdict was for
$45,000. (Sup.) 4 N. Y. Supp. 30. In this case the court, in passing
upon thè question as to whether the verdict was excessive, says:
"The verdict was only four and one-half per cent, for one year of de-
fendant's estate, as he admitted it to be. This cannot be deemed ex-
cessive, and afifords some évidence that the jury was not influenced by
any désire to punish the défendant for his failure to carry out his coo-
tract." In another case (one not cited) there was a verdict for $25,000,
which was allowed to stand. The verdict was for about one-sixth of
the defendant'is fortune. In both of thèse cases unlawful relations
were proposed by the défendants, but, so far as appears, they were not
-întered into.
The next highest verdicts to be found were for $16,000 and $12,500,
respectively. Both were aggravated by séduction. In one case
the défendant was worth between $50,000 and $75,000, and in the
other at least $75,000. In ail the cases that I hâve been able to fînd
none appear that approach in the amounts awarded by the jury the
cases last mentioned.
In this case the defendant's estate, as already shown, is of the value
of about $70,000, subject to a mortgage of $20,000. If to this mort-
gage is added the amount of this verdict, With costs and disbursements,
and the defendant's necessary expenses in the case, the amount will
probably be more than enèugh to wipe out his entire estate at a
forced sale, as tnay be inferred from the character of the property, the
manner in which it is held, and the usual expérience where property is
sold under legâl process. If a jury may thus divest a man of such an
estate, and award it for gênerai damages, its power ought to be exer-
cised with great caution, and the facts should not be doubtful nor the
injuries redressed altogether spéculative in character.
The alleged séduction 6f the plaintiflf was the thing mainly relied
upon to increase her damages. It is alleged to hâve taken place some
five weeks subséquent tô the promise of marriage, and was theréfore
not the considération for the promise, althôugh the relations estab-
lished by the promise may hâve been an inducement for an unlawful
M'CARTT V. HERTFORD. 49
relation between the parties. The défendant dénies that he seduced
the plaintiff, or that he ever had any improper relations with her. The
affidavit of the landlady of the hôtel at Bly, where the parties stayed one
night, contradicts the plaintiff as to the defendant's conduct in en-
gaging a room at that hôtel. If this affidavit is true, the plaintiff has
attempted to place the défendant in a false light in order to cor-
roborate her statement as to their relations at that place. If she
has done this in one part of her testimony as to the alleged séduction,
the whole cornes under suspicion. There is no explanation of the fact
that the claim of séduction was not made by plaintiff, and was not
known to her attorneys, until a few days before the trial of the cause.
There is nothing in the letters that passed between the parties that
hints of such a thing; and while on the trial it was sought to get such
a meaning out of the expressions on her part that "in the sight of
heaven they were married," yet thèse expressions do not necessarily
imply improper relations between the parties, and were not so under-
stood by her attorneys, who probably examined this correspondence
beforehand, and who were not advised, as already stated, of this fea-
ture of the case until the eve of the trial. In her letter written after
the défendant had informed her that he could not keep his promise
to her, she recounts the wrongs done her by his faithlessness, but
there is nothing said that is inconsistent with a perfectly lawful rela-
tion between them. It would seem that then, if ever, the wronged
woman would hâve spoken ; that, if in her list of grievances anything
was omitted, it would not hâve been that grievance which is the great-
est a woman can suffer at a man's hands. A letter by the plaintiff to
the défendant, written on May 29th, a few days before the trial, was
offered in évidence, but was not admitted. It was stated in open court,
when this offer was made, that the plaintiff in that letter advised the
défendant of her claim of séduction. The significance of the omission
from her letters written at the time of the breach of any référence to
such a charge is increased by this letter of May 29th, and by the fact
that copies of thèse letters were kept by plaintiff, probably with a view
to the use that is now made of them. Her explanation of thèse copies
is that they were originals which, owing to her state of mind, were so
written that she feared the défendant could not read them; that she
therefore copied them, and sent the copies. But thèse originals show
for themselves ; they are well and plainly written. A few unimportant
words are crossed out of them, the inference being that, in making the
second draft, thèse words were omitted, and that thereafter the two
drafts were caref ully compared, and the words omitted in the second
crossed out in the first, so that the retained original should be an
exact copy of the letter sent. There is no copy of any antécédent
letter. Moreover, thèse letters were registered, and the registry re-
ceipts are attached. She explains this by saying that theretofore in
their correspondence something had been said to the effect that he
did not get ail of her letters ; but she wrote at least two letters after
this, and it seems not to bave occurred to her to register thèse. The
suspicion in which her uncorroborated testimony is involved as to this
feature of the case is increased by the f ax;t, of more or less significance,
that while the alleged improper relations are said to hâve been main-
125 P.^
50 125 FBDSBAL BBBOaTBB.
tained for some weeks in a rbotn over one occupîeîi by a man ân3
his wife> with an eight-foot ceiling, in an unplastered house, where,
according to her own testimonyj the noise could be easily heard by
the occupants of the room below, not a breath of scandai or suspicion
was created as to the relations of the parties, although the other occu-
pants of the house testify that the occurrences narrated by the plaintiff
could not hâve taken place without some knowledge on their part to
excite suspi«;iph of what was going on.
It is the province of the jury to décide whether the plaintiflf bas
told the truth. The inquiry which the court makes is not to ascer-
tain whether they hâve erred or not in that behalf, but whether there
bas been error so flagrant as to imply that they hâve acted under
the influence of passion or préjudice. A verdict not exceptional in
character, upon doubtful facts, should not be disturbed; but an exceiv-
tional verdict, against the weight of the évidence, cannot be allowed to
stand. The judgment rendered upon a verdict is the judgment of the
court, and the respect which is due to the verdict does not require the
court in any case to enter an unjust judgment.
The law is that an ofifer of marriage by a défendant in a case of this
kind, made af ter the action is begun, if made in good f aith, may be
considered by the jury in mitigation of. damages. Kelly v. Renfro,
9 Ala. 325, 44 Am. Dec. 441 ; Kurtz v. Frank, 76 Ind. 594, 40 Am.
Rep. 275. The cases are not in accord as to this. One case, Bennett
V. Bean, 42 Mich. 346, 4 N. W. 13, holds that such an offer is not
admissible in iuitigation of damages. The reasoning of the court is
that the principle which would permît such évidence in any case would
admit it in a case where a man respectable, virtuous, of wealth, etc.,
should subséquent to his breach enter on a life of debauchery, and then
when sued offer marriage, when any woman of respectability would
shrink from his polluted touch. The criticism to be made upon this
reasoning is that it assumes that the jury must give the same con-
sidération to the subséquent offer in ail cases. It is a question for the
jury in the particular case as to what allowance, if any, should be
made because of the offer. In ail cases the effect of the offer dépends
, upon the advantages offered. If the subséquent offer is in ail respects
as advantageous as thcifirst offer, there is no reason why the plaintiff
should reject it for its, équivalent in money. Public . policy is better
served with the compromise of marriage than with sensational litiga-
tion, that spreads before the public, eager to listen, the secrets of a
çourtship and the unsavory détails of a séduction; and when it is
: manifest that the jury has refused to give considération to an offer in
, such a case the verdict should, in the interest of private justice and
public morals, be set aside. The weight of authority and the better
reasoning support the rule stated. When the défendant received a
copy of the original complaint in this case, containing the allégation
that the plaintiff was still ready and wiUing to marry the défendant,
the latter wrote her the following letter :
"Lakevlew, Oregon, Sept. 15, 1902.
"Miss Blrdle McCarty, Dear. Blrdle^— I was surprlsed when an offlcer to-day
served me with a copy of your complaint for breach of promise of marriage;
I did not believe that you would sue me for money because you so of ten sald
M'CAETT V. HEBTFOED. 61
you loved me for myself and I believed yoii, and still believe that you sued
me not through your own désire but by the advice of others. You know that
I hâve liked you for your interest and sympathy in me and admired you for
your éducation and ability. You know too, had it not been for my great
trouble caused by the slckness of my son Archie who required my constant
attention during the last twelve months and as a cause of such sickness he
is now totally blind In both eyes and still unable to help himself in any way.
Had It not been for ail this I should hâve gone to you and kept my promise,
but surely you vyould not wish me to be so selfish, cruel and unfatherly as to
leave my own child dying on a sick bed and go East in order to get married.
You, VFomanlike, can understand my feelings in this matter better than I
can explain them.
"I wIsh you to feel that I am quite willing to marry you. Cîould I leave my
son now, I should go and tell you this in person rather than by le-tter, but
as you promlsed to meet me In Reno to be married their (there) I now request
that you do so as soon as convenient and notif y me by wire the probable day
that you will be in Keno and I shall meet you their (there) and we will be
married. 1 enclose a draft on New York for two hundred dollars to pay for
your expenses to Eeno and after we are married we shall purchase such
things as you think necessary to f urnish our house.
"Hoping that you will corne quickly to Reno so that we can be married at
once and I shall try hard by kindness and affection to atone for any injury
or neglect of the past. J. D. Heryford."
This letter offered the plaintifï ail the advantages and inducements of
the original promise for which money damages are sought in this
action. It is not claimed that the défendant has less wealth, or is less
virtuous and respectable, than he was at the time of the breach. AU
the advantages that the marriage then promised her she coiild hâve
had by accepting the ofïer of September, 1902. The réparation for
her séduction, if there was séduction, would hâve been as complète
then as if the first promise had been kept, and would hâve been
infinitely more complète than any réparation that can be made in
money. There is nothing to impeach the defendant's good faith in
the subséquent ofïer, unless the breach of his promise has that efifect,
and this is plaintifï's contention. The defendant's breach is urged as
évidence that his subséquent ofïer was not in good faith. But if the
breach has that effect, then, of course, the ofïer of marriage made after
suit cannot in any case be considered in mitigation of damages, and the
rule would be abrogated by the conditions which give rise to it. Fur-
thermore, the plaintifï was willing to come to Reno and marry the
défendant in December — ^two months after he had notified her that
he could not keep his promise to her. She was willing to trust him
then, and she would hâve been wiUing to marry him at the time he
made his ofïer after the suit was begun, so she testified, if he had come
to her home for that purpose ; and she would hâve married him, so
she stated in her testimony, at the time she came to Portland to at-
tend this trial, if he would hâve secured her financially.
The letters in which the défendant stated that he had changed his.
mind, and that he had ceased to love the plaintifï, show that a very
great affliction had overtaken him in the blindness of his boy. In
the first of thèse letters he says that "Archie is sick again," and has
been so for two weeks. In the foUowing letter he says that "Archie
is blind, hasn't seen anything for two weeks, and the doctor says he
may be that way always." In the meantime the blind boy was being
cared for by his grandmother and the défendant, The plaintifï was
52 1^5 FEDERAL REPORTER.
conscious of the fact that the defendant's change of feeling towards lier
had been influenced, if not caused, by the calamity that had overtaken
his boy. In her answer to the letter which stated that he had changed
his mind, she says, "I know Archie's sickness causes you to worry,"
and she offers to help take care of the invahd. In his letter to her of
December 28, 1901, in answer to a letter of hers of the I3th of that
month, he reminds her that she had said she "never could live hère at
Lakeview only a little while at a time," and he gives this as a reason
for thinking that the marriage had better not take place. In this let-
ter he again refers to the sick boy, who "can't see yet and cannot help
himself very much."
It is not at ail surprising that the îeelings of this man, then 47 years
old, with his hopelessly bhnd boy requiring constant care, should
change in respect to marriage, and that he should conclude not to
marry a woman who could not be content to live where he was com-
pelled to maintain his home "only a little while at a timie." There was
no hope for him in such a, marriage of the companionship that belongs
to the married state, and it seems doubtful, from her statements to the
défendant and from her testimony, whether there was expectation or
désire for it on her part. Thèse conditions do not justify his breach,
but they relieve his conduct of the imputation of bad faith. The letter
containing his subséquent lofïer is creditable to both parties. It shows
a high regard for plaintifïy and a détermination on defendant's part
to be a good husband tô her. There is no redress that a court of law
can give to a woman in her situation that equals what was hère ofifered.
It seems incredible that she should hâve preferred to make merchan-
dise of her good name, hitherto unsulHed, by proclaiming her un-
chastity, in order to increase the sum of money she expected at the
hands of a jury.
, My conclusion is that this verdict is so grossly excessive as to im-
ply that the jury acted under the influence of passion or préjudice,
and that it should be set aside. The motion to set aside the verdict
and for a new trial is allowedi
UNITED STATES v. THRBE PACKAGES OF DISTIIXED SPIEITS.
(District Court, E. D.' Missouri, B. D. September 18. 1903.)
1. Internal Revenue — Changing Contents of Package^Addition op Colou-
ING MaTTER to DISTILLED StlRITS.
The provision of ReV. St. S 3455 [TJ. S. Oomp. St. 1901, p. 2279], wliich
subjects to forfeiture every barrelj wltli its contents, whicli lias been
stamped or marked to show that the contents hâve been duly Inspected
or the internai revenue, tax thereon has been paid, if such barrel contains
"anything else" thantlje contents which were therein when said barrel
was so stampëd or mâtkéd, is plain and unambiguous, and must be liter-
ally construed. While the government would be estopped to clalm a for-
feiture cf distilled spirits because of the addition of water thereto after
the barrels or eàsks contaiiiing the same had been stamped, where the
réduction was made In accordance wlth the régulation of the department
permittiiig the same, such éstoppel Is not broàder than the régulation,
and -the addition of a colorlng matter to such spirits, such as caromel,
is a violation of the statute, whioh sul)Jects the liquor to forfeiture.
UNITED STATES T. THKBE PACKAGES OF OISTILLED SPIKITS. 53
On Motion for New Trial.
David P. Dyer and Horace L. Dyer, United States Attys.
Warwick W. Hough, for claimants.
AMIDON, District Judge. This is an information fàled by the
United States seeking the forfeitureof three packages of distilled spirits
for an alleged violation of section 3455 of the Revised Statutes [U. S.
Comp. St. 1901, p. 2279]. The évidence shows that the distilled
spirits in question were produced in the state of Kentucky. When
they were withdrawn from the receiving cisterns at the distillery the
casks in which they were stored were stamped in accordance with sec-
tion 3287 [U. S. Comp. St. 1901, p. 2130], and at the time they were
withdrawn from the warehouse the casks were further stamped in ac-
cordance with section 3294 [U. S. Comp. St. 1901, p. 2135]. The
liquors were, therefore, what are known as two-stamp liquors. There-
after, under the régulation of the commissioner of internai reve-
nue permitting such réduction, a quantity of water was added to the
distilled spirits, whereby their proof was reduced from about 100 to
90. This was done on the premises of a duly qualified wholesale
liquor dealer, in the présence of a government gauger, who affixed to
the cask the stamp required by said régulation. It is charged by the
government that after this was done a quantity of burnt sugar or
caromel was surreptitiously added to the liquors, whereby the color
was restored to what it was before the proof had been reduced, and
thereafter the packages, with their contents, were sold. It is this addi-
tion of burnt sugar or carom.el, and the subséquent sale, which the
government claims: constitutes a violation of section 3455. A de-
murrer was interposed to the information, and overruled. At the
close of ail the évidence the claimant moved the court to direct the
jury to return a verdict in its favor, which motion was denied, and
thereafter a verdict was returned in favor of the government. On the
présent motion for a new trial it is not contended by counsel for
claimants that the évidence was not sufhcient to require the submission
of the case to the jury, but the position now taken is the same as that
urged upon the demurrer and the motion for a directed verdict,
namely, conceding that the charge of the government is proved, still
the facts constitute no violation of law.
So far as I know, this is the fîrst time that the précise question now
raised has been presented to a court for détermination. A large num-
ber of cases hâve arisen under section 3289 of the Revised Statutes
[U. S. Comp. St. 1901, p. 2132], and it is urged that those cases are
décisive of the one at bar. I do not so regard thenx. Section 3289
reads : "AU distilled spirits found in any cask or package containing
five gallons or more without having thereon each mark and stamp
required therefor by law shall be forfeited to the United States."
Among the cases which hâve arisen under this section are Three Pack-
ages of Distilled Spirits (D. C.) 14 Fed. 569 ; United States v. Four-
teen Packages of Whiskey (D. C.) 66 Fed. 9B4, 14 C. C. A. 220 ;
United States v. One Package of Distilled Spirits (D. C.) 88, Fed. 856.
An examination of thèse cases will show that the only point decided by
51 125 FEDBRAIi EEPOETEE.
them was thîs : The only marks or stamps "required by law" are
those specified in sections 3287 and 3295 [U. S. Corap. St. 1901, pp.
2130, 2135]. In each of the cases referred to those stamps were
found upon the casks. It was claimed by the government that because
the liquors at the time they were seized did not correspond as to proof
with the statnps that they were therefore subject to forfeiture. The
courts held that this was not the true construction of section 3289,
but that the stamps mentioned were to speak as of the time they were
affixed to the casks. At that time they spoke the truth. If the con-
tents of the casks were thereafter changed either by natural causes or
by artifîcial means, this change could not bring the liquors within the
scope of section 3289. In the case of United States v. One Package
of Distilled Spirits (D. C.) 88 Fed. 856, the same contention was made
with respect to the régulations prescribed by the Président and the
heads of departments under section 3287 ; but the court there properly
held that, while thèse departmental régulations could be made for the
purpose of carrying existing laws into efifect, a violation of such régu-
lations could not be made by the régulations themselves a ground of
forfeiture. The opinion in this last case contains the f ollowing state-
ment: "In quite a line of décisions the courts of the United States
hâve held that the addition of water or sugar to a package of distilled
spirits on which thè tax has been previously paid is no violation of law,
and does not work a forfeiture of the spirits." This remark is purely
obiter, and finds no support whatever so far as the addition of sugar
is concerned in the authorities cited.
The only case in which section 3455 [U. S. Comp. St. 1901, p. 2279]
has been brought under direct judicial considération is United States
V. Nine Casks of Distilled Spirits (D. C.) 51 Fed. 191. This case arose
on a demurrer to an information which charged that the packages in
question at the time they were sold contained "something else than
the contents that were in the packages when they were stamped, to
wit, other distilled spirits of a différent and lower proof and quality."
It was there held that this information charged an offense under sec-
tion 3455. That was the only question decided, but the court further
States, "to avoid any misconception," that the addition of water would
not constitute a violation of this section. This remark is purely obiter,
and the opinion contains no statement of the reasons for the holding.
It is, however, susceptible of entire justification. I think it exceed-
ingly doubtful whether the addition of water would not constitute a
violation of section 3455 for reasons which I will explain later. But
I do not think the government, after having promulgated a régulation
authorizing the réduction of proof by the addition of water, could claim
a forfeiture upon that ground.
The provisions of section 3455 which are pertinent to the présent
case read as f ollows :
"Whenever any person sells any barrels stamped, branded or marked in
any way so as to show that the contents thereof hâve been duly inspected, or
that the tax thereon has been pàld, or that any provision of the internai
revenue law has been complled with, sald barrel being empty or contalnlng
anythlng else than thè contents which were therein when said llquor had
been so lawfuUy stamped, branded or marked by an offîcer of the revenue,
he Bhall be liable," etc.
UNITED STATES V. THBEB PACKAGES OF DISTIUiED SPIEIT8. 55
This clause of the law deals with two kinds of vessels : First, those
that are empty, and it is made unlawful to sell any such vessel while
it bears the government stamps or brands. That is the first feature.
The second makes it unlawful to sell any vessel thus branded if it con-
tains "anything else" than the contents which were therein when said
liquors were lawfully stamped and branded. I should think that lan-
guage too plain for construction, if the internai revenue depart-
ment had not seen fit to promulgate the régulation above referred to.
"Anything else" would include water or sugar or wine or whisky or
coloring matter. It is as comprehensive as language can be made.
But the internai revenue department, under the section giving it power
to make rules and régulations, has seen fit to make a rule or régula-
tion on this subject which permits the réduction of the proof of Hquors
by the addition of water after the stamps hâve been affixed. It was
explained upon the argument of the présent case that this rule was
promulgated for the purpose of placing distillers in the United States
and dealers in liquors distilled in the United States on an equality with
persons handling the same kind of distilled spirits which were im-
ported from foreign countries. Such imported liquors were not sub-
ject to the régulations of the internai revenue law. The importer or
dealer in them was at liberty to treat them in whatever manner he saw
fit. This led to serious complaints by American distillers and those
handHng liquors produced in this country. To meet that difficulty
the régulation was made. The careful language in which it is framed,
however, shows that the officers of the internai revenue appreciated
the danger of its abuse, and threw about the permission granted every
protection possible. The rule requires that such réduction of proof
shall be made in the présence of a government gauger, either at a
distillery or a government warehouse, or upon the premises of a duly
qualified wholesale liquor dealer. Written application is required for
permission to make the réduction, and the government gauger is di-
rected to stencil upon the vessel his name and title. and between the
name and title words and letters showing unmistakably the change
that has been made.
I think it may be seriously doubted whether this régulation is valid.
Of course, it is not if it is in conflict with section 3455. United
States v. Two Hundred Barrels of Whiskey, 95 U. S. 571, 24 L. Ed.
491, and United States v. Eaton, 144 U. S. 677, 12 Sup. Ct. 764, 36
L. Ed. 591. But the government, having, through its officers in
charge of the internai revenue, promulgated the régulation permitting
the réduction, would be estopped to claim a forfeiture of liquors for
an act done in conformity therewith. This was probably the ground
of the remark of the court in 51 Fed. 191, "that the addition of water
would not subject the liquors to forfeiture." The estoppel of the
régulation, however, is not broader than the régulation itself. It does
not permit the addition of anything except water, and cannot, there-
fore, be put forward as a justification for the addition of caromel or
burnt sugar or other coloring matter.
It is said in many of the décisions to which référence has already
been made that the primary object of the internai revenue law is to
prevent frauds upon the revenue. That is no doubt true, but what
56 125 FBPEEAIi EEPORTKB.
will best accomplish that pUrpose îs a matter for législative, not Judi-
cial, discrétion. In the judgment of Corigress there were many classes
of acts which ought to be pf ohibited because of the possibility of their
being donc for the purpose of defrauding the revenue. Tîaese pro-
visions of the statute were made not for the reason that none of the
prohibited acts could be donc without defrauding the revenue, but be-
cause some acts falling within the class would be done for that unlaw-
ful purpose. Now, in the trial of any given case, it would be no dé-
fense that no fraud upon the revenue was in fact intended or accom-
plished by a forbidden act. The courts are bound to enf orce the law
as it is written, and not to pare down its spécifie mandates by a con-
sidération of the gênerai purpose for which the law was adopted. The
primary purpose of many of thèse régulations is to save the govern-
ment from being brought to a trial of the question whether the intent
was to defraud the revenue or whether any such resuit has been at-
tained ; for in the trial of such an issue ail the knowledge and ail the
évidence is in the possession of the défendant, and whether his act in
fact defrauded the revenue would be exceedingly difficult for the gov-
ernment to establish in court. The évidence in this case i? persuasive
on that subject. The record shows that chemists of national réputa-
tion were in direct conflict as to whether any sugar or caromel had in
fact been added to the packages complained of. Now, if in addition
to proving the fact that "something else" had been added to the pack-
age, the government was put to the proof of intent, and to the
further proof that by the act complained of the revenue had been de-
frauded, an issue would be raised in which the government could rarely
make out its case. The whole scheme of the internai revenue
law contemplâtes that at every change that takes place in distilled
spirits, except such as arise by natural causes, a government oificer
shall be présent, and shall register upon the vessel containing the dis-
tilled spirits the change that is made, so that, as Judge Thayer well
remarks, "the government can readily trace the origin and history of
each cask, and thus prevent frauds upon the revenue." If changes
could be made in the absence of the officer, and the owner of the dis-
tilled spirits could escape liability by proof of an honest intent, and
that his act had in no way defrauded the revenue, it would be well-nigh
impossible for the government ever to establish a case. Its only proof
would be such as could be derived from a chemical analysis of the
contents of the package, while the défendant would not only be per-
mitted to resort to the same évidence, but could further add the direct
and positive testimony of himself and his employés. It needs but a
moment's considération to see that an act coming within the terms
of the statute could not be justified, though done with an honest
intent and without any actual loss to the government. Take the very
statute we are considering. If the owner of a vessel which had been
used for distilled spirits, and which bore the stamps required by law,
the same being empty, should sell it for the purpose of storing vinegar,
the intent would be honest, and no fraud would be perpetrated upon
the revenue, but no one would contend that the act would not consti-
tute a violation of the first clause of this section. Learned counsel for
claimants urges that the "anything else" referred to in the statute
UNITED STATES V. THEEE PACKAGES OF DI8TILLED SPHUTS. 57
must possess thèse qualities : (i) It must be something put in to be
sold under the stamps ; (2) the contents must be a différent thing in its
entirety ; (3) it must be something subject to tax. Assume that the
offîcers of the internai revenue hâve discovered a vessel containing dis-
tilled spirits which hâve been tampered with after the officiai stamps
were affixed, and that in order to make out a case under section 3455
of the Revised Statutes the government will hâve to establish by a pré-
pondérance of the évidence that the substance which has been added
to the distilled spirits possesses thèse attributes, or that the case of
the government w^ould be defeated by a claimant who could prove that
the substance added did not possess ail thèse éléments, and it will be
manifest at once that the statute would be rendered of no practical
force or efïect. As was said by the court in Michel v. Nunn (C. C.)
loi Fed. 423:
"If we begin to détermine what sort of materials are meant, if we say that
water and sugar, and blackberry julce, and orange juice, and lemon juico,
/ire not materials within the sensé of the act, the trouble is to flnd a stoppins
place, and show what will be a material within the meaning of the act."
If the government finds that the liquors hâve been altered by the
addition of something else than was in the vessel at the time it was
stamped and branded, how is it to prove that that something else is
an article subject to the payment of an internai revenue tax? If we
say that anything which is not subject to such tax may be introduced,
then not only coloring matter, but any chemical compound which
would affect either the taste or the appearance of the liquid, could bc
added, and in any given case it would be quite impossible to show
whether that which was added was other distilled spirits or somc
chemical substitute. It is because of the difficulty of proving what has
been put into the liquors, and because ail the direct évidence in relation
to the fraud, if a fraud is committed, would be in the control of the
party who would profit by it, that Congress has wisely seen fit to for-
bid in unqualified terms the addition of anything, and it is impossible
to find any practical criterion less absolute than the statute itself.
It is suggested by counsel for claimants that the internai reve-
nue officers virtually repudiated the holding of the court in Michel
V. Nunn (C. C.) lor Fed. 423, because, after that case was decided,
they permitted, by a régulation, the addition of burnt sugar to fruit
brandy. This régulation, however, was made under the authority ex-
pressly conferred for that purpose by section 3255 of the Revised
Statutes as amended by the act approved June 3, 1896, c. 309, 2g Stat.
19s [U. S. Comp. St. 1901, p. 2111].
The motion for new trial is therefore denied.
58 . 'i-l: 125 S'SDHSBALîBBI'OBTSB.
THE NORTHIiAND.
(District Court, W. D. New York. September 16, 19(».)
No. m
1. Collision— Vessei, IiANDiNG atDock— Duty to Kbep Lookotjt,
It Is the Imperative duty o£ a steaiUBblp, when maklng a landlng at a
dock In a river where other vessels are constantly passing, to maintain
an efficient lookont, and the absence of such lookout cannot be excused
on the ground that ail the crew were otherwise engagea.
a bame.
A large lake steamshlp was maklng her berth In Buffalo river vrhere
It was about 250 feet wlde. A steam canal beat, wlth two other boats
In tow on a Une, passing down the river, meeting a tug when about
opposite, after glving the proper signais, went to starboard, and passed
within a few feet of the steamship, which was apparently stationary at
her berth. The steamship had no lookout, and no watch astern, and
paid no attention to the passing vessels or their signais. When one of
the tows was opposite the stem of the steamship, the latter started one
of her propeUers at highspeed, creating a suction which drew the canal
beat from her course and caused a collision, resulting in the sinking of
the canal boat soon àfter, from in jury inflicted by the ship's propeller.
Had a proper watch been maintalned, and attention glven to the passing
tows, the.injury might readlly hâve been avolded. Eeld, that the ship
was in fault, ?n^ that the canal boat was not in fault or négligent, hav-
ing the right to assume that the fehlp would perform her duty, and avoid
subjecting the passing boats tO danger of collision by operatlng her pro-
peUers.
In Admiralty. Suit for loss of Cargo through collision.
George Qinton, for libelant.
Joseph G. Dudley and Harvey L,. Brown, for the Northland.
John W. Ingram and Frederick G. Mitchell, for Lena Beadie.
HAZEL, District Judge. This is a proceeding in rem against the
steamship Northland, and in personaiii against the owners of the canal
boats Campania and Columbia, to recover certain damages to the
Campania's cargo, resulting from thç négligent manner in which the
aforesaid vessels were navigated, whereby the Campania was sunk.
Upon the abandonment of the cargo by the cargo owners, libelant paid
to them their loss, and thereby became subrogated to their légal rights
and remédies.
The facts established by the proofs are thèse: On June i8, 1900,
at about 5 o'clock in the aftefnoon, weather clear, the large passenger
steamship Northland, returning from a trial trip on Lake Erie to the
port of Bufïalo, N. Y., proceeded unaided under her own motive power
up Bufïalo river to the dock at the foot of Main street, her regular
landing. As the steamship was getting into her berth, the steam canal
boat Columbia, in charge of a licensed pilot, having the canal boats
Campania and Chicora in tow, each heavily laden, one astern of the
other in the order named, came north towards the river through
Peck Slip, which enters Bufïalo river from the south just above the
point where the bow of the Northland ordinarily lies when secured to
her dock. The canal boats were each approximately 98 feet in length
over ail, and 18 feet beam. The Northland has two engines port and
THE NOETHLAND. 59
starboard, with corresponding screws, and is 386 feet over ail, 40 feet
beam, and of 5,000 tons burden. The Columbia's tow Une from her
stern to the Campania was about 20 feet long and the towline from
the stern of the Campania to the Chicora about 35 feet. At the
time the steamer was making her berth, with her stern near mid-
stream, the Columbia and tow were then entering Peck Slip from
Blackwell Canal, and gave the usual bend signal of one blast of her
whistle. She repeated the signal very soon afterwards, upon leaving
the slip to turn into the river. The Northland, having stopped her
headway, was then alongside the opposite northerly bank, her bow
resting approximately 30 feet distant from the Columbia, which had
straightened into the river, and had sounded several short and rapid
blasts of her whistle to an approaching steam tug on her port side.
Thèse signais were sounded in compliance with governing rules, usage,
and custom. None of the signais were answered by the steamship,
and no attention was paid by her to the Columbia and tow. Believ-
ing the Northland to be stationary in her berth, the Columbia pro-
ceeded in her course in a westerly direction down the north side of the
river, and about 20 feet distant from the steamship on her starboard
side. The Northland's port propeller was in motion to facilitate land-
ing. It freely lashed the water, causing a suction which suddenly
drew the Columbia's bow, without any warning, towards the propeller,
but by a prompt maneuver she straightened into her course. The mo-
tion of the screw then stopped, but very soon afterwards, just as the
stern of the Campania came opposite the steamer's fan tail, the North-
land's starboard propeller, suddenly and without warning, began to
rapidly revolve, producing a suction and commotion of the water
which drew the passing Campania towards the revolving screw under
the stern of the Northland, where the screw impinged upon her star-
board quarter. The Campania, by reason of this injury, soon after-
wards sunk in Watson Slip, which is near by, whither she was assisted
by the steam tug Cascade. Her cargo was greatly damaged. At the
point of collision the channel is approximately 250 feet wide, and
steam tugs, vessels, canal boats, and tows are constantly passing.
The Columbia and tow were not seen by the master of the Northland,
and her signais were not heard, or, if heard, were not heeded. No
lookout was stationed upon the steamer's deck, instructed to report
signais or the approach in the river of other vessels. Neither had the
Northland a lookout at her stern or on her starboard side, next to the
river, who could bave seen a passing vessel or tow, or a threatened
danger, and, by giving timely warning, hâve stopped the engine until
the tow had safely passed beyond the steamer's stern. The master of
the Northland substantially testifies upon this point that, if he had
known of the présence of the tow, he could hâve averted the injury to
the Campania by stopping the revolving propeller within half a minute.
According to the engineers of the Northland, ail of whom were on
duty at their post, the engines were stopped instantly upon hearing
and feeling the jar of the collision, and before receiving the signal to
stop from Capt. Brown. In explanation of the absence of a lookout,
the master of the Northland further testifies that it is not usual
or customary for landing steamers to hâve a lookout forward and
60 125 FEDERAL BBPÔUTEK.
astern when the vessel is practically secure in her berth, or, indeed,
while she is proceeding up the river to lier dock. The claim of the
steamship is that her propellers were alternately and continually work-
ing for quite a distance beîore reaching her place of landing. To
get into her berth, she worked her bow slowly towards the dock, using
her port propeller to go ahead, and at the time of the accident her
starboard propeller was used to throw her stern, which was 15
feet out in the stream, towards the dock. There was a barge ahead,
alongside the dock, and an excursion steamer immediately astern of
the steamship's berth, requiring the landing to be made between them,
While the Northland was in this situation, with her bow Une around
the timber head on the dock, and the heaving line at stern, ready
to make fast, and almost ready to discharge her passengers, her
master, who was upon the bridge on the port side, quite a distance
from the accident, felt a slight jar, and almost instantly received a
signal from aft to stop the steamship's propeller. This was done.
The injury to the Campania, however, had then happened.
The argument of counsel for the Northland, explaining the absence
of a lookout, is based upon the fallacious theory that the entire atten-
tion of the ofïîcers and entire crew was rleeded to make a safe and
careful landing; that to report passing vessels to the master at such
time would distract his attention, so that safe landing might be im-
periled. This contention cannot be held to be in accord with that
degree of care and vigilance which a steamer is bound to exercise in
seeking her berth or in making a landing. It is unimportant whether
a steamship is endeavoring to efïect a landing or a departure. The
duty to maintain a proper lookout is imperative, and where vessels
are in close proximity the absence of such a lookout is not sufficiently
excused by other engagements of the crew. Thorp v. Hammond, 79
U. S. 408, 20 L,. Ed. 419. The degree of care required of a steamship
dépends upon the circumstances surrounding each particular case.
The measure of care demanded by the particular situation may be
extraordinary care and watchfulness or such reasonable care only as
a prudent person would use to avoid doing injury. The Nevada, 106
U. S. 159, I Sup. Ct. 234, 27 L. Ed. 149; The City of New York,
54 Fed. 181, 4 C. C. A. 268. I am of opinion that the Northland
is at fault for not having had a compétent lookout, properly instructed
to report to the master signais and approaching vessels, and also for
lack of proper watch astern. Had such precautionary measures been
taken, the accident could easily hâve been averted. Indeed, had the
plain obligation to avoid harm to other vessels having equal rights in
the river been heeded, the prospect of the injury complained of would
hâve been exceedingly remote. Such injury could then hâve been
received only through the négligence of the injured ship. It is a posi-
tive légal duty of a vessel, in making her berth or dock, to stop moving
if in motion in a channel or narrow river, where other vessels are
passing, whenever injury is threatened to another vessel on account of
the commotion produced in the water by her screw. The Nevada,
supra; The City of Maçon (D. C.) 20 Fed. 159; The Colon, Fed. Cas.
No. 3,025; Clapp V. Young, Fed. Cas. No. 2,786. No custom or
usage can be established requiring a less reasonable précaution. The
THE NOETHLAND, 61
City of New York, supra, cited by counsel for respondent, is net a
précèdent hère. That case merely holds that no recovery could be
had by a tug employed to assist the respondent vessel to her dock,
because such tug had notice of the intermittent use of the libeled
steamship's propellers, and therefore vohmtarily assumed a position
of danger. In the case at bar the Columbia three times gave notice by
signaling of her présence and movements. Assuming that the North-
land's propeller, while docking, was astir in the water, which the
Columbia should hâve seen, she nevertheless had a right to présume
that the révolutions of the propellers would momentarily cease, or
at least would be operated with due regard to her proximity and safety.
Irrespective of conflicting testimony as to whether the Northland was
actually stationary in her berth, the Columbia was undoubtedly justi-
fied in believing that the steamship was so secured to her dock that
no harm or danger to her, as a passing tow, need be apprehended.
The failure of the Northland to answer the signais sounded by the
Columbia when she turned into the river, and on account of her near-
ness to her place of landing, might well convince the Columbia that
she could proceed safely in her course down the river alongside and in
close proximity to the Northland.
The respondent steamship contends that the propellers of the North-
land were intermittently in continuai motion in the steamship's entire
course up the river to her berth; that the commotion of the water
produced by the propeller could hâve been observed for a distance of
more than loo feet, and therefore the approaching Columbia must
be held in fault for directing her course through the water in close
proximity to the screw. This contention lacks merit, for, as already
remarked, the Columbia was entirely justified in assuming that the
Northland would perform her duty in such a situation, and seasonably
stop the propeller to prevent injury. Nor was the Columbia négligent
in continuing in her course after she had succeeded in safely passing
the steamship. I am satisfied from the évidence that the port pro-
peller, which was in motion, stopped while the Columbia was passing.
Under the circumstances, she could very properly assume that her
passing with tow had been noted by the oiificers of the Northland, and
no further danger or harm would be precipitated by the movement
of any of her propellers. The évidence clearly preponderates that the
sudden and unexpected starting of the starboard propeller as the
Campania was passing, in and of itself, produced the accident, which,
however, as we hâve seen, could hâve been avoided by the présence of
a compétent lookout. The absence of a lookout at such a time, sta-
tioned where danger to passing vessels in the river could be observed,
and timely notice given to the ofhcers in charge, is a fault for which
the Northland is liable. In failing to comply with this reasonable
précaution, the burden is upon the Northland to prove that the acci-
dent was owing to other causes, for which she is not chargeable.
Clapp V. Young, supra ; The Hansa, Fed. Cas. No. 6,037. The cases
hold that "where fault on the part of one vessel is established by un-
contradicted testimony, and such fault is of itself sufïicient to account
for the disaster, it is not enough for such vessel to raise a doubt with
regard to the management of the other vessel. There is some pre-
62 125 FEDERAL EEPOETEB.
sumptîon, at least, adverse to its daim with regard to the propriety
of tïie conduct of such other vessel, and any reasonable doubt should
be resolved in its favor." Such is the doctrine enunciated in The
City of New York, 147 U. S. 85, 13 Sup. Ct. 211, 37 L,. Ed. 84. See,
also, The Umbria, 166 U. S. 404, 17 Sup. Ct. 610, 41 L. Ed. 1053 ; The
Oregon, 158 U. S. 187, 15 Sup. Ct. 804, 39 L. Ed. 943.
I conclude, on the évidence as a whole, that the charges of fault set
forth in the cross-libel are not well founded. The évidence abundantly
shows that a wide turn of the bend of the river by the towing canal tug
was made necessary to safely navigate the tow on account of the prés-
ence of a dredge and scowwhich were moored on the opposite bank,
and which occupied approximately 50 feet of the river. It also appears
that the steam tug Êlk was passing up the river on the port side of
the Columbia and tow. Thèse conditions made it practically neces-
sary that the Columbia and tow should pass down in a course close
to the north bank of the, river, and hence in close proximity to the
Northland. The évidence, of the respondent owners of the Columbia
and of the Campania sustains the view that both canal boats were
properly navigated and equipped. On ail the évidence, therefore, no
fault for the collision is attributable to them, or either of them. The
cross-libel is dismissed.
A decree may be entered for libelant against the steamshîp North-
land, and an order of référence to the clerk of this court to compute
the damages.
MORRIS T. OHESAPEAKE & O. S. S. CX).
(District Court, S. D. New Yorli. October 8, 1903.)
1 CoNTBACTS— Pbrson Entitled TO SuE FOK Bkbach— Undisci-osbd Princi-
PAI..
The real principal for whose benefit a contract was made is entitled
to avail himself of the contract, even though the other party had no
lînowledge that there was an undisclosed principal.
2. Same— Contract for Carriage of Cattle— Rights of Assignée.
A contract for the carriage of cattle on certain vessels Is assignable
by the shipper, and the, assignment vests the assignée with the right to
sue thereon in his own name, notwlthstanding a provision therein that
no part of the space côntracted for shall be sublet wlthout the consent
of the Bhipowner.
8. Same— CoNSTRacTiON— VesselS "All Sailing. "
A contract by a steamsjilp Company for the carriage of cattle on cer-
tain specifled vessels, "ail salling" during certain months, Imports a war-
ranty that ail the vessels named wUl sail during such months.
4 Same— Pabol Evidence to Vabt.
Where such contract makes no distinction between the several vessels
named, it cannot be changed by paroi évidence toexcçpt onè from such
warranty.
6. Same— Rights of Undisclosed Principal — Bquitibs Existinq eetwebh
Apparent Pbincipals.
Where an undisclosed principal cornes In and aVails himself of thé
contract, he must do so subject to exlsting equltles between the apparent
principals; and a elalm for démarrage existlng in favor of a steamship
% 1. See Principal and Agent, vol. 40, Cent. Dlg. ?§ 502, 503.
MOEBIS r. CHESAPEAKE & 0. S. 8. OO. 63
Company against a shlpper with whom a contract for further shipments
Is made may be set off against simllar claims arising against the Com-
pany under such contract, althougli the latter was In fact made by the
shipper on behalf of another who made the shipments thereunder, and
In whose favor the claims arose.
In Admiralty. Action to recover damages for breach of contract.
Opdyke, Willcox & Bristow, for libellant.
Convers & Kirlin, for respondent.
ADAMS, District Judge. This is an action which was brought by
the libellant to recover from the respondent damages arising out of
an alleged breach of contract made between the respondent and
Schwarzschild & Sulzberger Company and J. Shamberg «& Son and
assigned to the libellant. The contract was in writing and is as fol-
lows:
"Chesapealie & Ohlo Steamship Oo., Ltd., Agents.
Spécial Live Stoch: Contract.
New York, Oct. 19th, 1899.
Messrs. Schwarzschild & Sulzberger Co. and J. Shemberg & Son— Dear
Sirs: We offer, as Agents of Ohesapeake & Ohlo 8. S. Co. Ltd. and owners,
and not on our own behalf, to let you suitable space as undernoted, for the
transporta tion of Uve cattle, that is to say: On the Steamers named in
margln intended to be dispatehed about Salllng dates as per margin from
Newport News, Va., U. S. A. to the Ports named in margin, for 350 head of
cattle exceptlng 'RAPIDAN' and 388 head for S. S. 'RAPIDAN', at the rate
of Twenty-seven shillings and six pence SterUng per head. Freight to be
paid as customary at destination.
It being stipulated that no responsibility is to attach to the vessel, her
owners or her agents, for loss arising from delay in receiving or shipping,
or from the Steamer not being ready to embark the animais, or for loss or
damage when caused elther dlrectly or indirectly by the act of God, the
Queen's enemies, strike, mobs, quarantine, InsuiBciency or defect in fittings,
lighterage to or from the vessel, trans-shipment, explosion, beat, fire at sea
or on shore, périls or accidents of the seas, rlvers and navigation, or arising
from boilers, steam, machinery, pumps or pipes of any kind (including con-
séquence of defect therein or damage thereto), collision, stranding, heeling
over, upsetting, submerging or sinking of shlp in harbor, river, or at sea,
however thèse or any of them may be brought about, or from admission of
water into the vessel, whether this shall arise from any of the before men-
tioned causes, or from any act of omission, négligence, default or error in
judgment of the pilot, master, mariners, englneers, stevedores, or other per-
sons in service of the shipowner's occurring previously to the vessel's sailing,
or by unseaworthiness of the ship at or after the commencement of the voy-
age (provided ail the reasonable means bave been taken to provide against
such unseaworthiness); the other conditions being as customary with us, and
as expressed in our form of Live Stock Bill of Lading, a copy of which Is
hereupon endorsed, and which forms part of the Spécial Live Stock Contract.
No other cattle to be carried.
Ton are not to sub-let any part of the space referred to In this Contract,
withoTit our previous consent, nor iintil the party to whom you propose to
sub-let bas slgned and delivered to us an undertaking to be bound to ail the
terms and conditions herein specified, it being understood that you are re-
sponslble for the due observance of such undertaking. It is also provided
that we shall not be requlred to give any notice when to ship, except to you,
that you are not, under any circumstances, to be relieved from any part of
your obligation under this Contract; and that nelther ourselves nor the
Owners of the Steamship assume any obligations whatever to the party to
whom you may sub-let Bills of lading to be Issued at New York as soon
as cattle are loaded.
64 125 FBDBKAIi BBPORTEÏl.
It Js dlstlnctly nnderatood and ag^eed that under no clrcumstancea wlll
camç Jtje oàrrièd free, tlirongh theprbcess of crowding a few extra heada
in tue sp^é^ requlred for à less number, thç frelght being payable per head.
Six days'. notice tq be given you of the date when the steamer wlll leave
Newport News, and the cattle are to be in Newport News, ready for ship-
ment by the time called for, otherwlse usual demurrage to be paid the
Steamer. And If the cattle are detalned In Newport News, détention to be
paid for at the rate of 50 cents per heàd per day.
In considération of the Shippers éngaging the spaces on the above named
Steamers, Agents give Shippers the option to be declared on or before April
15th, 1900, of taking the cattle spaces, conditions as above, on their Steamers
sailing from Newport News to Liverpool and London for the months of
May, June and July, 1900, at 30/- Sterling per head. Should Shippers déclare
as their option that they will take the spaces for the additionai perlod named
above then a new contract shall be made containing an option to the Shippers
for a further perlod of three months on the same terms, option to be de-
clared On or before the flfteenth day of the last month covered by the con-
tract. This arrangement to continue for àll the months of the year 1900 In
perlods of three months each unless Shippers should at any time not avall
themselves of their Optiùn iwhen thls agreemènt is to terminate.
Shippers hâve option to be declared upon receipt of the six days' notice of
Steamers readlness to recelye of decllnlng to ship cattle In which case they
shall pay the Steamship Cotapany upon sailing of the Steamer from Newport
News one-half of the frelght on the cattle in fuU settlement of dead freight.
In which case also no other cattle to be carrled.
• * * accept the above offer, and hereby agrée and bind * • ♦ to
ship the number of animais called for on ' the terms and conditions thera
stated. P. Pro Furness, Wlthy & Co., Ltd.,
Geo L Woolley, Agents."
(Written across the face)
"Accepted Bach flnn Shlpplng
one half &
signed severally
not jolntiy. J. Shamberg & Son.
Schwarzschild & Sulzberger Company.
P. Joseph,
Vice Prest"
(Written on left-hand margln)
"Nothlng contained herein shall be construed to relleve any Manager,
Agent, Master or owner from any Uablllty which It Is made unlawful to con-
tract against by C. 105 of the Acts of the 52d Congress of the "Dnited States,
approved February 13, 1893, but they shall hâve the beneflts of ail the
exemption for llablllty conferred by the Act"
(Written on right hand margln)
"S. S. 'Eapid^n.' Ail sailing during the months
S. S. 'Shenandoah.' . of December, 1899, January,
S. S. 'Rappahannock,* February, March, Aprîl, 1900,
S. S. 'Greenbrier.' for London and LiverpooL
S. S. 'Chickahominy.'
S. S. 'Appomattox.'
S. S. 'Kanawha.' "
The libellant became the principal by the assignment and the saîd
original parties became his agents in the fulfilment of the contract.
Numerous shipments of cattle were made under the contract for the
benefit of the libellant whose acts tendèd to show a récognition by the
réspondent of the libellant as the principal in the' transaction.
On or about April s, 1900, the said agents notified the réspondent
that the option provided for in the contract to continue the contract
during the months of May, June and July, igoo, wôuld be exercised.
The option for the months of August, Sejptember and October, 1900,
MOBEIS y. CHESAPEAKE £ O. S. S. CO. 05
was also exercised by notification on or about July lo, 1900, and the
option for November and December, 1900, was exercised by notifica-
tion on or about October 5, 1900. ^^,
L First Cause of Action.
On or about January 27, 1900, the respondent gave notice to the
libellant that the steamer Chickahominy had been fixed to sail from
Newport News on February 2, 1900, and the libellant procured and
had in readiness for shipment on that vessel 351 head of cattle on the
day appointed, but the steamer did not sail until February 6, by reason
of which détention the libellant claims damages at the rate of 50c.
per day per head, amounting to $702.
Second Cause of Action.
On or about February 20, igoo, the respondent gave notice to the,
libellant that the steamer Greenbrier had been fixed to sail from New-
port News on February 26, 1900, and the libellant procured and had
in readiness for shipment 351 head of cattle on the day appointed,
but the steamer did not sail until February 28, by reason of which
détention the libellant claims damages at the rate of 50c. per day per
head, amounting to $351.
Third Cause of Action.
On or about February 24, 1900, the respondent gave notice to the
libellant that the steamer Rappahannock had been fixed to sail from
Newport News on March 3, 1900, and the libellant procured and had
in readiness for shipment 359 head of cattle on the day appointed, but
the steamer did not sail until March 5, by reason of which détention
the libellant claims damages at the rate of 50c. per day, amounting
to $359-
Fourth Cause of Action.
The libellant claims that the respondent at ail times during Decem-
ber, 1899, and throughout the entire year 1900, failed to furnish cattle
space or to carry any cattle upon the steamer Rapidan, although she
made seven trips across, on each trip carrying live cattle and freight
at rates greatly in excess of those fixed by the contract with the
libellant; that during said period the libellant had in readiness for
shipment cattle sufficient to fiU the space on the steamer reserved
under the contract, whereby libellant sufïered damages to the extent
of $40,000.
The respondent, answering the libel makes some formai déniais and
avers that the arrivai of the Chickahominy was delayed by sea périls
until February i, 1900, and ail reasonable diligence was used to dis-
patch the steamer as soon as practicable thereafter and no liability for
demurrage on the cattle accrued.
The answer to the second cause of action, after denying the formai
allégations, avers that the arrivai of the Greenbrier was delayed by
sea périls until February 25, and ail reasonable diligence was used to
dispatch her as soon as practicable thereafter and no liability for de-
murrage has accrued.
125 F.— 5
66 125. iFEDERAL REPORTEE. , ; . :/_
The aji;5wer tothethird cause of saction dénies the allégations of the
The answer to the fourth cause of action makfes some fofniaî déniais
and avers that there were no sailings of the Rapidan during December,
1899, or during 1900, and thàt it was not in contemplation of the
parties that the contract should attach unless the vesselsailed in the
respondeat'si Service, which she did not, and that in October, 1899,
Furness, Withy &-EdiîL,td., as agents of the respûndenty entered into
a live stock -contrael withSchwarischild & Sulzberger ,Co. and J.
Shamberg & Son, with certain steamers mentioned in the margin, the
Rapidan beingoncof tbem, but that it was understood andagreed be-
tween the parties prior to the . exécution of the ;c0ntract that the
Rapidan was not a vessel bçlojiging to the respondent or regularly
running jn its hne, bufîihàt shé -Was tempbrarily chartered and would
lusit hé orie of ■•the vessels"sailin'g during the moriths"; abbve stated
uiiless her charter was continlued and that if it was not and if the ves-
sel dië 'noi run in respoiidérit's service during the currency of the cattle
contractai or ahy renewalbf it, the contract should not be deemed to
apply td op includeher cattle spâces 'in any way. It is further averred
that the vessel with the knowledgeoi Schwarzsohild & Sulzberger Co.
and J. Shamberg & Son was taken on time charter by thé British Gov-
ernment prior to the signing.of the contract ,£^nd that her name was
included ip it only on fnè'faith of the âgréement and understanding
that it' wbuld attach to her only in the evcnt of het rettirn to the re-
spondént's service and that 'in fact thé steamer never came back into
the rëàjibndent's' service during the currency of the 'oattle contract in
quèstiôti and iftever was â vesSél to Which the contract or any rénewal
oîit attachéd;-;
- The contentions advâhcéd by the respondent are :
ist. That the libellant has not proved any privity with the re-
spondent entitling him to niaintain this action in his own name.
The , evideince shows that the respondent knew with whom it was
dealing. Certain icorrespqndence took place between the libellant and
hiôt assignor,s of which the, respondent jWas apprised and there was
soihEie direct dealing between the libellant and the respondent, in the
shâpe of bills_i0.f ladingfofisome of the shipments made. : The libellant
to the knowledgfe of the respondent, was operating in the name of the
Morris Beef Company, il,td.,.and many of the shipments were by that
Company and the respondent collecteid'demurragefrom the libellant
upon at least one shipment. The inference that he knew of the rela-
tion of the parties to the contract is irrésistible.
Moreover, the real principal Svas entitled to comè îli and avail him-
self of the contract made for his beriefit, even though the respondent
did not know there waS an undisclosed principal. New Jersey Steam
Nav. Co. V. Merchants' Baiik, 6 How, 344, 378, 380, 12 L. Ed. 465;
Ford v. Williams, 21 How. 287, 16 t. Ed. 36; Baldwin v. Bank, i
Wall. 234, 17 L. Ed. 534; Prichard v. Budd, yô Fed. 710, 22 C. C. A.
S04. ■■ '''■ '■■■■■, '";■'■ -■■' - ■■'',
The situation is not changed by thé provision in the contract that
none'of thé space should be sub-let. The contention of the re-
spondent is, that in view of such provision, the libellant could acquire
WESTEEN UNION TEL. CO. V. PENNSTLTANIA OO. 67
no rights in the contract, but the différence between sub-letting and as-
signing is material. In the one case, the lessee claims the whole or a
part of the premises he is entitled to occupy. In the other, he trans-
fers ail his right in a contract and the assignée acquires ail the rights
and assumes ail the liability of the assignor. Lynde v. Hough, 27
Barb. 415 ; Bedford v. Terhune, 30 N. Y. 453, 86 Am. Dec. 394; Field
V. Mills, 33 N. J. Law, 254.
2nd. The respondent is not liable for having offered cattle space on
the Rapidan.
The respondent's contention is that the words "ail sailing" during
the months covered by the contract, should be read "ail that may sail."
In my opinion, the expression should be held to import a warranty
that ail would sail. Any other view seems to me to be inconsistent with
the plain intention of the parties, as shown by the terms of the contract.
There is nothing in the contract to distinguish the Rapidan from
the other steamers, about which liability for, by the respondent, there
is no dispute. The contract is unconditional and unambiguous and
can not be destroyed by paroi évidence. Bast v. Bark, loi U. S. 93,
97, 25 L. Ed. 794; De Witt v. Berry, 134 U. S. 307, 315, 10 Sup. Ct.
536, 33 L. Ed. 896; Seitz V. Brewers' Co., 141 U. S. 510, I2 Sup. Ct.
46, 35 L. Ed. 837; Van Winkle v. Crowell, 146 U. S. 42, 13 Sup. Ct. 18,
36 L. Ed. 880; Corse v. Peck, 102 N. Y. 513, 7 N. E. 810; Thomas
V, Scutt, 127 N. Y. 133, 27 N. E. 961.
3rd. The claims for demurrage due to the respondent from
Schwarzschild & Sulzberger Co. and J. Shamberg & Son are admissible
as set-offs in this suit.
The respondent's contention in this regard is entitled to more con-
sidération. It is claimed that there is due to the respondent some
£1500 for demurrage arising out of transactions between it and the
assignors prior to this contract. The claims are before the court and
can be dealt with conveniently in this action. The parties stand in the
position they would hâve stood if the assignors had really been prin-
cipals. Montagu v. Forwood, Law Repts. 2 Q. B. Div. 1893, p. 350;
Taintor v. Prendergast, 3 Hill, 72, 38 Am. Dec. 618.
I do not find that the defences should be sustained except as to the
demurrage last referred to.
Decree for the libellant, with an order of référence.
WESTERN UNION TEL. 00. v. PENNSYL VANIA CO.
(Circuit Court, W. D. Pennsylvanla. October 6, 1903.)
No. 46.
TKLBGBAPHS— CONTRACTS BETWEEN RAIIiROAD AND TeLEGEAPH C0MPANIB8
—Construction.
An executory contract between a telegraph company and a railroad
Company for the construction and opération of a telegraph Ilne on the
rlght ot way of the railroad company, to be used for Its beneflt In the
transaction of railroad business, and for the benefit of the telegraph
company In the transmission of commercial messages, which provided
that the pôles and cross-arms for the original construction should be
68 125 FEDERAL REPORTER.
furnlshed and placed by the rallroad company, aud expressly gave tlie
telegraph company the rlght to string a second wire thereon, did not
operate as a conveyance to the telegraph company of any estate or In-
terest in the realty, in the absence of any words of grant thereln, but
created a relation of joint ownershlp and interest between the parties in
the personalty used in constructing the Une, subject to the terms of the
agreement.
a Same-^RiGht of Tekmination.
A contract between a telegraph company and a rallroad company for
the joint construction and use of a telegraph Une along the latter's road,
which fixes no tlme for its expiration, is not perpétuai in its opération,
but is termlnable at the option of either party on reasonable notice.
In Equity. On demurrer to bill.
Rush Taggart and A. M. Neeper, for complainant.
Dalzell, Scott & Gordon, for défendant.
BUFFINGTON, District Judge. This is a demurrer to a bill in
equity filed by the Western Union Telegraph Company against the
Pennsylvanîa Company, leSsee of the Cleveland & Pittsburg Railroad
Company, The bill is based upon an agreement entered into in Octo-
ber, 1856; between the Western Union Telegraph Company and the
Cleveland 8z. Pittsburg Railroad Cbmpany ; and the rights ot the com-
plainant herein considered ârise under that contract, and an alleged
subséquent paroi modification thereof. On June 2, 1902, the Pennsyl-
vania Company, the successor of the; Cleveland & Pittsburg Railroad
Company, notified the telegraph Company it would terminate such con-
tract in one year thereafter, whereupon the latter fàled this bill to com-
pel spécifie performance, and to enjoin respondent frôm terminating
the contract. The respondent hâs demurred, and the questions in-
volved in such demurrer which are herein considered are, first, whether
this agreement conveyed to complainant an easement or grant of real
estate in perpetuity ; and, secondly, whether the contract is terminable
by the railroad on reasonable notice. In view of the case of The
Western Union Telegraph Company v. The Pennsylvanîa Railroad
Company (C. C.) I20 Fed. 362, and the afiSrmance thereof by the
United States Circuit Court of Appeals (123 Fed. 33), it is not neces-
sary to hère consider any right claimed by the bill to vest in the
complainant by virtue of the act of Congress of July 24, 1866 (14 Stat.
221, c. 230). The case turns on the agreement of 1856, and the mean-
ing and construction of such contract are referable to its date of exécu-
tion. If the writing then vested no interest in realty, the actions of
the parties since hâve not enlarged its scope, for both hâve acted and
are now acting ûnder it, and their existing rights and status are derived
therefrom. The property hère involved is situate in Ohio and Penn-
sylvanîa, and in thèse states a grant of realty, by theîr statutes of
fraud, must be in writing. The common-law requirement in a con-
veyance of real estate is that it shall contain apt words of conveyance,
or manifest a clear intent by other terms. Examination shows that
this writing contains no apt words of conveyance, nor évidences an
intent to convey. Its form is not that of a conveyance. It styles itself
not by the title given to a conveyance, viz., "lease," "indenture," or
"deed," but by that of "agreement" or "contract" ; and, while ît is a
WESTEEN UNION TEL. CO. V. PENNSYLVANIE 00. 69
mère formai matter, it will be noted the grantor of the alleged realty
is made the party of the second part, and the grantee, of the first part.
Moreover, if this paper is to be regarded as a conveyance, and its
efïect is to create a perpétuai servitude and easement on the property
of the railroad, and to bind the telegraph company, in perpetuity, to
operating and exercising such easement, then thèse broad povvers and
obligations are irrevocably granted and assumed in perpetuity by thèse
respective corporations, without récital of any statutory authority
thereto enabling them, or, if such powers are presumed, no corporate
action authorizing their exercise by the executive officers is recited.
The paper simply shows exercise of power by the executive officers,
without reciting enabling statutory authority or corporate action.
Presumably, this agreement was made between parties familiar with
the forms and requirements of conveyance and due corporate action.
It was between companies engaged in large affairs. They knew what
each meant to grant and acquire. The omission, then, from this con-
tract of ail form, words, and terms incident to a conveyance of realty,
and of référence to authority to exercise the broad powers now im-
puted to this writing, is most significant. If the parties intended to
convey and grant, presumably they knew how to express such interest
in fitting terms. But if the instrument was capable of such construc-
tion as to make it a conveyance, it must be conceded it would be a
strained one, and therefore one to be resorted to only in case it is not
susceptible of a single, natural construction. But this we think it is.
The paper was executory. No présent considération passed. The
purpose was to establish a relationship between the parties covering
telegraph appliances and facilities thereafter to be constructed, to pro-
vide for their repair and extension, and to regulate their use in the
transmission of railroad business for the benefit of the railroad, and of
commercial business for the benefit of the telegraph company. Such
agreements hâve been held to create joint enterprises and ownerships.
St. Paul, etc., Co. v. Western Union Telegraph Company, ii8 Fed. 511,
55 C. C. A. 263 ; Western Union Telegraph Company v. Burlington,
etc., R. Co. (C. C.) II Fed. i; Atlantic & Pacific Tel. Co. v. Union
Pacific Railroad Co. (C. C.) i McCrary, 541, i Fed. 745. By it the
railroad was to secure télégraphie services in conducting its business,
and the telegraph company was to hâve the use of railroad property,
and the facilities to carry on a gênerai commercial télégraphie busi-
ness. In the original installation the railroad was to furnish in place
pôles and cross-arms; the telegraph company to furnish wire, in-
sulators, instruments, and patents, and string one wire. For stringing
this wire the railroad was to pay $30 per mile. Certainly, by this
original installation of pôles, cross-arms, and wires thus made or paid
for by the railroad company, and located on its own ground, it cannot
be said that the telegraph company acquired any title to the land to
which thèse fixtures were attached. For aught that appears in the
contract, the telegraph company had no express right of entry to
thèse pôles or wires. The duty of keeping the line in order rested
upon the railroad, and under the paroi modification the telegraph
company simply furnished material, while the railroad did the work.
Under a working contract for such a joint undertaking, it is clear that
70 125 FEDKKAL REPORTEE,
no easement or grant of.any interest in realty was contemplated or
reqûired. It is true, the telegraph çompany had the right to string
another wire for its own use; but this, it wiU be observèd, was on the
pôles of the railroad, and.such right, when exercised, was not incident
tô ownership created or'vested, but because the contract expressly
allowed it, Indeed, the express grant of such right by section s im-
plies that, in the scrivener's view, such grant was essential to the exer-
cise of that which would hâve been an incident of ownership, if the
telegraph company, by the agreement as a whole, was vested with a
line easement. The eighth clause provides thàt the railroad company
was not to allow any other telegraph line or individual to build or
operate a Une of telegraph on or along the said railroad, or any part
thereof. SuCh a provision was held, in tlie case of The Pacific Com-
pany V. Western Union Telegraph Company (C. C.) 50 Fed. 494, in-
compatible with the contention that the contract conveyed a right to
the real estate, because it àriiounts to an assertion by the railroad
company of a right to çohtrol the future use of the ground. That the
material fùrhished by the telegraph company went into the construc-
tion of lihes does not of itself make them or it realty. Much less does
it draw to such personalty ownership of the particular ground on which
they are placed. It must be borne in mind that they are so placed
under the contract, and if the contention of the parties, evidenced by
that contract, was that they were.hot to be considered realty, they will
be treated as personalty. Wliètlier fixtures such as pôles, wires, and
rails lose their character as piérsohalty dépends in a great measure upon
whether the one who plaCed; them on another's ground intended such
a resuit. St.- Paul, etc., Co; v. Western Union Telegraph Company,
118 Fed. 513, 55 C. C. À. 263;, Wiggins Ferry Co. v. Ohio, etc., R.
Co., 142 U. S. 409, 12 Siip. Ct. 188, 35 L. Ed. 1055; Van Ness v.
Pacard, 2 Pet. 137, 7 L. Ed- 374; Wagner v. Cleveland, etc., R. Co.,
22 Ohio St. 563, 10 Am. Rep. 770; Northern Central R. Co. v. Can-
ton Co., 30 Md. 347; Toledo R. Co. v. Dunlap, 47 Mich..456, 11 N.
W. 271 ; Oregon Co. v. Mogier, 14 Or. 522, 13 Pac. 300, 58 Am. Rep.
321; Western Union Co. v. Burlington (C. C.) 11 Fed. i; Tifït v.
Horton, 53 N. Y. 380, 13 Am. Rep. 537. To thèse may be added
Apsdenv. Austin, 5 A. & ElCs (N, S.) 671, where the court said:
"It is possible that each party to the présent instruraent may hâve con-
tracted on the supposition that ■j;he business would be carrled on, and the
service in fact contlnuei}, during the'three years, and yet, nelther party
mlght hâve been willing to blnd hlnlself to that effect; and it Is one thing
for the court to effectuate the intention of the parties to the estent to which
they may hâve even Imperfectiy expressed themselves, and another to add
to the instruments ail such coveijànts' as upon a full considération the court
may deem fitting for completlng thé Intention of the parties, but which they
either purposely or unintentionaliy hftVe omitted. The former is but the
application of a rule of construetioii to, that which is written, The latter
adds to the obligations by which the parties hâve bound themselves, and is,
of course, quite unauthorized, as well as llable tq great practical injustice
in the application."
The agreement then being one.for the further^ince of a joint enter-
prise, and not for the grant of ai;i interest or easement in realty, we are
of opinion it was terminable at tjie option of either party on reasonable
notice. No time was specified for its continu^nçe, but clearly, under
WE8TEKN UNION TEL. CO, V. PENNSTLVANIA CO. 71
the terms of this contract, its subject-matter, and the objects in view,
the failure to specify any time could not imply that this agreement was
for ail, time. As is the case in many joint enterprises without time
lirait, the parties probably assumed the success of the enterprise and
benefits accruing therefrom to the parties aiïorded a guaranty of in-
definite continuance. The outcome justified such belief, for this con-
tract, without provision for continuance, has, through the advantages
accruing to both parties, worked its own extension for nearly 50 years.
The view that the contract, being without limit, was terminable, is in
accord with the authorities. Echols v. New Orléans R. Co., 52 Miss.
610, was a contract for cord wood to be furnished without limit of
time, save that it was to "continue as long as satisfaction be given by
the contractors." It was held terminable on reasonable notice, al-
though there was no default of the contractors, the court saying :
"Perpétuai contracts of this character wlll not be tolerated by the law, or,
rather, will not be enforced as Imposlng an eternal and never-ending burden.
An agreement to fumlsh a support or service or a particular commodity at a
specifled priée, or to do a certain thing without spécification as to time, will
be construed either as terminable at pleasure, or as implying that the thing
to be done shall be implied within a reasonable time, and the obligations
shall cease with the same limitation. Any other theory than this would
subjeet Incautious persons— a elass, it may be remarked, which includes the
majority of mankind— into lifelong servitudes, and greatly fetter and embar-
rass the commerce of the world. Indeed, It may be said that any other theory
is a moral and praetical Impossibility, and, if indulged in by the courts,
could not be enforced in the ordinary concerus of life."
In Jones v. Newport News Co., 65 Fed. 736, 13 C. C. A. 95, a coal
tipple and trestle were constructed by a warehouseman under an agree-
ment with the railroad that it would construct a switch thereon and
deliver coal to him. There was no agreement as to time. It was held
the railroad company could terminate the switch right, the court say-
ing:
"It is not alleged that either the défendant or his predecessor agreed to
keep the switch in the main Une for any definite time, or that either ex-
pressly agreed to keep it there forever. The plaintifE conteuds that, nothing
having been said as to time, the implication Is that the switch was to be
maintalned at ail times; i. e., forever. Such a construction is quite at
varlance with the views of the Suprême Court, as expressed in Texas & P.
Railroad Co. v. City of Marshall, 136 D. S. 393 [10 Sup. Ct 846, 34 L. Ed.
385]."
In the case of The B. & O. R. R. Co. v. The Ohio Company, referred
to in the case of The Chattanooga Co. v. Cincinnati Co. (C. C.) 44 Fed.
456, it was held that though there was a grant by the Ohio & Miss.
Ry. Co. that the B. & O. R. R. Co. "shall hâve the exclusive right
to forward express matter over the said railroad of the party of the
second part," and the latter company had established and opened
offices ail along the Hne of the railroad of the Ohio & Mississippi Com-
pany, and had acted under a contract for some years, it was neverthe-
less terminable by the Ohio & Mississippi Company. Coffin v. Landis,
46 Pa. 432, was an agreement without spécification of time continu-
ance. This the court refused to regard as perpétuai, saying :
"It is évident, then, that were we so to construe the agreement as to hold
obligatory upon the one party to employ, and upon the other party to serve,
72 : • .125 FEDEBÀL UEEORTEÎl,
during ^ny perlod, we sbpuld be In danger of imppslng Uabillties whlch both
parties purposely avold^d âssumlng. And if It be admitted that neither of
the parties contemplated a severance of the relation formed by the contract,
at the wlll of the ôtii^ party, it dàés not foUdw thàt we are at Uberty to treat
the agreement as eontalning a eovenant against it' ' That would be to make
an expectation of résulta équivalent to a biuding engagement that they shouid
follow."
Without discussing at length cases , cited by counsel for the tele-
graph Company, of which the Mississippi LoggingCo. v. Robson, 69
Fed. 775, 16 C. C. A. 400, Great Northern Ry. Co. v. Manchester, S.
& h. Ry. Co., 5 De Gex & S. Ch. Rep. 138, and Llanelly Ry. Co. v.
London & Northwestern Ry. Co., 7 H. L. 550, are exarfiples, it will be
observed that présent and valuable considérations in each case, on the
exécution of the several agreements, pafesed to the party that after-
wards sought to terminate. Moreover, in considering the EngUsh
cases, regard must be had to the statutory right of the railroad, by
appropriate proceedings, to compel a running arrangement of the
gênerai nature provided by the agrefement. Holding the agreement
nonterminable was therefore, in eflfect, but giving the railroad what
it could secure by statutory proceedings.
After full considération, we are of opinion the présent agreement
conveyed no interest or easement in realty, and that it was terminable
on reàsonable notice, for which latter conclusion we find support in
Texas, etc., Ry. Co. v. City of Ma.rshall, 136 U. S. 407, 10 Sup. Ct.
846, 34 L,. Ed. 385. We are also of opinion the relation between the
parties was one of joint ownership and interest in the personajty sub-
ject to this particular agreement, bût the extent of that ownership
or interest is hot hère involved or determined.
Our view of both the two question^ noted in the early part of this
opinion being with therespondent, a decree sustaining the demurrer
to that extent mây be drawn.
BOARD OP TEADE OF CITY OF CHICAGO V. L. A. KINSBY 00, et al.
(Circuit Court, D. Indiana. July 14, 1903.)
No. 10,071.
l. ExcHANaEB— tPkopbrtt ih Quotations— Right to Protection in Eqditt.
Conceding that the Board of Trade of the City of Chicago bas a
property right in the quotatlons of priées made on its exchange, based
on legitlmate transactions, it is ribt èntitled to invoke the aid of a court
of equlty for the protection of its right In its quotatlons under évidence
showing that somethlng Ube 95 per cent, of the contracts made on its
exchange are for the gale of commoditles for future delivery. and are
closed Immediatély aftèr the transaction by a settlemènt of différences
between its members, permltted by its rules, and made with its knowl-
edge and consent at the olose of each day's business.
i. Sales for Fdt0iie Dbmvbrt— VAWDiTT-i-lNTBNïtoii of Parties,
Whethera contrait for the purchase and sale of a commodity for
future delivery, madè on an exchange, is legitlmate and valid, or morely
a wagering transaction, dépends on whether it was the Intention of the
t 2. See Gamlng, vol. 24, Cent Dig. §§ 22, 23, 25.
BOABD OP TRADB T. I<. A. KIN8BT 00. 73
parties at the tlme that there should be an actual dellTery of the com-
mofllty, and payment therefor. Such an Intention la not necessarily
negatived by the fact that the contract Is subsequently closed out without
dellvery, By thé payment of différences; but where It Is the habituai
praetice and custom of the members of the exchange to so settle contracta
Immedlately after they are made, extendlng to almost the entlre bulk
of the transactions of the exchange, It must be preaunied that such was
the Intention when the contracts Bo settled were made, and that no actual
sale and dellvery was contemplated.
In Equity. Suit for injunction.
Henry S. Robbins and D. P. Williams, for complaînant.
Smith & Korbly, Charles D. FuUen, and S. N. Chambers, for dé-
fendants.
ANDERSON, District Judge. On March 25, 1902, the complaîn-
ant filed its bill for an injunction to restrain the défendants from re-
ceiving, obtaining, using, selling, or distributing the quotations of
priées ôf grain and other commbdities dealt in on the floor of the
complainant's exchange in the city of Chicago. A temporary restrain-
ing order was denied by the court, and on motion of the complainant
for a temporary injunction the cause was referred to a master to take
the évidence. On July 8, 1902, the motion for a temporary injunction
was denied, and the cause was by the court, on its own motion, re-
ferred to Hon. Edward Daniels, master in chancery, to consider
the évidence already taken, and to take such further évidence as the
master should deera proper and pertinent to the issues, with direction
to report the facts, with his conclusions of law thereon. On October
10, 1902, the master filed his report. Both parties hâve filed excep-
tions to the finding of facts contained in the master's report, and the
défendants hâve filed exceptions to his conclusions of law. The ex-
ceptions to the fînding of facts will be overruled, except in so far as
inconsistent with this opinion.
I think the master's finding of facts is sustained by the évidence, and
substantially covers the case. But in some particulars the master
does not go as far as the évidence warrants, and I cannot agrée with
his conclusions.
The master states as his conclusions of law:
"(1) The continuons quotations of a trade exchange, as deflned In the fore-
golng flndlngs of fact, are a species of property.
"(2) The complainant has the common rlghts of property In tbe contlnnous
quotations of the Board of Trade of Chicago as descrlbed In the foregolng
flndings of fact, uniess the affirmative of eltber one of thèse four propositions
can be established."
No. 3 of thèse propositions is as follows:
"(3) That sald contlnnous quotations are made up elther entlrely, or at
least of such a large proportion, of flctitlous priées Ulegltlmately created In
felgned trading transactions conducted with the connivance of the complain-
ant, contrary to the inhibitions of the law against gambling, so that ail of sald
continuons quotations must be placed In the category of nuisances per se, in
which no property can exist."
The master then holds that neither of thèse propositions is, in law,
maintainable as regards complainant's continuous quotations, aad
1i .0.; y:;:-12g EBM)El.i;iBEP0RïfflEi;;1.: •:;.i
recoftlknèïM^s à'dedree in faVJDf 'î>f cOmplainant. • In dî the
abov^ prop9§itioji'3> tKé mastèr says: !
"Thé argument whlch allèges vice lai thèse contluupus quotatlons In efCect
cornes to this: In the tlïne contracta imade In the pitss delivery of the prop-
erty Is not intended, and the proof of.thlafaet lies !ïn the complalnant's rule,
under whlch such time eomtracts are entefed lato, wMch permits the closing
out of such contracta by the direct method or the ring method of settlement.
If auch methods of settlement do not beispeak a gambler's intent, then they
are valid, and upon this phase of this suit the only question is this: Do the
direct method of settlement and the ring method of settlement necessarily
imply an intent on the part of the parties to time contracta not to make or
receive delivery of the property sold and boughtî In my opinion, that ques-
tion is ans.wered In the négative by thé case of OlewB .v. Jamieson, 182 U. S.
461, 21 Sup. et 845, 45 L. Ed. 1183. Even if there be a few gambling trans-
actions in the pits of the complainant (and that such is probably the fact is
a matter of legitimate Inferençe from the foregoing flnding of facts), stlll that
fact would- not place ail the prtces made In the pits in the category of nui-
sances per se. The entlre vtilniiie of such priées cannot be so condemned."
In my judgmeht, proof oî the fact that delivery is not intended in
thèse contracts does not, so far as this case is concerned, lie "in the
complainant's rule ùnder which such contracts are entered into, whiçh
permits tlie closing out of such contracts by thç direct method or the
ring method of settlemeiit." The question w^ether delivery is really
intended is not to be determined by the form of the contracts, nor
by the hiethod by which they may be settled. To détermine this,
tiie real nature and character of the transaction must be looked into.
It may quite, prpperly bé sa^d that a rule which permits of the adjust-
ment of transactions by. settlement upon, différences instead of by
actual delivery 4oes not, pf itself, prove that no delivery was intended;
but other évidence may clearly show what the real nature of the
transactîoii is. , i-iir
The ma3ter,,|in his fîndings, States:
"Among the daily transactions in complainant's 'pits' thère are 'hedging'
contracts, 'spreiids' and 'scalplng contracta'; and ail of thèse forms of time
contracts are adjùsted by both the 'direct' method and the 'ring' method of
Settlement. Upon the question •«'bat part of ail the transactions In the pits
BM.adjuatedvby the 'direct' method and the 'ring' method of settlement the
évidence Is not very satlsfactory. It tends to show, howeyer, and I accord-
ingly so flnd, that at least three-faurths of the total transac^ons in the pits
are adjusted by the 'direct* anû'rihg* method of settlement."
And again the master states, "Most time contracts made in the
pits" are settled. by thèse methoids. I think the évidence discloses
that a much lar'ger proportion than three-fourths of the total transac-
tions in the pits is settled by the "direct" and "ring", inethods; that
the proportion is nearer 95 per cent, than 75 per cent. In other
words, the évidence in this^' Case shows that almost the èntire bulk of
the transactions in the pits (the reports of which ttiake «p the "contin-
uous quotaitiOTs") are transactions in which no delivery is made, and
,Which are clpsed by the difecî; or ring method of settlement. The
ihere fact that in a given ;Casê or in a number of cases no delivery is
made is not décisive. A man may buy or sell for future delivery,
and actually intend at the time pf making the purchase or sale to re-
ceive or deliver the property, and then, prîor to the time of the ma-
tùrity ôf the Contracts, châïige his mind, and offset the contracts, and
BOAED OF TEADB V. L. A. KINSET 00. 75
settle upon différences. In such case the transaction is légal, if he
in fact inténded to receive or deliver the property at the time the con-
tracts were entered into. The determining factor is the intention of
the parties at the time of making the contracts. "The generally ac-
cepted doctrine in this country is, as stated by Mr. Benjamin, that a
contract for the sale of goods to be delivered at a future day is valid,
even though the seller has not the goods, nor any other means of get-
ting them than to go into the market and buy them. But such a con-
tract is only valid when the parties really intend and agrée that the
goods are to be delivered by the seller and the pfice to be paid by the
buyer ; and, if under the guise of such a contract, the real intent be
merely to speculate in the rise or fall of priées, and the goods are not
to be delivered, but one party is to pay the other the différence be-
tween the contract price and the market price at the date fîxed for
executing the contract, then the whole transaction constitutes nothing
more than a wager, and is null and void." Clews v. Jamieson, 182
U. S. 461, 489, 21 Sup. Ct. 845, 45 L. Ed. 1183 ; Irwin v. Williar, iio
U. S. 499, 508, 4 Sup. Ct. 160, 28 fv. Ed. 225 ; Pearce v. Rice, 142 tj. S.
28, 40, 12 Sup. Ct. 130, 35 L. Ed. 925. It is perfectly plain that in al-
most ail of the transactions, the reports of which make up the "con-
tinuous quotations," no delivery is in fact made, but that they are set-
tled upon différences. The question then cornes to this : Do the
parties, at the time of making the contracts, intend delivery, or do they
intend to do what they actually do — settle upon différences ?
It is said that neither the number of instances in v/hich thèse con-
tracts are settled upon différences nor the proportion of them which
are settled in this way is sufficient to establish that no delivery was
contemplated. But certainly such facts bear powerfuUy upon the
question of intent. Ordinarily, men are presumed to intend to do
what they do in fact do. This is the presumption when the intent with
which a single act is done is the subject of inquiry. Surely it cannot
be said that this presumption is less strong in the case of a vast num-
ber of acts, done repeatedly and habitually. The évidence shows that
the actdrs in thèse transactions, as their settled habit and practice,
make contracts for future delivery, and immediately, with a uniformity
of practice almost complète, settle thèse contracts upon différences ;
and they do this continuously, day after day, month after month, and
year after year. Under the ordinary rule of judging the intent by the
act, there seems no room for doubt that thèse contracts are a "mère
cover for the settlement of différences" ; that no delivery is inténded.
The complainant asks this court to believe that the actors in thèse
transactions do one thing and intend to do another thing. It must
be conceded that in almost ail thèse cases of purchases and sales for
future delivery no delivery takes place. The court is asked to find
that delivery is inténded though no actual delivery is made ; and this in
the face of the fact that such purchases and sales are adjusted without
deUvery so soon after they are entered into. The master, in his find-
ings, says:
"Most time contracts made In the pits are adjusted as between members
of the complainant association before the specified time of delivery arrives by
elther the flrst or the second of the above-named methods. Direct settlements
76 125 FHDBEAIi EBPORTER.
ajre eflfeeted <by oflsetting Slmilar contracta at the close of the business hours
of eâcU âay'ln the foUowlng manner: As soon as it Is practlcable afteir the
çlosê of bu^ness In the 'plts' éa'ch broker (individual, flrin, or Corporation)
conductlng business in the 'plts' takes from the day's transactions on his
books the contracta simllar as to amoûnt and tlme of dellvery to counter con-
tracts made wlth other members of the complalnant association, and ascertains
therefroJn the différence of the aggregate prices of such slmilar contracts, and,
if the différence be In hls favor, the amount of such différence Is charged to
the other party in such counter contracta, and, if the différence is agalnst
him, such différence is credited to the other party to such counter contract
The foUowlng is a simple Illustration: If during the day broker A- bas sold
to broker B. 5,000 bushels of Dece.mber wheat at 75 cents per bushel, and
broker B. hàs spld to broker A. 5,000 bushels of December wheat at 76 cents
per bushel, aftér offsettlng : the contracta at 76 cents per bushel, there is a
différence In B.'s favor of one cent on each bushel, or $50. Thls offsettlng
différence In cash la placed as a débit or crédit, as the case may be, upon the
clearing bouse sheet hereipaîter descrlbed of the respective brokers, parties
to said counter or offsettlng èontracts. The 'ring' method of settlement is as
foUows: Each broker (pei*s6n, flrm, or corporation) conductlng business in
the 'plts' tes an employé, who is called a 'settlement clerk,' who keeps a
record of ail hls employer's transactions in the 'plts.' The complalnant asso-
ciation f umishes a room Whèreln ail of siich settlement clerka meet at stated
hours each day, and compare thelr respective books, called 'settlement books,'
which are reqnlred by the éomplainant association to be kept by each broker.
Upon comparing thelr respective books, said aettlement clérks ascertain what,
if any, outstanding tlme contracts may be offset by some other corresponding
tlme contract made by the parties wlth other members of the association, and
which of auch contracta are, by consent of the parties thereto, permitted to
be offset, and thereupon, under the rules of the complalnant association, are
deemed to hâve been settlefl, provided the requirements of sections 6, 7, 8,
and 9 of rule 22, of the complainant association are met as thereln provided
with référence to the clçapling housç sheet and other détails of settlement
thereln speclfled;"' >,
In other wprds, the persons "conducting business in the pits" day
after day meet in thes^^pits, and ostensibly buy of and sell to each other
enormous quahtities of grain and provisions for deUyery at certain
specifîed times in the fufùre, usually rnonths in the future. There is
no pretense whatever thçit thèse persons, or those forwhom they act,
hâve this grain and provisions on hand. This fact is met by the
proposition thatit is légal to, sell for future delivery what one does not
hâve, because-he may procufe it in tinje to deliver. Now, what do
thèse persons, as soori as they make thèse alleged contracts, do?
Does he who has sold proceed to;procure the property, so that he may
deliver it at the, time he has agreed, or does he who lias bought pro-
ceed to prépare himsçlf, tp receive what he has purchased? Not at
ail. "At the close of business; each day," "as soqn as itis practicable
after the close of business in the pitSj" the$^*persons meet, and imme-
diately proceed to settle their çonti^acts upon difEerences by the direct
method or the ring method of settlement. Between the time of
making the contracts , and, their s^ttlen^ent, what circumstance has
arisen to caus(2 them to prefer to settleby différences instead of by
delivery, as they ostepsibly agreed? The only time that intei-venes
between tl^e -plose of tlie transactions in the pits and the settlement
of the contracts there made is the time required to fînd "corresponding
time contracts!' which may be set ofïagainst each, other. Thèse per-
sons hâve "settlement clerks," and the clerks hâve books called "set-
tlement books," and complainant provides a "settlement room" for
BOAED OF TKADE V. L. A. KINSET CO. ( i
thèse "settlement clerks" to meet at stated hours each day, and com-
pare thèse "settlement books," ànd ascertain what contracts may be
settled by différences. There are no delivery clerks, no delivery
books, and complainant furnishes no room in which thèse persons
may meet and arrange for either the actual or symbolic delivery of the
property ostensibly bought and sold. The entire machinery provided
by complainant is for the purpose of settling thèse contracts upon
différences ; not for carrying them out by delivery.
The évidence aiso discloses that, when thèse persons "conducting
business in the pits" meet to settle, al! time contracts are settled upon
différences, unless orders are specifîcally given not to settle in this way.
Settlement upon différences is the rule; delivery is the exception, and
the rare exception. Can it be said of intelligent men that they meet
day after day and make ostensible purchases and sales of grain for
future delivery, and day after day settle such purchases and sales upon
différences with no pretense of delivery whatever, such being the
almost universal practice, and yet that they actually intend delivery
when the ostensible purchases and sales are entered into? To hold
this the court must find that thèse persons actually intend delivery
when they make the contracts, and change their minds between that
time and the time of settlement, which, as the évidence shows, follows
so swiftly after the contracts are made.
The master also finds that:
"It is fairly deduclble from the évidence that the aggregate business trans-
actions in grain (in the pits of the complainant association) was largely in
excess of the total wheat and corn production of the entire United States
during either of the years 1900 and 1901, and was many times over the entire
recelpts In Chicago of grain during each of said two years of 1900 and 1901,
and of such reçeipts In Chicago less than twenty per cent, inspected up to
grades of grain which could be dellvered upon time contracts made by said
sales and purchases in the pits."
So that it was physically impossible for more than a very small
part of the grain ostensibly bought and sold in the pits to be delivered.
Are men to be held to intend to do that which is and which they know
to be impossible?
Again, the master finds:
"It is also true that a decrease in the total grain production of the United
States does not cause a proportionate decrease in the volume of business done
in the 'pits* of the complainant association, but, on the contrary, such business
Is larger during a year in which theré îs a shortage in the grain crop."
The less grain there is to be bought and sold, the more thèse per-
sons buy and sell. There seems to be no legitimate relation between
thèse dealings in the pits and the actual commodity.
If the form of the contracts and the methods by which their settle-
ment may be accompHshed are alone to be considered, the master's
conclusion is correct. The contracts, on their face, are vaHd. "A
contract which is on its face one of sale with a provision for future de-
livery beifig valid, the burden of proving that it is invalid, as being a
mère cover for the settlemerit of 'différences,' rests with the party mak-
ing the assertion." Clews v. Jamieson, supra. Therefore the burden
is upon the défendants to show that no delivery is intended. I think
78 125 FEDERAL EEPOKTEB.
the défendants bave shown that sqch contracts are entered into with-
out any intention, at the time, on the part of the parties to the con-
tracts, that;,dejivery shall take place, but that the intention is tliat the
contracts sha'll be settled upon différences. Instead of reai contracts
for the /future dèlivery of property, they are pretended contracts for
immédiate settlement upon différences. If this be the case, they are
gambling transactions under the authorities above cited.
It may be said that some of thèse transactions are not tainted with
this vice ; that in them dèlivery took place and was intended. If the
rule was dèlivery, and settlement upon différences the exception, a
différent conclusion might be reached. But dèlivery is the rare ex-
ception, and thé intention to deliver is hkewise rarely présent. The
complainant dOes not prevent the making of thèse illégal contracts,
and pérmits the mingling of the illégal with the légal. I think that
the proportion of thèse transactions which are illégal is so large as to
charactérize and taint them as a whole, and that whatever property
right complainant may hâve in the "continuons quotations" in ques-
tion is so infected with illegality as to preclude resort to a court of
equity for its protection.:
VOIGHT V. MIHALOVITCH.
(Carcult Court, a D. OWo, W. D. December 19, 1899.)
No. 5,227.
1. OUSTOMS DUTIBS — CliASSIFIOATIOH— ChBRHIBS IN ALCOHOL.
Certain cherries Imported In casks, In a surroundlng fluld contalnlng
alcohol added for the purpose of resisting, fermentation and decay, the
cherries belng an Inedibl^ varlety, Intended to be used in the manufacture
of cherry Juice, are speclally provldéd for in paragraph 263, Schedule
G, § 1, c. 11, Tarife Act July 24, 1897, 30 Stat. 171 (U. S. Comp. St 1901, p.
1651), as "fruits preserved in * • * spirits," and are not dutlable under
paragraph 299, Schedule H, § 1, e.,11, of said act, 30 Stat 174 (U. S.
Comp. St. 1901, p. 1655), elther as "cherry julce" or as an unenumerated
article similar thereto, "elther In material, quallty, texture, or the use
to which it may be applled," under section 7 of said act, 30 Stat. 205
(TJ. S. Comp. St. 1901, p. 1693).
Appealby Henry Vôight^ surveyor of customs at the port of Cin-
cinnati, Ohio, from a décision of the Board of General Appraisers
(G. A. 4296) on certain merchandise imported by Mihalovitch, Fletch-
er & Co.
The merchandise In controversy consists of the sour, wlld red cherries
known In Germany as "Kirschen Sauer," Imported In casks. In a surrounding
fluld contalnlng more than 10 per cent, of alcohol, that was added for the
purpose of resisting fermentation and decay. The cherries are not Intended
or fit for human consumption, but were Imported to be used In the manu-
facture of the cherry Julce of commerce. The Importers entered the goods
for duty under the provision In paragraph 203, Schedule G, § 1, c. 11, Tariff
Act July 24, 1897, 30 Stat. 171 (U. S. Comp., St 1901, p. 1651), for "fruits pre-
served In * ♦ * splrlts" ; put the çurveyor of customs at the port of Cincin-
nati classlfled them as "cherry julce," under paragraph 299 of said act on the
ground that thèy are not enumerated in the tatltt, and under section 7 of said
act 30 Stat 205 (tJ. S. Comp. St 1901, p. 1693), wMch provides that un-
enum^ated articles "shall pay the same rate of duty which is levied on the
VOIGHT V. MIHALOVITOH. 79
enumerated article whlch It most resémbles," "elther In material, quallty,
texture, or the use to which It may be applied," were dutiable as cherry Julce
bécause they most resembled that article, wlthln the meaning of said section
7. His View that the cherrles are not enumerated in paragraph 263 was
based on the theory that the expression in that paragraph, "fruits preserved
in spirits," was a term of commercial désignation, and did not include the
cherrles under considération; also that said paragraph 263 covered only such
fruits as are edible and intended for table consumptlon, and, under the ruie
of noscitur a sociis, thèse uiedible cherries would be excluded. The Board
of General Appraisers, on protest by the importers, reyersed the décision of
the surveyor, directlng that the merchandise be reclasslfled as origlnally en-
tered by the importers. The surveyor appealed.
William E. Bundy, U. S. Atty., and Harlan Cleveland, Spécial
Asst. U. S. Atty., for the surveyor.
J. C. Harper and Judson Harmon, for the importers.
CLARK, District Judge. The décision of the Board of United
States General Appraisers îs before this court for review. There is
no such conflict in the facts in this case, so far as it dépends upon facts
directly in issue and to be decided, as to require a statement of the
case or a discussion in détail of the évidence. It may be said in a
gênerai way that the évidence to be considered consists of the facts
and circumstances as they existed at the time of the enactment of
the tarifï act in question (Act July 24, 1897, c. 11, 30 Stat. 151, U. S.
Comp. St. igoi, p. 1626), and those facts and circumstances are in-
tended to enlighten the inquiry as to the true interprétation of those
provisions of the tarifï act in question. This is, in gênerai, the pur-
pose df the évidence in the case, and in that view the conflict is not
serions or very substantial. It is true the experts difïer somewhat
sharply in opinion, but the importance of that différence is not very
great, and such a conflict is quite common, as the wide expérience of
counsel on both sides has led them to admit. The circumstances
thus brought out as facts, and intended to throw light upon the in-
quiry, are, among others, the trade history of the article in question,
its growth, method, and purposes of manufacture, and its uses, the
history of importations like this, the previous tarifï législation upon
the subject, décisions of the board of appraisers, the practice of cus-
toms officers, and the disputes as to proper classification. Thèse
are facts brought out for their supposed value i as bearing on a proper
interprétation of the existing tariff act. The primary question di-
rectly in issue and to be decided is whether the imported article in
question is "fruit preserved * * * in spirits," within the mean-
ing of paragraph 263, Schedule G, § i, c. 11, of the tariff act of July
24, 1897, 30 Stat. 171 (U. S. Comp. St. 1901, p. 1651). The conten-
tion, as I understand it, is not that the article is the cherry juice of
commerce, and subject to classification under paragraph 299, Sdhedule
H, § I, e. II, of the tariff act of July 24, 1897, 30 Stat. 174 (U. S. Comp.
St. 1901, p. 1655), instead of paragraph 263, but that in its condition
as imported, and in its chemical éléments, and considered in the light
of the only purposes for which it is used, it is so similar to cherry juice
as to remove its classification front paragraph 263, and render it
subject to classification under the similitude clause of paragraph 299,
section 7:of the act, 30 Stat. 205 (U. S. Comp. St. 1901, p. 1693)^ The
80 125 FEDEBAL JIEPOKTEE.
questions of what is the cherry juice of commerce, and how far thc
article iil (juestion is identical with that, hâve been disçussed, and are
hère considered pnly in ordér to «j^etéfmine whether this importation
wâs properly clasçified as "fruits, preserved * * * in spirits," Or
whether a proper classification would place it under the similitude
clause as more dosely resembling cHerry juice. It is conceded, and
has been distinctly decided, that cherry juice described in the tarifï
act has an estabUshed commercial ineaning. U. S. v. Rheinstrom,
13 C. C. A. 261, 65 Fed. 984, 31 U. S. App. 271.
It could not, therefore, be successfully insisted that the article in
questionis the cherry juicp of commerce, as it is not the manufactured
article which satisfies that description as known to commerce. Of
course, if the contents of a cask are separated, and the fruit and fiuid
in which it is preserved are separately considered, there would be
still less ground in support ofthe view that the fruit, or solids,-was
cherry juice, although it might be argued with force that the fiuid
separated from the ïruit was cherry juice, or should be so classified
under section 7. This, however, I think untenable, in view of its com-
mercial meaning.
It is also admitted, or too évident to be denied, that the words "fruit
preserved in spirits" had no technical or commercial meaning différ-
ent from, their popularand ordinary meaning at the time of the en-
actment of the tarifï law of 1897. It is also obvious and is admitted
that paragraph 263, Schedule G, § i, c. 11, of the tarifï act of July
24, 1897, 30 Stat. 171 (U. S. Comp. St. 1901, p. 1651), contains new
législation not found in the similar sections of previbus tarifï acts.
It is, moreover, an established fact that the red cherry juice importa-
tions like the one in question commenced in 1891 or 1892, and that the
proper classification of such fruit became a question between the im-
porters and the government officiais; and conceding, as argued by
counsel for the government, that the précise question now presented
was not considered in any of the disputes, nor in the décisions of the
board of gênerai appraisërs in relation to the gênerai subject, it still
remains true that the disputes neCessarily directed attention at once
to the difficulty found in the proper classification of fruit like that in
thèse new importations. There can be no doubt that the customs
officiais charged with the duty ofenforcing the tarifï act in relation
to thèse importations Were fully aware that the purpose of thèse
importations was to manufacture the red cherry juice from the arti-
cles imported, and to thereby secûre a more favorable rate of duty
than ha:d previously been obtained by importing the manufactured
or expressèd cherry juice itself. In this situation of afïairs it is difïi-
cult to believe that Congress would hâve enacted the law of 1897,
with the fuU- Considération in détail Which is gîven to such an act,
without their (attention being specially invited to this subject by the
government officiais, whô had experienced difficulty in the matter,
and who were; fully aware of thë' trouble which hâd grown out of
iniportations of this kind. It woulé hardly be just to assume other-
wise than that Congress was fully a:dyised of the facts relating to this
spécifie article, when dealing with thie tarifï act, and, if so, the fact
thai no difïerçnt or more spécifie référence was made to the article
VOIGHT V. MIHALOVITCH. 81
becomes significant. In view of the situation, it woiild hâve been
quite natural for Congress, in paragraph 299, aftér referring to the
cherry juice, to hâve added the words, "or materials used for manu-
facturing cherry juice," or the like spécifie description appUcable to
this article. Or again, in paragraph 263, this article could hâve been
distinguished for the purpose of classification by adding to the enu-
meration there given the words, "and other fruits of an edible char-
acter, or intended for table use," or such similar terms. It would, I
think, be difficult to maintain logically that an article should be classi-
fied under the similitude clause as a nonenumerated article, when such
an article had been previously imported, and was well known, and
therefore subject to spécifie description and enumeration. If the
origin of importations of this kind was subséquent in time to the
enactment of the tarifï law of 1897, there would exist much more
satisfactory ground for classification under the similitude clause, for
the reason that the article was not previously known, and therefore
not subject to spécifie enumeration or classification at the time of the
passage of the tarifï act. Furthermore, it is conceded that cherry
is a fruit as originally put up, and if it had remained in Germany for
the purpose of being there manufactured, as was the custom, it
would undoubtedly at any time previous to its manufacture into
cherry juice hâve remained a "fruit preserved in spirits," according
to the ordinary and popular meaning of the words. Again, if we
imagine our tarifï law as being in force as an internai revenue law in
Germany, it would seem quite clear that the cherries in question, as
originally put up in casks for the purpose of préservation until cherry
juice could be manufactured therefrom, vt^ould remain classified as
fruits preserved in spirits, according to the popular meaning, notwith-
standing any changes which might take place in the casks. Nor do
I think such a classification would become difïerent by reason of any
changes resulting from motion in transportation between any places
in Germany, such, for example, as transportation from Magdeburg
to Hamburg. It is true that the change brought about as a resuit
of transportation is much greater when the goods are brought to this
country, but the change is a différence in degree, and not in kind.
The other fruits enumerated in paragraph 263 are of a character suit--
able for human food, and to be used as such, as must be admitted, and,
this being so, counsel for the government contends, and with great
force indeed, for the application of that principle of construction
recognized as the rule of noscitur a sociis. The application of this
principle was pressed in argument at bar, and is again urged in the
brief, and the great force of the argument must be acknowledged.
In view of the fact that the article in question fully satisfies the de-
scription in the statute, or, stated otherwise, that the descriptive terms
in the statUte undoubtedly fit the importation in question, when taken
in their ordinary and popular meaning, with the further fact that there
is no techtiical or trade meaning, it may, I think, be well doubted
whether the fundamental principle embodied in this familiar maxim
noscitur a sociis applies in its full force. I am disposed to think that
the force of the argument based upon this rule is somewhat broken,
in view of the remark alreàdy made that the article in question, and
125 F.— 6
,82 .jïS5i?W>nBAIi BEPPPTPR.
the methôd in wWdh it had been injported, mûst havébeen known to
Congress at the time of thg tarifïE act, and that notwithstanding such
kuQwledge the descriptiçii in paragraph 263 was left so that, taken in
its genefal and popular; me^ning, it would lundoubtedly be applied to,
and fit, the article or.pbject in question. This, I think, muSt be trufe,
notwithstanding that no reason should be given for associating the
article under a gênerai description in a class with other articles dif-
férent in their use, but not in their name or method of préservation,
as fruits: preserved in spirits. In this connection, I thihk, too, the
fact mi5?t be noted, as Judge Somerville says, that Congress imposed
a duty of 25 : cents more per proof gallon upon the eXcess of spirits
used in the importation of preserved fruits than the duty "upon import-
ed brandy and spirits, intending tfaereby apparently to protect the
governpiient against frauds upon the revenue under color, of importing
fruits preserved in spirits. The fact that, in the tariff acts prior to
1897, Congress had found no occasion tp deal with the fruits preserved
in spirits or brandy on a per centum basis and with a limitation in
that respect, must be treated as possessing ^ some significance or in-
fluence in construing paragraph 263. It is true one case, In re Maron
(1896), is cited as showing a previous coatroversy where the quantity
of brandy and of cherries were about eqt|al. But that case was çlearly
an attempt at fraudulent évasion of the customs laws, and should hâve
beèn so treated. It will admit of question whether the fruits pre-
served in spirits or brandy, enuraeriated in paragraph 263, designed
for human lood or table use, and ordinarily put up for suçh purposes,
would hâve brought abomt, the new législation in paragraph 263. If
put up in casks or other large vessels, so as to furnish opportunity
to import alcohol in that form, and thereby commit frauds U;pon the
revenue, it \yould seem not difficult to deal with it as a fraud; for if
the form anji original identity of the fruit were so changed in trans-
portation as the cherries in question, the article could no longer be
practically used for human food or on the table, and no such claim
could be made for it. Be this as it may, the façtis that the ordinary
importations of fruit preserved for table use for many yea.rs , had'
produced no législation like the new; provisions in paragraph 263,
Schedule G, § i, c. 11, 'I^ariffi Act July 24, 1897, 30 Stat. 171 (U. S.
Comp. St. I90i,:p, 1651), and we may infer that no such trouble had
been experienced as to callfor législation Uke that in this paragraph,
dealing not pnly with "fruits preserved * * * in spirits," but
with such fruits when containing aboyé 10 per :ç€int. of alcohol, with
a spécifie duty on the excess, leaying the remainder subject to the
regular duty. ; ■;[.. ,, ..,,,- j;;-,' i, ; .
Somewhat broadly çoçsidered, Ithink it must be acknowledged that
in the article; in- question; we ha,ve the^ différence between the raw ma-
terial and the manufactured product, between the materials and the
article madç- therefrom,|in:the process of manufacture. The article
made is çhçfry juice,; and tl^^ words "cherry juice" havje a commercial
meaning,. ?iid must be Jimited accprdingly,; while-rthe, words, "fruits
preserved *' * '* in spirits/'- baye .no such restrictedçpnamercial
meaning, and must be takçi;i in their ordinary and comprehensive
meaning. Artl^ur y. Morrison, 96 U. S.>îo?,;24 L,. Ed. 764, Giving
UNITED STATES V. LINISIEE. 83
to the words this popular comprehensive meaning, the article in
question cornes witliin the description, "fruits preserved in spirits,"
and must be classified accordingly.
Conceding that the question of proper classification is left doubtful,
the resuit must be the same. In American Net & Twine Company
V. Worthington, 141 U. S. 468, 12 Sup. Ct. 55, 35 L. Ed. 821, Mr.
Justice Brown, giving the opinion of the court, said :
"We thlnk that the intention that thèse goods should be classlfled as gilling
twine is plain; but were the question one of doubt we should still feel obliged
to résolve that doubt In favor of the importer, since the intention of Congress
to impose a higher duty should be expressed in clear and uuambiguous lan-
guage."
It would seem that Congress is willing that this material may be
imported for the purpose of making cherry juice, subject only to the
provisions of paragraph 263. If not, there is and was at the date
of the enactment no difficulty in making its intention clear by spécifie
and apt words of description. There was no concealment, false repré-
sentation, or other act showing fraud in the case. If the importer
can import the fruit and manufacture the juice in this country, and
thereby avoid a higher rate of duty, the right to do so cannot be denied
when no other valid objection exists.
As I concur in the opinion of Judge Somerville in the more particu-
lar discussion of the case, I refer to that opinion as giving my reasons
more in détail, and with this référence I do not deem it necessary to
carry the discussion beyond the gênerai statements made from my
study of the case.
The resuit is that the ruling of the board of appraisers is afifirmed.
tJNITBD STATES V. LINNIBR.
(Carcult Court, D. Nebraska. September 28, 1903.)
No. 157.
1. Cbiminaii Law — JcDGMBNT— Power op Court to Pbonouncb for Loweb
Offense.
In a criminal case In whîch a verdict has been retumed flnding the
défendant guilty of a higher offense than was warranted by the évidence,
the court has power to pronounce Judgment thereon for such lower offense
included in the one charged as the évidence warrants.
2, Same — Power to Accept Plba dp Guiltt of Lower Offeîjse.
A verdict flnding a défendant guilty of murder In the flrst degree, as
charged In the indictment, was set aside by the court, and a new trial
granted, on the ground that, under the évidence, défendant was guilty
of manslaughter only. Subsequently, and at the same term of court,
défendant offered a plea of guilty of manslaughter. Held, that the court
had power to accept such a plea and render judgment thereon, notwith-
standing the objection of the district attorney, since It still had power
to vacate Its order settlng aside the verdict, and to render judgment for
manslaughter thereon, as It, In fact, should hâve done in the flrst instance.
Indictment for Murder. On oflFer to file plea of guilty of man-
slaughter.
' W. S. Summers, U. S. Atty., and S. R. Rush, Asst. U. S. Atty.
J. M. Macfarland, for défendant.
|84f 125 FÉDBEAIi BEPOÉTBK.
McPHERSON, District Judge. The défendant waâ indicted for
murder. The jury returned a verdict of guilty of raurder, without
capital punishtnent. The défendant filed a motion for a new trial,
which a few days since was sustained, and a new trial granted. There-
upon défendant ofifered to file a plea of guilty of manslaughter, and
allow the court to pronounce judgment thereon. Ail of the foregoing
things occurred at the présent term. The United States attorney
objects to the court receiving such a plea, and objects to the court pro-
nouncing judgment on such a plea. The questions now for détermina-
tion are, what is the du^y, and what the power, of the court in the
matter ?
I hear(3 ail the évidence in the case, having presided at the trial.
While there are différences of opinion as to the case, I am entirely
familiar with ail its phases! And my knowledge and my beliefs, and
mine only, must govern me in my actions. My vievvs of the case are
stated in an opinion fîled in sustaining the motion for a new trial.
The United States attorney dpes nôt claim to hâve additional évi-
dence. Under the theory of the prosecution, the government could
not well hâve other évidence thàn whàt was introduced on the trial.
He does say that "sinCe thé trial sevciral suggestions hâve come to this
office that lead me to believe the case has aggravating features, such
as to justify a jury in réturning a verdict of guilty of murder," etc.
What thèse suggestions are, is not stated. By whom received, it is
not stated. From whom received, cari only be surraised. The court
cannot act on statements so extravagantly hearsay, and when the
author of the "suggestions" is not made known.
Briefîy stated, my conclusions are that the défendant is guilty of
manslaughter, and should be punished therefor, and that he is not
guilty of murder, and should not be punished for that crime.
Having disposed of the question of what crime défendant is guilty
under the indictment, and that he is not guilty of the higher crime
of murder, the remaining question is, has the court the power or légal
right to, and ought the court to, réceive the plea of guilty of man-
slaughter, and pronounce judgment thereon? '
State V. McCormick, 27 lowa, 492-414 : : T^iis. case is one of the
leading cases, if not the leading case, of the country, mapping out the
distinction between murder at commpn law and murder of the first
degree, as defined by statute. The défendant was convicted of mur-
der in the first degree, and seiatenced to death, which the évidence
seemed to warrant. But the indictment was adjudged by the lowa
Suprême Court îto only be good as a common-law indictment, and
therefore only good for murder in the second degree, the punishment
for which was life imprisonment,, or fçr, à term 01 years. The indict-
ment not covering so high a crime as that of which he was convicted
and sentenced by the district court, necessarily the judgment had to
be set aside by the Suprême Court. A statute then in force in lowa
with. référence to appeals incriminai cases providedj "It [the Suprême
Court] may àffirm, reverse, or modify the judgment, and render such
judgment, aa the district court should hâve rendered." The Suprême
Court of lowa adjudged tlikt, on thé yerdict of guilty of murder in the
first degree, it would render judgmeht as for murder in the second
UNITED STATES V. LINNIER. 85
degree, because that was the judgment the district court should hâve
rendered. The opinion was by Judge John F. Dillon, then Chief
Justice of lowa.
State V. Schele, 52 lowa, 608, 3 N. W. 632 : In this case the de-
fendant, and apparently over the objection of the district attorney, was
sentenced for the crime of simple assault, in the face of a verdict for
a higher crime, viz., an assault with intent to inflict a great bodily
injury. The judgment was affirmed.
State V. Fields, 70 lowa, 196, 30 N. W. 480: In this case the de-
fendant was convicted of murder in the first degree. It was con-
tended that the indictment was not good as covering that crime. The
Suprême Court passed that question, but, with the consent of the
Attorney General, rendered a judgment for the crime of manslaughter.
This was donc because the Suprême Court held that the évidence only
showed the crime of manslaughter, and that the jury and the trial
court were mistaken in holding it to be murder.
State v. Keashng, 74 lowa, 528, 38 N. W. 397 : In this case the de-
fendant was convicted by the verdict of the jury of the crime of an
assault with intent to commit murder, The court overruled his mo-
tion for a new trial, no doubt as contended for by the district attorney.
But with the motion for a new trial overruled, the court sentenced
him for a lesser crime, but which lesser crime was covered by the in-
dictment. The Suprême Court affirmed the action of the trial court,
with one judge dissenting, and another expressing no opinion on the
point.
Corn. v. Squire, i Metc. (Mass.) 258: The jury found the défend-
ant guilty of doing an act feloniously. The court pronounced judg-
ment as for a misdemeanor, and the judgment was affirmed.
Com. V. Mahar, 8 Gray, 469: The défendant was convicted of the
crime of larceny from a room. The Suprême Court ordered the de-
fendant to be sentenced for a simple larceny.
Sullivan v. State, 44 Wis. 595 : The défendant was convicted of
the crime of assault with intent to commit a great bodily injury. The
case was reversed, with directions to the trial court to sentence him
for assault. This, however, was done because of a defective verdict.
Anderson v. State (Neb.) 41 N. W. 951 : In this case the défendant
was convicted of murder in the first degree. On appeal the Suprême
Court held the évidence only warranted a conviction for murder in
the second degree, and the judgment was so modified as to be for
murder in the second degree only. The Suprême Court did this by
virtue of a statute. But such action was because it was that which the
trial court should hâve taken.
State V. Watson (Wash.) 27 Pac. 226: The défendant was con-
victed on a verdict of the crime of assault with intent to murder, and
he was sentenced to a term in the penitentiary. The Suprême Court
reversed the case, with directions to pronounce the judgment as for
a simple assault.
Simpson v. State (Ark.) 19 S. W. 99: The défendant was by the
verdict of the jury and the judgment of the circuit court convicted of
murder of the first degree. Because of the évidence, the Suprême
Court reversed the case, with directions to the trial court to pronounce
86 125 FEDBpAI, BBPORTER.
jydgn?ent for murder in the seconcj; d^gree. The opinion, çUeswîth
approvai the lowa cases I hâve refèrred to^ and also the following :
Hogan V. State, 30 Wis. 438, 11 Am. Rep. 575; Johnson v. Common-
wealth, 24 Pa. 386.
Some of the cases cite the following, which I hâve not been able to
examine: State v. Hupp, 31 W. Va. 355, 6 S. E. 919; State v. Hall,
108 N, C. 776, 13 S. E. 189.
Counsel fbr the government hâve submitted a brief on this question,
but they fail ta cite any case in confiict with the foregoing, and the
points sought to be made do not meet the question, and I hâve not
been able tpfind any case in conflict with the foregoing.
It can therefore be said that, instead of setting aside the verdict
over the objections of both the United States attorney and the détend-
ant, or of either, the court, on the verdict as it stood, because of the
State of the évidence, could hâve pronounced, and it wOuld hâve been
the duty of the court to pronounce, judgment for manslaughter, pro-
vided, of course, the évidence shows the défendant to be gnilty of
manslaughter, and if there were no errors during the trial as to the
crime. :And the court havitig such.power and such being its duty on
a verdictj it is the more certain thàt a court can and should receive
a plea of a lesser offense, and pronounce judgment thereon. Because
the trial of the case was at this term, as was the order granting the
new trial— the term not yet having adjourned — it would be entirely
proper to vacate the order granting a new trial, and theri pronounce
judgment on the verdict, but pronounce judgment for manslaughter.
This authprity is recognized in the following civil cases : Memphis
V. Brown, 94 U. S. 715, 24 L. Ed. 244; Barrell v. Tilton, 119 U. S.
637, 7 Sup. Ct. 332, 30 h. Ed. 511; Bronson v. Schulten, 104 U. S.
410, 26 L. Ed. 997. And in the following criminal cases: State v.
Daugherty, 70 lowa, 439, 30 N. W. 685 ; Com. v. Weymouth, 2 Allen,
144, 79 Am. Dec. 776; Ex parte Lange, 18 Wall. 163, 167, 21 L. Ed.
872. And the following cases are cited, which I hâve not examined :
United States v. Harmison, 3 Sawy. 556, Fed. Cas. No. 15,308; Rex
V. Price, 6 East, 323. And such was the rule at common law. Free-
man on Tudgments (4th Ed.) § 69. As to this rule there can be no
doubt. Therefore this court at this time has the power and the right
to vacate the order granting a new trial, and then pronounce such
judgment for such degree of crime as is covered by the indictment,
or (the form not being material) the order granting a new trial can
stand, and a plea be filed, and the judgment rendered thereon. The
resuit is the same, excepting that in the latter case the défendant is
absolutely bound by it. And the question is in no way met by the fact
that the United States attorney. objects to a judgment for man-
slaughter. Such objection is, in a meagure, persuasive, but not in the
slightest degree legally contrôlling. I do not speak lightly of the
ofRce of United States attorney. But it is the duty of that ofHcer to
prépare such indictments as ordered by the grand jury. When the
indictment is réturned, then it is his duty to move to dismiss, if he
believes such order should be entered, or, if he believes otherwise, it
is his duty to prosecute the case. In the case at bar he and his assist-
ant hâve prosecuted the case, and to the fullest extent hâve performed
UNITED STATES V. LIKNIEB. 87
that duty. They now, as they hâve the right, ask for another trial.
That is their judgment, but in which they are mistaken. And their
opinion, no more than the opinion of defendant's counsel, can control.
Both can and shoyld urge their beliefs, supporting the same as best
they can by argument and by authority. But the motion of neither
is jurisdictional, and the argument of either one, in any case, can only
be intended as persuasive. The United States attorney has no lawful
power to hâve the grand jury return an indictment, nor direct what
degree of crime shall be charged, nor say under what statute the case
shall be prosecuted. The language of Justice Harlan in the opinion
of WilHams v, United States, i68 U. S. 382, 389, 18 Sup. Ct. 92, 94,
42 L. Ed. 509, is pertinent :
"It is sald that thèse indictments were not returned under that statute,
and that the above indorsement on the margin of each indictment shows that
the district attorney of the United States proceeded under other statutes, that
did not cover the case of extortion committed by a Chinese inspector under
color of his office. It is whoUy immaterial what statute was in the mind of
the district attorney when he drew the Indictment, if the charges made are
embraced by some statute In force. The indorsement on the margin of the
indictment constitutes no part of the indictment, and does not add to or
wealjen the légal force of its averments. We must look to the indictment
itsftif, and, if It properly charges an offense under the laws of the United
States, that is sufflcient to sustain it, although the représentative of the United
States may hâve supposed that the offense charged was covered by a différent
statute."
The United States attorney legally cannot prevent the return of an
indictment. It is not material, either, that he prépares it or signs it.
On his own motion he can file a bill of particulars, or the court may
direct him to file it. But when filed it is no part of the indictment.
And the United States attorney cannot amend an indictment by add-
ing to or taking from it a wrord, even with the approval of the court.
Ex parte Bain, 121 U. S. I, 7 Sup. Ct. 781, 30 L. Ed. 849. It is and
must be the work of the grand jury, and, when indorsed by the
foreman and presented in ppen court in the présence of his fellow mem-
bers, nèed hâve and can hâve no other évidence of its verity. The
United States attorney cannot dismiss a criminal case. He may
move to dismiss, but it is the judgment of the court only that can
dismiss the case. He can malce no valid agreement as to what the
judgment shall be, either on a plea or verdict of guilty. Ali thèse
things, as donc by the court, must be done by the judge presiding, and
he is alone answerable, excepting only his errors of law may be cor-
rected by the appellate tribunals.
Therefore the défendant being guilty of manslaughter, and of that
only, in the judgment of the court, the défendant will be permitted to
file a plea of guilty of manslaughter, and on that plea the judgment of
the court will be pronounced.
'SS 125 FEDERAL BEPOETBB.
EQUITABLE MFE ASSIIK. SOC. OE '*ttlE UNITED STATES V. FOWLBR.
(Circuit Court, D. Delaware. October 1, 1903.)
No. 1.
î. Inscbancb Commissionek— Qualification.
Section 1 of tlie Delaware act of March 24, 1S79, entitled "An Act in
relation to Insurance Corûpanles," as amended Mârch 17, 1881, 16 Del.
Law«, 854, in providing that the Insurance Oommissloner "shall net be
a director, offlcer or agent of , or directly or indirectly Interested In any
insnrance company except as an insured," créâtes a légal inability in one
wïille liolding tlie office of Insurance Commissioner to be or act as agent
of an Insurance company of anotlier state for the receipt of service of
process in Delaware.
(Syllabus by the Court.)
Thomas F, JBayard, for plaintiff.
William S. Hilles, for défendant.
BRADFORD, District Judge. The défendant, Edward Fovvler,
a citizen of Delaware, bas demurred generally to the déclaration of
The Equitable Life Assurance Society of the United States, a corpo-
ration of New York, hereinafter called the Insurance Company, in an
action on 'the case. The déclaration, containing but one count, in
substance allèges, aside from matters not requiring présent considéra-
tion, that Fowler was on or about June 15, 1897, duly appointed in
writing by the Insurance company "the agent or person" in Delaware
"upon whom service of process might be made on behalf" of the in-
surance company in Delaware ; that this appointment was duly filed
as required by law in the office of the prothonotary of the Superior
Court in Kent county on or about June 18, 1897; that on or about
June 15, 1897, the Insurance company, by one of its officers, duly noti-
fied in writing Fowler of such appointment and of thé filing thereof
in the prothonotary's office; that afterwards, on or about October
I, 1901, Fowler, as agent of the insurance company, was served with
a writ of summons at the suit of one William D. Denney in an action
of assumpsit brought by him in the Superior Court in and for Kent
county agaihst the insurance company; that Edwler, on being sa
summoned as agent, was "in the proper and légal discharge of his
duties as such agent", bound to notify the insurance company that he
had been so summoned as agent, in order that the insurance company
might appear by counsel atid make défense in the action brought by
Denney ; that the insurance company had a fuU, just and légal defence
to that action ; that Fowler "wholly neglected and failed to inform the
insurance company of the brihging of the action by Denney, and has
never informed or taken meatis to inform the insurance company of
the fact that he, Fowler, as its agent was summoned in that action ;
that by reason of the failure of Fowler as its agent to notify the in-
surance company of the service upon him of the writ of summons in
that action, the insurance company, having no knowledge of its
pendency, made no defence or appearance therein, and consequently
Denney obtained judgment by default against the insurance com-
pany, the damages being assessed at the sum of $2,213.38, with inter-
EQUITABLE LIFE A88UB. SOC. V. FOWLEE. 89
est and costs, for which final judgmeiit was rendered; that after such
final judgment was rendered Fowler "continued to neglect the proper
and legai discharge of his duties as such agent, as aforesaid, and
wholly failed and neglected to inform" the insurance company of the
recovery of such judgment by Denney, so that the insurance company
remained in ignorance of the recovery of such judgment until the
time had elapsed within which it had a right under the law to hâve
it opened and to enjoy an opportunity to make defence in that action ;
that, such judgment having been so recovered, the insurance company,
on or about June 28, 1902, paid and discharged the same with in-
terest and costs, aggregating the sum of $2,311.39, and thereafter
made demand upon Fowler to reimburse and pay to it the amount of
such judgment, interest and costs; and that Fowler has neglected and
ref used and still neglects and refuses to pay to the insurance com-
pany the whole or any part of such amount. A copy of the wrîtten
désignation of Fowler as agent is attached to and made a part of the
déclaration. It contains a certificate which in part is as follows :
"I, Thomas D. Jordan, ComptroUer of The Equitable Life Assurance So-
ciety of the United States, do bereby certify that:
• •••*«••••
(2) The said corporation désignâtes Hon. Edward Fowler, Insurance Oom-
missloner, residing at Laurel, as a person or agent within the State of Dela^
ware upon whom service of process may be made and orders, rules and no-
tices served in matters and things pertaining to the said corporation."
A copy of the record of the action brought by Denney against the
insurance company, attached to and made a part of the déclaration,
shows, among other things, the return on the writ of summons as
follows :
"Summoned personally Dr. Edward Fowler of Laurel, as agent of 'Tlic
Equitable Life Assurance Society of the United States', (a corporation of the
State of New York), on October Ist, 1901. So Saith,
"Peter J. Hart, Sheriff."
The déclaration is framed on the theory that Fowler at the time
he was served with the writ of summons in the action brought by
Denney against the insurance company was its agent to receive serv-
ice of process, and as such agent was under an obligation and clothed
with the légal duty to inform his principal of the institution of the
suit. If Fowler was such agent he was by necessary implication under
such obligation and clothed with such légal duty. The vital question
is whether he was such agent. Section 5 of the act of March 24,
1879, entitled "An Act in relation to Insurance Companies", 16 Del.
Laws, 24, appears as section 7 in the act as amended March 17, 1881,
16 Del. Laws, 354. That section, among other things, provides:
"No insurance company or corporation shall be engagea in, prosecute or
transaet any insurance business within the limits of this State, wlthout flrst
having obtained authority therefor, agreeably to the provisions of thls act.
and every such company, not incorporated under the laws of this State, shall,
before doing business as aforesaid, deliver to the 'Insurance Commissioner'
a certifled copy of Its charter or déclaration of organization, and also a cer-
tificate, in such form as may be provided by the 'Commissioner', of the
name and résidence of some person or agent within this state, upon whom
eervice of process may be made, and ail process against such company issued
90 125 FEDERAL EBPQBTEB.
out of tbe courts of f^iis State, m&y tben and tbereafter be serred upom snch
pefsoji ppa^entso deslgnated," &c.
* Section- 2 of the act as amendée is in part as foUows :
"Sectloiï 2. The tollowlng shaU be the diities of tbe 'Insurance Oommlsslon-
er': Flrist To see that ail laws of thls State respectlng Insurance companies
are faltbfttlly executed, and to require from ail companies not cbartered by
the laws of this State, transactlng the business of Insurance in this State, a
certifled copy of thelr charter or déclaration of organization, and a certificate
of the name and résidence of an agent or agents of sald company résident in
this Statei upon whom service of process against said company may be made,
both of which shall be flled in bis offlIcB."
A compàrisoft of sections 2 and 7 of the act as amended renders it
clear that tlie term "agent" as employed in section 2 has in ail respects
the samè force and efféct as the terms "pefson" and "ageiit" in the
phrase "persori or agent" fôund in section 7. In section i is the fol-
lowing provision :
"The 'Insurance Gommlssioner' shall npt be a director, offlcer or agent of,
or dlrectly or indirectly întérested in any Insurance company, except as an
Insuredi''
Ail the above quoted statutory provisions were in force, not only
when Fowler was designated by the insurance company as its agent
on or aboût June 15, 1897, but when he, at the suit of Denney, was
served with the writ of summons October i, 1901. This court takes
judicial notice of the fact that Fowler was Insurance Commtssioner
of Delaware at the timie he was so designated as agent) and of the
further fact that in January, 1901, he ceased to be and has ne ver since
been Insurance Commissioner. TThe prohibition contained in section
I, save in one particular, is absolute and unqualified. "Except as
an insured", the Insurancp Commissioner "shall not be a director,
ofîicer or agent of, or dirëctly or indirectly interested in any insur-
ance company." À person employed by an insurance company to
accept on its behalf service of process certainly is an agent of the
company within the usual and common acceptation of the term.
There is nothing in the act or in any act in pari materia to indicate
that the word "agent" as used in section i should receive so narrow
and qualified a construction as to exclude its application to "an agent
* * * upon whom service of process against said company may be
made", as mentioned in paragraph "First" of section 2, or to a "per-
son or agent * * * upon whom service of process may be made",
as mentioned in section 7. On the contrary, an examination of the
various provisions in the act touching the duties of the Insurance
Commissioner afifords strong support to the conclusion that the
term "agent", as found in section i, was intended to apply to anyone
employed by an insurance company pursuant to sections 2 and 7 to
accept on its behalf service 6f process. It is, however, urged on the
part of the plàintiff, first, that the prohibition in section i is directed
to the Insurance Commissioner only in his officiai capacity, and, sec-
ondly, that the words "InsuranCe Commissioner", immediately foUow-
ing Fowler's name in his désignation by the insurance company as
agent, were used, not as indicating'àny officiai capacity in which he
should act as agent, but solely as descriptio personse. The latter con-
EQUITABLE LIFE ASSUR. SOC. V. FOWLEE. 91
tention probably is correct; but the first cannot be sustained. In
declaring that "the 'Insurance Commissioner' shall not be a director,
officer or agent of * * * any insurance company", the législature
manifestly intended that no person while holding that office should
be such director, officer or agent. To hold that the prohibition ap-
plies to the Insurance Commissioner in his officiai capacity, and not
in his private capacity, would emasculate the provision and présent
a reductio ad absurdum. Fowler, then, being Insurance Commis-
sioner, was expressly prOhibited so long as he held that office from
being or acting as an agent of the insurance company on its behalf
to receive service of process. This prohibition was not declared for
the benefit of the Insurance Commissioner, but for the protection of
the insuring public. It is not a private or personal right or privilège
to be waived or insisted on by the Insurance Commissioner at his
option. It rests on public policy and créâtes a légal inability in
anyone, while holding that office, to be an agent of or interested in
any insurance company except as an insured. Such agency on the
part of Fowler while Insurance Commissioner was forbidden and
illégal. No consent, acceptance or agreement could create or im-
part vitahty to it. The déclaration is not based on the ground of
estoppel, misfeasance or malfeasance, but proceeds solely on the
theory of liability for breach of duty restilting from the relationship
of agency supposed to hâve been directly created by'the making and
fîling of the certificate designating Fowler as agent, and his notifica-
tion thereof. But the making and filing of that certificate, and the
notification to him, did not of themselves constitute him an agent or
impose any duty upon him to act as such ; for, as above stated, the
law prohibited him while Insurance Commissioner from acting as
agent. The déclaration in its présent form cannot be sustained. I
hâve been strongly impressed with the injustice and hardship to which
the insurance company has been exposed through the omission of
Fowler, on the facts disclosed, to inform it of the institution of the
Denney suit. It appears from the déclaration that Fowler was
promptly informed by the insurance company of his désignation as
its agent to receive service of process on its behalf. It was his duty
imder section 2, as amended, to "require" from the insurance com-
pany "a certificate of the name and résidence of an agent * * *
of said company résident in this state upon whom service of process
against said company" might be made. It was further his duty under
that section "to see that ail laws pf this State respecting insurance
companies are faithfully executed." It does not appear that Fowler
at any time before recovery of judgment by Denney repudiated the
appointment on the ground of its illegality or for any other reason,
or that, as Insurance Commissioner or in any other capacity, he
denied or questioned that the insurance company in designating him
as agent had pursuant to law complied with a prerequisite to the
right to carry on business in Delaware. It further appears that
Fowler ceased to be Insurance Commissioner in January, igoi, and
thereafter was under no légal disability to act as agent for the insur-
ance company, and that, although served October i, 1901, with the
writ of summons at the suit of Denney against the insurance company,
92 ,125 FEDEBAIi REPOETEE.
he dîd not at any tîme communicate or take means to communicate
that fact to the insurance company, but left it in total ignorance of the
suit and of the recovery of final judgment therein. And it is further
averred that when the insurance company first learned of the Denney
suit the time had elapsed withiri which the judgment recovered therein
might hâve been opened and the insurance company permitted to avail
itself of a defence alleged to haye been full, just and légal. Under the
peculiar circumstances of the case, and without intimating any opinion
whether the déclaration can or cannot be rendered sufficient through
an amendment, leave will be granted to the plaintifï, should it be so
advised by counsel, to amend the déclaration within thirty days next
following the date of filing this opinion. Should the déclaration not
be so amended judgment will be rendered on the demurrer in favor of
the défendant.
UNITED STATES v. CLARK et al.
(District Court, M. D. Pennsylvania. September 30, 1903.)
No. 6.
l. Indiotment— Motion to Qdash— JEkboe in Caption.
An error In the captlon of an indlctment in statlng the term at whlcb
It was found Is not ground for quashlng the indlctment, the captlon being
amendable by the record.
!. Use of MAits to DBFRAtJD— Indictmbnt.
A count of an Indlctment eharglng the défendant with uslng the mails
for the purpose of carrylng ont a fraudulent scheme is not rendered bad
by further unnecessary allégations relatlng to the consummation of the
schéme; such averments being disregarded as surplusage.
1. Samb.
An indlctment under Rev. St. § 5480, as amended [U. S. Comp. St.
1901, p. 3696], for uslng the mails for the purpose of carrylng eut a
fraudulent scheme devised by défendant, must charge that the letters,
etc., allegéd to hâve been deposited in the mails were so deposited for
the purpose of carrylng out or executlng such scheme, that being a ma-
terial part of the offense, whlch cannot be supplied by Intendment.
i Samb — Kumbeb of Offenses Chabged m One Indictmknt — Statdtort
LiMIT.
Each, letter put Into the post office in pnrsuance of a scheme to def raud
to be effected by the use of the mails constitutes a separate and distinct
offense; and as, by the express provisions of the act of Congress, but
thrce offenses commltted within the same six calendar months can be
Joined In one indlctment, a count whlch charges the défendant witb
havlng deposited within specifled dates "a large number of letters, clr-
culars, and booklets, to wlt, 500 letters, 500 circulars, and 500 booklets,
addressed to varions pérsons whose names and addresses'' are unknown,
is bad. United States v. Lorlng (D. C.) 91 Fed. 881, dlssented from.
. Indiotment^Joinder of Offenses.
UndeR.]Bev. St. § 1024 [U. S. Comp. St 1901, p. 720], counts for uslng
the mails to def raud. In violation of section 5480, and for consplracy to
commit such offense, under section 5440 [U. S. Comp. St. 1901, p. 3676],
where based ùpon fhe same transaction, may be joined in one indlctment.
Ruie to Quash Indictment. See 12 1 Fed. 190.
Ï2. Nonmallable matter, see note to Tlmmons v. U. S., 30 C. C. A. 79.
UNITED STATES V. CLABK. 93
S. J. M. McCarrell, U. S. Atty.
C. A. Van Wormer, for défendants.
ARCHBALD, District Judge. The caption is wrong, but that is
amendable. The indictment was found at the June term last at Wil-
Hamsport, and the title should show it. The statement therein that
it was found in October, 1902, is a mistake of the draftsman, due no
doubt to the idea that it was to stand as an amended and not as an
original indictment. But the records of the court show the time, and
by them it can now be corrected. 10 Enc. Plead. & Prac. 425. There
are other defects, however, which are more serious.
The first and third counts are good, and so is the last. The joinder
of the latter is another matter, which will be disposed of presently.
The complaint made against the two former, that they combine a féd-
éral offense with one of false prêteuse against the state law, can not be
maintained. It is true that at the close each of thèse counts contain cer-
tain averments with regard to what may be called the consummation
of the fraudulent scheme, and while it may be that thèse are unneces-
sary, if not to some extent objectionable, as tending to lead the mind
away from the real issue, yet they do not vitiate that which is good in
the counts, and may be disregarded as surplusage, allowing the rest to
stand.
The second and fourth counts, however, are bad. In the second it
is not charged that the letter there said to hâve been deposited in the
post office was so deposited for the purpose of carrying out or execut-
ing the fraudulent scheme which the défendants are alleged to hâve de-
vised. This is a material part of the offense, and cannot be omitted.
It is the use of the mails as a means of accomplishing the fraud that
is the gravamen of the charge, and we cannot supply it by intendment.
In the fourth count the défendants are charged with mailing on vari-
ous days between May 26, 1901, and May 26, 1902, in pursuance of
the scheme described, "a large number of letters, circulars, and book-
lets, to wit, 500 letters, 500 circulars, and 500 booklets, addressed to
various persons, whose names and-addresses are to the grand jurors
* * * as yet unknown." Aside from its gênerai indefiniteness,
an omnibus count of this character cannot be sustained. Each letter
put into the post office in pursuance of such a scheme constitutes a
separate and distinct violation of the act (In re Henry, 123 U. S. 372,
8 Sup. Ct. 142, 31 L. Ed. 174; United States v. Martin [D. C] 28
Fed. 812) ; and, according to its express provisions, but three of-
fenses committed within the same six calendar months can be joined
in the same indictment, to say nothing of the same count. Act
March 2, 1889, c. 393, 25 Stat. 873 [U. S. Comp. St. 1901, p. 3696J.
This does not prevent the government from prosecuting other offenses
of the same character which hâve occurred within the period men-
tioned ; that is to say, it is not required to sélect out three, and con-
done ail the others. United States v. Martin (D. C.) 28 Fed. 812.
The statute simply limits, for the purpose of trial and sentence, the
number that may be embraced in any one indictment. I cannot ac-
cept the view expressed in United States v. Loring (D. C.) 91 Fed.
881, that ail the letters mailed in pursuance of a single fraudulent
<94 '125 FBDBBAL REPORTER.
scheme are to be taken as constituting one offense, and that the send-
ing of them as a whole may therefore be put into a single count.
This interprétation of the law fails to distinguish the fraud from the
use oî tîie post office to effectuate it, wîth which the fédéral iaw is
alone cotïçerned. It is to be noted that the quashing of the second
and fourth counts relieves the indictment from the exception which
might othèrwise hâve been taken to it as a whole, that, contrary to the
provision of the section referred tô, it charged more than three of-
fenses committed within the same six calendar months.
The lâst count is for a conspiracy, under section 5440, Rev. St.
[U. S. Comp. St. 1901, p. 3676], to commit the offense charged in the
first count, of which the fraudulent use of the mails, described in that
and the others, are specified as the ovért acts. As this, though a dis-
tinct violation of the law, and separately but similarly punishable,
grows dut of the same transaction, its joinder is not only proper on
gênerai principles, but is expressly required by the provisions of sec-
tion 1024 bf the Revised Statutes [Û. S. Comp. St. 1901, p._72o].
The second and fourth counts are quashed, but the exceptions to the
first, third, and fîfth are overruled. The exception to the caption is
sustained, with leave to the governnient to amend.
UNITBD STATES v. CORfeESPONDENCE INSTITUTS OF AMERICA.
(District Court, M.D. Pennsylvanîa. September 30, 1903.)
No. 7»
I. Crtminàl Law— Indictmbnt of Coepôbation— Necessitt oi' Preliminart
COMPLAINT.
In the prosecution of, a corporation, the appropriate first step Is the
finding of an Indictment, a preliminary complaint and. hearing being un-
necessary.
Rule to Quash Indictment.
C. A. Van Wormer, for défendant.
S. J. M. McCarrell, Dist. Atty., for the United States.
ARCHBALD, District Judge. This indictment was found at the
June term, 1903, and the caption should so state, instead of describing
it as found in October termi 1902 ; but this is ameûdable by the record,
and there is no occasion, therefore, for quashing the indictment as a
a whole.
The second and third counts are détective in not charging that the
letters which are there spoken of were deposited in the post office in
pursuance of the scheme to defraud, which the défendant is said to
hâve devised. And the fourth count is objectionable as embracing a
large number of différent offense^, the statute limiting each indict^
ment, to say nothing of each count, to three offenses, committed with-
in the same six calendar months.
Aside from this, the indictment, limited to the first and fifth counts,
ïs good. The fact that there was no previous complaint. or binding
over is pf no conséquence. The défendant is a corporation, and the
95
finding of an îndictment is the appropriate first step, therefore, in the
prosecution. U. S. v. John Kelso Co. (D. C.) 86 Fed. 304; Com.
V. I/chigh Valley Ri R., 165 Pa. 162, 30 Atl. 836, 27 L. R. A. 231;
Boston, etc., R. R. v. State, 32 N. H. 215 ; State v. West North Caro-
lina R. R., 89 N. C. 584.
The second, third, and fourth counts are quashed. The exception
to the caption is sustained, with leave to amend. The remaining ex-
ceptions are overruled.
O'BEIBN V. HBARN et al.
(Circuit Court, S. D. New York. September 16, 1903.)
1. CosTB— Sbcubitt by Nonrbsidbnt Plaintiff— Dblay in Màking Applica-
tion.
A nonresldent plaintiff, who may be requlred by défendant to glve
Beeurity for costs under the statute, wlU not be relleved from such re-
quirement by a fédéral court because of defendant's delay until after
answer in moving for the security, wliere no spécial préjudice to plaintiff
is shown to bave resulted.
On Application to Vacate ex Parte Order Directing Plaintiff, a
Nonresident, to File Security for Costs.
Edward P. Lyon, for plaintifï.
Nadal & Carrere, for défendants.
LACOMBE, Circuit Judge. This application is made upon the
theory that because défendants did not move at once, but obtained ex-
tensions of time to answer, and answered the complaint, they are to
be refused the security provided for by the Code on the ground of
lâches. Neither the Code nor the rules limit the time within which ap-
plication should be made to require plaintiff to file security for costs.
Nevertheless the state courts hâve adopted the practice of refusing
such relief, when there has been delay in making the application.
Buckley v. Gutta Percha & Rubber Mfg. Co., 3 Civ. Proc. R. 428 ;
Thomas v. Mutual Protective Union, 49 Hun, 171, 2 N. Y. Supp. 195.
This practice, however, has not been foUowed in this district, at least
when no spécial préjudice to plaintiff's right is shown to hâve resulted
from defendant's delay in moving. Stewart v. The Sun (C. C.) 36 Fed.
307. Our calendars are now overcrowded with litigations like this,
where the action might just as well hâve been brought in the state
courts. If parties plaintiff in accident causes, so called, will insist
upon their right to come hère because they happen to live in Jersey
City instead of Brooklyn, and thus delay and impede the trial of con-
troversies involving fédéral questions, the least they can do is to com-
ply with the provisions' requiring them to secure the costs of the liti-
gation, should it be found that their action is without merit.
Motion is denied.
V 1. See Costs, vol. 13, Cent Dlg. S 466.
96.' 125 FBDBBAI^ BEFOBTKB.
In re liEDERBR.
ODtetrict Court, S. D. New York. September 17, 1903i')
1. BANKR0PTCT— Abuse op Proceedinqs to Delay Ckeditobs— fDisMiBSAi, of
Pétition fok I?ischarqe.
A. bankrupt wh6 filed a pétition for dlscharge, buttook no further
8teps In the matter for a year thereafter, is ehairgeable with an abuse
of the proceedings for the purpose of delaylng creditors; and, on proper
application by a créditer, his pétition for dischargé Wlll be dismissed,
and an injunctlon staylng proceedings by the credltor for the collection
of his debt vacated.
In Bankruptcy.
Milton Mayer, for petitîoners.
Franklin Bien, for bankrupt.
HOIyT, District Judge. This jis à motion to either , dîsmîss the
bankruptcy proceedings, or to déclare them ended,. or to vacate the
adjudication in bankruptcy, or to deny the application for a discharge,
or to grant such other relief as may seem proper.
George W. Lederer was .adjudicated a bankrupt in involuntary pro-
ceedings oii September 27, 1901. The matter was regularly referfed
to a référée. No proceedings werè taken before the référée until Sep-
tember 26, 1902, when a pétition for a discharge was filed with .the
référée. Since the pétition for discharge was filed, no fUrther pro-
ceedings hâve been taken in bankruptcy, except that on September
30, igà2, the bankrupt bbtainéd an order staying ail proceedings on
the part of the créditer who makes this motion, who ha,d brought a
suit against the bankrupt. This, in my opinion, is a clëai" case of an
abuse of bankruptcy proceedings for the purpose of delaying creditors.
The fifty-ninth section of the bankrupt act of July i, 18^ (chapter
541, 30 Stat. 561, 562 [U. S. Comp. St. 1901, p. 3445]), provides that
"a voluntary or involuntary pétition shall not be dismissed by the
petitioner ■ or petitioners for want of prosecution or by consent of
parties until after notice fp the creditors." That part of the motion
which asks to hâve the pétition dismissed, or the adjudication vacated,
therefore, must be denied, as no. notice to creditors has been given.
I think that the proper course to pursue is to dismiss the pending ap-
plication for discharge for want of prosecution, and to vacate the in-
junctlon staying the créditer from proceeding at law, I think it
proper to add that it is nôt necessary for creditors to wait in any case
as long as they hâve waited in this case. If the bankrupt files a
pétition for discharge, and then fails to carry on the proceedings with
reasonablé prdmptness, the court, upon a proper application, will
dismiss the application f Or discharge for want of prosecution, and
vacate ail injunctions staying proceedings at law.
The motion is granted so far as to order that the application for dis-
charge be dismissed for want of prosecution, and that the injunction
staying the moving creditors' proceedings be vacated.
LOUISTILXiE & N. B. CO. V. MEMFHIS GASLIOHI Ca 97
LOTJISVILLE & N. R. CO. v. MEMPHIS GASLIGHT CO. et al.
(Circuit Court of Appeals, Sixth Circuit July 21, 1903.)
No. 1.149.
L Qdasi Public Corporations— Qas Plants— Opkratikg Materials- Claims
— PrIORITY— MORTUAGES— BlLI.— DBMCRRER.
At varlous tlmes between May, 1892, and August, 1893, complalnant
fumlshed coal and coke to défendant gaslight company for use in Its
business, and for the amount due therefor obtained a judgment by con-
fession against défendant in January, 1894. Executions were returned
nulla bona against the corporation, and its assets were subsequeutly sold
by trustées for the payment of mortgage bondholders, without the ap-
pointment of a receiver. On April 12, 1894, complalnant flled a bill al-
leglng such facts, and averring on information and belief that within
12 or 18 months before the bill was flled there had been a diversion of
the company's earnings to the payment of Interest on such bonds and
for the improvement of the plant, but failed to allège the dates or amounts
of such diversion, or that they occurred within the time when the ex-
penses for coke and coal furnished accnied. Held, that the facts alleged
were insufflcient to entitle complalnant to be pald out of the proceeds
of the sale of the corporation's assets in préférence to the mortgagee.
Appeal from the Circuit Court of the United States for the Western
District of Tennessee.
John W. Judd, for appellant.
T. K. Riddick, for appellees.
Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.
RICHARDS, Circuit Judge. The question involved is whether an
unsecured créditer of a gas company is entitled to be paid out of the
proceeds of the sale of the plant, in préférence to the mortgagees, be-
cause it furnished coal and coke used in operating the plant, although
no receiver was ever asked for or appointed, The billbelow was dis-
missed upon demurrer, and the case cornes hère by way of appeal from
this judgment.
It appears from the bill that the défendant below, the Memphis Gas-
light Company, was a quasi public corporation owning and operating
a gas plant in Memphis, and charged (so it is alleged) with the duty of
making and furnishing gas within that city for public and private pur-
poses. In April, 1873, the company placed a lirst mortgage upon its
plant to secure an issue of $240,000 of bonds, and in July, 1892, a sec-
ond mortgage to secure an issue of $400,000 of bonds, $240,000 of
which were to be reserved until the first mortgage bonds should
be paid. During the months of May, November, and December, 1892,
and January and February, 1893, the complalnant below, the Louisville
& Nashville Railroad Company, furnished the gas company coal and
coke on an account amounting to $2,808.45, for which a note was
given, and during the months of March, April, May, June, July, and
August, 1893, furnished coal and coke on an account amounting to
$3,657.55. On January 27, 1894, the railroad company took a judg-
ment by confession in the state court against the gas company on this
note and account for $6,809.90. On March 17, 1894, an exécution on
this judgment was returned nulla bona, and on April 21, 1894, the
125 F.— 7
railroad company filed its bill in the court below, setting out the above
facts, a-i*«rring, upon inf ormatiofl and. belief , that more than: enough of
the current ijicome tp pay tbç complainant's claim had.been diverted
to the paymerit 6f iiitérest and' thé iihprovement of the ' plant within 12
or 18 months preceding, alleging -that the trustée under the second
iflprtg3gje;\y^sabput,tosell the plant and apply theproceed? to the pay-
ment of the bonds issued under the two mortgages, and praying that
the tourt dedare the preférential châracter of the complainant's claim,
and r'egûire the truste^ tf^rset aside a sufficient sum;fronl'the proceeds
of thé sale td's'àtisfyi its' judgment. No receivérship éxisted or was
prayed tor,
The allégations respéctirtg a diversion of the current incoffîe were of
the.hipst général tiatwe. , The biU averred, upon information and be-
liçf, tfiat tïie gas çompany had made a considérable amount of money
within the past 12 or 18 'months, môre than enough to pay the com-
plainant's claim, and that much of thîs money had been used to pay the
interest dri, the bonds '^nd to improve the plant. No détails were
given,;.. -[;^\ '., ■;; ■ •"; ' ,,,/ , .■',:,^, , , ' '' '
On May. 20, 1899, an;amended bill was filed stating that after the
filing of tht original bill the trustée had sold and conveyed the prop-
efty bî the gàs compâny, and asking such additional relief as might
be proper under the changed circumstances.
The appellant rehes upon the doctrine announced in Fosdick v.
Schall, 99 U. S. 235, 25 L. Ed. 339, in the case of a railroad in the
hands of,^, receiver, and. seeks to apply it to a gas plant not in the
hands ûf a receiVer, urging that a gas company is a quasi public cor-
poration, charged with the duty of furnishing a public convenience,
which should be suppli.ç|d without interruption, and ther,efore those
who furnishmaterial or lator to, keep it in opération should be accord-
ed an équitable lien in jpreference to mortgagees. In the interest of
the public it'isinsisted'tHè; gas plant niust be kept "a going concern,"
and therefore those who keep jt èoing should be paid first out of the
proceeds cif its sale.
In the case of Wood v. Guarantee Trust Company, 128 U. S. 416, 9
Sup. Ct. 131, 32 L. Ed. 472, an attempt was made to apply the doctrine
of Fosdick V. Schall, 99 U. S. 235, 25 L. Ed. 339, to a waterworks
company whifflj supplied water to a:;mujiicipality, and Mr. Justice
Lamar, speaking for the court, said (page 421, 128 U. S., page 132, 9
Sup. Ct., 32 L.|Èd,472):
"The doctrine of,,FosdI(;k v*. Schall bas never yet been applied in any
case, escept ^hat of a r&Uroaa. The case lays great emphasis on the consid-
ération that a railroad is a péCuUar property, of a public nature, and dis-
charging a greàt publie worki There is a broad distinction between such a
case and tiiatiof a purelyprivate concern. We do not undertake to décide
the question hère, but only point it out There is other ample ground upon
which to décide this question."
This probably still remains true of the Suprême Court, but other
fédéral courts hâve applied the doctrine to street railway, téléphone,
and telegraph cofflparries. Manhattan Trust Company v. Sioux City
Cable Railway 'Company (C. C.) 76: Fed. 658 ; Central Trust Company
V. Clark, 81 Fed. 269, 26 C. C. A. 397; Keelyn v. Carolina Mutual
Telegraph .& Téléphone Company (C. C.) 90 Fed. 29; Illinois, etc.,
LOUISVILLE & N. R. CO. V. MEMPHIS GASLIGHT CO. 99
Banking Company v. Doud, 105 Fed. 123, 44 C. C. A. 389, 52 t. R. A.
481; Guaranty Trust Company v. Galveston City Railway Company,
107 Fed. 311, 46 C. C. A. 305 ; and other cases.
Obviously, street railroads and téléphone and telegraph companies
are similar to raiiroad companies in a sensé gas companies are not.
A gas Company is more lilce a waterworlcs company. It is more of a
private concern — a manufacturing enterprise. It supplies a public
convenience, but it does not enjoy the same privilèges and franchises,
nor would its stoppage resuit in that injury to the public and détriment
to the mortgaged security which would flow from the stoppage of a
raiiroad. A gas company is not so dépendent upon crédit, nor is there
usually the same need of a receiver to keep its plant in opération. The
présent case illustrâtes this. No receiver v^ras ever prayed for or ap-
pointed. The plant was kept in opération by the company until the
trustée under the mortgages sold it, and it is now being run by another
company.
It is not necessary, however, to elaborate this distinction, or to dé-
cide that under no circumstances could the doctrine of preferential
claims be applied to a gas company. It is enough to say that the bill
does not show a state of facts which would justify the application of the
doctrine, even if the défendant below were a raiiroad company ; for, to
displace the lien of mortgagees and charge the corpus with an operat-
ing expansé as a preferential claim, something more must be shown
than that the suppHes were used to run the road and are unpaid.
There must be a receivership, the supplies must hâve been furnished
within a limited time (in this circuit six months) before the receiver-
ship, and it must appear there was a diversion of the current earnings
for the benefit of the mortgagees, either by the payment of interest
or the betterment of the mortgaged property.
In the leading case of Fosdick v. Schall there was an application for
a receivership by the mortgagees. It was held that this put it within
the discrétion of the court to direct the receiver to pay out of the in-
come of the receivership certain preferential claims which ought to
hâve been paid out of the current earnings of the Company, but the
court said (page 253, 99 U. S., 25 h. Ed. 339) :
"The mortgagee has his strict rights which he may enforce in the ordinary
way. If he asks no favors, he need grant none. But if he calls upon a court
of chaneery to put forth its extraordinary powers and grant him purely
équitable relief, he may with propriety be required to submit to the opéra-
tion of a rule which always applies in such cases, and do equlty in order to
get equity."
In Miltenberger v. Logansport Railway Company, 106 U. S. 286,
I Sup. Ct. 140, 27 L. Ed. 117, the necessity of authorizing a receiver
to pay pre-existing debts of certain classes out of the earnings of the
receivership, or even the corpus of the property, is explained, yet the
discrétion to do so, it is said (page 311, 106 U. S„ page 162, i Sup. Ct.,
27 L. Ed. 117), "should be exercised with very great care." The
claims of operatives, of supply men, and of Connecting lines for freight
and ticket balances for a limited time before the receivership, must be
paid to préserve the crédit needed to enable the receiver to keep the
road in effective opération. Thèse considérations, says the court (page
312, 106 U. S., page 163, I Sup. Ct., 27 L,. Ed. 117), "may well place
100 125 FEDERAL EEPORTEB.
such payments in the category of payments to préserve the mortgaged
property in a large sensé, by maintaining the good will and integrity
of the enterprise." Thèse and other cases are reviewed, and the doc-
trine "in ^question discussed, in the opinion delivered by Mr. Justice
Harl^n in. the récent case of Southern Railway Company v. Carnegie
Steer Company, 176 U. S. 257, 20 Sup. Ct. 347, 44 L. Ed. 458.
In the case of Kneeland v. American L,oan Company, 136 U. S.
89, 10 Sup* Ct. 950, 34 L. Ed. 379 (approved in Thomas v. Western Car
Company^ 149 U, S. 95, 13 Sup. Ct. 824, 37 L. Ed. 663, and V. & A.
Goar Company V. Central Railroad Company, 170 U. S. 355, 18 Sup.
Ct. 657, 42 X. Ed. 1068), attention is called to the necessity of a court
of equity confining itself within very restricted limits in the application
of the doctrine of Fosdick v. Schall, and the court, speàking by Mr.
Justice Brewer, uses the foUowing language (136 U. S. 97, 10 Sup. Ct.
953. 34 E. Ed. 379) :
"The appointment of a recelver vests In the court no absolute control over
the property and no gênerai authority to displace vested contract liens. One
holding a mortgage debt ùpon a railroad has the same rlght to demand and
expect of the court respect for his vested and contracted prlority as the holder
of a mortgage on a farm or lot. So, when a court appoints a receiver of
railroad propierty, It has no rlght to make that receivership conditional on
the payment of other than those few unsecured clalms which, by the ruiings
of this' court, hâve been declaréd to hâve an équitable priority. No one is
bound to sell to a railroad eompany or to work for It, and whoever has
dealihgs with a eompany whose property Is mortgaged must be assumed to
hâve dealt wlth it on the falth of its personal responsibility, and not in ex-
peetatloa of subsequently dlsplacing the priority of the mortgage liens."
The limited application; of the doctrine of Fosdick v. Schall, thus
adverted to by the Suprême Court, has always obtained in this circuit.
The doctrine has never beën applied except in the case of a receiver-
ship, and only where "the current income, either before or after the
receivership, has been diverted to the benefit of the displaced mort-
gage" (International Trust Company v. Brick & Contracting Com-
pany; 95 Fed. 850, 37 C. C. A. 396, 406), and "almost universally" has
been restricted to preferentiàl claims accruing within six nionths prior
to the receivership (Central Trust Company v. Railroad Company, 80
Fed. 629, 26 C. C. A. 30).
The complainant below sold the gas eompany coal and coke, which
was used in making gas, and failed to collect the judgment on the
note and account for thèse supplies, because of the outstanding mort-
gages. Thè first of this çoal and coke was furnished in May, 1892,
and the last in August, 1893, The judgment by confession in a state
court was taken in January, 1894, and this bill fîled in April, 1894.
Twenty months had elapsed after the iîrst item fell due, and five
months after the last, before the judgment by confession was taken.
No receivership existed when the bill below was filed, and none has
ever been created. No diversion of the current earnings is charged
to hâve occurred within the time whên thèse operating expenses ac-
, crued. There is only the vague assertion, on information and belief,
that within twelye or eightéen months before the bill was filed there
had been a diversion, without giving dates or amounts.
If this were a clâim against a railroad eompany, no facts are shown
which vyould justify thé court below in displacing the lien of the mort-
TALBOT V. MASON, 101
gagées for the purpose of paying it. Nor has any reason been sug-
gested which would justify the enlargement of the doctrine of prefer-
ential claims so as to cover this one. The mortgagees asked lio
favors of the court, but stood upon their rights as lienholders. While
the coke and coal were used to run the plant, it does not appear that
without the crédit extended in furnishing thèse supplies the plant would
hâve shut down to the inconvenience of the public and the détriment
of the mortgaged property. The complainant below stopped supply-
ing coal and coke in August, 1893, but the plant did not shut down,
nor was it necessary to apply for a receiver with authority to pay this
and similar claims, in order to keep it "a going concern," and thus
préserve the integrity of the mortgage security. The Memphis Gas-
light Company kept on running the plant until it was sold by the
trustée under the mortgages, and since then it has been operated by
its successor.
The judgment of the Circuit Court is affirmed.
TALBOT V. MASON.
(Circuit Court of Appeals, Sixth Circuit. July 21, 1903.)
No. 1,176.
L APPEAL — ESTOPPBL — ACCEPTANCK OF CONSENT OliDKR,
A claimant who, on the entry of an order denylng hls pétition for an
allowance from a fund in court on the ground that he h ad no legai or
equitabie claim thereon, accepted an offer made in open court by counsel
for opposing interests to consent to an allowance of a smaller sum, which
allowance was accordingly made, based expressiy on the consent, and
•who accepted payment thereunder, was thereby estopped to prosecute
an appeal from the order disallowing his daim.
Appeal from the Circuit Court of the United States for the Western
District of Michigan.
Russell C. Ostrander and Thomas H. Talbot, for appellant.
Horace G. Stone, for appellee
Before LURTON and RICHARDS, Circuit Judges.
RICHARDS, Circuit Judge. This is an appeal from an order of the
Circuit Court denying the pétition of the appellant for an allowance
of counsel fées payable out of the fund in court in the case of Mason
et al. V. Rewabic Mining Company et al.
On March 31, 1884, Mason and others, minority stockholders of
the Pewabic Mining Company, a Michigan corporation whose charter
had expired in April, 1883, filed their bill in the Circuit Court for the
Western District of Michigan against the company, its directors, and
a new corporation called the Pewabic Copper Company, formed by
the majority stockholders of the mining company for the purpose of
acquiring its property, in which the complainants sought to prevent the
proposed transfer and sale of the property of the mining company to
the copper company, to obtain a public sale of such property, and an
accounting by the directors of the mining company. The Circuit
102 125 FEDERAL EBPOBTEB.
Court decreed a sale, but denied an accounting. Mason v. Pewabic
Mining Company (C. C.) 25 Fed. 882. The case was carried to the
Suprême Court and the decree afïirmed, except with respect to the ac-
counting, as to which it was reversed and a référence to a master
directed. Mason v. Pewabic Mining Company, 133 U. S. 50, 10 Sup.
Ct. 224, 33 h. Ed. 524. Uflder this mandate the Circuit Court ordered
a référence, report, and sale at public auction, and on February 3,
1891, the master filed his report of sale, which was confîrmed. There
was another appeal to the Suprême Court, and the decrees of the Cir-
cuit Court were, on May 16, 18921, in ail respects afïirmed. Pewabic
Mining Company v. Mason, 145 U. S. 349, 12 Sup. Ct. 887, 36 L. Ed.
732.
On February 28, 1893, afi.er affirmance by the Suprême Court of
the decree conêfming the sale of the property for $710,000, Dickinson
& Russell, counsel for the complainants in the original suit, filed a
pétition for an allowance of $71,000 out of thé amount realized on
the sale, to which résistance was made and the pétition denied, where-
upon an appeal was prosecuted to the Suprême Court, which, on May
14, 1894, dismissed the appeal for lack of jurisdiction. Mason v.
Pewabic Mining Company, 153 U. S. 361, 14 Sup. Ct. 847, 38 E. Ed.
745-
While the case \^as pending before thé master, 17 claims against the
fund arising from the sale of the property were presented for allow-
ance, including, among others, a claim of Thomas H.Talbot for légal
services rendered the mining company and its directors after the fîrst
appeal to the Suprême Court had been decided and a mandate sent
down directing the référence tb a master for an accounting. The firm
of Dickinson, Thùrber & Ste\i'enson, representing the complainants in
the original siiit, successfuUy resisted the allowance of thèse claims
by the master, and his report was sustained by the court. From this
decree, nine of the complainants appealed to this court, which, on De-
cember 4, 1S94, afRrmed the decree with respect to ail the claims ex-
cept that of the Franklin Company, which was remanded for another
référence. Mason v. Pewabic Mining Company, 66 Fed. 391, 13 C. C.
A. 532.
With respect to the claim of Mr. Talbot, we said in that case (66
Fed. 398):
; "pieither hâve we overlooked the fnrther f act that the counsel for the com-
plainants sought to hâve their compensation charged upon the fund, and that
appellants, or some of them, actively resisted the claim thus asserted. It Is
the right of every beneflclary who Is Interested In the distribution of a
common fund to contest each clalm ' demandlng participation. Each Is Inter-
ested In cutting down every other clalm, that his own share may be thus en-
larged. We do not understand that, for every contest thus made, the con-
testant establlshes a charge upon the common fund. Self-lntereat Is the mo-
tive for such défenses, and the resultlng enlargement of hls own share, lo
case of success, Is the antldpated reward."
Subsequently, on February 21, 1896; the firm of Dickinson, Thurber
& Stevenson filed its pétition for an allowance of fées and expenses in
successfuUy resisting the claims referred to, and on May 7, 1896, the
Circuit Court allowed the pétition, reciting that, although notice of the
hearing had been served upon ail parties adversely interested, no one
had appeared except Thomas H. Talbot, of counsel for the Pewabic
TALBOT V. MA80N. 103
Mining Company, Daniel L. Demmon, and Thomas H. Perkins, stock-
holders in said company, and that he had not opposed the granting of
the pétition. In other words, ail parties having been notified of the ap-
plication, and no one opposing it, the allowance was made as prayed
for.
On February 8, 1902, the appellant, Thomas H. Talbot, filed his
pétition in the court below, asking for an allowance of $10,000 out of
the fund in court, as équitable compensation for his services in suc-
cessfully opposing the pétition of Dickinson & Russell for $71,000 for
professional services resulting in the sale of the property of the mining
company for $710,000. In this pétition the appellant set out that he
was in 1887, and ever since has been, engaged as counsel for the
minin" company; that it devolved upon him to represent the mining
company in the matter of the allowance or refusai of the pétition of
Dickinson & Russell; and, after examining the légal questions in-
volved, he reached the conclusion that it ought not to be allowed. Ac-
cordingly, "with the concurrence and approval of the directors" of the
mining company, of whom he was one, he determined to oppose the
allowance of the compensation prayed for, and did so successfully.
For this he asked an allowance of $10,000.
On May 21, 1902, the matter came on for hearing before the court
below, and the following entry was made :
"This matter came on to be heard, and was argued by Russell 0. Ostrander,
counsel for the petitloner, and Horace G. Stone. counsel for ail parties oppos-
ing sald pétition, and after mature délibération the court announced its dé-
cision and judgment that the prayer of said petitloner should be denied and
said pétition dismissed, for the reason that the claim of said Thomas H.
Talbot is not a légal or équitable claim against the fund from whicb re-
covery is sought; and thereupon counsel for the parties opposing said pétition
announced In open court that ail of the parties to said cause interested in said
fund and opposing said pétition consent that an allowance of $1,000 be paid
fo said petitioner out of said fund; and thereupon. it Is ordered, adjudged,
and decreed that in compliance with said consent there be allowed out of the
fund now in the custody of the court to the said Thomas H. Talbot, petitioner,
the sum of $1,000."
On August 13, 1902, the following further order was made:
"\n order having been duly entered in this cause on the 21st day of May,
A. D. 1902, allowing the claim of Thomas H. Talbot in part, and directing the
payment to him of the sum of $1,000 as the total amount allowed on said
claim, on reading and filing the request of sald Thomas H. Talbot to pay said
sum to Russell C. Ostrander, it is ordered that there be paid to said Russell
C. Ostrander out of the moneys now in the reglstry of this court in this cause
the sum of one thousand dollars."
Acting under this order, on August 20, 1902, Mr. Ostrander received
and receipted for the $1,000 allowed Mr. Talbot.
Thus it appears that Mr. Talbot's claim was argued by counsel for
both sides, and the court, "after mature délibération," announced its
décision that the prayer be denied and the pétition dismissed, for the
reason that Mr. Talbot's claim was not a légal or équitable one against
the fund in court. It further appears that, after the court had thus
deHvered its décision, the counsel for the parties opposing the pétition
announced in open court their consent that an allowance of $1,000 be
paid to Mr. Talbot out of the fund, whereupon the court decreed that,
104 125 FEDERAL BBFORTBB.
"in compliarice wifli said consent," there be allowed Mr. Talbot the
sum of $1,000. The subséquent order recites the allowance to Mr.
Talbot of the sum of i$i,ooo "as the total amount allowed on said
ciaim," and directs that it be paid to Mr. Ostrander at Mr. Talbot's
request. This was accordingly done.
This is not the case of an appeal from a judgment allowing as of
right part of a claim and denying the balance. If Mr. Talbot, by the
deliberate judgment of the court and against résistance, had recovered
a part of what he claimed, and had appealed from the part denied, those
opposing might hâve appealed also, and thus the matter be brought
before us in the shape in which it was presented to the lower court.
This was not done. Mr. Talbot did not succeed in part. He was de-
feated altogether. Those opposing hitii were not defeated in part, so
they couid appeal. Theyiwere successful altogether. The judgment
allowing him $i,ooo wàs a consent judgment. It expressly states it
was made "in compliance with said consent." It rested solely upon
the agreement of the parties. The court was the mère médium of
carrying this out, because the fund was in charge of the court. Mr.
Talbot claimed $io,ooo out of the fund. The court found he was
entitled to nothing. After the matter had thus been disposed of, the
opposing counsel announced they would consent that an allowance of
$i,ooo be made. This proposition, made in open court, was essentially
similar to a like one n\ade out of court. Whether made in court or out
of court, such an oflfer is one to substitute the consent of the parties for
the judgment of the court. If it had been made out of court, if the
successful parties had said to Mr. Talbot, "You hâve been beaten in
court, but we will pay you $i,oop for the services you rendered," and
he had accepted the ofïer and taken the money, would he not hâve been
estopped to prosecute his original claim further? The same resuit
followed his acceptance of the ofifer made in court. The consent judg-
ment was dflfered as a substitute, and, when accepted, took the place of
the deliberate judgment. The petitioner had his choice between the
two, but he could not take advantage of both. He could either take
nothing under the first and prosecute his appeal, rr $i,ooo under the
second and quit. He chose the second alternative, and the appeal
must for this reason bè, dismissed, with costs.
SULLIVAN V. PIERCB.
(Circuit C!our. of Appeals, Fifth Circuit. October 6, 1903.)
No. 1,053.
1. Sales— Rescibsion bt Seller— Pai.8e Représentations.
Unless stàtemènts and représentations made by a buyer to the seller
of property were relied upon by the latter, and were the Indueing cause
of the sale, they afford no ground for Its rescission by the seller, and it
Is imroaterlal whether they were true or false.
2. Same— Reliancb on Statbmbnts— Confidential Relation of Parties.
The confidentlal relation exlstlng between partners may be presumed
to hâve contlnued after they formed a corporation to whlch the partner-
ship property was transferred, and In which they were practically the
only stockholders, and to bave induced one in selling bis stocli to the
SULLIVAN V. PIKEOB. 105
other, who was the active manager of the business, to place reliance on
the latter's statements In respect to the condition and value of the prop-
erty to the same estent as thongh the partnership had contlnued, in the
absence of évidence to the contrary.
8, Bame— Evidence Considbkbd.
Evidence considered, and held uot to entitle complainant to a rescission
of a sale by him to défendant of hls stock in a corporation of which they
were practically the only stockholders, on the ground of false and f raudu-
lent représentations made by défendant, ^ho was the active manager
of the business, it being shown that complainant was the miuority stock-
holder; that the relations of Personal, friendshlp and confidence whicli
for many years existed between the parties had been broken some time
before the sale, making complainant desirous of terminating their busi-
ness connection; and that in making the sale he did not act in reliance
on any statements or représentations made by défendant, but on hls own
independent knowledge and judgment, and received a price not greatly
below the actual value of his interest in the property at the time.
Appeal from the Circuit Court of the United States for the Eastern
District of Texas.
M. E. Kleberg and Charles W. Ogden, for appellant.
J. W. Terry and F. C. Proctor, for appellee.
Before PARDEE, McCORMICK, and SHEEBY, Circuit Judges.
SHELBY, Circuit Judge. This suit was brought by Daniel Sulli-
van, a citizen of Great Britain, against Abel H. Pierce, a citizen of Tex-
as, to rescind a sale. The parties had been friends for many years, and
each had confidence in the business integrity of the other, They formed
a partnership for the purpose of purchasing real estate and cattle and
to raise and sell cattle. Sullivan put in one-fourth of the capital, and
Pierce and his brother three-fourths. Pierce soon bought his broth-
er's interest, so that the assets of the firm were owned by Pierce and
Sullivan, the former owning three-fourths interest and the latter one-
fourth. Pierce was the active or managing partner. He bought for
the firm about 55,000 acres of pasture and farm lands, and cattle to
stock them. The investment of cash advanced and accruing profits
amounted to large sums, variously estimated from $200,000 to
$300,000. During the partnership, which existed about a year,
Pierce lived on or near the ranch, and Sullivan in a county near
by. Pierce was a "cowman," and was in charge of the partnership
business, and Sullivan was a banker. Pierce furnished Sullivan an-
nually with an account or statement showing the condition of the
partnership business. By mutual agreement, in the year 1883, a cor-
poration was formed to own the ranch and cattle, which was capital-
ized at $1,000,000. Stock of the par value of $250,000 was issued to
Sullivan, and stock of the par value of $750,000 was issued to Pierce,
less a few shares, probably 5 or 6, which were held by a member of
Pierce's family. By agreement, Pierce was to be, and he did become,
président, and Sullivan secretary, of the corporation. The ofïîcers
received no salaries. Pierce continued to manage the business just
as he did during the partnership, but there were regular meetings of
the directors, of which minutes were kept.
On May 9, 1896, after correspondence and negotiations, which will
be referred to later, Sullivan sold his stock in the corporation to Pierce
106 125 FEDERAL BEPOBTICB.
for $^o^^6';îtli^)d;*;f 10,000 tô be paid bëforç Jlily i, and $40,000 on or
beforé D'^céltiBet' I, 'iSQÔ, with 6 jpercerit;, interest. Pierce' pàid the
purchasè money and received the stoclf. ; ! Two years after the sale,
May 9, 1898, this biU was filed for its rescission. , It charges that the
sale was proCured by fraud. It is alleged that the complainant had
great confidence in the défendant, and in making 'the sale relied on
his assertions regarding the property. The followîng are the false
and fraudulent statements alleged in the bill to hâve been made by
the défendant to the complainant : "(i) That the land, if put up and
sold for cash, would not bring the amount paid for it ; (2) that a large
and valuable plantation upon the land had been totally ruined by John-
son grass; (3) that high taxation and continued land litigation had
depreciated the value of the land ; (4) that the stock interest in that
section of the couhtry was on the heels of the biggest die up that was
ever knownjn that cowntry, thereby intepding to cause your orator
to believe that a large number of the cattle belonging to your orator
and said défendant, as stockholders of the said Pierce-Sullivan Pasture
& Cattle Company, had recently died; (5) that the ranch would not
pay two per cent, on the investment ; (6) that comfilainant's interest
in the property was not worth more than $50,000."
The défendant having answered, and évidence having been taken
(nearly 2,000 printed pages), the Circuit Court dismissed the bill, re-
fusing on the merits to cancel the contràct of sale. The complainant
appealed, and the decree of the Circuit Court, with spécifications, is
assigned as error.
The theory of the bill is that there were confidential relations be-
tween the complainant and the défendant growing out of their long
and intimate business and personal association, and that the sale was
made by the complainant "believing that said représentations were
truthful, and represented the actual facts, and relying upon the obliga-
tion of the défendant to deal fairly and truthfuUy with him in relation
to said property." It is averre.d, and an effort made to prove as an
essential part of the complainant's case, that the relations between the
parties to the contràct were such that the complainant was entitled
to and did rely in making the sale on the defendant's représentations,
and that he did not réiy on knowledge obtained from other sources
and on an iridependefit investigation.
It is clear that if Sullivan sold to Pierce, exercising his own Judg-
ment as to the value of his interest, depending on his knowledge of
the value of the property obtained from other sources, and not relying
oh Pierce's statements, that it is immaterial whether Pierce's state-
ments were true or untrue. It is a necessary step in the complainant's
case to show that in making the sale he relied on the alleged false
représentations of the défendant. Until that appears, we are not called
on to invfestigate in détail whether the statements are true or false.
The évidence abundantly shows that for many years the complain-
ant and the défendant were intimate friends ; that they had large busi-
ness dealings, showing mutual confidence; that they became part-
ners ; that the défendant was the active partner in control of the busi-
ness ; and that the relation between them was pne of great personal
confidence, aside from what the law implies from the fact of their part-
SULLIVAN V. PIEKCE. 107
nership and the mode of conducting the business. Notwithstanding
the fact that they formed a corporation and transferred to it the part-
nership property — they being practically the only stockholders and
the business being conducted in practically the same way as during
the partnership — this relation of confidence would be presumed*prima
facie to continue. Although the sale of the stock was made by the
secretary to the président of the corporation, the pecuhar facts of the
case are such that we may look at it as practically a sale by one part-
ner to another of his interest in the partnership property. Looking
at the substance, and not at the form, we may consider the trade as
one made between partners; and prima facie, in the absence of évi-
dence to the contrary, we would conclude that the complainant relied
on the statements and représentations of the défendant. But we find
the record pregnant with évidence — much of it the évidence of the
complainant — which rebuts this conclusion. The évidence does not
présent to us the picture of one partner confidently relying on the
représentations of another, and being induced to maïce a sale by such
représentations, but of two unfriendly men, anxious to separate their
joint holdings, and negotiating at arm's length to produce that resuit,
each acting on his own judgment, and the seller placing no confidence
whatever in the buyer's statements.
In February, 1895, the pleasant personal relations between the com-
plainant and the défendant were interrupted by a disagreement be-
tween members of their familles, and the latter announced that he
would never enter the banking house of the former again. Sullivan
claimed that it was agreed that the corporation's stockholders' meet-
ings should be at San Antonio, and that the président was to hâve no
salary. On February 3, 1896, Pierce, the majority stockholder,
caused the by-laws to be so changed as to remove the company's
office from San Antonio to the company's ranch, and to permit the
président to be paid a salary. Sullivan, who was présent at the meet-
ing when thèse changes were made, charged, by his attorney, that they
were made "to perpetrate a fraud." On February 10, 1896, by letter,
Sullivan called on Pierce for statements of account, and on February
24, 1896, drew on Pierce for $4,527.90, an amount claimed as due him
by the statement of account. The draft was not paid. On March 4th,
Sullivan appointed Herman Brendel his agent "to make full investiga-
tion into ail matters of account, statements, and books pertaining to
ail business transactions" between complainant and défendant, includ-
ing the business of the Pierce-Sullivan Pasture Company. From
March 10 to April 4, 1896, Pierce wrote three times to Sullivan to
hâve the seal and books of the company sent from San Antonio to the
company's new office on the ranch. On March 31, 1896, Sullivan, by
Brendel, his cashier, replied that Pierce's letters were referred to his
(Pierce's) attorney. On April 9, 1896, Pierce wrote Sullivan about
the company's books : "If you désire to send any détective or ex-
pert down hère to examine them, he shall be shown every courtesy,"
etc. "If I hâve been robbing you as long as you hâve reported I
hâve been, why hâve you not discovered it before?" Brendel, duly
authorized to investigate the company's books for Sullivan, visited
the ranch. He returned, and .reported to his employer that he was
108 125, FBDBKAL EBPOETEB.
not «Uowtd a laîr opportunity to examine thebooks, and that Pierce,
charging Brendel with màking remarks concerning the company's
business feflecting oti Pierise, had threatened to hâve Brendel killed.
A mère récital of thèse occurrences is sufEcient to show that un-
friendly feeling existed between the parties, and that Sullivan was net
in a condition of mind to rely implicitly on représentations made by
Pierce.
On April lo, 1896, Sullivan wrote to Pierce a proposition to sell his
interest "for cost and eight per cent." On April I5th Pierce declined,
and offered to sell on the same terms. : On April i7th Sullivan wrote
again, asking Pierce what he "would consider a fair figure" at which
he would bùy SuUivan's interest. On April 22d Pierce replied, ofïer-
ing $50,000 for SuUivan's interest, $10,000 to be paid on or before July
I, and the balance on or before December i, 1896, with interest at
• 6 per cent, from July 1, 1896. , On April 24, 1896, Sullivan replied,
ofïering to take $75,000 for his interest on the terms as to payments
and interest as proposed by Pierce. On April 27th Pierce wrote again,
declining to give $75,000.,. On May i, 1896, Sullivan again wrote,
saying that he would like to settle the ranch afïair "amicably," and
suggested an interview. In subséquent letters they agrée to meet in
Galveston, at the Tremont Hôtel, on May 9, 1896. In Pierce's letters
(whith we hâve not quoted in full) several of the représentations are
made which are charged in the bill. The gênerai tone of Pierce's
letters tends, in the trader's usual way when buying, to depreciate the
property, and the gênerai tone of SuUivan's letters, as is usual with
a seller, tends to appreciate the value of the property. It is Sullivan
who ofïers to sell,- and who requests the interview. The correspond-
ence shows a minority stockholdgr,' unable to control the corporation,
anxious to sell, and a majority stockholder in control, willing, but not
seemingly anxious, to buy.
The parties met, as agreed, on May 9, 1896. Sullivan, being asked
what occurred at the Tremont Hôtel, answered: "It was very short.
I told him I had come to see if wë.bould make an amicable deal for
the property, and he said he would not give me any more than he
had written me. ,1 told him I wouldn't take that. I began at $75,000.
I told him I would take $60,000, Hesaid he wouldn't give it to me.
He said, 'You will • hâve to,' take my offer or let it stand as it is.' "
After testifying that hefinally accepted Pierce's ofifer, he was asked:
"What did you think of it at the time?" He answered: "I thought
it was worth a good deal more; if he would, hâve divided with me, I
wouldn't hâve taken double the money."; Piercci testifying as to the
interview, says he-ofifered to sellto Sullivan at $180,000; that is, at
the rate of $60,000 :for a bne-fourth interest. Sullivan in this inter-
view acceptéd Pierce's ofïer of. $50,000, bût stipulatéd for payment in
gold. Later, Pierce oiïered to pay thé notes before they were due if
Sullivan would discount themi; aiid it is a significant fact that Sullivan,
On May 26, 1896,' expresséd' the opinion in a letter to Pierce that the
occurrence of,a named politieàl. event would cause 'Igold to command
25 per cent. pTremium at once," and on the happening of another event
suggested that "gold will be a way up, possibly 2 to i." "With thèse
prospects in vie\y," he added,,"X would. not entertain your proposition
SULLIVAN V. PIERCE. 109
to discount your notes, as the chances are I will make more by wait-
ing."
The unquestioned facts and circumstances preceding and following
the sale are such that we cannot believe that Sullivan was induced to
make it by the représentations of Pierce. At the time he made the
sale he probably believed, as he testified, that the property was worth
more than he sold it for. If he could hâve obtained a division, he
said, "he would not hâve sold it for double the money." We cannot
reconcile this évidence with the contention that he accepted the
$50,000 on the faith of Pierce's assertion that it was a fair price.
There were strong reasons why Sullivan might wish to sell. He was
a minority stockholder, on unpleasant terms with the management
of the corporation. He was a banker, making large interest on
money in his business, He was getting small or no dividends on his
stock. The majority stockholder had the power (never exercised,
however) to lessen his dividends by fixing a salary for the président.
He was suspicious that the property was managed unfairly. His
agent sent to investigate had been threatened. The office of the cor-
poration had been moved from San Antonio to a place inconvénient
to Sullivan. Thèse and other reasons, while they would tend to pre-
vent his relying on Pierce's représentations, would naturally make
him désire to sell his stock. He had tried to sell to others, and now
he turned to Pierce, and ofifered to sell to him. We think the learned
judge in the court below correctly held that the évidence does not show
that Sullivan was induced to make the sale by his reliance on repré-
sentations made by Pierce.
But it is urged that the price paid is grossly inadéquate. The évi-
dence tends to show that cattle and grazing lands were very low when
the sale was made. In the two years following the sale they greatly
increased in price, probably nearly doubled in value.
The difificulty in «estimating the value of lands and cattle is considér-
able. It is clear they are worth as much to the owner as they would
sell for in cash. But, when the tract and herd are so large that there
is no market for the whole, their value as a whole becomes a matter of
opinion. The witnesses in this case place greatly diiïering valuations
on the lands involved. The question hère is, of course, what vvas the
value of the property at the date of the sale. The complainant early
in his efifort to sell ofïered to take $75,000 for his interest, later he
offered to take $60,000, and finally accepted $50,000. The défendant
says that at the time of his purchase he ofïered to sell his three-fourths
interest at the rate of $60,000 for a one-fourth interest. The learned
judge who so carefully considered the case in the circuit court thought
the one-fourth interest was probably vv;orth $75,000. It requires con-
scious efïort, when we attempt to estimate the value of the property
at the date of the sale, to exclude from our minds the efïect of the
great increase in value immediately following the sale.^ Such increase,
doubtless unconsciously to the witnesses, aiïected their testimony.
This great advance in values made the complainant regret his sale,
and probably sharpened his wits to discover badges of fraud.
We shall not attempt the useless labor of analyzing ail the évi-
dence on this point. When we exclude from our minds the efïect
110 125 FEDERAL ^EJPQBTEB.
of the greal, «iCTi^ase in value within a short time after the sale, we are
of opinion that the complainant, on the évidence, did not sell his inter-
est for a surp, greatly legs than its value at the date of the sale. Ex-
clude the great rise in values which necessarily occurred between the
sale and the filing of the bill, and we find no fact alleged in the bill
and disclosed by the évidence which, if known to Sullivan, would hâve
probably prevented the sale. Leave out that fact— which was a
subséquent occurrence unknown to both parties — and the, sale seems
fair, and; not unwise. Sullivan's business, his relation to the company
as 3 minprity stockholder, and his then unpleasant personal relations
with Piercei, would naturally lead him to sell. Pierce, owning three-
fourths of the stock, his business being that of a "cowman," and the
unpleasant relations with Sullivan, would naturally; cause him to be
willing to buy Sullivan's interest. With full knowledge of ail facts
disclosed by, the record, but in ignorance of the rise in values that
would occur in a year or two, we think the évidence shows that Sulli-
van would hâve sold his interest for $50,000 in gold, and we do not
think that at that tirpe he could hâve sold it as a whole at one sale for
a larger sum- The sale dops not reflect on his character, established
by the record, as a shrewd pian of afïairs, for he did not deal unwisely
on existing facts. He onlyiailed in, a matter of prophecy. He pre-
dicted that gold would gorup and cattle down. If this had occurred,
if cattle and grazing lands; had fallen greatly in value, Pierce would
hâve lost money by his purchase and Sullivan would hâve profited
by the sale. We fînd nothing in the record to satisfy us that Sullivan
should not be bound by his sale.
The court, we think, decided correctiy in refusing to rescind the con-
tract. The decree is afî&rmed.
PITCAIRN V. PHILIP HISS CO,
(CSrcult Court of Appçals, Thlrd Circuit October 8, 1903.)
1. C0NTBACT8— MoDiPioATioN tir Paroi.
According to the modem view, the rule which prohlblts the modifica-
tion of a written eontract by paroi Is a rule of substantive law, and not
of évidence.
S. Same—Eppbct OF Admission op Evidence Without Objection.
The fact that paroi évidence to modify a written contract was Intro-
duced withoùt objection in an action on such contract does not affect the
right and dnty of the court in Instructing the jury to pasa upon the com-
petency and légal effect of such évidence, especlally in a fédéral court,
where It Is the settled rule that a written contract cannot be ref ormed in
an actibû at law:
8. Same— G6NTBACT FOR Dbcoratino Housk.
Written contracta for the repair and décoration of a house and furnish-
Ings cannot be modifled In ^n action thereon by the contracter by évidence
of a paroi agreement, made at the tlme the contracta were signed, that
the work should bë ûODe to the satisfaction of defendant's wife, or de-
fendant would not be 'réquired to accept and pay for thé same, no such
condition being expressed In the writings.
In Error to the Circuit Court of the United States for the Western
District of Pennsylvania.
PIÏOAIRN V. PHILlP HI88 00. 111
The eontraet on whieh the plalntiffs brought suit was made out by the
following written proposais antl acceptances:
"January 28th, 1899.
"Mrs. Robert Pitcalm, Pittsburgh, Pa. Dear Madam — Below please flnd
our estlmate for the complète décoration of walls and ceiling8 of your main,
first, second and third halls.
"ïhe protecting and clfianing of the floors and woodwork is included. The
eelllngs to be gllded in duU gold and overlald with a carefuUy deslgned orna-
ment of appropriate style, in rich Italian colors. The walls to be of rich red
damask pattern, painted and glazed on canvas. The décoration of the ves-
tibule is also Included.
"We will do the above worls in the most artistic and workmanlike manner
for the sum of sixty-flve hundred ($6,500.00) dollars.
"We also propose to repaint and regild the réception room ceillng for the
sum of three hundred ($300.00) dollars. Very respectfuUy submitted,
"Accepted by The Philip Hiss Company,
"Mrs. Robert Pitcairn. Per Philip Hiss, Prest."
"January 28th, 1899.
"Mrs. Robert Pitcairn, Pittsburgh, Pa. Dear Madam: — ^We propose to re-
cover, re-gimp and re-fringe two (2) sofas and flve (5) chairs. In your lower
hall, using moleskln mohair velvet In combination wlth your tapestries, for
the sum of six hundred and twenty-five ($625.00) dollars.
"Also the sofa and two (2) chairs In second hall in moleskln mohair velvet
for the sum of two hundred and fifty ($250.00) dollars.
"We will also re-make and re-line flve and one-half (5%) pairs of portiers
with moleskin mohair velvet, using your tapestry borders, for tlie sum of
eight hundred and twenty-five dollars $825.00. AU this work to be done
in the best manner. Very respectfuUy submitted,
"Accepted by The Philip Hiss Company,
"Mrs. Robert Pitcairn. Per Philip Hiss, Prest."
"January 28th, 1899.
"Mrs. Robert Pitcairn, Pittsburgh, Pa. Dear Madam: — We propose to make
one fine Aubusson carpet for room over dining room, for the sum of sevènteen
hundred and seventy dollars $1,770.00
"Also for halls of EngUsh handwoven rugs —
No. 1, 2, 3, 4, and 5 2,425.00
No. 6, 7, and 8 1,382.00
Stairs and landings 2,233.00
Total, including designing and laying, seventy-eight hun-
dred dollars $7,800.00
"RespectfuUy submitted,
"Accepted by The Philip Hiss Company,
"Mrs. Robert Pitcairn, Per Philip Hiss, Prest."
"July 14, 1899.
"Mrs. Robert Pitcalm. Dear Madam: We will reflnish, reupholster and
cover In Aubusson tapestries thirty présent chairs and make tour new chairs
to match $5,000.00
1 rug, plain center, hand woven 2,900.00
"ïours very truly,
"Accepted by The Philip Hiss Co.,
"Mrs. Robert Pitcairn. Philip Hiss, Président."
"Mrs. Robert Pitcairn. Dear Madam: Below please flnd estimate for work
at your house.
"Ofiice. Building the extension to third floor, Including two bath rooms (In
one of which the old fittings are to be used), also light to be introduced by
side window Into pantry under office. New part of office to hâve wood work
and wall coverings in accord with old part, color of wall stuff to be selected.
New rug, «ofa ré-covered In velour, 2 new easy chairs In velour, 2 old leather
112 125 FBMIliiL RHPORTBB.
4esk «balrs In hand wovpn tapestyy, curtalns for doors and wîndows, cost to
be $8,550.00.
"Lijjrary. CeUtng repainted, walls covered In hard brocatelle, wood work
reflntsbed, caps oi doors and -windowB made less beavy, ends of ceiling wood
wçrk refltted, new curtalns and portiers dï Genoaese velour, furnlture recov-
éréd In same, 1 large and 2 small rugs, cost to be $7,9T5.0O.
, "Bimard Room. Ceiling and walls redecorated, tops of Windows lowered,
aew maptel àt old wood, wood work çlçwed and flnisbed, curtalns of material
tq b|è seleetçd, furnlture recovered of leather of quality of présent ieather in
new.desto,,Cpst to be $4,500.00.
"Son's Kobïn. Walls and ceilings redecorated, furniture recovered and cur-
talns, neyf rug, wood work cleaned, cost to be $2,200.00.
"Daùgliter's Room. Walls and ceilings redecorated, wood work and mantel
(sbutters :po^. Ineluded) of maple (bird's eye panels), curtalns and furniture
covérs ôf d^mask selected, new rug, 2 bureaus, 1 bed (5' 6") and bedding, 1
easy chair, I rocker, 2 small cbalrs, 1 work table (3x2) of bird's eye maple,
cost to be $5,20^.00.
Summary,
Office; baths, &c $ 8,550.00
Library ! .n: . i ..j 7,975.00
Bllliard room 4.500.00
Son's room .j........ 2,200.00
Daughter's room i 5,200.00
Reflnlshing wood and floors èf halls, ail bed rooms (not over),
about i 2,000.00
Putting shutters and wood work in order, not over 1,000.00
.1531,425.00
"An allowttnce of $1,500.00 for plumblng and tlles Is Ineluded in above
estimate.
"No wiriiig or heating work ineluded. Very truly,
"Accepted: Ihe Philip Hiss Co.,
"Robert Pitcaim. Per Philip Hiss, Président.
"Septembér 14, 1899."
The défendant Gontended that the work was to be done to the satisfaction
of his wife, and testlfled as follows: ^'Q. What was the conversation you
had with Mr, Hiss at the time you signed this contract (referring to the
$31,000 proposai whlch he had accepted)?. A. The chlef point in the conversa-
tion was that he, -as well as every-body, knows that I did not attend to that
business for my bouse; that It was entlrely in the hands of Mrs. Pitcairn,
and had been for over 40 years. Q. Well, was there anything said about this
contract or your liability under the contract at that time? A. I declined to
hâve anything to do with the matter, when he told me that he had come to
see me at the spécial request of Mrs. Pitcairn, who would be very much
pleased, on account of the size or amount, if I would sign it. I told him that
I did not want to sign it or hâve much to do with the matter on account of
my expérience; that I was very much afraid it would be too much for Mrs.
Pitcairn, but that my whole désire was to please her. Mr. Hiss dlstinctly
stated that that Was his désire, and he knew he could please her, and would
please her, and desired to be dlstinctly understood that if he did not please
her hè would make no charge. Q. Did you hâve that distinct understanding
with him immediately before you signed this contract? A. He reiterated
that, and plead with me, on account of Mrs. Pitcairn, and I, on a sudden Im-
pulse, 'On that condition,' I sald, *I wlll sign It,' and signed it."
Mrs. Pitcairn also testlfled to a slmilar effect in regard to the acceptances
signed by her: "Q. Whàt statement, if any, Mrs. Pitcairn, was made to you
b^y Mr. Hiss, as to how this. work w;as to be done in your house? A. When
Mr,Hlss presènted the design or sketch or suggestion to me I rather hesitated,
and hesaid: 'Mrs. Pitcairn, If you will allow me to do this work, I will do it
to your enfire satisfaction; otherwlse you will not be required to pay for It
pr accept ïi,' " -And Mrs. Pitcairn is also corrobora ted in ttJa by Mrs. Reese,
PITCAIBN T. PHIIJP HI83 Oa 118
■ nlece, who Mved In the house: "Q. DId you hear the conversation between
Mr. Hlss and Mrs. Pltcalm shortly before thèse contracts were slgned? A.
I dld. Q. Can you state what was sald between tbe parties as to thèse con-
tracts shortly before they were signed, as to how the work was to be done,
and se on? A. Well, It was wlth regard to the hall. That was the flrst con-
tract glven. • • • The design was shown me, and I sald, 'Well, that was
pretty, If It tumed ont ail rlght' Mr. Hlss sald: 'I wlU make that ail rlght.
l wlll make a grand hall of that Mrs. Pltcalm wlll be perf ectly satisfied; if
not, she don't need to accept or pay for It' Q. Was that sald In the présence
of Mrs. Pltcalm? A. It was." And agaln: "Q. Now, Mrs. Reese, after thls
contract was signed, and the other decoratlng was being done throughout the
house, dld you hear any conversation between Mrs. Pltcalm and Mr. Hlss
relating thereto? • * • A. Well, Mrs. Pltcalm objected to the work not
being as she desired, and Mr. Hlss sald be would make it ail rlght He as-
Bured her he would make it ail rlght. * • • He sald: 'Let me put the
thlngs In place. Let me complète the work, and I am sure you wlll be sat-
isfied. If not, you don't need to accept It. You don't hâve to take It or pay
for if "
Clarence Burleigh and W. W. Smith, for plaintiff in error,
Wm. M. Hall, Jr., for défendant in error.
Before DALLAS and GRAY, Circuit Judges, and ARCHBALD,
District Judge.
ARCHBALD, District Judge. According to the modem and bet-
ter view, the rule which prohibits the modification of a written contract
by paroi is a rule, not of évidence, but of substantive law. 21 A. & E.
Enc. Law (2d Ed.) 1079; Thayer's Evidence, p. 390 et seq. ; 1 Green-
leaf, Evidence (i6th Ed.) § 3Soa. Paroi proof is excluded, not because
it is lacking in evidentiary value, but because the law for some sub-
stantive reason déclares that what is sought to be proved by it (being
outside the writing by which the parties hâve undertaken to be bound)
shall not be shown. Where, by statute, a writing is required either to
create an obligation or to efïect a resuit, as in the case of deeds and
wills, or of contracts within the statute of frauds, it is readily under-
stood that it is the writing alone that is to speak ; but this is equally
true of contracts which by the convention of the parties hâve assumed
a similar form. The writing is the contractual act, of which that
which is extrinsic, whether resting in paroi or in other writings, forms
no part. If through fraud, accident, or mistake it fails to express the
contract as it was intended to be made, equity will reform it upon
proper proof. But still it is the writing as corrected that is the meas-
ure of the parties' undertaking, and they cannot be otherwise held.
There is much admitted confusion on this subject, due in part to the
way in which in some jurisdictions the rule is administered ; and the
failure to recognize the true basis of it is ail that créâtes any difficulty
hère.
This is a suit to recover the balance due for decorating and fur-
nishing the interior of the defendant's résidence. The contract for
the work was expressed in certain written proposais or estimâtes,
aggregating some $56,000, made by the plaintiff, and accepted in
writing by the défendant, or by his wife in his behalf. The jury gave
a verdict of $47,000, which, allowing for a bill of extras of $3,300,
and deducting admitted payments of $10,000, substantially covered
the plaintififs' claim. The défendant contended that the work, by
125 F.— S
lié ' 125 FBDœBAL ElfOBTBB.
exprçS& 'Sgréeinent, was to be completed to the satisfaction of Mrs.
Pitcaïrn, ^çcl'that as shç [yv,ns dissatisfied with it in many particulars,
and as some of it hadîbeen donc in actual disregard of her wishes, he
was ttot bound to pay: No such condition appears in the writings ; but
Mr., Pitcàîçn testifies that it was agreed to by Mr. Hiss ,at the time
he accèptèd the $31,000 contract, and t^Jjat he signed solely on the
strength of it, and Mrs. Pitcairn and her nièce Mrs. Reese testify to
sîtnilar assurances with regard to the others which had preceded it.
Mr. Hi^s emphatically dénies thèse assertions, and says that he nierely
undertôok tq please Mrs. Pitcairn so far as he could. Ail this évi-
dence was admitted without objection, and on the strength of it the
def endant's counsel at ■ the close of the case requested the court, in
substance, to charge that if the jury found, as they might, that the
work waS to be done to the satisfaction of the defendant's wife, or
otherwise he would not be bound, and that Mrs. Pitcairn, acting honest-
ly and not capriciously, was not satisfied, even if the jury believed that
she ought to hâve been, the plaintifï was not entitled to recover.
Thèse instructions were refused, the court saying: "The contract in
suit having been reduced to writing in the shape of written proposi-
tions by the plaintifif, and written acceptançes by the défendant, signed
by the parties or their' ?represéritatives, f espectively, such written con-
tracts cannot be contradicted or varied by évidence of an oral agree-
ment * * * beforè or at the time of the exécution of the con-
tracts." The case turnson the correcthess of this charge. It is con-
tended by the défendant that, as the évidence reîerred to was before
the jury -without objection, it tould not be withdrawn from their con-
sidération, and should haVe been submitted to them in the way re-
quested. Bût to this wè cannot agrée. Notwithstahding its ad-
mission, it was still for the court to declafe what, as a matter of law,
was the contract between the parties — ^whether it was to be confined
to that which was expreséed in the writings, or coùld be extended to
the verbal assurances àllegèd to hâve been given outside of them.
This did hcit dépend on how the évidence; came in — whether with or
without objection ; it still devolved on the court, instructing the jury,
to pass upon' its competency and légal efïect, and that is ail that was
done in the fuling complained of. The court simply held that the
writings were to be takèn as constituting the agreement, and that ex-
trinsic évidence could not be rèsorted to, to modify it. No error was
committed' în so applying the fami-liar rule. Whatever be the case
in other jurisdictions, in a fédéral cdtirt a' written contract cannot be
reformed oh" the trial of an action at law, and, disguise it as we may,
that is what the attempt to make effective the évidence in question
plainly amounted to. The contract, as niade out by the proposais and
acceptancès, was to do certain ■«'orkdf deîinite character and exterit for
certain specified priées. It may hâte làcked détails, to be filled dut by
oral direction ; but that it was to be done to the satisfaction of any par-
ticular perspii, who thereby became the sole arbiter as to wbethér it
had been done as it ought, is nowhere suggested in it, and câhuot now
be supplied without introducing a most materîàl variation, as the prés-
ent controv^rsy abundantly shows. It would hâve been easy for the
défendant when he signed to hâve written, "Accepted on condition that
PITOAIEN V. PHILIP HISS 00. 115
the work shall be donc to the satisfaction of Mrs. Pitcairn ," if thèse
were the terms on which he proposed to alone be bound ; and without
this we must assume that what passed between him and Mr. Hiss at
the acceptance of the last proposai, and between Mr. Hiss and Mrs.
Pitcairn at the exécution of the others, was regarded as mère assur-
ances of the intention and abiHty to please, much as a salesman com-
mends without warranting the excellence of his wares.
Neither can the alleged undertaking of Mr. Hiss be regarded as a
separate agreement resting in paroi outside of the writings, and consti-
tuting a condition précèdent, on fulfillment of which the obligation of
the principal contract was to attach. It must stand, if at ail, as an
added term, by which the right of the plaintifï to final compensation
is measured and concluded, entering into it vitally from the start.
Unless, therefore, the rule which prohibits the introduction of ex-
trinsic évidence is to be disregarded, the writings must be taken as
expressing the contract between the parties, and there was no waiver
by the plaintifts of their right to adhère to them, and to hâve the case
determined thereby, merely because paroi évidence as to what passed
outside of them was permitted to come in. The competency of this
évidence, as a matter of law, to afïect the writings, was not necessarily
conceded by the failure to object at the time. Moody v. McCowan,
39 Ala. 586; Hamilton v. Railroad, 51 N. Y. 100. Nor were the plain-
tifïs precluded from raising that question without at least something
to show that the défendant had been prejudiced in conséquence in his
proofs.
It is said, however, that the plaintifïs in their case in chief called
Mr. Hiss to show that in the choice of material they were to be guided
by Mrs. Pitcairn's wishes and taste, which was an important variation
of the contract, and that, having given their version of the transaction,
the défendant, on famihar principles, was entitled to give his. Bogk
V. Gassert, 149 U. S. 17, 13 Sup. Ct. 738, 37 L. Ed. 631. But the
agency of Mrs. Pitcairn and her authority to represent her husband
were unquestioned. She signed four of the acceptances, covering an
expenditure of $25,000, and if Mr. Pitcairn's wishes had Ijeen followed
she would hâve signed for the whole. The entire disposition of the
work, as he pointedly déclares, was committed to her charge. Her
sélection of materials, and her expressions of taste, therefore became
his, and proof that she was constantly consulted in the course of the
work in no wise constituted a variation of the contract, nor opened the
door for the very serious modification of it which was sought to be
made. The plaintifïs simply showed that they had followed the direc-
tions of one who admittedly stood for the défendant in the transaction,
not in variation of the contract, but in compliance with its implied,
if not its express, terms.
The judgment is afïirmed.
118 125 FBOBBAL' BfilfOBTSB.
GKEIST MFG. CO. v. PAESONS*
(Circuit Court of Ajppeals, Severith Circuit. April 14, 1003.)
No. 944.
1. Patents — Invention— Sewins Machine Attachments.
The Johnston patent, No. 324,261, for a ruffling or gatherlng attachment
for sewing machines, covers a combina tion of old éléments to produce
a devlce new in form, but old in function, having no new mode of opéra-
tion, and producing no new resuit, and is vold for lack of invention.
S. Samb — Impbovbmbnt in Mechanical Dbvice— Redbcing Cost of Construc-
tion.
A patent for an improvement in a machine whiCh is a combination of
mechanlcal éléments adapted to the production of a mechanical resuit
cannot be sustained on the ground alone that because of the changes
made in the arràngeinent of the parts the machine may be more cheaply
made.
Appeal from the Circuit Court ôf the United States for the North-
ern Division of the Northern District of Illinois.
Appellant unsuccessfully sought to hold appellee for infringement of the
first, third, and flfth claims of letters patent No. 324,261, August 11, 1885.
to Johnston, appellant's assignor. Thp circuit court ruled, in substance, that
the claims, if valid, were limited by the prior art to the précise structure
shown in the drawings and descrlbed in the spécification, and that, so con-
strued, they were not infringed by appellee's devlce.
The claims in suit and a part of the spécification read as foUowS:
"This invention bas référence to that class of ruffiing or gatherlng attach-
ments (for sewing machines) now most commonly used which hâve a re-
ciprôcating blade to form the goods into plaits or folds;. but it is In part
applicable tô other rufflers or gatherers.
"The invention eonsists, first, in new means for regulating the stroke of
the rulHer-Made. In letters patent 259,643, granted to me June 13, 1882, a
ruffler is descrlbed in which the blade is reciprocated by a pin movlng be-
tween two s^ops, and the stops are made adjustable toward and away from
each other by one movemeiit of an adjusting device, so that the said blade
moves fârthe* fbrward in niaklng fuU thah in making scant gathers.
"In letters patent No. 264,088, granted to me September 5, 1882, an improve-
ment upon or 'modification of the formeii Invention is descrlbed, the stops
being formed by the walls of a groove of varylng width eut in the periphery
of a cyllnder. By t'urning 'the cylinder the reciprocating pin acts in difEereut
parts of the groove, so that the lost motiori is varied according to the différent
widths of said parts.
"The présent new means for regulating the stroke may be considered as
an improvement upon or modification of both the former • ones descrlbed in
said patents. '
"Instead' et the pin a contact dévice, piVôted or otherwlse sùpported so that
It can be turned, is interposéd ' betweèn the stops, and thè adjustment is
efCected by turnl'ng the said contact device. The part to which the stops are
fastened or in which they are formed may be reciprocated and communicate
its motion to thé part which carries the contact devlce, or the part earrying
the adjustable contact device may be reciprocated and impart its motion to
the other. Both forms will be shown. This construction of a contact device,
adjustable by turning and interposed between stops, can be used not only
when the said contact device and stops are such that the ruffling-blade is
advanced farther in making fuU than In makipg scant ruffles, but also when
this is not the case, the effect depending upon the shape of the contact device
and stops.
• Kehearing denied October 6, 1903.
GRBIST MFG. CO. V. PAESONS. 117
"Another Improvement consîsts in comblning, wlth two levers for com-
municating motion from a movlng part of the sewing machlue to the ruffler-
blade, adjusting means carried thereby for altering the stroke of said blade
when one or both said levers is supported and turned upon a flxed center
or pivot, and when the adjusting means are so constructed and arranged
that the rufller-blade is advanced farther In making full thaii in making scant
rutiles or gathers. • * ♦
"It may be observed that there is no novelty, broadly, in placing the means
(or regulating the stroke upon the levers for operating the ruffler. ïhe only
novelty, so far as that feature is concerned, résides in the placing there of
the particular kind of regulating means indicated, and in the adapting or con-
Btitutlng of such means to operate in that position. * • *
"It is évident that modifications may be made in détails without departing
from the spirit of the invention, and that parts of the invention may be used
separately. * * •
"What I claim is:
"(1) In combination with a ruffler-blade operating meehanism comprising
two reeiprocatory parts, stops upon one of them, and an interposed pivoted
contact device carried by the other of said parts, and adjustable wlth respect
to both stops to vary the amount of lost motion, and also to a less extent the
forward limit of the blade's motion, so that said blade is advanced farther
in making full than in making scant gathers, substantially as described.
'■(3) The combination, with the ruffler-blade and ruffler-frame, of the two
levers pivoted at a common point to the ruffler-frame, stops on one lever, and
an adjustable interposed contact device carried by the other, substantially
as described.
"(5) The combination, with a ruffling device or blade, two reeiprocatory
parts, and stops on one of said parts, of a journaled or pivoted contact device
interposed between the stops and adjustable by turning on Its journal or
pivot, substantially as described."
The prior art is illustrated in the record by the following patents: 120,173,
October 24, 1871, to Toof; 125,230, April 2, 1872, to Toof; 130,5&2, August
20, 1872, to Perkins; 139,064, May 20, 1873, to Johnston; 146,005, December
30, 1873, to Johnston; 157,462, December 8, 1874, to Sievers; 158.834, January
19, 1875, to Darby; 181,879, September 5, 1876, to Toof; 200.431, Februarv
19, 1878, to Burgess: 211,679, January 28, 1879, to Wilson; 229,877. July 13,
1880, to Elliott; 231,844, August 31, 1880, to Onderdonk; 233,025, October 5,
1880, to Rowley; 235,235. December 7, 1880, to Harris; 238,086, February 22.
1881, to Carter; 245,471, August 9, 1881, to Farwell; 238,939, June 6, 1882,
to McMullen; 259,511. June 13. 1882, to Edgecomb; 259.643, June 13, 1882. to
Johnston; 2(J0,633, July 4, 1882, to Amaden; 263,332, August 29, 1882, to Gar-
letson; 264.038, September 5, 1882, to Johnston; 264,456, September 19, 1882,
t) Hamilton; 266,544, October 24, 1882, to Smith; 269,781, December 26, 1882,
to Giddings; 271,890, February 6, 1883, to MeCaslin; 272,427, February 20,
1883, to Grotz; 280,926, July 10, 1883, to Griest; 290,478, December 18, 1883.
to Sackett; 293,090 and 293,091, February 5, 1884, to Sackett; 296,740, April
15, 1884, to Goodrich; 311,119, January 20, 1885, to Griest.
John W. Munday and Henry Love Clarke, for appellant.
John G. Elliott, for appellee.
Before JENKINS, GROSSCUP, and BAKER, Circuit Judges.
BAKER, Circuit Judge (after stating the facts as above). The
patent relates to alleged improvements in sewing-machine attachments
for making rufHes, plaits, or gathers. In the opération of thèse at-
tachments, as a, genus, a steel blade moves back and forth near the
needle in the direction of the feed; levers are so connected that the
up-and-down motion of the needle-bar is converted into the to^and-fro
movement of the rufïling-blade; the two pièces of cloth to be sewn
together are placed under the needle, with the ruffling blade in contact
118 125 FEDEBAIi EE)POETEB,
with the upper pièce ; and as the needle rises out of the cloth the f uf-
fling-blade pushes the upper pièce into a fold whicli is secured by a
stitch when the needlé descends. To regulate the size bf the fold, dne
speçies had meana for controlling the amount of "lost motion" between
the needle-bar and ruffiing-blade. The less the lost motion, the greater
the stroke of the rufïling-blade, and vice versa. Withirt this species,
one class adjusted only thé limit of the backward stroke of the ruffling-
blade, while another adjqstèd also, to a less extent, the limit of the
forward stroke, so that the blade moved farther forward in making
fuU than in making scant gathers, in order to bring the stitches nearer
the center of the folds. This was ail old. To the création of genus
or species or class the disclosure in the présent letters contributed
nothing. The alleged improvement is a mère variation within the
last-named class.
The meçhanism, so far as the claims in suit are concerned, may
be descrifced as consi'stirig df two levers, pivoted at a common point,
one Connecting with the needle-bar and the other with the ruffling-
blade, which levers are made to co-operate with each other by means
of two stops mounted on one of the levers and a cam-shaped con-
tact device pivoted to tHèj other lever and interposed between the
stops. By turning the cam on its pivot, its opposite edges may be
caused to recède froni orapproach both stops simultaneously, where-
by the âmôûnt of lost motion between the levers is varied, and the
limit of both the forward ànd backward stroke of the ruffling-blade
is adjusted. ,
We do ndt concur with àppellee in the contention that Johnston
in his spécification disclaimed ail novelty except in the form of the
stops and pivoted cam. The wording of the disclaimer, in connection
with that of the claims in suit, indicates that Johnston asserted priority
in pivoting the levers at a common point and putting upon one lever
two stops and a cam between them pivoted to the other lever ; that
the novelty lay in the placing bf the carji between the stops, and in
adapting them to co-operate in that position, and not in the précise
form of cam and stops shown in the drawings and described with par-
ticularity in the spécification. And a careful examination of the 35
référence patents fails to disclose a rufHer that may not be distin-
guished from the exact terms of each of the claims sued upon. But
the prior art is full of various combinations of levers, stops, and cams,.
which were pperative tp produce ail, the work that can be done with
appellant's ruffler. It was old to pivot the levers at a common point,
and place two stops upon one of the levers, and upon the other an ad-
justable contact device to act between the stops. Smith, No. 266,544,
for example, shows this. The kinds of contact devices were many.
And Johnston, No. 259,643, had demonstrated the efifectiveness of
the cam, by a single movement thereof, not only to vary the Hmit of
the backward stroke of the ruffling-blade, but also, to a less extent,.
the forward stroke. He did this by means of a pin between two stops,
one of which was a cam, and the other a plane which, by connection
with the cam, moved toward or from the pin in accordance with the
cam's movement. This was not a cam between two pins, but, in
GEEIST MFG. 00. V. PAES0N3. 119
effect, a pin between two cams that could be moved as one ; and, tak-
ing either the forward or backward stroke of the ruffling-blade, the
différence was that between a pin striking against a cam and a cam
striking against a pin. Each élément of the claims in suit was old in
this very art, and had been used to perform the same function assigned
to it in Johnston's présent device. This ruffler introduces no new
mode of opération, produces rufïles no better and no faster, and does
not afford to the user (though it may to the manufacturer) any ad-
vantage over others. The novelty consisted in selecting and rear-
ranging old éléments to produce a machine new in form, but old in
function, and therefore an old machine. And though Johnston made
a better sélection and arrangement than did Horace's painter, who
"joined a human head to neck of horse, culled hère and there a limb,
and daubed on feathers varions as his whim, so that a woman, lovely
to a wish, went tailing off into a loathsome fish," the genius of the
artist was not more wanting in the one case than that of the inventer
in the other ; for "it is not invention to combine old devices into a new
article without producing any new mode of opération." Walker on
Patents (3d Ed.) § 37; Burt v. Evory, 133 U. S. 349, 10 Sup. Ct.
394, 33 L. Ed. 647; Florsheim v. Schilling, 137 U. S. 64, 11 Sup. Ct.
20, 34 L. Ed. 574; Interior Lumber Co. v. Perkins, 80 Fed. 528, 25
C. C. A. 613; Kelly v. Clow, 89 Fed. 297, 32 C. C. A. 205.
Appellant urges very earnestly that Johnston gave a good considéra-
tion, for which the grant of a monopoly should be sustained. That
considération is the alleged cheapness of manufacturing this ruffler.
It is said that Johnston made such a sélection and arrangement of élé-
ments that the parts of the ruffler can be stâmped out of sheet métal
by the use of presses and dies. But the patent is for improvements in
a machine which is a combination of mechanical éléments adapted
to receive and apply motion to the production of a mechanical resuit.
And the patent would as certainly be infringed by a ruffler of which the
parts were forged or cast or machined as by one made of stampings.
The considération of cheapness therefore lies in the process, and not in
the product.
The decree is affirmed.
120 ; 125 FEDERAL BSFOBTEB.
BATON & PRINCE CO. v. WADSWORTH.
(Circuit Court. N. D. Illinois, N. D, October 21, 1903.)
1. PÀTBNTé— Infkingembnt— Sai'ety Brakb fob Elevatohs.
The Eaton, Prince, ma Llvesey patent. No. 347,778, for a safety brake
for elevators, daim S, construed, and Iteld net infringed.
In Equity. Suit for ihfringement of letters patent No. 347,778, for
a safety brake for elevators, granted to Thomas W. Eaton, Frederick
H. Prince, and Joseph H. Livesey, August 24, 1886. On final hear-
ing.
Frank T. .Brown, for complaînant.
Thomas F. Sheridan, for défendant.
KOHI^AAT, District Judge. Complaînant files its bill for in-
fringement o^claims i and 6 of patent No. 347,778, for a safety brake
for elevators. After the filing of the bill it withdrew the charge of
infringement as to claim i,, so that the cause stands now only as
to infringement of claim 6, which reads as follows, viz. : "In an ele-
vator safety brake the combination with an expansible bail governor
of a trigger located, relatively to the governor, substantially as shown,
whereby sai4 trigger is operated directly by contact therewith of the
governor balls, essentially as speciiîed." The défendant, by way of
défense, sets up (i) lack of patentable novelty; (2) that the patent is
a mère aggregation ; (3) that there is no infringement. The only pat-
ent in the prior art, so far as the record discloses, in which an ex-
pansible bail governor is used for the purpose of tripping a braking
device in connection with an elevator, in a combination similar to that
of complaînant, is the Smajl patent, No. 228,284. In that patent the
flexible bail governor is the same as that used by complaînant, except
that the free end of the governor fits over a sliding sleeve in the shaft,
whiçh opérâtes the governor, to which sleeve is rigidly secured a dog
or trigger, the other end of which rests in a guide in the upper brace
or cage of the elevator, thereby preventing the sleeve from rotating
with the governor. This trigger supports a bell crank lever, which
opérâtes the braking device. Whenever the elevator begins to move
at an undue speed, the governor balls expand by centrifugal force,
thereby contracting the governor longitudinally, and dragging with
its sliding end the sliding collar and the dog, whereby the lever is
released and the braking device applied. The spécifications provide,
however, that the governor may be in any suitable form. Thus it
will be seen the governor in th}& device drags what might be termed
the trigger from restraining contact with the braking apparatus.
In the patent in suit the same expansible governor is used, and the
only substantial différence between the two devices is that the gov-
ernor balls in the patent in suit, when the speed is too great, expand,
and strike the trigger and release the lever which applies the braking
apparatus. The one pulls the trigger out of the restraining contact
with the lever. The other knocks it out. Both operate simultane-
ously with the undue expansion of the governor. The direct contact
élément of the claim is, in my judgment, the sole dilïerentiation ot
GEEENWICH INS. CO. V. CAKBOLL. 121
complaînant's patent from the prior art. It is not claimed by com-
plainant that such direct contact by the balls of an expansible governor
with a trigger or tripping device is new, outside of the elevator art.
It is old in the prior art. Indeed, it is shown to hâve been in use in
connection with elevator safety attachment in the C. R. and N. P.
Otis patent, No. 110,993, the R. H. Hill patent, No. 210,693, the Ripp
& Mills patent, No. 226,553, ^"d others ; but the braking devices set
in motion in thèse patents seem to be more complex than in the patent
in suit, so that perhaps they should not be considered as anticipation,
in the same art.
The language of the patent in suit, taken in connection with the file
wrapper, would seem to lirait the device to an expansible bail govern-
or. Ail that it has done is to take an old form governor as used in
the Small patent, and make it kick instead of pull the trigger out of
restraining contact with the braking apparatus. To do this, it has
used a device old in other relations, and known to the elevator art in
a différent combination.
Defendant's governor is what might be called a disk governor.
Its palis operate by centrifugal motion or force. It difïers, however,
quite as much from complainant's device as the latter does from the
prior art, in view of which I am constrained to hold that complainant
has failed to estabhsh infringement.
The bill must be dismissed for want of equity.
GEEENWICH INS. CO. et al. v. CARROLL, State Auditor.
(Circuit Court, S. D. lowa, 0. D. October 13, 1903.)
No. 2,410
1. StATOTES— COSSTITUTIONALTTY — lOWA INSURANCE LAW.
lowa Code, §g 1754, 1755, prohibiting combinatlons between flre Insur-
ance companies doing business in the state in relation to rates, agents'
commissions, or the manner of transacting business In the state, and
providing (or the revocation by the state auditor of the permits of any
companies found to bave violated such prohibition, are not in violation
of the provisions of the state Constitution prohibiting the granting of
spécial privilèges and immunities, and requlring that ■wben they can be
made applicable ail laws shall be gênerai and of unifonn opération
throughout the state.
3. Equity Jurisdiction— Enjoining Enforckmbnt of Invalid Statute.
A court of equity, state or fédéral, has jurlsdiction to enjoin the enforce-
ment of an invalid law when its enforcement would cause loss of busi-
ness, expense and hardshlps to complainant, and resuit in irréparable In-
Jury.
8. CONSTITDTIONAL LAW— LiBKKTY TO CONTKACT — loWA InSURANCB StATUTB.
The provisions of lowa Code, § 1754, which make it unlawful for two
or more flre Insurance companies doing business in the state to enter into
any agreement as to the amount of commissions to be allowed agents
or as to the manner of transacting tire Insurance business in the state,
are invalid as depriving Insurance companies of the llberty to contract
secured to ail persons by the fourteenth constltutlonal amendment and
of the equal protection of the laws.
If 2. See Injunction, vol. 27, Cent. Dig. § 156.
122 ; 1,123 FEDERAL BHPOBTEB.
In Equity. On demutrer to bill.
Jameë C. Davis and George H. Carr, forxomplaînahts.
Cha;rles W. Mullan, Atty. Gen., for défendant.
McPHERSON, District Judge. This case is pendingr. on defend-
ant's demurrer to a bill in equity, filed by a number of f oreign fire
insurance companies, against the défendant, who is Auditor of the
State and Insurance Copimissioner. The bill asks that défendant
be restrained from taking action against them under certain statutes
of the state, alleging that the statutes in question are void because in
conflict with both the state and fédéral Constitutions. It is alleged
that aÙ thege companies hâve been engaged.in doing a fire insurance
business in the state fçr a great many years, paying the fées and taxes,
and in ail respects complying with the laws relating to such compa-
nies ; and it is also alleg-ed that, prior to the adoption of the statutes
in question, they had established their business in equipping offices,
paying out large sums in adyertising and so on, and from year to year,
including the current year, they having fuUy complied with the laws
of the state in making their reports as well as ail other things, and
the Auditor gave each of , them a certificate authorizing them to con-
tinue in business. They each hâve an extensive business in lowa,
carrying large and nunièrous risks on property in the state. It is
alleged that there are 85 foreign companies, including complainants,
doing business in the state, and which pay to the state annually large
sums as fées and taxes.
The statutes complained of were enaiCted in the year 1896, and are
now parts of the Code, being as foUows: Section 1754 provides that
it shall be unlawful for twb or moré fire insurance companies doing
business in this state, or for the officers, agents, or employés, to make
or enter into any combination or agreenjent relating to the rates to be
charged for insurance, the amounts of commissions to be allowed
agents for procuring the same, or the manner of transacting fire
insurance in this staté. Penalties and fines are to be imposed for a
violation of the statute. Section 1755 provides that the Auditor shall
summon before him and examine under oath ail those he suspects of
violating the statute ; and if they fail to appear, or if he finds that they
are doing the things inhibited, he shall revoke their permits to do busi-
ness, and thereafter they shall not do business in the state. It is al-
leged that the Auditor is about to proceed against them, and that he
will oust them from the state unless he is restrained.
The first question presented is, are the statutes in confîict with the
state Constitution? Section 6, art. i, provides that ail laws of a gên-
erai nature shall hâve ùniform opération, and that privilèges and im-
munities shall not be granted which shall not on ihe same terms be
granted to ail.
Section 30, art. 3, provides "that where a gênerai law can be made
applicable, ail laws shall hb gênerai and of uniform opération through-
out the state." The question was fully discussed in ail its phases in
the case of State v, Garbroski, m lowa, 496, 56 L. R. A. 570, 82
N. W. 959, 82 Am. St. Rep. 524. The statute under discussion pro-
GREENWICH INS. CO. V. CAREOLL. 123
vided that peddlers plying their vocation outside of a city or town
should pay a license or tax, but that a person who had served in the
Civil War nêed not pay the fee. The statute was held unconstitu-
tional. It is apparent to ail that the statute involved in that case is
not akin to the statutes now before the court. Judge Ladd in the
Garbroski Case reviews many, if not ail, the cases upon the subject,
and one need not look further for the correct rule, or for the authori-
ties, than his admirable opinion in the Garbroski Case.
Ail laws of a gênerai nature shall hâve a uniform opération. Thèse
laws in question do hâve a uniform opération. No one can expect
that ail laws shall operate upon ail people. We hâve laws with réf-
érence to the Législature, and those laws operate upon that body
alone. So as to the office of the Auditor, and a score of other offices,
State, county, and municipal. And it is the same as to private afïairs.
Railroad companies are held liable for an injury to an employé brought
about by the négligence of a fellow servant. Such législation, as ail
know, is valid. Hundreds of statutes hâve been enacted in this state
known by ail to be intended to apply in each case to a single city or
town, corporation or trade. That they are valid but few doubt. Stat-
utes were enacted many years ago applying to bridges across the
Mississippi river when there was but one bridge, and now there are
but few. No one doubts their validity. Years ago statutes were
passed authorizing the sale of a railroad to one at the state line, to
thereby make a Connecting line. But few, if any, ever doubted their
validity. Illustrations will readily occur by which I could multiply
thèse cases. And so it is as to granting immunities to some which are
denied to others^ Exempting farmers, merchants, manufacturers,
mining companies, and other corporations from liability in case an
employé is injured by another employé's négligence, and holding a
railroad liable, well illustrâtes the whole proposition.
Classifications can be made, providing they are not arbitrarily made.
If the lowa statute provided that a railroad company were liable, in
the case above stated, where an employé was injured in building a
bridge, cutting timber, or at work in the shops, ail the courts would
hâve held the law invalid. But the Législature provided for a recovery
only when the injury occurred in the hazards arising from the use and
opération of the road. If thèse statutes in question are otherwise
valid, then it is not an arbitrary classification, because they apply to
a business peculiar in itself.
Ail will agrée that there must be rules and régulations applicable to
insurance companies not applicable to other corporations. There
must be some ofifîcer, with the powers of an Insurance Commissioner,
to govern and direct and control them. The lowa Suprême Court has
upheld so many statutes in principle like this that the question now
being discussed seems very clear to me. The following statutes
bave been held valid: (i) înnumerable curative and legalizing acts;
(2) statutes making railway companies liable for double damages for
stock killed; (3) allowing a défendant a continuance, as of course,
when in the military service ; (4) classifying railroads as to charges for
carrying freights and passengers ; (5) taxes need not operate upon ail
persons alike; (6) taxing railroads by one set of ofHcers, and indi-
124 125 FEDERAL BEPOBTBB.
vidnals by anotîier; (7) exempting property from water taxes; (8)
taxing foreign Insurance companies on 1 their business; (9) exempt-
ing certain property from municipal taxes, and compelling others to
pay such taxes ; (10) taxing transient merchants ; (ï i) assessing stock
of State bank differently from that of a national bank ; (12) a spécial
law authorizing the building of a particular railroad. No doubt there
are others that hâve been upheld.
Counsel for complainant seem to hâve forgotten that spécial législa-
tion in ail cases is not prohibited. Spécial législation is prohibited
as to six enumerated subjects: (i) Assessment and collection of
taxes; (2) for laying out highways; (3) for changing the names of
persons ; (4) for incorporating cities and towns ; (5) for vacating
roads, streets, and town plats ; (6) for locating or changing county
seats.
But as np one of the above referred to provisions of the Constitution
is applicable to this case, it is necessary to see what other spécial légis-
lation is prohibited. The Constitution then recites : "In ail cases
above numerated, and in ail qther cases where a gênerai law can be
made applicable, ail laws shall be gênerai and; of uniform opération
throughout the state." It is too apparent to admit of discussion that
there are hundreds of subjects upon which the state, through its Lég-
islature, should speak: "Where a gênerai law cannot be made ap-
plicable, and where it cannot be of uniform opération throughout the
state." And insurance is one of thèse subjects. In my judgment, the
statutes in question are not prohibited by either of the state constitu-
tional provisions.
Chapter 4, tit. 9, of the lowa Code, which chapter includes the stat-
utes now under considération, afïirmatively makes two among other
things appear: (i) That itis the poHcy of this state to invite solvent
and reliable foreign insurance companies to come into this state, par-
ticularly for the purpose of giving the people the benefit of compéti-
tion, and partly for the purpose of obtaining revenue for the state
treasury ; and both purposes are subserved. (2) That it is the duty of
the state auditor to license such companies to do business in the state,
if upon investigation he finds them solvent and financially worthy.
Such being the policy of the state, and such being the duty of the
Auditor, he cannot deny the foreign companies, of the kind as above
described, from receiving the proper certificate and from doing an
lowa business. Should ne undertake to keep such a company out, the
proper court will by mandamus compel him to grant the authority, and
admit such company. This being so, he cannot put them out, after
they are once lawfullyand rightfully in* excepting by virtue of the
power lodged with him under a valid and constitutional statute.
What was said by the Chief Justice in the case of R. R. v. State, 31
N. J. Law, 531, 543, although in a tax case, is pertinent:
"It Is not denied that the çorporate existence of a eompany is recognized,
not by right, but by grâce, In foreign Jurisdlctlon, nor that each government
bas the compétence to refuse to recognlze such existence, except on Its own
conditions. The prlnclple. Is unlversally acknowledged. Hence laws requlr-
Ing Insurance companies ana other foreign corporations to file bonds and sub-
mit to other exactions as a prerequisite to their admission in an Incorporated
capaeity into the state. Such laws, when rightfully made, are evidently mère
GEEENWICH INS. CO. V. CAEKOLL. 125
police régulations, designed to protect tiie citizens of tlie state In whicb they
are enacted from loss or Imposition, and on this ground their legality cannot
be drawn in question. But a tax law, liaving revenue for its object, is
based upon a principle entirely différent. The right to tax for revenue is
the rlght of the government to take so much of the property of tlie person or
Company on V7hom the tax falls as such government may deem necessary
for its public wants. The act of taking the property, therefore, must, of
necessity, be an ackno-wledgment of the légal status of the person or Company
v?hose property is taken. To as.sert that the company whose property is thus
taken bas no rlghts but such as the government taking it chooses to confer
is to assert that such company has no title to its property but such as may be
conceded to it by the taxing power. It seems to be utterly inconsistent with
légal prineiples which hâve always been deemed axiomatic to bold tliat a
government can recognize the légal existence of a toreign corporation for the
purpose of taxation, and at the same time can deny such légal existence for
the purpose of depriving it of those rlghts which belong to every Individual
or company known to the law. Such a doctrine would, obviously, offer the
entlre property of foreign corporations as a prize to the rapacity of any state
in whose territoriea it might be, or over which it might happen to be carried.
It is readily to be admitted that a law imposing certain terms upon ail foreign
corporations as conditions to their acquisition In this state of the right to act
In the unity of their eorporate existence would be légal. Such law would pre-
vent foreign persons from doing any légal act in this state as a corporation.
But can it be maintained that such a law would hâve the further efCect of
leaving the property of the company as a spoil of the first taker?"
Thèse companies having the requisite capital, being- solvent, having
paid their taxes and license fées, and having done ail the things re-
quired of them by the laws of lowa and the exactions of the Auditor,
having been invited to do business in the state, and being now right-
fully hère, they for the time being, and until the policy of the state is
changed, hâve the rights, neither more nor iess, than the lowa com-
panies enjoy, and illégal exactions cannot be made npon them. In
Insurance Company v. Morse, 20 Wall. 445, 22 L,. Ed. 365, the Su-
prême Court held a statute to be void which required a foreign com-
pany to agrée not to remove a case to the fédéral courts. But in
Doyle v. Insurance Co., 94 U. S. 535, 24 L. Ed. 148, the Suprême
Court recognized the right of a state to oust the company if it did
remove its cases to the fédéral courts. It so held, not because such
removals were a good reason for ousting the companies, but because
the state had the right to exclude them without référence to the
reason.
But that is not the question now being considered. It is not a ques-
tion of keeping a foreign company eut. The question is, shaîl ail
companies, foreign and domestic, now rightfully in the state, be com-
pelled to submit to the exactions of an invalid and unconstitutional
statute? It is quite certain that an lowa corporation cannot by any
législation be ousted or dissolved by reason of invoking the fédéral
Constitution. And if the lowa Législature should ever be persuaded
that the better way to prevent monopolies as between foreign com-
panies is to create a monopoly by giving ail the business to lowa com-
panies it can easily be done. Let there be a législative déclaration to
the efïect that the local companies may do as they see fit if they stay
inside the Constitution, but that foreign companies must quit the
state if they hold up the fédéral Constitution as their shield. It is
scarcely possible that such a position will ever be taken. But Wiscon-
126 125 PBDBHAL REPORTER.
sin ondé;'dîd:''an^, if lowa ever does, theh, and fïot until then, will the
Doyle <t!asè peiciijine binding as to ïowa législation.
The, distinct policy of lowa fqr many years has been to invite for-
eign insurance companies into the state. They hâve been imposed
with somë burdens not imposed upon home companies, and that this
is allowable no one dénies. That they can be whoUy excluded no one
dénies. But for the obvious reasons of compétition for the benefit of
people needing insurance, and for moneys for the state treasury, the
state for years has said that they itiay come and may remain in ; and
yet the Attorney General now contends that, in the face of such poUcy,
this court, by construction and implication, shall say that such foreign
companies shall be punished for seeking the benefits of the fédéral
Constitution.
It must be kept in mind that the statutes in question do not apply
alone to foreign conipanies. Those laws, if vahd, apply to ail com-
panies. This bill in equity is filed by the complainants for the use and
benefit of ail companies.
It is not at ail necessary in this case to make allégations of diverse
citizenship. ■ There are ,sUch allégations, but they are unnecessary
allégations in this case. Home companies could be joined as plain-
tifïs in this action. Not only one question, but the principal contro-
versy herein, is a fédéral question. The court takes jurisdiction be-
cause of that question, regardless of citizenship, and will retain juris-
diction over ail questions in the case, including questions that are not
fédéral, regardless of the citizenship of the parties. See Opinion of
Judge Brewer in Omaha Company v. Cable Company (C. C.) 32 Fed.
727, and cases cited.
But it is argued that there is a remedy at law. A court of equity
has the power, and it is likewise its duty, to enjoin the enforcement
of an unconstitutional statute when such enforcement wbuld subject
the party to innumerable prosecutions, and particularly when such
prosecutions would, pending litigation, work great hardships and
wrongs and damages.
The récent décision of the Circuit Court of Appeals for this circuit
in the case of City of Hutchinson v. Beckham, 118 Fed. 399, 55 C. C.
A. 333, is an authority, and of binding force upon this court. It puts
at rest the question as to the jurisdictional amount involved. It also
puts at rest the duty and the power of a court of equity to enjoin the
enforcement of an invalid law when prosecutions woUld be followed
with loss of business, expense, and hardships. And it also holds the
fact that the party could resist the enforcement of such invalid law
by a défense to proceedings in the state court does not prevent a court
of equity, state or fédéral, from taking jurisdiction. A state statute
can neither enlarge nor curtail the equity jurisdiction of this court.
And it will not do to say that because a law is unconstitutional, and
because ail are conclusiveily presumed to know the law, there need be
no fear that the officer Who is commanded to act under the statute will
attempt to enforce it. It is the duty of the state Auditor to enforce the
statute, if it is a valid statute, and he no doubt feels that it is not in-
cumbent upon him to pasS upon its validity, but will recognize it as
of force until it is otherwise held by the courts. And it is alleged in
GREENWICH INS. CO. V. CAKROLL. 127
the bill before me that the state Auditor will enforce the statute if
not restrained by the process of a court. In the light of such déclara-
tions, and the presumptions that he will attempt to enforce the statute,
the case of Osborne v. Bank of United States, 9 Wheat. 738, 6 L,. Ed.
204, must be regarded as an authority. And the reasons given by
Chief Justice Marshall in the opinion in that case as to why Osborne,
the State Auditor of Ohio, should not be allowed to enforce a statute
of that state, are equally applicable to Mr. Carroll, the Auditor of
Iowa> if the statute in question is invalid. In the Doyle Case, 94
U. S. 535, 24 L. Ed. 148, the statute of Wisconsin specifically provided
that, if any foreign company should remove a case to the fédéral
court, the state ofïicer should, under an imperative duty, recall and
revoke the license of such foreign company to do business in the state.
But in the case at bar foreign and domestic companies are placed on
an exact equality. And the statute does not say that, if the foreign
companies shall invoke the fédéral Constitution, such a wrong has
thereby been done that the state Auditor can punish it by removing it
from the state. But in the case at bar the statute if applicable, and if
enforced, will be made to read, in efifect, that any insurance company,
domestic as well as foreign, shall not dare to look further than the
lowa laws, and that they shall not, at the péril of their existence in this
state, dare to claim any right under "the suprême law of the land."
This, to me, is not comity between the states, but subordinates the
nation to a petty position that it has not occupied for many years.
The statute in question provides that two or more companies shall
not do any of the following things : (a) Make or enter into any com-
bination or agreement relating to the rates to be charged for insur-
ance ; (b) agrée as to the amount of commissions to be allowed agents
for procurjng the same ; (c) agrée as to the manner of transacting the
fire insurance business in the state.
The first I shall not discuss ; but as to the second and third propo-
sitions I hâve no doubt but that the statute is beyond the power of
législation, and will give my reasons: As was held in Hooper v.
California, 155 U. S. 648, 15 Sup. Ct. 207, 39 L. Ed. 297, and cases
cited, insurance is not commerce. Therefore the many cases cited by
the Attorney General, arising under the "commerce clause," are not in
point. They are irrelevant, and do not hâve the slightest application.
The commerce cases were so decided because ail parts of the Consti-
tution applicable must be construed together. And so the Suprême
Court has within the last few years in the Addystone Pipe Case, 20
Sup. Ct. 96, and Traffic Association Cases, 19 Sup. Ct. 25, and the
Circuit Judges in the Northern Securities Case, 120 Fed. 721, made it
plain to every one that, if the question is one of commerce between the
States, then the right and liberty of contract must in a measure yield.
That is to say, Congress shall hâve the right to regulate commerce
between the states, even though the freedom of contract is curtailed.
If this were not so, then the commerce clause would be subordinated
to other provisions of the Constitution. The two provisions of the
Constitution must be construed together.
There is another class of cases, numerous in number, sound în prin-
ciple, but which, in my judgment, hâve no application to the question
128 125 FEDERAL. EBPORTER.
now beîhg cdnsidered. I refer to cases arising under the police power
of the States. Such a case is that of Holden v. Hardy, 169 U. S. 366,
ï8 Sup. Cti 383, 42 h. Ed. 780. The State statute inhibited the em-
ploymènt of a person for more than eight hours a day in underground
mines. The Suprême Court held the statute a valid exei*cise of the
police powers, as protecting the life'and health of individuals, and that
the same could not be contracted away. No one dénies that insurance
is a legitiniate business, aud one that is necessary to the welfare of ail
people who cannot aflford to carry their property without such guar-
anty against loss. To carry on the business calls for the services of
men of affairs and expérience. Men must be employed, and that
requires contracts. Reinsurance is often required, and that câlls for
contracts between two or more companies. Adjusters are necessary,
and one such person must, or often does, act for several companies.
One risk oftentimes must be apportioned between sevëral companies.
Companies must charge reasonable rates, and in some states can be
compelled to pay the face of the policy. What are reasonable rates,
and how are such rates determined? No doubt, partly from the
history and statistics of the business, and partly from current expéri-
ence. One risk is more hazardous than another, and rates must vary.
Téléphone wiring may or may not increase the risk. Electric lighting,
with or without "cut-ofïs" or "step-downs," may or may not increase
the risk. Experiments and expérience and statistics may show or
différences of opinion may exist. Some risks are greater in the sum-
mer and others in the winter. The salary of ofïicers is one item of
the costs. The cçmmissions of the solicitors hâve much to do with it.
In short, the business canrtot be carried on for a day without making
contracts, not alone with the insured, but with other companies, and
with persons employed by othèr companies.
The Attorney General, seeking to avoid the force and weight of the
authoritiés, leaves but little for argument when he concèdes in his two
briefs as follows:
"It Is urged that the act Of the Législature is unconstitutlonal because it
takes from the flre Insuranèe companies doing business within the state the
right of contract, whiph is one of the liberties guarantied by the f ourteenth
amendment. The conclusive answer to this contention is that the statute does
uot taise away from any insurance company transacting business within the
State the right to contract with ahy pérson or corporation desirihg to enter into
any lawf ul contract with such company, nor does it in any manner abridge
the right to make such lawful contract The sole purpose of the statute, and
the end sought to be accomplished by Its enactment, Is to prevent flre insur-
ance companies from enterlng into a contract or combination whereby their
rights to enter into lawful contracts with those desiring flre insurance is
abridged and restrained. It Is conceded at the outset that any act of the
Législature which restriçts or abridges the llberty of contract guarantied by
section 1 of the .fourteenth amendment to the fédéral constitution Is void."
That thé authoritiés cannot be reconcîled is known by ail. For in-
stance, statutes quite identical in language, meaning, and purpose
were before the courts in Holden v. Hardy, supra, and in Ex parte
Morgan (Colo. Sup.) 58 Pac. 1071, 47 L. R. A. 52, 77 Am. St. Rep.
269, and the one décision is squarely against the other. Practically
nothing is left to be said on either side, after reading the two opin-
ions. But in those cases the contracts inhibited were by reason of
GEEENWIOH INS. CO, V. CABROLL. 129
statutes to protect the heaith o( individuals for whose benefit the laws
were enacted.
Then, again, the subject is exhaustively treated by Mr. F. N. Jud-
son in a paper, "Liberty of Contract under the Police Power," before
the American Bar Association in 1891. See Reports Am. Bar Ass'n
for that year, vol. 14, p. 231.
There are three récent cases which cover the entire question, and
which corne so near citing ail the authorities that one need look but
little further for the authorities upon the subject. People v. Orange
County Road Const. Co. (N. Y.) 6^ N. E. 129; Republic Co. v.
State (Ind. Sup.) 66 N. E. 1006; State v. Kreutzberg (Wis.) 90 N. W.
1098. Thèse cases are not cited as involving inhibited contracts, like
the ones prohibited by the lowa statutes, but they are cited as being
in principle much the same, and because of the exhaustive discussion
of the question. And the fact that the law assailed is what is knovi^n as
an "Anti-Trust Law" does not take it out from under the fédéral Con-
stitution. In re Grice (C. C.) 79 Fed. 627 ; Connolly v. Sewer Pipe,
184 U. S. 540, 22 Sup. Ct. 431, 46 L. Ed. 679. As against those casés,
see State v. Buckeye Pipe Line Co., 61 Ohio St. 520, 56 N. E. 464;
Cleland v. Anderson (Neb.) 92 N. W. 306.
But it becomes académie, and mère common place, to undertake to
Write what this court or that court bas said on the question. Law is
not an exact science, as is illustrated by the cases arising under the
fourteenth amendment, perhaps more than by any of the other de-
batable légal questions. The "liberty" of the Constitution has been
defîned, and it will continue to be defined, by some as the right of an
individual to keep out of prison, excepting for crime committed.
Others will define "liberty" as also including the right to earn a liveli-
hood, acquire property, perform services for another, employ others,
make contracts not tainted with an illégal or immoral considération,
and those not injurions to the heaith or welfare of people. I prefer
the latter définition.
Within the meaning of the constitution, as has been held many times
by the Suprême Court, "corporation" is a "person." A corporation
has the same rights to agrée or contract within the scope of its powers
as has a person. Can it be possible that législation like that now pre-
sented to the court is valid? If it is valid, then what becomes of the
provision, "No man shall be deprived of equal protection of the law,"
or of that other provision, "No man shall be deprived of life, liberty,
or property without due process of law ?" Justice Field once said :
"The right to pursue them without let or hindrance is a distinguished
privilège of the citizens of the United States, and an essential élément
of that freedom which is their birthright." Another Justice of the
United States Suprême Court said: "Yet the power does not and
cannot extend to prohibiting a citizen from making contracts, and this
is institutional law in England as well as America." Another great
Justice has said : "Liberty includes the right to acquire property, and
that means and includes the right to make and enforce contracts."
And I dare say that there is not an appellate court in this Union but
has given a like définition of liberty : "The right to make and enforce
contracts."
125 F.—»
130. j,; 125 FBDJBRAÏi REPORTER.
,W!h«iPjtîie;,pight of contract ceases» the right tpjîo busines? îs at an
end. The right to purchase, hold, or sell property must dépend upon
contract, a.nd vi^ithout contracts business affairs cannot be carried on
for a single day. , And the slightest knowledge of insurance will per-
suade any one that companies, bqth home and foreign, must hâve
some arrangements and must make some contracts with other com-
panies. Farmer^, i merchants, laboring men, railway companies, and
ail othçr classes oiboth men and associations must do the same, and
both the laws and Constitution permit it. And to single out insurance
companies, and say they shall not, is not Ipgical, and, in my judg-
ment, not allowable, under the fourteenth amendment.
Employers of labor agrée what they will pay, and laboring men
agrée for what sum th^y will work. Buyers and vendors of live stock,
grain, groceries, clothing; anything and eyerything, make their agree-
ments. Farmers will and do agrée as to the price for which they will
sell, and what they will payfor labor; but this statute says that insur-
ance companies shall agrée as to none of thèse things.
Of course, I do not hold that insurance companies can combine, and
thereby enter into a conspiracy to accomplish any desired purpose.
But no such question is involved in this case. I am only holding that
insurance companies may make the usual contracts that ail other per-
sons and corporations may make, which the statute seeks to take from
them, and which will be taken from them if the statute in question js
upheld. My conclusions are that the statute in question is invalid
for thereasons stated, and that, the state Auditor cannot enforce its
provisions.
The demurrer will be overruled, and the défendant allowed to file a
plea or answer, as he may deem best.
THE DELMAR et al.
(District Court, E. D. ■Virginia. August 8, 1903.)
1. Collision— Stbam and Sailino Vbbsbls— Pbesumption of Fablt.
Ie case of a collision between a Salllng vessel and a barge in tow of
a tug, on whicli rested the duty of teeplng out of the way, ail the pre-
sumptlons are in f avor of the salllng vessel.
8. Same — Evidence Considbbbd.
A collision occurred at night In Chesapeake Bay between a schooner
coming into Hampton Eoads, and a barge 842 f eet long, loaded with freight
cars, which was passing out In tow of a tug on a bawser 300 feet long.
There was a strong wind, and the vessels were admittedly on parallel
courses until shortly beforè the collision, the tug passing to windward of
the schooner. Eaeh vessel clalmed that she made rio change in her
course, and the testlmony from each supported her contention. There
was plenty of sea room, and the ttig could hâve glven the schooner a
wlder berth than she admittedly did. Eeldi that, undegc the évidence, she
must be charged with tlie sole fault for thë collision.
In Admiralty. Suit for collision.
Hughes & Little, for libelant.
T. H. Willcox and Floyd Hughes, for respondents.
THE DELMAB. 131
WADDILL, District Judge. The collision in this case occurred in
Chesapeake Bay, near the mouth of Hampton Roads, on the evening
of the ist of March, 1903, about 7:45, at a point about halfway be-
tween Old Point Comfort and Thimble Light, between the R. M.
Graham, a three-masted schooner, and barge No. 5 of the New York,
Philadelphia & Norfolk Railroad Company, then in tow of said rail-
road company's steam tug Delmar. The night was dark, tide ebb,
and wind blowing a strong breeze from the north. The course of the
Graham was west by south half south, and of the tug northeast by
east. The schooner, loaded with lumber, was coming into Hampton
Roads for anchorage, and the barge, loaded with cars, was being
towed to Cape Charles, on her regular trip between Norfolk and that
place ; the vessels, respectively, making between six and seven miles
an hour. The faults assigned by the parties, respectively, one against
the other, are such as that each places the responsibility for the col-
lision entirely upon the other ; the schooner, in efifect, charging that
she was proeeeding on her regular course, with the red lights of the
tug exhibited to her, and the red lights of the schooner exhibited to
the tug, until within a short distance of the tug, and when too late
to avoid the collision by any movement on her part, the tug suddenly
starboarded, and ran across the schooner's bow, bringing the barge
into collision with the schooner, whereby she sustained damage to the
extent of $9,084 ; whereas the respondent's account of the coHision is
as follows:
"After passing Old Point, the wind was blowing heavily from the north
northeast. The night was very dark. The tug and barge were on their
proper and usual course to pass to the west of the Thimble, the tug towing
the barge on a hawser of about fifty fathoms in length. While thus run-
ning, making between six and seven miles an hour, the Ughts of three sailing
vessels were sighted ahead, seemingly on schooners bound in, two of them
showing their red lights on her port bow, and one, which afterwards turned
out to be the schooner Graham, showing her green light to the tug and barge;
the green light on the tug and barge being also visible to her. The schooners
were apparently bound in for Hampton Roads, while the tug and barge were
bound out, and the courses in which they were moving at that time were
practically parallel, and there was nothing to suggest auy danger or risk of
collision. The vessels continued to move in this direction. The green light
of the Graham broadened on the starboard bow of the tug until the tug had
passed the schooner to port, and was about abeam of the Graham, when the
Graham, for what purpose respondent Is unable to say, rapidly changed her
course by porting her helm, causing her to lufC, and come into the barge,
striklng her starboard bow on the starboard of the barge, aft of amidships,
and receivlng the injury complained of."
The respective contentions of the parties are supported by the crews
of the vessels in collision, and the évidence is irreconcilably conflicting
as to just how the accident happened, as it is évident, if the vessels
approached each other, each exhibiting the same lights, — that is,
green to green, or red to red, — as they insist they did, no collision
could hâve occurred, unless there was a change of course on the part
of one or other of the vessels. This conflict, in the view taken by the
court of the law governing the case, need not necessarily be deter-
mined to ascertain the liabiHty, though the court strongly inclines to
adopt the schooner's version as to the circumstances of the colHsion,
and as to the lights that were exhibited by one vessel to the other at
%32 125 FEDERAL REPOllTEE.
the tiine. It is higlily jmprobabla that the Graham, on whom was
ipigjpseà the burden of keeping on her course, would hâve made the
change cpntended for at the time it is claimed it was made; and the
circumstances strongly favor the contention that the navigators of
the tug, in their endeavor to keep their usual course, so as to pass
through the swash channel on the west of Thimble Light, and avoid
passing round the light, in the exîsting condition of the weather, took
greater chances than otherwise would or should hâve been taken.
Certain it is, they make no claira ofhaving changéd their course in
the slightest respect in the conditions surrounding them, and insist
that none was necessary. It will not be readily assumed that a vessel
charged with the duty of keeping her course would, if in the position
claimed by respondent, hâve purposely made such a maneuver as in-
evitably to bring her into collision with another vessel, and impose
upon her the responsibilîty for so doing. It is far more probable that
the coUision occurred by reason of the tug's master, upon whom was
imposed the burden of keeping out of the way, making a mistake in
the navigation of his vessel, when he found himself in a position of
dangerous proximity to the Graham. Haney v. Baltimore S. P. Co.,
23 How. 287, 291, 16 L. Ed. 562. The collision being between a sail-
ing vessel and a steam vessel and tow, the law imposed upon the latter
certain obligations, one of which was to keep out of the way of the
sailing vessel, and in the collision between them the presumptions are
ail in favor of the sailing vessel. Spencer on Marine CoUision, 212,
213; The Belgenland (D. C.) 5 Fed. 89; The Richmond (D. C.)
114 Fed. 208, 210; The Ardanrose (D. C.) 115 Fed. loio, 1012.
The respondent's évidence is to the efifect that the schooner's green
light was sëen as far as a mile or more away, and that the two vessels
exhibited their green lights one to the other, and proceeded on their
respective courses, until the tug was about abeam of the schooner,
and about 200 yards away, when the schooner suddenly changed her
course, luflfed, and run across the course of, and into, the barge. This
was a chance of collision that should not hâve been taken by the tug,
and for which there was no, excuse. It was not eUough that the tug
should hâve avoided a collision, but she should hâve avoided the risk
of collision ; and to proceed so closely on the course of the Graham,
under the circumstances of this case, at the speed the vessels were
respectively going, and in the then condition of the weather, on a dark
night, having in tow an ocean-going barge 342 feet in length, 46 feet
beam, and a hawser 300 feet in length, loaded with freight cars, as
to involve probable danger of collision, when there was no reason for
so doing, was a risk that jt assumed, and must bear the conséquences
thereof. The Carroll, 8 Wall. 302, 19 L. Ed. 392; The Falcon, 19
Wall. 75, 22 L. Ed. 98; The New York, 175 U. S. 187, 207, 20 Sup.
Ct. 67, 44 L. Ed. 126; The Luckenbach, 93 Fed. 841, 842, 35 C. C.
A. 628; Wilders S. S. Cd. >. Xow, 112 Fed. 161, 166, 171, 50 C. C. A.
473 ; Hughes Ad. 291.
The tug's navigators evidently failed to take into account, and make
proper allowance for," the efifect of the then prevailing wind on a barge
of the kind and length this was. There was ample searoom for the
tug to hâve made any maneuver she saw proper, and there was noth-
THE DELTA. 133
ing in the condition of the weather that prevented her navigators from
avoiding the collision, by the proper exercise of care and fore-
thought on their part, whether the Graham was proceeding with her
red lights showing, as claimed by her, or proceeding with the green
lights showing, as contended by the respondent. If the Graham was
exhibiting her green light, and the same was seen at the distance ad-
mitted by the respondent, then there was no reason, from the tug's
standpoint, why she should not hâve starboarded, and gone to wind-
ward, so as to give safe fairway to the Graham, as the tug admits
that the other two sailing vessels coming in and ahead of the Graham
were a mile or more away to the windward ; whereas, if the Graham
was showing her red light, as she contends she was, so as to throw
ail three schooners to the windward of the tug, then there was not the
sHghtest reason why the tug should not hâve ported, and gone to lee-
ward, thereby passing under the Graham's stern, and en route on her
course. Assuming the Graham did make a wrong maneuver, as
claimed by respondent, and improperly changed her course, thereby
bringing about the accident, her conduct, under the circumstances of
this case, and in the emergency in which she was placed, should be
treated as an error in extremis, and not avail to relieve the respondent
from liability, since the collision resulted from the dangerous naviga-
tion of the steam vessel. The Lucille, 15 Wall. 676, 21 L. Ed. 247;
The Luckenbach, 93 Fed. 843, 35 C. C. A. 628.
In the view taken by the court of the évidence in this case, the col-
lision resulted solely from the fault of the tug, and a decree may
accordingly be entered, so ascertaining the liability.
THE DELTA.
(District Court, W. D. New York. September 1, 1903.)
1. TowAGK— Loss op Tow — Négligence of Tug.
LJbelant's scow, which was equlpped with a suction pump, was
lashed to the side of a stranded tug, being engaged to pump out the
water and keep it down while the tug was towed into port. The tug Delta
was employed to pull the stranded tug from the reef, after which the
towing was to be done by another tug. Immediately after the tow was
drawn from the reef, the scow's suction pipe burst, and those on board
the tow shouted to the Delta, stating the fact, and asked her to go ahead,
and take them to a place of safety, and to hurry up. She then started
ahead at an increased speed, the resuit being the swamping and sinklng
of the soow, which was low, and being towed stern foremost. Beld, that
libelant, who was on board the tow, must be deemed to hâve assented to
the towing being done by the Delta, but that she was legally bound, in
doing it, to exercise ordinary care to proceed only at such rate of speed
as was reasonably safe for the scow, and was in fault for e.icceeding such
speed, it not appearing that the situation was such as to require it in
order to save the Injured tug, and the danger to the scow theref rom being
obvious. Eeld, further, that the scow was aiso in fault for participating
In the halls, from which the Delta assumed that the tug in tow was in
great danger.
a, Same— Action for Damages— Défenses.
A tug libeled for loss of a tow cannot avoid liability for any part of
the damages on the ground that a third vessel contributed to the injury,
unless she files a pétition and brings such vessel in, as provided by ad-
mlralty rule 59.
134 125 FiDEBAL EHPOETER.
In Admiralty. Suit in rem against tug to recover for loss of tow.
Frederick G. Mitchell (George Clinton, of counsel), for libelant,
Crangl'e & Burke, fOr respondent.
HAZEL, District Judge. This is a proceeding in rem against the
steam harbor tug Delta for damages sustained on account of the sink-
ing of libelant's scow Mayfiower on October ii, 1902, near Horseshoe
Reef, at the mouth of the Niagara river. At the time of the disaster
the scow was lashed abreast and stern foremost to the starboard side
of the tug Bellinger, while the steam yacht Corsair was made fast
to her port side. On the day before the accident the Bellinger was
stranded upon Horseshoe Reef. Thereupon the scow Hayflower was
employed to pump her out, assisted by the steam yacht Corsair. The
respondent was employed on the day of the accident to pull the dis-
abled Bellinger off the rocks, whereupon the Oneida, a slower and less
powerful tug, was to tow the wreck ashore. After the Bellinger was
freed of water by the use of the Mayflower's suction pump, a 5-inch
towline about 300 feet in leijgth, from the Delta, was made fast to the
Bellinger's towing post astern, preparatory to releasing her. Before
and at the time of the sinking of the scow the master of the Bellinger
and engineer were on bôard the wreck to render such assistance as
might be necessary. Upon receiving a prearranged signal from the
master of the Bellinger, the Delta easily released the wreck, which slid
into deep water, the scow remaining lashed to her starboard side. Al-
most immediately after the wreck was released, and while still in use,
the suction pump of the scow burst. Thereupon the steam yacht
Corsair, which had on board a syphon pump, made fast to the Bellin-
ger's port side, intending to render assistance in keeping her free of
water. Fearing a récurrence of a like palamity, or that the injured
tug would sihk in deep water, those on board the Bellinger and assist-
ing craft became alarmed, hailed the Delta, apprising her of the oc-
currence and the imrainence of danger, and admonished her to hasten
with them in tow to a place of safety. The évidence is conflicting as
to whether the master of the Bellinger hailed the Delta to quicken
her speed. He testifies to an impression (which, however, is denied)
that libelant joined in thé outcry. Keenan, an employé upon the
scow and witness for libelant, testifies on his direct examination that
ail hands except himself were hailing the Delta to go ahead. It
does not specifically appear by the évidence who shouted to the Delta
to hurry, but I am quite convinced from the évidence on this point that
the hail to the towing tug to quicken her speed because of the sup-
posed danger to the tow had the approval of the master of the Bel-
linger and the acquiescence of the libelant. Reilly, witness for re-
spondent, corrobdratésl the master of the Delta, and says, "Everybody
hollered that the suction pump had burst, and to hurry up and get
her inside ; that she was sinking." Repeated hails of that nature were
heard on board the Delta by her master and engineer. It is true that
libelant, who was in personal charge of the scow, with two employés
was engaged in arranging the pumping apparatus of the Corsair, then
alongside the Bellinger, with a view to its immédiate use. The com-
THE DELTA. 135
motion caused by breaking the suction pipe, and the alarmîng admoni-
tions to the Delta, establish beyond serious doubt that the libelant
was aware of the shouting, knew that the Mayflower was being towed
by the Delta instead of the Oneida, as was originally contemplated,
and assented to such arrangement. It appears by the évidence that
instantly upon the release of the tug the towline, which had been prop-
erly made fast to the Bellinger's stern post in order to expedite her
release, was transferred by her master to her bow, according to cus-
tom and usages in towing and the changed position of the tug. Thus
secured, the Bellinger, Mayflower, and Oneida were towed a short dis-
tance, approximately 1,500 feet, when suddenly the scow lurched for-
ward and was sunk, dragging the Bellinger down with her before the
speed of the tug could be elïectively lessened and the mishap averted.
Two signais in quick succession to check the speed of the Delta were
given by the Corsair upon the request of the libelant, who became ap-
prehensive because of water coming over the front of the scow. Thèse
signais were instantly obeyed by the Delta, although the accident was
then inévitable. The disputed point as to whether the Oneida was to
tow the wreck and scow is unimportant in view of the above implied
towage engagement entered into immediately after the wreck was re-
leased.
It is contended by libelant that the sinking of the scow was wholly
due to the négligent navigation of the towing tug. It is asserted that
the towing speed was unsafe, and practically resulted in drawing the
forward end of the scow (which had a freeboard only of two feet and
six inches) underneath the water, and her conséquent foundering. It
is contended on the part of the respondent that the bursting of the suc-
tion pipe of the pumping apparatus was the primary cause of the acci-
dent ; that the scow was négligent in not being properly fastened to
the Bellinger; hence the bursting of the pipe when the wreck was
puUed into deep water endangered the safety of the tug, and justified
the Delta, when admonished of the mishap, in quickening her speed.
Thèse grounds of négligence by the scow Mayflower, which was well
secured and properly lashed to the starboard side of the wreck, are
without foundation or merit. No substantial reason exists for at-
tributing fault to her on account of her failure to part from the wreck.
On the contrary, the nature of her employment necessitated her con-
tinued présence alongside the imperiled tug. The respondent further
charges that the loss was occasioned wholly by the unseaworthy con-
dition of the scow in having a hole or opening in her stern, causing
her to rapidly fîU with water when towed stern foremost. If this be
true — that is, if the scow leaked in the manner claimed while being
towed with reasonable care — the responsibility for the damage caused
would be determinable without difïiculty. The évidence, however, on
this point does not impress me as being entitled to much weight.
Furthermore, I think" the scow was reasonably seaworthy, and that
the alleged hole did not contribute to the disaster. She was suf-
ficiently staunch for the particular use to which she was employed,
and her condition was not such as to render her employment in calm
weather perilous. A différent question might be presented for décision
had the weather conditions been unfavorable. Giving considération,
13& 125 FBDBBAL REPOBTEB.
therefore, to the évidence as a whole, I ara satisfied that the sînkîng
of the scow was solely because of the excessive speed of the towing
tug. From this standpoint the respônsibility of the respondent will be
considered. It was the duty of the Delta, as a towing steam tug, to
exercise ordinary care, diHgence, and skill in her navigation, and to
use such rate of speed only as might be safely employed to tow a
scow of the construction and dimensions of the Mayflower. The
Mosher, 4 Biss. 274, Fed. Cas. No. 9,874; The Niagara (D. C.) 20
Fed. 152. Coùnsel for libelant maintained that, irrespective of the
apparent exigencies of the situation in the absence of spécifie waiver
by the Mayflower of a positive légal duty to use ordinary care and
diligence, the Delta must bè held in fault for going at a rate of speed
which manifestly was hazardous to the safety of the scow. In other
words, that fault is imputable to the towing tug because of her ex-
cessive speed, irrespective of any imminent danger to the Bellinger and
those on board of her. To support this argument the court is cited
to The Chickasaw (D. C.) 38 Fed. 358; Sherman v. Mott, Fed. Cas.
No. 12,767 ; The Clara, Fed. Cas. No. 2,788. This question, however,
need not, in view of the facts found, be discussed or decided. It is
not controverted that the owner of the Mayflower had nothing to do
with the navigation of the tow. Neither was the Hbelant specially
concerned with the movements of the scow while lashed alongside
the wreck. The duty of the libelant, besides supplying' the necessary
pumping apparatus, was to perform manual labor only in pumping out
the wreck. The Mayflower must be presumed to hâve assented to ail
reasonable directions concerning the movements of the tow given
by the master of the Bellinger to the Delta, as such directions had
relation only to the purpose for which she was employed. It quite
clearly appears by the évidence that the shoutings of alarm and admo-
nition to hasten ashore by those on board the tow, to which référence
has already been made, indUced the Delta to increase her speed, which
obviously endangered the safety of the scow. Although the occasion
required the exercise of prudence and foresight, the gravity of the
situation nevertheless was not such as entirely justified the course
adopted. The conditions simply demanded the exercise of reasonable
caution in a moment of possible difHculty and danger such as navi-
gators not infrequently confront. Despite the cries of alarm the occa-
sion was not specially dangerous or hazardous, for almost instantly
after hailing the Delta signais were given to check her speed. As I
am of the opinion that the sinkihg of the scow could hâve been avoided
by the Delta through the use of slower speed, the suggestion on argu-
ment that the disaster was inévitable lacks force. A défense of in-
évitable accident may only be interposed where it appears that the ac-
cident happened because of some act beyond the control of the per-
son or ship charged with the commission of the négligent act, which
could hâve been avoided by the exercise of such care as the law re-
quired. 16 Am. & En^. Ëncy. of Law (2d Ed.) 242. Neither the
highest skill nor the greatest care is required of a towing tug, but, as al-
ready remarked, reasonable skill, care, and foresight must be exercised
by those intrusted in handling a tow. The Niagara, supra. The re-
spondent tug was legally bound to proceed through the water at
ACrnESELSEÂBEX BAEFOD V. HILTON & DODOE LUMBEB 00. 137
such rate of speed only as was reasonably safe to the Mayflower.
Her excessive speed is not justified by asserting a situation requiring
increased speed to save the Bellinger from loss, thereby sacrificing
the scow. The Delta, although induced in the first instance to in-
crease her speed, was not justified in a long-continued increase of such
speed when the ordinary observation from a towing vessel would hâve
demonstrated that such excessive speed would resuit in the destruction
of the Mayflower. Because of the absence of that degree of care,
therefore, which the towing tug was bound to exercise, she must be
held in fault. The Mayflower was also to blâme. She is in fault for
participating in the hails by which the Delta assumed that there was
great danger to the safety of the Bellingef^
Another point is made by respondent. By the testimony of Keenan,
libelant's witness, it appears that for the period of about one or two
minutes the Oneida, which closely followed the scow astern while
being towed by the Delta, shoved her forward through the water.
Obviously, such an act by the Oneida would hâve contributed to the
disaster, but it does not appear that the libelant had knowledge thereof,
or assented to it in any way, otherwise it might with propriety be con-
sidered a fault for which the scow would be responsible. Even as-
suming the Oneida to hâve contributed to the accident, no cross-libel,
as provided by admiralty rule 59, having been filed by respondent,
this court cannot decree against her. The Atlas, 93 U. S. 317, 23
L. Ed. 863; The New York, 175 U. S. 209, 20 Sup. Ct. 67, 44 L. Ed.
126.
For the reasons stated the tug Delta and the scow Mayflower are
held to be in equal fault, and therefore the damage sustained must be
equally apportioned between them. A decree containing an order of
référence to compute the damages may be entered accordingly.
ACTIESELSKABET BABPOD v. HILTON & DODGE LUMBER CO.
(District Court, S. D. Georgia, B. D. July 13, 1903.)
Shipping— LiABiLiTT OF Chartbrer por Demurragb— Delay Due to Strikb.
A charter party requlred the charterer to dock and load the vessel,
and do the harbor towage and the towage to sea, and specifled the lay
days for loading. It mutually excepted "the act of God, * • *
strikes, combinations or any extraordlnary occurrence beyond the con-
trol of either party, • * * dangers and accidents of the seas, rivers
and navigation," and also contained a spécifie clause that "in the com-
putatlon of the days allowed for deliverlng the cargo to the ship at port
of loading shall be excluded any time lost by reason of strikes." On
arrivai at the port of loading a strlke was In progress among the long-
shoremen and stevedore's men, and many vessels were waiting to load,
making It impossible to load for a number of days, and delaying the
work after it was commenced. Held, the delay beyond the time allowed
for loading being entirely attributable to the strlke, that the charterer
was not liable for demurrage on that account, but that for a delay In
towing the vessel out to sea, after the weather was such as to permit,
It was liable for demurrage.
If 1. Demurrage, see notes to Eandall v. Sprague, 21 C. G. A. 337; Hager-
man v. Norton, 46 C. C. A. 4.
138 :' 125 ÏBDBÏtil,' EBPORTBR. ' ;*!,
In Admiralty. Suit against charterer for demurrage.
Walter G. Charlton, for libelant.
William Garrard and Peter "VV.Meldrim, for respondent.
SPEER, District Judge. The libel of the Actieselskabet Barfod,
a Norwegian maritime corporation, is brought to recover a claim for
damages in the nature of demurrage against the Hilton & Dodge
Lumber Company, a corporation of this district.
It appears from the charter party in évidence that the bark Barfod
was chartered by the respondent for a voyage in ballast to Sapelo, Ga.,
and thence with a cargo of pitch pine timber, etc. From the charter
party it also appears that the respondent was under contract to dock
and load the vessel at the port of Sapelo, to do the harbor towage,
and the towage to sea. It was further stipulated that the shipper
should give the charterer written notice three clear working days be-
fore cargo was required. Twenty-one weather working days were to
be allpwed in which to deliver cargo to the ship, and if through any
fault of the respondent the ship was longer detained demurrage was
fixed at the rate of £14, or $70, for each day of such détention. It is
charged in the libel that the bark was delayed contrary to the terms
of the charter party for 37 days, and that, thereby the libelant became
entitled to demand from : the respondent demurrage in the sum of
$2,590,, and for this sum a decree is sought.
Respondent by its answer admits the détention and delay, but dé-
fends the claim for demurrage upon the ground that it was ascribable
to a gênerai strike among the longshoremen, stevedore's men, and
laborers working in the port of Sapelo. The respondent specially sets
out the terms of the charter party which it is claimed avoid liability
for delays thus occasioned. This contract, as usual, imposes a liability
upon the respondent for demurrage, but contains the explicit excep-
tions following:
"The act of God, restralnts of prlnCès and ruiers, the queen's enemles, fire,
floods, frost, droughts, strike^, oombinations, or any extraordinary occurrence
beyond eontrol of elther party, and ail and every other dangers and acci-
dents pj; the Béas, rivers and navigation of what nature and kind soever
durlng the sa.id voyage, always mutually excepted."
It appears from the évidence that the bark Barfod arrived at Sapelo
on the 7th, and was entered at the custom house on the gth of July,
1900. It is indisputable that at this time there was a gênerai strike
in progress among the longshoremen, stevedore's men, arid laborers
engaged in loading vessels at that port. This strike was directed by
an organization termed the "American Fédération of Labor," and had
been active since the z^d day of the preVious month. A large num-
ber of vessels were in port at that time, spme at the docks of respond-
ent and other mer chants on Julington river, other s at the ballast
grounds, and still others lying at anchor in the roads awaiting their
turn to dischàrge ballast ànd proceed to the loading wharves. It was
with great difficulty that any work could be conducted. Laborers in-
sufficient in number, and whoUy inexperienced, had been brought in
by the stevedores from neighboring points and from Savannah.
ACTIESELSKABET BAEFOD V. HILTON & DODGE LUMBER CO. 139
Thèse were terrorized by the striking laborers. Although kept under
heavy guard at Julington, the hostility toward them was so great that
they were attacked by the strikers and several of them were wounded.
A large number of them quit work, and returned to Savannah.
Thèse conditions continued until practically ail the shipping was out
of the port, and this was net until October, igoo.
With thèse conditions prevailing at the Juhngton docks the bark
Barfod from July 7th to the 24th lay at anchor in the sound about iîve
miles distant. At the latter date she was berthed at No. 3 dock of the
respondent, taking the place of the "Telefone," which had been trans-
ferred to St. Simons, a neighboring port. It is évident that the Barfod
was placed in this berth in her turn, and in view of ail the facts, as soon
as practicable.
By the terms of the charter, the charterer was entitled to notice
three clear working days before it was required to deliver cargo. The
requisite notice was given on July 29th, but ballast was not com-
pletely removed and the ship ready for cargO' until 6 p. m., July 30th.
This appears from the testimony of the master. Since notice given at
this hour would hâve reached the charterer on the following day, lay
days for the delivery of cargo would hâve begun August 4th, and on
that day one-third of the cargo was actually delivered to the bark.
The stowing, however, did not begin until August loth. On August
30th ail of the cargo had been delivered alongside, and on September
3d ail had been stowed. Excluding Sundays, the iith and I3th, which
were stormy, and a légal holiday, the cargo was delivered and stowed
within 23 weather working days. Since by the terms of the charter it
must hâve been stowed in 21 days there were only 2 days of delay in
this respect. This also is plainly ascribable to the strike. Indeed,
the master testified, "I suppose the vessel was loaded as rapidly as the
stevedore could considering the delay in lack of men and cutting and
trimming timber;" and the stevedore testifies that this "cutting and
trimming" is necessary with ail cargoes of lumber.
The bark cleared on September sth. On the loth she was dropped
down into the sound by the tug Passport, and on the I3th was carried
across the bar and to sea by the tug Iris. The strike did not involve
the tugboats, and the delay in getting to sea is ascribed by the re-
spondent to the prevalence of stormy weather.
There can be no doubt that most of the delay experienced by the
Barfod was ascribable to the strike. In addition to the passage from
the charter party already quoted, by which it is plain it was agreed that
a strike would avoid damages for détention occasioned thereby, para-
graph 6 provides : "In the computation of the days allowed for de-
livering the cargo to the ship at port of loading shall be excluded any
time lost by reason of strikes." Since the charterer was under obli-
gation not only to deliver the cargo which at Sapelo is donc afloat and
alongside by means of rafts guided by towboats, but to stow it also,
delivery, in the sensé of the charter party, must be construed to im-
port delivery stowed. It is contended by the learned proctor for the
libelant that this clause does not exonerate the respondent, for that
it does not relate to delay in berthing the ship. This is by no means
clear. The exonerating language seems to relate to the entire voyage
140. 125 .FBD|]BAIi EEPORTEK.
for which the Barfod was chartered, but if it were otherwise the delay
in placing the vessel in her berth would hâve been damnum absque
injuria, for it would hâve been wholly idle to berth the vessel when on
account of the strike the charterer could not hâve beguh to deliver or
stow the cargo. So the Barfod would hâve been in no better plight
at the wharf bhan she was when lying at anchorage. In either case
there would hâve been a delay of 15 or 17 days directly chargeable to
the strike.
The loading having been completed, the master of the Barfod signed
the bills of lading, accepted the customary gratuity from the shipper,
and cleared at the custom house on the 5th of September. It was now
the duty of the respondent to tow the Barfod to sea at the earliest
practicable hour. This was especially true in view of the long, but as
we hâve seen unavoidable, delay occasioned by the strike. The bark
was, however, not carried across Julington bar until the loth of Sep-
tember, and not until the I3th was she towed over the outer bar.
Stormy weather and heavy winds, it is alleged, occasioned this delay.
It is unquestionably true that the weather which usually prevails on
the Atlantic coast of the Southern states at this season is not favorable
to sailing vessels in similar plight with the Barfod. It is the season
of violent storms, sometimes termed the "equinoctial." One witness,
a pilot, testified that there was bad weather from the ist to the loth
of September, and that it wasldangerous to take a vessel out. From
the logbook of one of the tugs the following entries were abstracted :
"September 4th. Wind WoWlûg hard from E. N. B. At 5 p. m. we hove
onr anchor np, and run up to Jùlington for a harbor. Wind blowing strong
from the E. N. E, Barometer 29.9."
"September 5th. At S p. m. the wind beg'an to Increase, and the barometer
f ell one-tenth."
"September Bth. Wlndi blowing very strong from east, and the barometer
falllng, we taken the large hawser frpm below and made it fast to thé piling
ashore and hove tant on It to help anohor. Received word from the Dandy
(another tiig) that storm 'sigûals were lip. Made everything seeure. Barome-
ter 29.6." '
The log of the Barfod also shows that on the 5th there was a gale.
From the 5th tô the 8th of' September the testimony of the pilot and
the logbook of thé Timmons snpw that it would hâve been dangerous
to hâve attempted to carry the Barfod, a vessel drawing 21 feet, across
the bars. But on the 8th the weather seems to haye moderated, and
there appears tO Rave been no.reason for further delay in carrying the
Barfod to sea and in startirig lier on her homeward voyage. Sapelo is
an arm of the océan, and 'lis bar one of the best on the. Atlantic coast,
having 24 feèt pf w^ter at liigh tide. It takes two days in that port to
carry a vessel ôî the draught of the Barfod over both bars and to sea.
She could easily hâve been given her offing on the gth, and we think,
therefore, that the Actieselskabet Barfod is entitled to a decree for
damages in the nature of demurrage from that date until the i3th,
when she was carried to sea, namely, four days, which at the stipulated
rate willaraountto $280. .
While we hâve some dbùbt as to the apportionment of costs, since
ail the witnesses for the respondent are employés of the Hilton &
Dodge Lumber Company or officially connected with it, and since the
FEEGTJSON V. PROVIDENCE WASHINGTON INS. CD. 141
Norwegian sailors who hâve their ail invested in their one ship, the
Barfod, were in no sensé responsible for the strike, and yet if charged
with any part of the cost would reçoive no compensation whatever for
the great hardship and loss they hâve actually experienced, and since
there was but one witness sworn for the libelant and many witnesses
for the respondent, whose claims can be readily adjusted by the re-
spondent company at a minimum of outlay, it is believed on the whole,
in accordance with the sounder principles of justice, to charge the
respondent with the entire costs.
Decree will be taken in accordance with thèse views.
FEEGTJSON v. PROVIDENCE WASHINGTON INS. CD.
(District Court, S. D. New York. October 2, 1903.)
1. Marine Insurakce— Construction of Policy— Insurance against Liabil-
ITT op TuG FOR Collision ou Stranding.
A marine policy insured the owner of a tug against "loss and damage
arising from or growing ont of any accident caused by collision or strand-
ing resulting from any cause whatever to any other vessel or vessels
• * * for which said steamer or its owners may be legally liable."
The tug found a scow adrift in the harbor In the night, and towed her
to a slip, where she soon after sank at her mooring place. The master
of the tug, although having knowledge of the sinking, took no steps to
mark the place, and the scow was struck by other vessels entering the
slip, and injured so that she became a total loss, and the tug was sub-
Jected to liability therefor. E«U, that it was immaterial to the liability
of the insurer under the policy whether the loss or damage to which the
tug was subjected arose out of a towage or a salvage service, or that
it was occasioned by the négligence of the master after the service had
terminated, since the tug was adjudged liable therefor, and that the loss
was within the terms of the policy.
In Admiralty. Action on policy of marine Insurance.
Wing, Putnam & BurHngham, for libelant.
James J. Macklin, for respondent.
HOIyT, District Judge. This is an action on a policy of marine
Insurance. The Providence Washington Insurance Company, the
respondent, by a policy dated May 19, 1894, insured William E.
Ferguson, the libelant, the owner of the tug Governor, in the sum of
$5,000, for one year, against "such loss or damage as the tug Governor
may become legally liable for from any accident caused by collision or
stranding." The policy, in a later section, stated the contract more
particularly as foUows :
"This insurance is to fully indemnify the assured for loss and damage aris-
ing from or growing out of any accident caused by collision or stranding
resulting from any cause whatever to any other vessel or vessels, • * •
for which said steamer or Its owners may be legally liable."
On a night in February, 1895, the tug Governor found the scow
Peerless adrift in the harbor, and towed her to a slip between Seven-
teenth and Eighteenth streets, and moored her there. The scow shortly
after sunk at her mooring place, and the master of the Governor,
142 125 FEDKB4I" EEPOETHB.
kqowing t%t she was stink, placed no buoy over her, and did nothing
to give any notice to other vessels that she was sunk there. There-
after other vessels coming into the slip ran upon the sunken scow,
and injured her so badly that she was a total loss. The owner of the
scow sued the tug Governor in this court, and recovered, judgment
against her for damages on the ground that the master of the Governor
was bound, after having towed her to the place where she sunk, to
takp reasonable measures to give notice of her situation, so as to pre-
vent her from being injured by other vessels while submerged, until
her owners could hâve notice and take proper steps to s.ave her.
Serviss v. Ferguson, 28 C. C. A. 327, 84 Fed. 202. The libelant, as
owner of the tug Governor, having paid the judgment, brings this suit
for reimbursement.
The substantial défense urged in this case is that this was an Insur-
ance against collisions or accidents pccurring while engaged in the
business of towage ; that the service rendered by the tug to the scow
was a salvage service ; that the service, whether towage or salvage,
terminated before the collision; and that the négligence of the master
of the tug, for which the tug was held liable, was négligence of the
master after the tug's service had ended. The application for this
policy of insurance described the policy wanted as one covering a
tower's liability, and the policy cônfîned the insurance to the tug while
engaged in the waters of New York Harbor and its vicinity; but the
policy issued is the instrument which. fixes the terms of the contract,
and there is nothing in the policy which confines the indemnity to a
collision Of accident occùrring while the tug was engaged in strictly
towage service. Towage service is often distinguished from salvage
service by the fact that the former is aid rendered in the movement of
vessels not in distress, while salvage service is confined to aid rendered
to those in distress ; but I think that no such distinction was intended
by the parties to the contract contained in the policy. It was the in-
tention of Ferguson, the owner of the tug, to obtain, and of the insur-
ance Company to confer, by insurance, indemnity against any liability
to which the tug might be subjected by reason of any coUison or acci-
dent to any other vessel, and I do not think the liability is afïected at
ail by the question whether the tug was engaged in towage or salvage
service. If there were any ambiguity in the policy, it would be the
duty of the court, in construing it, to adopt the interprétation most
favorable to the assured. Indemnity Co. v. Dorgan, 7 C. C. A. 581,
58 Fed. 956; National Batik v. Ins. Co., 95 U. S. 673, 24 L. Ed. 563;
Thompson v. Phénix Ins. Co., 136 U. S. 287, 10 Sup. Ct. 1019, 34
L,. Ed. 408; American S. S. Co. v. Indemnity Co. (D. C.) 108 Fed. 421.
But I do not see any ambiguity in this policy. It insures against "ail
loss and damage arising from or growing dut of any accident caused
by collision or stranding resulting from any cause whatever to any
other vessel." Nor dO I think that there is anything in the point that
the master's négligence was his individual négligence, after the tug's
service was finished. The fact that the court held the tug liable for
the master's négligence in not placing a buoy over the sunken scow
shows that the court considered that the négligence was négligence of
the master for which the tttg was hable. A tugboat's responsibility
IN BE XEWia. 113
3oes noï en3 witH tHe actual towing. There are varîous cases holding
that a tug is responsible for injuries to a tow after it has been left
by the tug, if left in an unsafe place. Connolly v. Ross (D. C.) ii Fed.
342; Cokeley v. The Snap (D. C.) 24 Fed. 504; The Thomas Purcell,
Jr., 34 C. C. A, 419, 92 Fed. 406.
My conclusion is that there should be a decree for the libelant for
the amount demanded in the libel, unless the respondent desires to
contest the amount due, in which case the usual référence will be or-
dered.
BASTBEN MILLING & EXPOBT CO. OF NEW JERSET T. EASTERN
MILLING & EXPORT CO. OP PENNSYLVANIA.
(CHrcuit Court, B. D. Pennsylvanla. September 21, 1903.)
No. 37.
L MOBTOAGES— KiGHT OP MORTGAOEB TO lUSDRANCE.
A mortgagee is entitled to tUe proceeda of Insurance effected by the
mortgagor, where a contractual obligation exifits requiring the mortgagor
to Insure for the mortgagee's benefit.
John Stokes Adams, for petitioner.
Burr, Brown & Ivloyd, for respondent
DALLAS, Circuit Judge. The answer of the receîvers ïo the péti-
tion of the Union Trust Company, filed September 10, 1903, in sub-
stance admits that the insurance in question was efïected for the pur-
pose set up in the pétition, and that an obligation of a contractual na-
ture existed requiring said insurance to be made for the benefît of the
petitioner. Upon thèse facts I am of opinion that the petitioner is
entitled to the relief prayed (Farmers' Loan & Trust Co. v. Penn
Plate Glass Ce, 186 U. S. 444, 22 Sup. Ct. 842, 46 L. Ed. 1234), and
accordingly an order may be prepared and submitted granting the
praj;er of the pétition.
In re LEWIS.
(District Court, E. D. Pennsylvania. October 6, 1903.J
No. 1,567.
L Balbs— Rescission bt Sblleb— Falsb Représentations.
It is the settled law In Pennsylvanla that the Insolvency of a pur-
chaser of goods, and his knowledge of It •when he made the purchase,
not communicated to the seller, are not alone sufflcient to Invalidate the
sale or to entltle the seller to rescind after delivery of the goods, but, to
avold the sale, there must hâve been, In addition, conduet whlch reason-
ably Involves a false représentation. Under such rule, a promise by the
Insolvent purchaser to pay cash for the goods on completion of delivery,
and a breach of such promise, does not entitle the seller to rescind. Such
a promise is Implied In every sale, unless other terms of payment are
agreed upon, and expressing It in words does not so change the transac-
tion as to render It fraudulent
In Bankruptcx. On certificatc of référée upon getition of .William
S. Driver.
14A 125 FBDEiBAIi BBpOBTEB.
Robert J. Byron, for trustée.
Isaac D. Yocum, for creditor.
J. B. McPHERSON, District Judge. Whatever may be the rule
in other jurisdictions, it bas for 50 years been settled law in Pennsyl-
yania that'"the intention of the buyer of goods, at the time of purchas-
ing them, not to pay, together with his insolvency atthe time, and his
knowledge of it, not cdmmunicated to the seller, will not avoid the sale
after the delivery of the property sold. To avoid the sale, there must
be artifice intended and fitted to deceive, practiced upon the vendor
in procuring the property." This was decided in Smith v. Smith, 21
Pa. 367, and, while the ruling was criticised and t-egretted in Bughman
V. Bank, 159 Pa. 94, 28 Atl. 209, it was expressly foUowed, on the
ground that it would not be wise to unsettle the law by another change.
The court said :
"We will therefore stand on the ftuthority of, Smith v. Smith and Its kindred
cases, but we will not go a step beyond what they requlre. Any additional
eircumstance, whlch tends to show trick, artifice, false représentation, or, in
the language of Smith v. Smith Itself, •conduct which reasonably involves
a false représentation,' will be sufiScient to take the case out of the rule of
thèse authoritles."
And in the somewhat later case of Cincinnati Cooperage Co. v.
Gaul, 170 Pa. S4S, 32 Atl. 1093, the court pronounced as follows :
"It Is well settled in Pennsylvania that the Insolvency of the purchaser,
and his knowledge of it when he made the purchase, are not alone sufficient
to Invalldate the sale, or to support ah action by the seller in rescission of
It. But they are évidence to go to the jury, with other facts, to show the
Intended fraud. Rodman v. Thalheimer, 75 Pa. 232. It is essential to the
Impeachment of the sale as fr?iudulent, that there should be artifice, trick,
ai|d false prêteuse intended and fltted to deceive the vendor, and operative
In obtalning from him possession of his property (citing cases). But the
insolveney of the purchaser, and his knowledge of It, coupled with a repré-
sentation of solvency, which Induced the seller to part with the possession of
his property, wiU hâve that efifect, and enable the latter to recover possession
of it by a suit in rescission of the sale."
See, also, Diller v. Nelson, 10 Pa. Super. Ct. 449.
This being the law of Pennsylvania, the remaining inquiry is whether
any additional eircumstance, of the character above described, appears
in the présent case. The facts are, briefly, thèse: The bankrupt,
who was certainly insolvent at the time when he purchased the peti-
tioner's goods, and as certainly had knowledge of it, promised to pay
cash upon completion of the order; that is, upon delivery of ail the
goods that he was buying. There was no représentation of solvency,.
and, indeed, no représentation of any kind; merely the promise to
pay cash on completion of the order. The petitioner stopped deliver-
ing the goods before the order was completed, and it is argued that
the default of the bankrupt bas not been shown, for the time of pay-
ment under the contract bas not yet arrived. But, even if the argu-
ment is valid, I prefer not to put the décision upon that ground. It
should rather rest, I think, upon the proposition that a promise by an
insolvent manto pay cash upon delivery of. goods does not make the
rule of Smith v. Smith inapplicable, and the breach of the promise
THE KAISERINE MABIA THERESIA. 145
docs not entitle the seller to rescind the contract and recover the
goods. Such a promise is made no stronger by being expressed. It
is implied in every sale, unless différent terms of payment are agreed
upon; and, therefore, merely to speak aloud or to write the same
words that the law would otherwise make part of the contract cannot,
as it seems to me, so change the transaction as to make it fraudulent.
It is conceded that, if the promise had not been spoken, the purchase
would hâve been within the rule of Smith v. Smith, and, in my opinion,
speaking the promise did not change its character. It remained a
promise, and did not become a false représentation, such as is referred
to in Bughman v. Bank. Even an insolvent man might, under some
circurastances, reasonably expect to be able to fulfiU such a promise
when the time should arrive, and it would be very difïicult in any case
where the promise might be made to pronounce with confidence that
the words amounted to "trick, artifice, false représentation, or conduct
which reasonably involved a false représentation."
The décision of the référée is affirmed.
THE KAISEKINE MAEIA THERESIA.
(District Court, S. D. New York. October 5, 1903.)
L COIiMBION— SCHOONBB OvBRTAKEN BT StBAMSHIP— FaiLDRB TO ExHrBIT
Stbkn Liobt.
Article 10 of the international navigation raies (Act Aug. 19, 1890, c.
802, 8 1, 26 Stat. 320 [U. S. Comp. St. 1901, p. 2866]), which requlres a
vessel which is being overtaken by another to show from her stern a
whlte light or flare-up llght, applles to a schooner which is being over-
taken by a steam vessel, and she is m fault for a collision resultlng
from her fallure to observe It.
S. Samb — Reuovai. dp Lookocts feom Stations— Dutt to Rkduce Speed.
It was the duty of a steamshlp which was compelled, by the coldness
of the weather and the freezlng of the spray, to remove her lookouts
from thelr proper places forward to the bridge, to reduce speed so that
she could reverse in tlme to avoid collision with a vessel ahead after
Buch vessel could be seen; and where she continued at full speed she was
in fault for a collision with a schooner which she overtook, although the
latter was primarily In fault for exhlbltlng no stern light, where she
could hâve been seen in time to hâve avolded the collision it the lookouts
had not been removed from their proper stations.
In Admiralty. Suit for collision.
Carver & Blodgett and Convers & Kirlin, for libellants.
Shipman, Larocque & Choate, for claimant.
ADAMS, District Judge. This is a libel which was filed by the
oflScers and crew of the British schooner Pavia, to recover the damages
caused by a collision with the steamship Kaiserine Maria Theresia, on
the Atlantic Océan in the early morning of the 4th of January, 1901.
The schooner was proceeding from Port Morion, Cape Breton, to
Boston, loaded with frozen fish, and the steamship from Cherbourg,
France, to New York, with passengers and a gênerai cargo. There
was a strong wind prevailing, practically a gale, from the north-west.
The weather was clear but extremely cold. The schooner was headed
125 F.— 10
146 12S f BDâ&AC BBFOBTBB. ^ '
ab6ti»*Wésti sotltK-west and the ètéatnshîp about west^ nortK. The
schoônef^s side lights were set and burniiig but could not be seen
frottl the steamship, which was approaching from astefri.
The schooner contends that the steamship was solely in fault for the
collision because she had no Idokouts properly stationed, and the
steamship contends that the schooner was solely in fault beCause she
did not exhibit a light as required by article lo, International Rules
(Act Aug. 19, 1890, c. 802, § 1, 26 Stat. 320 [U. S. Comp. St. 1901, p.
2866]), which provides:
"À vessel which Is being overtaken by another shall show from her stem
tô euch last mentloned vessel a whlte Ught or a flare-up llght."
The steàmship's contention against the schooner must be sustained.
The schooner had np white light set astern, and failed to properly ex-
hibit a flare-up light. She had a torch aboard but it was. not in condi-
tion for iise for lack of oil, so that when it was lighted and attempts
made, on two occasions, to exhibit it to the steamship it quickly went
out and, in efïect, she exhibited no light astern.
The real question in the case is whether the steamship should also
be held. Her lookouts were stationed on the bridge instead of for-
ward or in the crow's nest on the f oremast. The testimony shows that
the coldness of the weather had caused the spray, which flew aboard
the steamship, to freeze on the forward part of the vessel including the
foremast, so that the removal of the lookouts to the bridge was justi-
fîed by the circumstances, but it remains to be determined whether the
continuànce of the steamship at full speed of from 15 to 17 knots was
excusable. I do not consider that it was. The upper parts of the
schooner's masts could be seen above the horizon without regard to a
light astêrri and were seen by the ofificers and men stationed on the
bridge but not until the vessels were in such close proximity that it
was deenied 1?est on the steamship not to stop but to endeavor to avoid
the schooner by use of the helm and one of the engines. If the
steâmsHip had been procèeding at a slower rate of speed, the collision
coùld dpubtiess hâve l?^éi(i avoided by the reversai of her engines.
The reruQyal of the lookouts from the best positions for seeing ahead
imposed a duty upon the steamship to slacken her speed, so that she
would be ùnder commahd aiiid' tûuld feverse in time to avoid a collision
with a sailing vessel aheâd oî her, which could be seen without a light
exhibited astern. Full speed under the circumstances was inconsistent
with the duty pf the steamship to stop if there should be danger and
there was danger hère, wbich dovibtless could hâve beêni seen in time
to avoid if the lookouts had not beën removed from their proper sta-
tions. Thêir remoVal^néeessitatéd the précaution of reducing speed.
The Java„:ï44 Blatch. 524,-530; Fed. Cas. No. 7,233. The conclusion
"reached is'baséd upon: the steàmship's testimony; therefore this case
does not faU;rwithin The Iberia (D. C.) 117 Fed. 718; Id. (C. C. A.)
123 Fed. 865. ; 7
Decree for the libellants for haU damages, with an order of réf-
érence. 17
M'OULLOOH V. MUKPHT. U7
McCTJLIiOCH V. MTJRPHY et al.
(Circuit Court, D. Nevada. September 26, 1903.)
No. 751.
1. Mining Claims— Location bt Agent— Validitt.
There is no provision of law prohibiting the location of a mining clalm
or the doing of any of the acts required to complète the appropriation
by an agent, and the fact that the locator aeted by agent in sueh matters
does not invalidate the location.
2. SaME— ASSESSMENT WORK— EVIDENCE.
The object of the statutory provision requiring annual assessment worli
on mining claims Is to give substantial évidence of the locator's good
faith, and the law should be Uberally construed vylth that end in view;
a compliance vrith the statute may be proved by any évidence which
establishes that the work done and improvements made are reasonably
■worth the sum of $100.
3. Same — Epfect of Recobding Statute.
The Nevada statute (St. 1887, p. 136, c. 143), providing for the record-
ing of évidence of the doing of the annual assessment work on mining
claims, is designed merely to préserve such évidence, and the failure to
record the prescribed afBdavIt does not preclude the owner of a claim
from making the necessary proof of work by any other évidence; nor is
the record proof, If made, conclusive.
4. Same— PoRPBiTDRK— BuKDBN AND Measure of Proop.
The burden of provlng an abandonment of a mining clalm, or that the
required annual assessment vrork bas not been done, so as to render it
subject to relocation, rests on the party asserting it, and the proof must
be clear and convlnclng to establish a forfeltttre.
5. Same— Assessment Work— Evidence Considerkd.
Evidence considered, and held to establish by a prépondérance of proof
the validity of a mining location by défendants, and that the required as-
sessment vfork was done in a certain year, whIch rendered vold a relo-
cation of the claim by plaintiff in the following year.
Suit to Quiet Title to Mining Claim.
Samuel Platt, for plaintiff.
J. F. Dennis, for défendants.
HAWLEY, District Judge (orally). Plaintiff, claiming to be the
owner of the Copper King mine, in the Battle Mountain mining dis-
trict, in Lander county, Nev., commenced this suit, and obtained an
injunction against défendants enjoining them from entering into or
upon any portion of said mining claim, or taking any ores or minerais
therefrom, and prayed to hâve the title to said mine quieted by a
decree. The answer dénies the material allégations of the complaint,
and allèges ov^^nership and title in themselves to the ground in contro-
versy. A mass of testimony was introduced, which covered a wide
range over minor détails, and upon thèse points there was more or
less conflict, and much confusion in the testimony, especially upon the
part of some of the witnesses introduced by the défendants.
The real and controlling question in the case is whether or not at
the time that plaintiff made his relopation of the ground in controversy
it was vacant, unoccupied minerai land, open to location and occupancy
as such. The plaintiff in his testimony made out a clear case in his
favor. He testified that in the year 1882 he was engaged in prospect-
148 125 FEDERAL REPORTEE,
ing in the Battle Mountain mining district as a miner ; that he located
the ground in dispute and worked upon the same within the bounda-
ries of the ground now known as the "Copper King Mine"; that
he, and others in his employ, dug a eut 53 feet long, ran an indine,
and dug other cuts ; that he then left the ground, and abandoned it ;
that in September, 1902, he returned to said mining district, and visited
the ground in dispute, with a view of locating the ground upon which
he had worked 20 years before ; that he examined the place, and found
but little work in addition to what he had done thereon in 1882; that
he made inquiries and examined the mining records of the district, and
became satisfied that the ground had been abandoned, and was vacant,
and that thé locations made thereon had been forfeited from lack of
discovery and assessment work ; that he located the ground on the 22d
of September, 1902, as the Copper King mining claim. His notice
of location, which contained a description of the ground by metes
and bounds, was recorded in the mining records of the district Decem-
ber 4, i^02. His testimony showed that under this location he had
taken ail the steps required by law by posting his notice, building
monuments, and performing discovery and assessment work thereon,
etc. He introdiiced in évidence a certificate of the district recorder,
which reads as follows:
"The Copper Glance mining claim was located on the 19th day of September,
1900. Eecorded on 23rd day of October, 1900. The record does not show as-
sessment work f pr the year 1901 on the Copper Glance mining claim. I hereby
certify that the above is correct and true.
"C. F. Mellander, District Kecorder."
W. W. Coleman, a surveyor and mining engineer, was introduced,
and produced a map of the ground, designating the lines and bounda-
ries thereof, and the places where excavations, drifts, tunnels, inclines,
and cuts had been made, and giving in détail, the character and dimen-
sions thereof, and was permitted as an expert to give his opinion as to
the âge of such excavations, and gave it "at aboutten years." Among
other points, he testified to the existence of an open eut 53 feet long,
"from the entry or where, it commences at the slope of the hill to the
face of the. cut'or 'the eiitry of the tunnel. * * * The tunnel is.
twenty feet six inches long from the entry to the face, approximately
six feet in liéight, four feet in width at the base. * * * The phys-
ical condition of the eut i$ apparently the same as the other workings
I hâve describèd. The tunnel jtself seems to be of récent construction,
and the eut haâ ifàved SOmewhat oh the sides above the rock through
which the eut has been exeavated. There is disintegrated material
that has caved down'in, and there are bushes growing up through the
waste rnateriàl that hàs been thrown ont apparently in running this
eut. They hâve dug a trench, and thrown the waste material out, and
the bushes hàvé grown out from that as thèy hâve through the other
workings déscribed." He furthertestiftéd that the âge of the eut
would be abbut 10 years; that thére is a strong contrast between the
âges of the tiirinèl proper and'thè eut — a decided différence. The eut
is apparently mucholder than the tunnel itself.
The défendants claim title to the ground under locations made by or
for them (i) to the Copper Glance, located by Cornélius Murphy on
MUKPHT. 149
the igth day of September, 1900, and notice of location thereof record-
ed October 13, 1900; (2) to a relocation of the ground under the name
of Defender, made by H. R. Lemaire on August 9, 1901, and recorded
November 22, 1901.
It is admitted by plaintif? that the boundary lines of the Copper King
and the Copper Glance are substantially identical. It is suggested by
plaintifif that the Copper Glance claim was never properly located,
and that there is a variance between the allégations of the complaint
and the proofs in this: that it appears from the complaint that the
location was made by one Cornélius Murphy, and the proofs show that
M. J. Murphy was the original discoverer of the Iode, and that the
location was made by Cornélius Murphy as an agent. The testimony
of défendants upon this point is to the efifect that it was agreed by the
parties interested in the location what their interests should be, and
that the claim should be located for them by Cornehus Murphy.
There is nothing in the mining laws that prohibits one from initiating
a location of a mining claim by an agent. It is not necessary that a
party should personally act in taking up a mining claim, or in doing
the acts required to give évidence of the appropriation, or to perfect
the appropriation. The suggestions made by counsel do not, in any
manner, afïect the validity of the Copper Glance claim. i Lindley on
Mines (2d Ed.) § 331, and authorities there cited.
The object of the law in requiring annual assessment work to the
extent of $100 on the claim is that the owner shall give substantial évi-
dence of his good faith. A libéral construction must be given to the
requirements of the law. The labor and improvements, within the
meaning of the statute, should be deemed to he donc when the labor
is performed or improvements made, for the purpose of working,
prospecting or developing the mining ground embraced in the loca-
tion, or for the purpose of facilitating the extraction or removal of
the ore therefrom. St. Louis Smelting & Refining Co. v. Kemp, 104
U. S. 636, 655, 26 L. Ed. 875 ; Book v. Justice M. Co. (C. C.) 58 Fed.
106, 117, and authorities there cited.
The method of proof usually required to establish the fact that the
amount of labor for the annual assessment has been donc is not uni-
form. Mère proof of the expenditure of l$ioo is not, of itself, suf-
ficient, but ît furnishes an élément tending strongly to estabhsh the
good faith of the owner. One of the main tests of determining this
question is not what was paid for it, or the contract price, but whether
or not the labor, work, and improvements "were reasonably worth
the said sum of one hundred dollars." In addition to cases before
cited, see Mattingly v. Lewisohn, 13 Mont. 508, 520, 35 Pac. m;
Penn v. Oldhauber, 24 Mont. 287, 291, 61 Pac. 649 ; Quimby v. Boyd,
8 Colo. 194, 208, 6 Pac. 462; Wright v. Killian, 132 Cal. 56, 64
Pac. 98.
The testimony concerning the amount of labor performed furnished
a wide field of controversy, and an opportunity for a broad différence
of opinion as to the value of the work. There is always a conflict
as to the actual or reasonable value of the labor. It has been said —
and a wide expérience in such cases has convinced the court of its
truth — that every relocator is interested in depreciating the value of
150 125 FBDBBAI. BBFOBTBR.
the work performed by the original locator, and the îatter in saving
his daim from forfeiture is interested in extolling his wprk. The
case in hand certainly forms no exception to this gênerai rule. In
cases oi a conflict upon this point, it is always proper to consider
whether there has been a bona fide attempt to cpmply with the law.
The certificate of the district mining recorder that the records do not
show assessment work for the year 1901 on the Copper Glance mining
claim is at best only prima facie évidence of the fact, subject to be
rebutted. by oral or other testimony. No penalty is attached to the
failure of having the record show that the work was done. There is
no provision in any of the statutes bearing upon this subject which
déclares that;such a failure to hayç the proper certificate recorded will
work a forfeiture of the daim.
In Book V. Justice M, Ço., supra, the court, referring to the statute
of Nevada (St. 1887, p. 136, c. i43),;said :
"The object of this act was eyidently to flx some deflnlte way In which
the proof as to the performance of the work or expenses Incurred In the
making of improvements mtght be, In many cases, more accessible. In ail
mining communlties there Is liable to be some difiBculty lu flnding the men
who actually performed the labor or made the improvements, and procuring
their testimony, in order to establish the facts necessary to show a compliance
with the mining laws;in this respect. The apt was passed, as expressed in
the title, 'foif the bettër préservation of titles to mining clalms.' Locators of
mining daims would doubtléss often save mnch tlme and trouble, as well as
hardship, inconvenlenee, and expensie, by complying with the provisions of
this act; but the act does not prevent, and was not Intended to prohibit, the
owner of a mining claim from making the necessary proof in any other man-
ner, nor does it prohibit the contestlng party from contradlcting the facts
stated in the affldavlt. It slmply makës thé record prima facie évidence of
the facts thereln stated."
It is perhaps safe to say that if tHe défendants in the présent case
had filed their alfidavits in the district recorder's office, as required by
the statute of this state, no relocation would hâve been made by the
plaintiff.
The law does not favor forfeitures. The penalty for failure to com-
ply with the law is thus expressed in section 2324, Rey. St. [U. S.
Comp. St. 1901, p. 1426] : "Upon a failure to comply with thèse con-
ditions, the claim or mine upon which such failure occurred shall be
open to relocation in the same manner as if no location of the same
had ever been made." The word "forfeiture" is not used in the stat-
ute, although it is a comprehensive word to express results which
flow from a failure to comply with the law. The rule is well settled
that the forfeiture cannot be established except upon clear and con-
vincing proof of the failure of the original locator to hâve work per-
formed or iniprovements made to the amount required by law. The
burden of proof to establish a forfeiture rests upon him who asserts it.
Hammer v. Garfield M. & M. Co., 130 U. S. 291, 301, 9 Sup. Ct. 548,
32 ly. Ed. 964 ; Book v. Justice M. Co., supra ; Justice M. Co. v. Bar-
clay (C. C.) 82 Fed. 554, 559; Emerson v. McWhirter, 133 Cal. 510,
65 Pac. 1036; Axion M. Co. v. White, 10 S. D. 198, 201, 72 N. W.
462. The law is well settled that actual possession of a mining claim
is not essential to the validity of a title obtained by a valid location;
that until such location is terminated by abandonment or forfeiture
m'CXJLLOCH V. MUEPHT. 151
no right or daim to the property can be acquired by an adverse entry
thereon with a view to the relocation thereof. Belk v. Meagher, 104
U. S. 279, 283, 284, 26 L. Ed. 735.
The légal principles herein announced are elementary, and I hâve
not deemed it necessary to elaborate them, or take the pains to cite
ail the authorities. They are abundant. Keeping in mind the settled
rules of law as to posting notices, the placing of stakes, building monu-
ments, replacing or moving them, the discovery of minerai, and the
liberality of the construction to be given to thèse acts of the rainer,
as announced in Book v. Justice M. Co., supra, and supplemented by
the authorities cited upon thèse subjects in Walton v. Wild Goose
M. & T. Co. (C. C. A.) 123 Fed. 209, 218, I hâve no hésitation in say-
ing that the Copper Glance was a valid location, and that ail the steps
required by law to be performed thereon were complied with in the
year 1900. The whole case résolves itself into the question whether
the annual assessment work was donc by the défendants during the
year 1901. It is argued by plaintifï that the testimony on behalf of
the défendants was given in such a manner as to raise a doubt and
uncertainty touching the main question, and that as given it is entitled
to but little, if any, weight. The confusion of the principal witness
upon the part of the défendants on this point suggests the only doubt
that arises in the case. He was possessed of ordinary intelligence, and
seemed capable of giving his testimony in a proper manner, but he be-
came enibarrassed, bewildered, and could not be confîned by the court
or counsel to a mère statement of the facts as they occurred. He
was disturbed by questions asking him to explain his testimony by
the map made on behalf of plaintiff of the ground, which he did not
understand, and made mistakes in answering them, much to the cha-
grin of his counsel, and at times lost his bearings upon many of the
essential points. It was a case of dumb confusion worse confounded
by the surroundings of the trial. It seemed to be impossible for him
to make any connected statement concerning any j^articular subject
without wandering ofif upon irrelevant matters. The court at divers
times attempted to assist the witness, and get him to state the facts in
his own way, and confine himself to his own knowledge of what ac-
tually occurred ; but ail efîforts in this direction for a day or two, at
least, proved as fruitless as the efforts made in that direction by coun-
sel. A référence to one statement made by the court, as shown by the
record, as to where the stakes and monuments were placed, illustrâtes
the whole difïîculty which arose from his testimony upon ail the points
involved at the trial, namely: "We are having difïïculty apparently
in getting at the facts ail around. The witness is not spécifie enough ;
he jumps from one corner to the other, and in a way that is difïicult
to understand." After vain efiforts to testify from the map, he pro-
duced a little timebook, wherein he had kept the time of himself and
employés, from which he testified that, in 1901, he, his brother Con,
Fred Barnes, and one Uren performed 60 days' labor upon the Cop-
per Glance mine in cleaning out an open eut and running' a tunnel.
There was some conflict as to whether the open eut was the same as
that testiiîed to by plaintifï as having been made by him in 1882, some
of the witnesses for défendants statîng that it was not; but, for the
152 125 PEDBRAIj EBPOBTEK.
purpose of this opinion, it will be conceded that it was ; but there was
no pretense that the tunnel part was constructed by the plaintiff.
This tunnel, as testified to by défendants' witnesses, was 24 feet in
length from the open face, 4 feet wide, and 6 feet deep. The witness
Murphy testified that the ground was in hard rock, and that a man
might drive 6 or 8 inches of the tunnel in a day, and in some places
might make a foot per day ; that the men worked 8 hours a day, and
the employés were paid regular miners' wages. In justice to this wit-
ness, whose testimony I hâve criticised, it is proper to state that he
impressed me as desiring to tell the truth, and was always willing to
explain his testimony, and admitted that he had net understood the
questions, and had made mistakes or was misunderstood by the court
and counsel. His greatest fault was in not confining himself spe-
cifically to the questions asked as to the month; and year when, and
place where, the annual assessment work was done. For this reason
I hâve confined myself to a gênerai statement gleaned from his whole
testimony, and hâve con^ned myself to the year 1901. Dui-ing the
course of his testimony he testified that the Defender and Copper
Glance run parallel :
"Q. Now, Mr. Murphy, Is this work upon the Oopper Klng mine, designated
by the red figures 1, 2, 3, 4, 5, 6, 7, and 8 upon plalntifC's map, is not that work
performed substantjally upon the Copper Glance mining elaimî A. Yes, sir.
Q. Is It not ail withln the boundaries of what you claim to be the Copper
Glance mining Claim? A. Tes, sir. Q. Is there any portion of the work per-
formed and represented upon that map upon the Defender mining claim? A.
No, sir. Q. Who performed the location work upon the Copper Glance mining
claim In the year 1900? A. I did. Q. You did personally? A. Mr. Holcomb
and Mr. Barnes and I; I employed Mr. Barnes."
His attention was then called to plaintifif's map, and he was asked
where the work was performed at the incline:
"A, Twenty-four or twenty-five feet from the top of this incline there Is a
eut runnlng east and west. • * ♦ Q. Upon the incline? A. Yes, sir; in
the Incline. Q. In the Incline you made a eut? A. Yes, sir. Q. How long
was that eut? A. The west eut is about flve or six feet, and the other prob-
ably about four feet— four or flve feet. Q. Now, Mr. Murphy, you testified in
direct examinatlon that lu the year lÔOO you and a company of others were
upon the Claim known as the Copper Glance mining claim, and cleaned out
ail the inclines, tunnels, cuts, and workings which had been performed by
somebody else? • • * Your testimony shows that you did that in the
year 1900, A. Yes, sir. * • • And also this work I described In the in-
cline. Q. That was ail done in the year 1900? A. Yes; I done ail this work
in the year 1900. * * * Q. I wish you would state when you began to do
your assessment work for the year 1901 on the Copper Glance? A. In 1901
I commenced on the 7th day of October. Q, What did you do toward the
performance of the assessment work? * • * A. We still continued the
eut; the object was to tap this éhaft. * * * Q. The assessment work that
you did Was a continuation of that eut that you hâve just been talking about?
A. Yes, sir; and the tunnel. ♦ ♦ ♦ Q. How muchof the eut which you
say that you dug as a Continuation of the original eut of eighty feet long,
how much of tliat did you côniplete In the year 1901? A. Well, it would lae
I think * * * about eighty feet, must hâve about sixty feet of tunnel
and open eut, and there is à poirtlon of thàt work that was done In the year
1902— this four feet that we speak of àdded to it. Q. YoU now testify that
sixty feet of that work was the assessment work upon the Copper Glance?
A. There was flve or six men working, ♦ • * ail worked in this eut. Q,
When you testified, Mr. Murphy, that Mr. McOuUoch was correct when he
MURPHT. 153
stated that the cuts and the Inclines were bullt about ten years ago, what
■dld you mean? A. I mean those that surrounded the incline; that Is, 1, 2,
and 3."
The attention of the witness was then called to his previous testi-
mony, that the 8o-foot eut was at the point marked "7" on plaintifï's
map:
"Q. I point out to you upon the map the red number 7, which you testified
positively was the eut upon which that work was performed. A. I testified
positively to this work on my map, known as the eighty-foot eut. Q. Then
when you testified that you performed that work— that assessment work— upon
the eut marked upon plaintifï's map as No. 7, • * * you were mlstaken?
A. I testified positively I worked hère (pointing to his own map). I don't go
on that map. I told you I didn't understand that map, and the judge ailowed
me to use this map, and I conflned myself to this map. I superintended and
oversaw ail of that work from the time the first pick was stuck until thn
year 1902. Q. How much work did you do on the Defender— how much as-
sessment work? A. Ran an open eut on the Defender, running about twenty
feet; It is twenty feet from the eut which Mr. McCuUoch put in, and it is
about twenty-three feet, with a little over ten foot face in solld ore. Q. When
did you commence that work? A. In the year 1901. Mr. Barnes worked with
me on that, too; Mr. Bames, I think, worked on that claim about fifteen days.
• * * I worked with him myself. Q. How long a eut dld you dig? A.
About twenty-three feet long."
The testimony of this witness was corroborated by other witnesses
on several of the essential points. Notwithstanding the confusion of
the principal witness for the défendants, and the confîict raised as to
the amount of assessment work donc on the Copper Glance in 190 1,
there is nothing in the évidence justifying the inference that there was
any intention on the part of the défendants to évade the law or corne
short of its requirements. It is no doubt true that the provision of
the law as to assessment work is often evaded, and locators must be
made to understand that the conditions imposed by the act of Congress
and by the statutes of Nevada are wise and salutary, are not onerous,
and must be comphed with.
As was said in Sisson v. Sommers, 24 Nev. 379, 387 :
"To enable a party to maintain a right to a mining claim after the right is
acquired, it is necessary that the party continue substantially to comply, not
only with the laws of Congress, but with the valid laws of the state and valiâ
rules established by the miners, in force in the district where the claim is
situated upon which such right dépends."
With référence to the amount of assessment work donc by the de-
fendants in the year 1901 upon the Copper Glance, which is the con-
trolHng question in this case, my conclusion is that there is a pré-
pondérance of évidence in favor of défendants that the work was done
in the manner and to the extent required by law, and that the labor
performed by them was reasonably worth the sum of $100. It there-
fore necessarily follows that the défendants had the entire year of 1902
to do the assessment work for that year, and no lawful relocation could
be made by others until January i, 1903. At the time plaintifif made
the relocation of the ground under the name of the Copper King the
owners of the Copper Glance claim had the exclusive right to the pos-
session and enjoyment of the mining ground embraced in that location.
A relocation on lands actually covered at the time by a valid and sub-
154: 125 FEDERAL REPORTEE.
sisting 'location is voîd, because the law does not allow such a thing
to bè done. Belk v. Meagher, supra; Gwillim v. Donnellan, 115 U.
S. 45. 49. S Sup. Ct. iiio, 29 L. Ed. 348; Manuel v. Wulff, 152 U. S.
505, 511, 14 Sup. Ct. 651, 38 L. Ed. 532; Del Monte M. Co. v. Last
Chance M. Co., 171 U. S. 55, 78, 18 Sup. Ct. 895, 43 L. Ed. 72.
Judgment must be entered herein in favor of défendants for their
costs.
In re SNBLL et aL
(District Court, N. D. Calllomlai September 29, 1903.)
No. 4,294.
1. Bankbuptot— L1BN8— RiGHT TO Enfoece Valid Attachment.
A creditor who obtalned a valid lien by attachment on property of a
bankrupt more than four months prlor to the bankruptcy is entltled to
prosecute the action to judgment, and a sale of the attached property
thereafter.
Edmund Tauszky, for the motion.'
Haveh & Haven, for bankrupt.
DE HAVEN, District Judge. This is a motion made by Albert
Hirschfeld for a modification of the order heretofore made staying
proceedings in an action pending in the superior court of the county
of Nevada, state of California, entitled "Albert Hirschfeld, Plaintifï, vs.
B. F. Snell and J. D. Fleming, Partners under the Firm Name of
Snell & Fleming, Défendants." It appears from the afïidavit filed in
support of the motion (and the fact is not disputed) that the moving
party, who ÏS plaintifiE in the action referred to, obtained a valid attach-
ment upon certain property of thé bankrupts more than four months
prior to the commencement of the bankruptcy proceedings. Upon
the authority of Metcalf v. Barker, 187 U. S. 165, 23 Sup. Ct. 67, 47
L. Ed. 122, and In re Beaver Coal Co., 113 Fed. 889, 51 C. C. A. 519,
it must be held that the lien of this attachment, having been obtained
more than four months prior thereto, was not aiifected by the bank-
ruptcy proceedings ; and from this it follows the plaintifï in the action
referred to should be permitted to prosecute it to judgment, and sat-
isfy the same by an exécution sale of the attached property. See,
also, in support of this conclusion, Brandenburg on Bankruptcy (3d
Ed.) § 1114.
Motion granted.
T 1. See Bankruptcy, voL 6, Cent. DIg. { 831.
WEATER V. NORTHERN PAC. RT. 00. 155
WEAVEE r. NORTHERN PAC. RY. CD. et al.
(arcult Court, D. Montana. August 17, 1903.)
No. 658.
1. Eemovai. of Causes— Sepabablb Contboverst.
An action In which the pétition charges concurrent acts of négligence
against each of two defendapts does not présent a separable controversy.
2. Bame— Motion to Remand— Issde as ToJnRisDiCTiONAL Facts.
A statement of .iurisdictional facts, such as the cltizenship of the par-
ties, in a pétition for removal, Is sufficient, prima facie, to establish such
facts for Ûie purpose of removal; but such statements may be traversed
by the plaintiff by a pleadlng in the nature of a plea in abatement, in
which case the court may receive évidence on the issue. A cause will
not be remanded, however, merely on the flling of an affldavit by plain-
tiff controverting such statements.
On Motion to Remand to State Court.
Walsh & Newman, W. C. Jones, and Robertson, Miller & Rosen-
haupt, for plaintiff.
William Wallace, Jr., for défendant Northern Pac. Ry. Co.
KNOWLES, District Judge. The questions presented for con-
sidération in this case arise upon a motion to remand the same to
the State court, from which it was removed into this court upon a
pétition, made under oath, alleging (i) that the plaintiff is a résident
and citizen of the state of Washington, and that Charles Gibson,
one of the défendants, is a résident and citizen of the state of Montana,
and that the other défendant, the Northern Pacific Railway Company,
is a corporation organized under the laws of the state of Wisconsin,
and a citizen of said state; (2) that there is a separable controversy
presented in said suit between plaintiff and the défendant Northern
Pacific Railway Company, which can be wholly determined between it
and said plaintiff, and in which said défendant Gibson is not in any
manner interested. Upon this last ground the court is able to déter-
mine, from an inspection of the complaint, as to what it contains.
Upon such examination, the court finds that this is a case where con-
current acts of négligence are charged against both défendants. Such
an action présents no separable controversy. Cuddy v. Horn (Mich.)
10 N. W. 32, 41 Am. Rep. 178; Masterson v. N. Y. Central, etc.,
R. R., 84 N. Y. 247, 38 Am. Rep. 510; Hoye v. Great Northern Ry.
Co. et al. (C. C.) 120 Fed. 712 ; Teal v. American Mining Co., et al.
(Minn.) 87 N. W. 837; Moon v. N. P. R. R. Co., 46 Minn. 106, 48
N. W. 679, 24 Am. St. Rep. 194; Consolidated Ice Mach. Co. v.
Keifer, 134 111. 481, 25 N. E. 799, 10 L. R. A. 696, 23 Am. St. Rep.
688; 2 Wood's Railway Law, 1341.
As to the other questions, the complaint does not specify the
citizenship of the plaintiff or the défendant Gibson. The pétition for
removal, however, does. Judge Dillon, in his work on Removal of
Causes from State Courts to the Fédéral Courts, lays down the ruie
ir 1. Separable controversy as ground for removal of cause to fédéral court,
see notes to Eobbins v. BUenbogen, 18 0. 0. A. 86; Mecke v. Valleytown
Minerai Ce, 35 C. G. A. 155.
156 125 FBDBEAIi BBPORTER.
that a pétition and affidavit are sufficient to bring the case, în the first
instance, before the fédéral court, and furnish presumptive évidence
of the necessary jurisdictional facts. But of course this first showing
will not be considered conclusive, and the plaintiff may traverse the
facts set forth in the pétition or affidavit for removal, and an investi-
gation be had as to the truth thereof. Short v. C, M. & St. P. Ry.
Co. (C. C.) 34 Fed. 225; Malone v, Railway Co. (C. C.) 35 Fed. 625.
Although the above-cited authorities apply to cases of removal on the
ground of local préjudice, etc., they also apply to the prâctice to be
observed in cases like the one at bar. Where the pétition for re-
moval States jurisdictional facts, suçh as citizenship, etc., which are
not true, the plaintif? may traverse thèse facts by allégations in the
nature of a plea in abatement, and the court can receive évidence to
détermine the same. Dillon's Removal of Causes, § 158, note 4. As
stated, plaintifï did not do this, but sought, by an affidavit made by
one of his counsel, to hâve the case remanded. This is not the correct
prâctice, and, as the case now stands, the motion to rertiand must be
overruled.
UNITED STATES V. BALDWIN.
(Circuit Court, S, D. New York. May 9, 1899.)
No. 2,479.
L Cdstoms Duties— Classification — Shotgun Barrki,s.
Certain gun barrels, made under the Whltworth patent process, and
shown to hâve been subjected to a hammerlng process, are held to be
"forged," and to be free of duty as "shotgun barrels, forged, rough bored,"
under Tarifl Act Aug. 28, 1894, c. 11, § 2, Free List, par. 614, 28 Stat. 544.
Appeal by the United States from a décision of the Board of Gen-
eral Appraisers, which reversed the classification of the collecter of
customs at the port of New York on importations by Baldwin Bros.
& Co.
Henry C. Platt, Asst. U. S. Atty.
Stephen G. Clarke, for importers.
TOWNSEND, District Judge. The articles în question are gun
barrels, assessed at 35 per cent, ad valorem, under Tarifï Act Aug. 28,
1894, c. 349, § I, Schedule C, par. 177, 28 Stat. 520, as "manufac-
tured articles or wares, not specially provided for, * * * com-
posed * * * of métal." The importers claim that the merchan-
dise is free, under paragraph 614 of said act (section 2, Free List,
28 Stat. 544), as "shotgun barrels, forged, rough bored." It appears
that they are made under the Whitworth patent process, whereby it is
claimed that steel ingots are compressed into shape by rolls, in order
to eliminate blowholes, and to produce a better quality of steel. The
steel, after having been subjected to this process, is capable of being
adapted to various purposes other than gun barrels.
Counsel for the United States contends that thèse barrels are not
forged, because hammering is essential to forging, and that it does
not appear that thèse barrels are hammered either by hand or machine.
DILLAKd's ADM'b V. CENTRAL VIKGINIA lEON CO. 157
There îs a conflict of testimony as to whether hammering is essential
to forging. Some of the witnesses say that forging may be donc by
squeezing the barrels, or passiiig them through rolls. There is algo
a conflict of testimony as to whether or not thèse barrels hâve been
hammered, but it is practically acîmitted that they could not hâve been
produced in their présent shape without hammering, and the prépon-
dérance of évidence indicates that they hâve been whoUy or in part
subjected to a hammering process. Irrespective of this fact, however,
the Board of General Appraisers has found, on trustworthy and suf-
ficient évidence, that the barrels are forged, and their décision, there-
fore, is afïirmed.
DILLARD'S ADM'R v. CENTRAL VIRGINIA IRON CO. et aL
(Circuit Court, W. D. Virginia. October 3, 1903.)
1. Abatement — Death of Plaintifp — Procédure bt Défendant.
The failure to revive a suit wliich has abated by the death of plaintiff
is not ground for a motion by défendant to dismiss for want of prosecu-
tion, but he may, on proper notice, obtain an order requiring the suit
to be revived within a time fixed, or to be dismissed.
2. Same — EQ01TT— Procédure por Revival,
One entitled to revive a suit In equity which has abated by the death
of a party is not authorized to proceed therefor by motion, but must
follow the procédure prescribed by equity rule 56, by flling a bill of re-
vivor or a bill in the nature of a bill of revivor.
In Equity. On motion by défendant to dismiss for want of prosecu-
tion, and by the successor in office of the deceased plaintifï for revival
of the suit.
Caskie & Coleman and O. L. Evans, for plaintifï.
Lewis & Lewis, for défendants.
McDOWELL, District Judge. This equity suit was instituted in
the State court. In 1896 it was removed to this court. In 1900 a
motion to remand was overruled. A demurrer to the bill was there-
after argued before Judge Paul, but, on account of his illness and sub-
séquent death, no décision was ever made on the demurrer. On
March 13, 1902, an order was enter ed suggesting the death of the
plaintifï. The record does not show who made this suggestion, but
it was in fact made by the défendants. No order has been made and
no step taken in the cause since that date. On October 2, 1903, the
défendants moved that the cause be dismissed for want of prosecution.
Counsel for the successor in office of the deceased plaintifï resisted
said motion, and moved that the cause be revived in his name. The
défendants opposed this motion.
The motion of the défendants should, I think, be overruled. In 2
Bâtes, Fed. Eq. Proc. § 655, it is said, in treating of the defendant's
right to compel the plaintifï to revive or hâve an order of dismissal,
that the défendant may, upon application to the court, obtain an order
î 2. See Abatement and Revival, vol. 1, Cent. Dig. § 447.
158 ■■' 125 FHDHBAL EEPOETBB.
that the fààîfltîflfs représentative shall revive the cause wîthîn a tîme
to be limited in the order, or that the biU be dismissed ; citing 3 Dan.
Ch. (ist London Ed.) 207, 208.
In I Foster, Fed. Pr. (3d Ed.) § 294, it is said:
"Dlsmlssal for failure to perfect or revive a suit. When a suit has abated
or become otherwise defective before a decree, tlie party or parties against
whom it can be cpntinued may, upon notice served upon tbe person or per-
sons entltled to revive or supply the defect In the same, nlbve for and obtain
an order, directlng that thèse revive or supply the defect withln a certain
limited time to be fixed by tbe court, or that else the bill be dismissed. If
the suit abàte by the deatb of one of several coplalntifEs, the order may be
obtained against the survivors; and it seems that the objection that there
is no Personal représentative of the deceased plaintifiC will not prevent the
court from granting such an order. It is irregular in such cases to move
to dismiss a bill for want of prosequtlon, and an order to that effect, if ob-
tained, will be discharged for Irregularlty. A bill may be dismissed at a
defendant's motion for the plalntiff's failure to serve with process another
défendant named in the bill, who is a necessary party to the suit."
To same eflfect, see l Dan. Ch. Pr. (4th Am. Ed.) 812-814; 2 Dan.
Ch. Pr. 1539.
It is intimated in Simmons v. Morriâ fC. C.) 109 Fed. 709, that lâch-
es in fîHng a bill of revivor sufficient to defeat an original bill vs^ould be
sufficient to defeat the bill of revivor ; but we hâve no such state of
facts in the case at bar. The défendants hâve ail the time had the
simple remedy pointed out by th- above authorities to bring the delay
to an end, and there is consequently very little force in their complaint.
The motion of the new administrator raises a question of some
interest : Is a bill of revivor, or a bill in the nature of such bill, the
only method of revival in a case such as we hâve hère ? Upon such
examination of the authorities as I hâve been able to make, it seems
that such is the better opinion. It is true that in Griswold v. Hill, i
Paine, 483, Fed. Cas. No. 5,834 (an equity case), a défendant was al-
lowed to corne in on motion. But in this case no question seems to
hâve been made as to the necessity for a bill of revivor. This is sup-
posed to be the only case in which such procédure has been allowed. i
Foster (3d Ed.) p. 398. In Allen v. Fairbanks (C. C.) 40 Fed. 188,
on the death of a défendant in equity, the plaintifï had issued scire
facias to revive. In this case no point was made as to the propriety of
this method. Thèse are the only two fédéral equity cases I hâve found
in which the revivor was not by bill.
Mr. Foster says:
"The only methods of revivlng a suit in equity In the fédéral courts seem
to be a bill of revivor, a bill In the nature of a bill of revivor, a bill of re-
vivor and supplément, and a supplemental bill in the nature of a bill of re-
vivor." 1 Foster, § 179, p. 398.
Mr. Bâtes seems to be of the same opinion. See 2 Bâtes, Fed. Eq.
Proc. § 634 et seq.
In Kennedy v. Georgia Bank, 8 How. 610, 12 L. Ed. 1209, it is said,
in passing: "When, in the progress of a suit in equity, the proceed-
ings are suspended from the want of proper parties, it is necessary to
file a bill of revivor." This, however, was not a case in which there
had been an effort to revive by motion or scire facias.
IN BB WOKRELI* 159
Equîty rule 56 provîdes a procédure to fit the case we liave Kere, and
the ordinary rules of construction lead to the belief that the expression
"may be revived by," etc., should be read "must be," or "shall be,"
etc. But if this is not intended as the only method, I doubt the au-
thority of this court, without a rule of court authorizing the simpler
method of revivor on motion, to inaugurate such a practice. While I
confess to a personal prédilection for simple, speedy, and inexpensive
methods of procédure, yet as to this question, aside fromithe want of
authority, a seemingly sufEcient reason against allowing revivor by
mère motion is found in this considération: The défendant may
désire to contest the right or title of the proposing new plaintifï, and
many complex questions of lavsr or fact, or both, may be raised. If
the procédure be a mère motion, the absence of regular pleadings,
such as would be filed were a bill of revivor used, is liable to lead to
confusion and error. If we consider section 955, Rev. St. U. S. (U.
S. Comp. St. 1901, p, 697), as intended to apply to equity suits — as to
which there is roora for some doubt (Clarke v. Mathevirson, 12 Pet.
171, 9 L. Ed. 1041 ; Ex parte Connaway, 178 U. S. 435, 20 Sup. Ct.
956, 44 ly. Ed. 1134) — it does not seem to me to authorize revival on
mère motion, at the original instance of the successor of a deceased
party. If the living party had had issued scire facias against the ad-
ministrator of his deceased adversary, probably the order of revival
would be made on motion merely of the administrator. In such case
both parties seek the same end. But if, as hère, the living party seeks
a dismissal of the suit, and is not in the position of desiring the ad-
ministrator to revive, I find no warrant in this section for the party
seeking to revive to do so, otherwise than by the regular method
point ed out in equity rule 56. While section 955, if applicable to a
chancery suit, seems to recognize the right of the Hving party to hâve
scire facias issued against the représentative of his deceased opponent,
the statute does not make such procédure obligatory.
The motion in behalf of the proposing new plaintiff must be over-
ruled.
In the case at bar, if the défendants (assuming that they are satisfied
that their motion to dismiss is properly denied) do not désire to con-
test the right of the proposing plaintifï to revive, no reason suggests
itself why the expense and delay incident to a bill of revivor may not
be avoided by a consent order of revival.
In re WORREMi
(District Court, B. D. Pennsylvanla. October 19, 1903.J
No. 1,619.
Bankeuptct— ExAMiHATiow ov Bankrupt's WirB— Scopb of Inqthbt.
Under Bankr. Act 1898, S 21a (Act July 1, 1898, c. 641, 30 Stat 552 [U.
S. Comp. St. 1901, p. 3431]), as amended by Act Feb. 5, 1903, c. 487 (32
Stat. 798 [V. S. C!omp. St Supp. 1903, p. 413]), whlcb anthorizes the
examinatlon of a bankrupt's wlfe, but only "touchlng business transacted
by her, or to -which she Is a party, and to détermine the fact whcther ebe
had transacted or been a party to any business of the bankmpt," a cer-
160 125 FODOEAC ttsaPOBTBS.
tain lAtttnde mnst be permltted in her ezamlnatlon; anfl, where tbere te
reasonable ground therefor, she way.lje examlned, to c'etermlne wKether
' a JbiiBtiies;! conducted in her namè Is in fàct bers or tlie bankrupfs, and
' mày bè as]ced sucb questiqns as ate pertinent to that Inqulry,
In Bankruptcy. On certificate from référée and pétition to extend
time for filing objections to discharge.
Williaiïi A. Hayes, for bankrupft. •
Franz Ehrlich, Jr., and Simpsôti & Brown, for objecting creditor.
J. B. McPHERSON, District Judge. The amendment of 1903 to
the bankrupt act (Act Feb. 5, Ï903, c. 487, 32 Stat. 798 [U. S. Comp.
St. Supp, 1903, p. 413]) enlarges clause "a," § 21, Bankr. Act July i,
1898, c. 541 (30 Stat. 552 [U. S. Coïnp. St. 1901, p. 3431]), so as to
make the wife ôf a bankrupt a compétent and cdmpellable witness in
any inquiry concérning his acts, cbnduct, or property. But even in
sùch an inquiry she cannot be exattiined generally. The proviso to
the clause specially confines the èxàmination to "business transacted
by her, or to which she is a party, and to détermine the fact whether
she bas trarisacted or been a party to any business of the bankrupt."
Her owri separate business is, of course, not the subject of inquiry
at ail, but it is at this point, precisely, that questions are most likely
to àrise. Is the particular business her own, or is it her husband's ?
Obviously, she cannot be allowed to détermine that question for her-
self, and the resuit is that a certain degree of latitude in her èxàmina-
tion must, of necessity, be permitted, in order that the court may be
sure that she has not been, and is not now, transacting business as a
mère cover for the bankrupt, or in aid of a scheme to injure his credit-
ors. If the course of inquiry should reveal matters that in the end
turn out to concern herself alonè, such a resuit is to be regretted ; but
this cannot always be obviated, and it is certainly better than to allow
her to décide conclusively that the business is hers by making a bare
assertion to that eff ect.
In the présent case, the adjudication was made on April 15, 1903.
On the next day, the wife of the bankrupt bought the lease of a
theater, and soon afterwards eniployed him to manage it; she herself
having had no previous professional expérience, while he had been
managing another theater for sonie time. Under such circumstances,
I hâve no doubt that the wife may be properly examined, to discover
what she paid for the lease, and where the money came from, and may
be asked any other questions that bear upon the point whether this
enterprise is really hers, or is being carried on by the bankrupt in her
name. The lease itself need not be produced until it fairly appears
from the testimpny that the business is not hers, but her husband's.
The referee's second and third ruUngs were correct. The first ruling,
concérning the production of the léase, is covered by what I hâve
just said.
The time for filing objections to the bankrupt's discharge is extend-<
ed until December 15, 1903.
0HBI8TIB GEAIN 4 STOCK 00. 7. BOAKD OP IBADB. 161
CHHISTIE GRAIN & STOCK CO. et al. r. BOARD OF TRADB OF CITY
OF CHICAGO (two cases).
(Circuit Court of Appeals. Eighth Circuit October 8, 1903.)
Nos. 1,805, 1,911.
L Exc'HANGES— Peopekty Right in Quotations— Protection in Equitt.
The Board of Trade of CUcago is net entltled to invoke the ald of a
court of equity to protect its claimed property right in the quotations
made on the transactions of its exchange, under proof which shows that
at least 85 per cent, of such transactions are deals in which it is not in-
tended to inake a future dellvery of the article nominally dealt in, but
which are to be settled by the payment of money only according to the
fluctuations of the market, and that for a specified price It furnlshes
Bueh quotations to telegraph companies for distribution as a means of
encouraglng spéculation In futures, and for the purpose of bringing such
business to its members; both the permitting of such transactions, and
the sending out of such quotations for the purpose stated, belng In viola-
tion of the statutes of the state, as construed by its Suprême Court.
Appeals from the Circuit Court of the United States for the West-
ern District of Missouri.
For opinions below, see ii6 Fed. 944, and 121 Fed. 608.
James H. Harkless, John O'Grady, Charles S. Crysler, W. H. Ros-
sington, Charles Blood Smith, and Clifford Histed, for appellants.
Henry S. Robbins, for appellee.
Before SANBORN and VAN DEVANTER, Circuit Judges, and
SHIRAS, District Judge.
SHIRAS, District Judge. On the i8th day of April, 1901, the
Board of Trade of the city of Chicago filed in the Circuit Court of
the United States for the Western District of Missouri a bill in equity
against the Christie Grain & Stock Company, a corporation created
under the laws of the state of Missouri, C. C. Christie, the Western
Union Telegraph Company, the Postal Telegraph Cable Company,
and the Gold & Stock Telegraph Company, the three companies last
named being corporations created under the laws of the state of New
York ; the relief prayed for in the bill being the granting an injunc-
tion restraining the Christie Grain & Stock Company and C. C.
Christie from receiving or surreptitiously acquiring from the tele-
graph companies certain market quotations representing the dealings
had on the Board of Trade in the city of Chicago, and restraining
the telegraph companies from entering into any contracts with the
Christie Company or C. C. Christie for the delivery to thèm of the
quotations furnished the telegraph companies by the complainant.
As grounds for asking the relief prayed for, it is averred in the
bill that the complainant is a corporation created by a spécial char-
ter granted by the Législature of the state of Illinois on the i8th
of February, 1859, with authority "to maintain a commercial ex-
change; to promote uniformity in the customs and usages of mer-
chants ; to inculcate principles of justice and equity in trade ; to
facilitate the speedy adjustment of business disputes ; to acquire and
disseminate valuable commercial and économie information and
125 F.— 11
162 , .125 FEDEBAL^BipjppETEB. . .
generally to secure to its members the benefits of co-operatîon in the
furtherance of their- iegitiraate. puicsuits" ; that there are about i,8oo
members of the Board of Trade; that the corporation has provided
in the city of Chicago an exchange building, whiçh cost upwards of
$1,000,000; that thèrè is provided within this building, foï the ex-
clusive use of the members, an exchange hall, where many of its
membpr^ meet ejjpry business, day to buy and sell for themselves, or
as brokers for their customers, for présent and future delivery, ail
kinds of grain and hdg products, the Value of said transactions aggre-
gating fnany million bush'els of grain and many million pôunds of
hog products annually,,' and having become so large that said ex-
change is one of tibe great grain and provision markets in, the United
States ; that such transactions are permitted only during market
hours, and by open, viva voce bidding; that the knowledge of the
priées thus made on said transactions dùring market hours upon the
exchange has become .a species of property of large value, for which
the telegraph companies are willing to pay large sumsto the Board
of Trade, in order that they may secure the same promptly, with
the privilège of selling'thé sanïe to their cùstomers; that on the i5th
of April, 1901, the complainant entered into a written Çontract with
the Western Union and Postal Telegraph Companies', whereby it
agreed to furnish to the telegraph companies complète and continuons
quotations of priées made in transactions between members of said
Board of Trade in its exchange hall, the telegraph companies agree-
ing to pay a certain price therefor, and also agreeing that they would
not knowingly furnish or sell, directly or indirectly, the continuons
quotations furnished them to any person, iirm, or corporation con-
ducting a bucket shop or other simil^r place where such quotations
are used as a basis for bets or other illégal contracts, based upon the
fluctuations of the priées of commodities dealt in on said Board of
Trade,, there being set forth in the written çontract a form of appli-
cation which the personk desîring to,receiye from the telegraph com-
panies the quotations furnished by th'e Board of Trade were required
to sign as a prerequisite to obtaining the same; that the Christie
Grain & Stock Company and C. Ç, Christie, doing business at Kan-
sas City, Mo., hâve not signed any such applications, and hâve not
entitled themselves to rightfully receive and use the designated quo-
tations, but without right and surreptitiously hâve bbtained and used
thèse quotations to the great injury bf the complainant, and hâve
demanded of the telegraph companies that they shall furnish the quo-
tations to the said Christie Company without the latter signing the
application çrepared by the complainant or agreeing to its terms.
To this bill the Christie Company and C. C. Christie filed an an-
swer and an amended answer, in which it is, in substance, claimed
that the business transaçted in_the exchange hall of the Board of
Trade is of'a public nature, and that the Christie Company and ail
other parties engaged in dealing in grain and hog products are en-
titled to the knowledge and use of thèse quotations; that the Western
Union Telegraph Cqmçaiiy is a public corporation engaged in busi-
ness as a coramon carrier, and as such is under obligation to furnish
thèse quotations, when sent over its wires, to any party desiring the
CHEISTIE GRAIN & STOCK CO. V. BOAED OF TEADE. 163
same, upon payment of the proper cost thereof; that the effort of
the Board of Trade and of the telegraph company to limit the de-
livery of the quotations is in restraint of trade, and is a violation
of the act of Congress known as the Sherman Anti-Trust Act (Act
July 2, 1890, c. 647, 26 Stat. 209 [U. S. Comp. St. 1901, p. 3200]);
that the quotations sent out by the telegraph company are not the
private property of the Board of Trade, in stich sensé that the Board
of Trade can rightfully confine the knowledge thereof to such per-
sons as will subject themselves to the terms of the application con-
tracts; that such attempted restriction in the use of thèse quota-
tions tends to create a monopoly in the articles dealt with on the
Board of Trade, and that the Board of Trade is not entitled to the
aid of a court of equity in securing to itself the pecuniary benefit
derived from the sale of the quotations, because the same represent
or grow out of transactions had in the exchange hall of the Board
of Trade, which are in violation of the statutes of the state of Illi-
nois and of the state of Missouri, prohibiting any person or cor-
poration keeping or causing to be kept any bucket shop, office, or
place wherein is permitted the pretended buying or selling of cotton,
grain, provisions, and other articles without any intention of receiv-
ing and paying for the property so bought, or of delivering the prop-
erty so sold, or wherein is permitted the buying or selling of any
such property on margins, it being further therein enacted that any
corporation, association, copartnership, or person who shall com-
municate, receive, exhibit, or display in any manner any such offer
to buy or sell, or any statements or quotations of the priées of any
such property, with a view to any such transactions, as aforesaid, shall
be deemed an accessory, and be liable to be fined and punished as
provided for in the act.
The telegraph companies did not answer the bill, and the questions
at issue are those presented by the bill and the answers of the Christie
Company and C. C. Christie.
A large amount of testimony was taken, and the case was finally
submitted to the Circuit Court upon the pleadings and proofs, whicJh
court tound in favor of the complainant, granting it a decree as
prayed for; the opinion of the court being reported in 116 Fed. 944.
From the finding and decree of the circuit court the Christie Com-
pany and C. C. Christie hâve appealed to this court, and counsel for
the adversary parties hâve submitted the case upon full and elaborate
briefs.
We deem it advisable to first consider the question whether the
quotations of prices, which it is the purpose of the bill to prevent
being delivered or furnished by the Western Union Telegraph Com-
pany to the Christie Company, grow out of transactions had in the
exchange hall of the Board of Trade, of such a nature that they come
within the condemnation of the statute of Illinois quoted in défend-
ants' answer, the fîrst and second sections of which are as follows :
"That it shall be unlawful for any corporation, association, co-partnership
or person to keep or cause to be kept wlthln this state, any bucket shop,
office, store or other place wherein is cOnducted or permitted the pretended
buying or selling of the shares of stocks or bonds of any corporation, or
164 125 FEDERAL EBPOETKR.
petroleum, cotton, grain, provisions or other produce, either on margins or
otherwlse, -without any Intention of receiving and paying for the property
80 bodgbt, (n: of dèllvering the property so sold; or wlierein is conducted or
peiriQitfteâ ,tbe pcetended buying or selllog of such property on margins; or
when the party huying any of such property, or offering to buy the same,
does not Ihtend açtually to receive the same If purcliased, or to delïTer tlie
same if sold; and the keeping of ail such places is hereby prohlblted. And
any corporation or person, whether actjng Individually or as a member or
as an ojBcer, agent or employé of any corporation, association or eo-partner-
ship, who shall be guilty of viola tlng thls section shall, upon conviction
thereot, be flned in any sum not lèss than $200 and not more than $500; and
any person or persons who shall be guilty of a second offense under this
statute, in addition to the penalty above described, shall, upon conviction, be
imprisoned in the county Jail for the period of six months, and if a corpora-
tion, shall be liable to forf eiture of its charter. And the continuance of such
establishment after flrst conviction shall be deemed a second offense."
"It shall not be necessary, in order to commit the offense deflned in section
1 of thls act, that both the buyer and the seller shall agrée to do any of the
acts thereih prôhlbited, but the sald crime shall be complète against any cor-
poration, association, co-partnershin or person thus pretending or offering to
sell, or thus pretending or offering to buy, v^hether the offer to sell or buy is
accepted or not; and any corporstion, association, co-partnership or person
who shall communicate, receive, exhlblt or display, in any manner, any such
offer to buy or sell, or any statements or quotations of the prices of any
such property, with a vlew to any such transaction as aforesaid, shall be
deemed an accessory, and, upon conviction thçreof, shall be fined and pun-
Ished the same as the principal, and as provided in section one of this act."
In Soby v. Peopîe, 134 111. 66, 25 N. E. 109, the Suprême Court
of Illinois, in construing this statute, held as foUows:
"In construing a statute the primary considération is to ascertain and give
efCect to the législative intention. In order to accomplish this object the court
should look at the whole act, and seek to ascertain such intention by au
examination and comparison of its various provisions. Mason v. Finch, 2
Scam. 223; People v. Comnilssioners, 3 Seam. 153; Perteet v. People, 65 111.
230. The court may also consider other and prior acts relating to the same
gênerai subject, and thus ascertain what mischiefs the later législation was
designed to remedy, and the true spirlt and import of such législation. Strib-
ling V. Prettyman, 57 111. 371. By the Revised Criminal Code of 1874 (Eev.
St. 1874, p. 372, c. 38, §§ 130, 131) it was made a criminal offense to contract
to hâve or give the option to sell or buy, at a future time, any grain or other
commodity, etc., and it was provided that ail contracts made in violation of
such law should be considered gambling contracts, and should be void. It
was held under that statute that, even though a contract purported upon its
face to be an absolute contract for the sale or purchase of grain or other
commodity for future delivery, yet the transaction would be a gambling con-
tract, within the prohibition of the statute, if the real Intention of both parties
at the time of making the contract was tO; deal only in options, and make
future settlements upon the basls of the différence in the market price, with-
out the actual delivery of the grain or other commodity sold or purchased.
But it was also held, under the same statute, in numerous cases, that, if either
party contracted in good falth, the contract was a valid and binding contract,
no matter what mlght haye been the secret intention of the other party. It
is manifest that the object of the statute was to suppress and prevent gam-
bling In, gratn and other comtnoditles. But so great was the difBculty of
establlshing the unlawful Intent of the parties making illégal contracts, so
many were the shifts and devices resorted to for the purpose of concealing
the true charaeter of the gambling transactions entered Into, that the statute
was found to be ineffectuai to accomplish the purpose for which It was
enaeted. It is a matter of eommon notorlety that, notwithstanding the highly
pénal charaeter of the statute of 1874, the evil it was aimed at continued to
inerease with wonderful rapidity throughout the state, untll in almost every
elty or town of any considérable Importance commission houses, offices, or
CHKISTIE QRàlN & STOCK CO. V. BOAED OF TEADE. 105
agencies were established, in which the great bulk of tlie business transacted
was tbe maklng of contracts which, while legitimate upon their face, were
in fact mère gambling transactions, which were never allowed to mature,
but were uniformly adjusted before maturity upon différences in market price,
and without any actual delivery of the articles which were the subject-matters
of such pretended contract. To remedy the mischief, the liegislature, satisfled
with the futility of attemptlng to suppress gambling in grain and other com-
modities by striklng merely at the gambling contracts themselves, and the
parties entering into such contracts, has sought, by the statute of 1887 (Laws
1887, p. 96), to suppress ail bucket shops, offices, stores, or other places
wherein gambling in grain or other commodities is conducted or permitted,
and to do thls by punishing, by fine, imprisonment, or forfelture of charter,
any person, eo-partnership, association, or corporation that keeps or causes
to be kept a place of that character within the state, and also punishing by
fine of not less than $500, nor more than $1,000, the owner of any building
who knowlngly permits on hls promises any of the Illégal acts denounced
by the statute. It would seem clear from the évidence that the plaintiff in
error kept an office or place wherein was 'conducted or permitted' the buy-
ing or selling of grain or other produce on margins, 'without any intention
of receiving and paying for the property so bought, or of dellvering the prop-
erty so sold,' and wherein was 'conducted or permitted the pretended buying
or selling of such property on margins,' and where the party buying any of
such property, or offering to buy the same, does not intend actually to receive
the same if purchased, or to dellver the same if sold.
"A considération of the act will, as before Indicated, show that it is di-
rected against the keeplng of any office or place, etc., flrst, wherein Is con-
ducted or permitted the pretended buying or selling of grain or other produce
on margins, or otherwise, without any intention of receiving the property
bought, or dellvering It if sold. Under thls clause of the first section the
offense consists in keeplng the place, etc., where such buying or selling is
conducted or permitted. That plaintiff in error kept the place or office is con-
ceded; and that buying or selling upon margins, without any intention on the
part of the customer to receive the thing bought, or to dellver the thlng sold,
was permitted In such office or place so kept by the plaintiff In error, is also
substantlally conceded, and. If it were not, is abundantly proved. Under thls
provision of the act the keeper of such office, or place, etc., cannot shield
himself from crlmlnal responslbllity behlnd the fact that he made no Inqulry
of his customers. The statute Is préventive in its character, and is aimed at
the keeplng of places where gambling In grain is permitted. The keeper
must know that the transaction is not gambling, or In good faith bave just
reason to belleve that the bnylng or selling Is not within the Intended prohi-
bition of the statute. But if thls were not so, there Is abundant évidence
in thls record to show that the plaintiff In error knew that hls customers did
not contemplate an actual delivery of the commodity bought or sold. Agaln,
the second clause makes It an offense to keep a place, etc., wherein is con-
ducted or permitted the pretended buying or selfing of such produce on mar-
gins. It Is scarcely contended that the customer dld not In fact Intend only
to purchase options, and to make money in the rlse and fall of the markets,
without any expectatlon of receiving or dellvering grain. In other words,
it is toc plain for argument that the buying and selling of grain was a mère
prêteuse, at least so far as the customer was concerned. Agaln, the third
clause créâtes the offense where the party buying such produce, or offering
to buy the same, does not Intend actually to receive the same if purchased,
or to dellver the same If sold. Hère the proof established beyond question
that purchases were made without any intention of receiving the commodity
purchased. The only object was to make money on the fluctuations of the
market by the pretended purchase of the grain on margins. * • • Nor
can the fact that Lindbloom & Co. may hâve gone into the Board of Trade,
and made Uke contracts of purchase or sale, avail plaintiff in error. As before
said, the act Is Intended to prevent the keeping of places where gambling In
grain Is conducted or permitted. If the employers of plaintiff in error, in
order to protect themselves, made, even In good falth, purchases or sales of
llke amounts of grain or produce, it would not change tbe nature of the trans-
166 125 FEDERAL BEPOEÏBB. , i
action wWch had transpired between pJtalntifl in error anfl hîs customer, so
as tp free It from the tfllnt of gambllng, slnce, In respect ofsuch customer,
it would still be a merâ; gambllng on niacgins^-a mère speculatlng on tbe rlse
and fall of the market It Is apparent from tbe whole act, from the tltle to
tbe concluding sentence; that the purpose and objeet of tbe Législature was
to spppress the evU of gambllng in produce. Primarily, it was intended to
reach and suppress the bncket shop and bucket-shopping, from which much
of the eyil sought to be qorrected necessarily flows. But it is manif est that,
probably owing to the dlfflculty of securing conviction where ail the éléments
to constituée a bucket shop, or the practices of bucket-shopping, as the same
bave been defined in tt^e . décisions of the courts, are requlred to be estab-
lished, the Législature sa,w proper to strlke a fatal blow at both bucket shops
and bucket-shopping, by prohibiting the keeping of ail offices,: places, etc.,
where gambling in grain and other produce is carried on or permitted. There
can be no question but that the evll of gambling in futures was présent In
the business carried on by plalntifC in error. There is in the évidence even
just ground for the conclusion that Itwas présent, to ail Intents and purposes,
as fuUy 8,8 if his office had been denominated, a 'bucket shop,' instead of an
'agency' or a 'commission house.' The shif ts and devices so easily and f re-
quèntly resorted to for the purpose: of glving to transactions tainted witli
gambling the semblance of légitima te deals were sufflcient considérations, in
the législative Judgment, to require, as a piatter of public policy, that ail
places wherein is conduoted or permitted the pretendéd buying or selling of
property, such as is speçifled in the act, on margins or otherwise, shall be pro-
hibited. If two firms, members of the Board of Trade, eonld be found, wlio
were wiUing to enter Into such a scheme, it is manif est that one firm repre-
senting agencies in half of the commercial centers in the state, and the other
representing the other hajf, could buy or sell to flll the orders of their re-
spective agents, from each other receive the margins, and 'wring out their
deals' without a bushel of grain or pound of any other commodity changing
hands. ïet, if either demanded the grain or other prodnct of the other, the
contract ^:puld be so drawn as to be a yalld sale and purchase of the produce
itself; and they could, without légal perjury, testify that it was to be de-
liveredif desired by the party entitled to it under the contract. By such
means the state would still be subject to ail the evils of the bucket shop and
bucket-shopping.
"We are not permitted, by the rules of construction, to extend the body
of the açt by référence to its title, which is, 'An act to suppress bucket-shops,
and garâbllng in stocks, bonds, petroleum, cotton, grain, provisions, and other
produce,' but we may conslder it for the purpose of determining what was
within législative contemplation. Perry Oo. v. Jefferson Co., 94 111. 214. The
Législature by the fourth section, as we hâve seen, déclares that it Is the
intention of this act to prevent, punish, and prohibit within this state the busi-
ness now engaged in and conducted in places commonly known and designated
as 'bucket shops,' and also to include the practice now commonly known as
'bucket-shopping,' etc. To accompllsh this purpose the Législature bas pro-
hibited the keeping of the places where what is commonly known as 'bucket-
shopping' îs carried on. They bave not In the body of the act prohibited the
keeping of, bucket shops, or the practice of bucket-shopping, only, but hâve
included. thé keeping of every place wherein is conducted or permitted the
gambling in grain or other produce, and hâve expressly provided that it shall
not be necessàry, in order to commit the offense, that both the buyer and
seller shall agrée to do any of the acts therein prohibited. By the act the
mère qffer of the corporation or person keeping such place to make such pre-
tendéd sale or purchase, whether the offer to sell or buy Is accepted or not,
renders thé offense complète agalnst such corporation or person. Such cor-
poration or person is also prohibited from communicattag, receiving, exhibit-
ing, or dtsplaying in any manner any such ofCer to buy or sell, or any state-
ment or quota tion of the priées of such property, with a view of any trans-
action of the kind prohibited. Moreover, as, we bave already seen, the person
who knowingly permitted any of the acts prohibited by the statnte in any
house or place owned by hlm is subjected to heavy penalty. It Is apparent,
we think, that the Législature, for tt^e purpose of carrying into effect their
CHRISTIK GRAIN & STOCK 00. V. BOARD OF TRADE. 167
expressed Intention of preventing the evlls resultlng frona bucket shops and
bucket-shopping, and to suppress the vice of gambling in grain and other
produce, so detrlmental to the interests and welfare of the people, hâve de-
termined to close, suppress, and prohlbit the keeping of places where the
practlce of bucket-shopping or gambling in such commoditles is permitted.
No other construction of the act would be consistent either wlth its letter
or spirlt. We are of opinion that it is no longer possible, in this state, under
any shift or device, however speclous, to keep an office or other place where
parties may, under the prêteuse of buying or selling grain or other produce,
engage in spéculation in futures, and gamble upon the rise and fall of the
market. • • •»
In Clews V. Jamieson, 182 U. S. 461, 494, 21 Sup. Ct. 845, 858, 45
L. Ed. 1183, the Suprême Court of the United States, after a review
of.the ruling of the Suprême Court of Illinois in the cases of Picker-
ing V. Cease, 79 111. 328 ; Lyon v. Culbertson, 83 111. 33, 25 Am. Rep.
349; Tenney v. Foote, 95 111. 99; Pearce v. Foote, 113 111. 228, 55
Am. Rep. 414; Cothran v. Ellis, 125 111. 496, 16 N. E. 646; Schnei-
der V. Turner, 130 111. 28, 22 N. E. 497, 6 L. R. A. 164; and Soby
V. People, 134 111. 66, 25 N. E. 109 — held that:
"Thèse cases hold thèse various propositions: (1) That 'option contracts'
to sell or deliver grain or qther commodity, or railroad or other stock, which
contracts are intended to be settled by payment of différences at the settling
date, are invalld. 79, 83, 113, and 125 111., supra. (2) A contract to hâve or
give to himself an option to sell or buy at a future time any grain, etc., sub-
jects the party to fine or Imprisonment, and ail contracts made in violation
of the statute are gambling contracts, and void, under section 130, Cr. Code
(Rev. St. 1874, p. 372, c. 38), and ail notes or securities, part of the considéra-
tion of whlch is money, etc., won by wager upon an unknown or contingent
Gvent, as described in section 131 of the Code, are also void. 95 and 113
Illinois, supra. (3) An 'option contract' to sell or buy at a future time grain
or other commodity or stock, etc., is void, under the Illinois statute, even
though a settlement by différences was not contemplated. 130 111., supra.
(4) The keeper of a shop or office where dealing is carried on in stock, etc.,
on margins, without any intention of dellvering articles bought or sold, is
guilty of an offense under the Illinois act of 1887 [Laws 1887, p. 96]. 134 111.,
supra."
The construction thus placed upon the state statute by the Su-
prême Court of IlHnois is binding upon this court, not only as a con-
struction of the statute of the state, but also as declaratory of the
public policy of the state with respect to the character of the business
that may be lawfully carried on within the borders of the state by
the Chicago Board of Trade and other kindred organizations. Wade
V. Travis Co., 174 U. S. 499, 19 Sup. Ct. 715, 43 L. Ed. 1060; Hartford
Fire Ins. Co. v. Railway Co., 175 U. S. 91, 20 Sup. Ct. 33, 44 L.
Ed. 84.
It is thus authoritatively settled that, under the statutes of the state
of Illinois, it is unlawful for any person or corporation to keep or fur-
nish an office or place wherein persons may, under the prêteuse of
buying or selling grain or other produce, engage in speculating in
futures and in gambling upon the rise or fall of the market, and
every person and corporation is prohibited from communicating or
receiving any statement or quotation of priées with a view to aiding
in the carrying on of the prohibited gambling transactions.
Of the nature of the business carried on by the members of the
Board of Trade there can be no question under the évidence sub-
168 125 FEDEEAL BBPOETEB.
mitted în this case. The testimony of the président of the board,
William S. Wafren, and of a large number df the members of the
board was taken for thé purpose of showing the character of thé
transactions had upori the floqr of the exchange hall; and there is
absolute unanimity in their évidence to the efïect that niuch the
larger part of thèse transactions wére deals wherein it was not ex-
pected or understood that there would be any delivery of the article
nominally devait in, but the same were carried through and settled by
methods clearly devised to avoid the need of actual delivery. The
estimâtes of the witnesses vary as to the percentage of the trans-
actions in which actual delivery was contemplated or had, running
from I to 15 per cent., thus proying that at least 85 and more prob-
ably 95 per cent, of the transactions would corne under the condemna-
tion of the Illinois statut'e.' We do not deem it necessary to set forth
the détails of this testimony, which Can be found in the opinion of
Judge Thompson iri the case of The Board of Trade of the City of
Chicago V. Ô'Dell Commission Co. (C. C.) 115 Fed. 574. In that
case, and in Board of Trade v. Donovan Commission Co. (C. C.) 121
Fed. 1012, upon considération of substantially the same évidence sub-
mitted in this case, the conclusion was reached that over 90 per cent,
of the transactions had on the floor of the exchange hall maintained
by the Chicago Board of Trade were purely gambling transactions.
It is thus proven beyond ail reaSonable question that the Chicago
Board of Trade maintains in the building owned by it in the city of
Chicago a place known as the "Exchange Hall," wherein the mem-
bers of the board, acting for themselves, and also as brokers for
outside parties, engage in making and carrying through deals in
grain and provisions, in which it is not intended to make a future de-
livery of the article nominally dealt in, but which are to be settled
by the payment of money only according to the fluctuations of the
market and which are in ail essentials gambling transactions. It
further appears that the continuous quotations sent out by the Board
of Trade are quotations of the pricçs bid and paid in connection
with thèse spéculative transactions had on the floor of the exchange.
It further appears that the Board of Trade, for a specified price paid
to it, furnishes thèse quotations to the telegraph companies, and au-
thorizes them to send the same over their wires for delivery to ail
persons who will agrée tp take them under the terms fixed by the
Board of Trade ; thèse quotations being thus furnished by the Board
of Trade and sent out over the Hnes of the telegraph com.panies as a
means of encouraging spéculation in futures and in garhbling upon
the rise and fall of the market, and. for the purpose of bringing to
the members of the Boar4 of Trade as large a part of this spéculative
business as can be possibly secured. As already shown, the stat\ite
of Illinois, as construed by the Suprême Court of that state, abso-
lutely forbids any person or corporation from keeping an office or
place wherein gambling in grain or other produce is permitted, or
from communicating or receiving any quotations of priées of such
property with a view to encourage or aiding in gambHng transactions
in such property. The évidence clearly establishes the lact that the
Chicago Board of Trade maintains in its exchange hall a place where-
IN BK BODOEK3. 169
in transactions coming within the inhibition of the statute are per-
mitted and carried on, and the préparation and sending out oî the
continuons quotations of prices, based upon thèse forbidden transac-
tions, are intended to aid its members, as well as outsiders, in en-
gaging in spéculative gambling on the rise and fall of the market, and
therefore in both thèse particulars the Board of Trade violâtes the
plain provisions of the statute.
The purpose of the bill filed in this case is to invoke the aid of the
court, as a court of equity, in securing to the Board of Trade the
pecuniary benefit derived from the communication and sale of quo-
tations derived from transactions conducted by it in open violation
of the statutes of the state in which it maintains its place of business,
and to which state it owes its corporate existence. The powers of a
court of equity cannot be successfuUy invoked for such a purpose.
It will not lend its aid to the furtherance of transactions expressly
forbidden by the statute, and thus declared to be contrary to the pub-
lic policy of the state wherein the transactions are had. In seeking
the aid of the court, under the circumstances developed in the évi-
dence introduced in this case, the Board of Trade does not corne
with clean hands, nor for a lawful purpose, and for thèse reasons its
prayer for aid must be denied. The conclusion thus announced re-
lieves the court from the need of considering the other questions aris-
ing on the record, and which hâve been very fuUy presented in the
briefs of counsel.
The decree appealed from is reversed, and the case is remanded to
the Circuit Court, with instructions to dismiss the bill upon the merits
at cost of the appellee.
In re RODGBRS.*
(Circuit Court of Appeals, Seventh Circuit. Aprll 22, 1903.)
1. BaNKKUPTCY— JCRISDICTION OF COURT— DISTRIBUTION OF FUND.
Wliere a receiver appointed by a court of bankruptcy obtained peace-
able possession of property from the bankrupt, although a wareliouse
Company claimed to be in tlie actual possession, and had issued receipts
therefor to the banlîrupt, who had transferred the same, and such prop-
erty was afterward sold by order of the court, to which the holders
of the warehouse receipts agreed by stipulation, the property and its
proceeds passed into the custody of the court, which had jurisdlction to
détermine the ownership of the fund.
2, Warehodskmen— Validity op Receipts— Property not in Possession of
Warbhoosbman.
A bankrupt was a dealer In seeds, occupying premises for which he
paid a large rental, where he maintained his office and transacted hls
business, and in which he also stored the grain and seeds purchased by
him, largely on crédit. He made a contract with a storage Company by
which he gave it a lease of the premises without considération, and the
Company issued to him warehouse receipts for the seeds therein, which
he hypotheeated as security for loans. The bankrupt continued to oc-
cupy the building as before. No sign was placed thereon showing
possession by the storage company, which had no key thereto, and the
only thing done to give notice of its possession of the seeds for which it
" Behearing denied October 6, 1903.
170 125 FfflDERJiLi, BEPÔETEB.
had glren receiptswas to place sinalliahd inconspicuous signs In the
rooms and smaU tags on the piles of: bags eontalnlng such seeds. The
, bankrujpt contli^ued to treat thé piopertjy as his o^n, cleaping the seeds,
and In some càség' séllJng theiii, ind stb^titùting other seeds for those
covered by the recëlpts; àlthoagh It did net appeàr that the storage Com-
pany kne-w of suèh action. Beld, that there was no such dellvery or
change^ of possession as to constltute In fact a warehousing of the prop-
erty, but that under the law of lUinolg, by which secret liens are invalid,
the transaction was constructively fraudaient and voldable by creditors
of the bankrupt.
8. Pledqes— Validitt— Delivbky op Warehocsb Receipts.
To constltute a valld pledge.of property by the transfer of warehouse
receipts theref or as seeurlty, su(A ijeceipts must bave been Issued by one
havlng the actual possession of ttie property, so that their transfer
amounts to a constructlve dellvery.
4. BakkkuptCy— Efpect OF Pboceedings— RiGHTs Vesting in Tedstee.
The flllng of a pétition In bankruptcy Is not merely an appropriation
by the bankrupt of his property to the payment of bis debts, but the
trustée appoint ed thereunder is vested not only with title to.the property
and ail the rlghts bf the bankrupt therein, but also with the rigbts of
action of creditors with respect to property which bas been fraudulently
transf erred or Incumbered by hlm.
6. Same, i ;: ■ ■
The, flling of a pétition în bankruptcy, foUowed by an adjudication, Is a
selzure of the property by the law which is equal in rank to selzure on
attachment or exécution, and with respect to the right to attack transfers
or ineumbrances by the bankrupt as elther actually or constructively
fraiudulent the trustée stands in the' samé position as an attachment or
exécution creditor. .
Appëfil from the District Court of the United States for the North-
ern District of Illinois.
Alexander Eodgers was adjudged a bankrupt on May 8, 1901, and on that
day the Chicago Title & Trust Company was appointed receiver, and subse-
quently trustée, of the property and estate of the bankrupt, and took posses-
sion of the estate, Includlng the property herelnafter mentloned. The bank-
rupt was a dealer in seeds, havlng his place of business upon the promises
Nos. 220:, toaSO Johnson street, in the clty of Chicago. Thèse premises, con
sisting ôf the south half of the basement, the north half of the south half
of the second» tilrd, fourthj , flf th, and sixth floors, with the right of way to
the south filevator from the railroad platform by way of the èast door on
platform, and by way of entrance on alley, and the right of way to go upon
the elevator, and the right to ship in and out by wagons by the front door,
by chute, and by the rear -entrance, as described, were leased by hlm from
one Hascall from January 10, 1899, to Aprll 30, 1902, at a monthly rental of
$200. On November 28,. 1899, he: also leased untll Aprll 30, 1902, the south one-
fourth of the flf th and sixth floors, at an addltlonal rental of $60 per month.
So that af ter that date he had the whole of the south half of the flf th and
fiixth floors, the north half of the south half of the second, thlrd, and fourth
floors, and the whole of the south half of the basement; the flrst floor being
vacant, apd used as a passageway. A wooden partition separated the south
balf from the flprth balf of the floors of the building, the latter being occu-
pied by another tenant. The entrance was from the west front of the build-
ing on Johnson street to the main floor^ and thence stalrways at the south
«nd of the building ran from each floor to the floor above and to the base-
ment. The front of the south half of the second floor was partitioned into
an office, and was oecupled by the bankrupt. There were also machlnery
and applianeea and a frelght elevator for the handllng of seéd, and on certain
floors were bins with cleanlng machlnery for cleanlng and grading seed. The
. seed was usually reeeived from railroad cars into the basement; thence ele-
Î4. See Bankruptcy, vol. 6, Cent Dig. §§ 222, 273.
IN HE EODGEBS. 171
vated to the top floor, If to be dumped or cleaned; and was usuàlly received
and shipped In bags, most of the business being in car-load lots of about 250
bags, and when stored on any floor was usually In car-!oad lots. ïhe usual
pile or lot was made up In two tiers of bags lyipg horlzontally, the ends of
the bags of one tier abutting the ends of the bags of another, with five or six
bags piled up in front agalnst the two tiers. Thèse piles were about 16
feet long and 6 to 7 feet hlgh. The building was known as "mill construc-
tion"; that Is, the timbers were exposed posts supported by joists and girders.
The various floors were known as divisions from the sixth down, A, B, C, D,
E, and F; the latter being the basement. Dependlng from the ceiling girders
or joists were wooden signs on whlch were painted "Div.," with the letters
"A" "B," etc., indicating the floor, and "Sec," with a number thereafter,
as 1, 2, 3, etc., to indicate a section, so called, of the floor. The floors were
large open floors, 50 by 90 or 60 by 100 feet, and had no blns for the separate
storage of seed, and had no partitions dividing the floor space. The boundary
Unes of "sections" were imaginary Unes, the signs being put up by Rodgers
upon his leasing the premises; and there was no division of sections on the
second floor, where a large part of the seed now in controversy was located.
The National Storage Company is a corporation, incorporated under the
laws of the state of Illinois on December 29, 1886. It was authorized to carry
on a gênerai warehouse business, to receive for safe-keeplng or storage gên-
erai merchandise, grain, etc.; to take charge of and perform the duty of pay-
ing freight charges, duties, etc., on bonding, i»jceiving, landing, hauling, and
deliverlng such property deposited, or intended to be deposited with such cor-
poration; to issue receipts or certificates for goods and personal property to
the owner or owners thereof when such goods and personal property "bave
been received, are on the premises, or under the control of the said corpora-
tion at the time of issuing such receipts or certificates."
On August 25, 1900, the National Storage Company and the bankrupt en-
tered into the foUowing written agreement:
"Proposai for Warehousing.
"Ofl[ice of National Storage Company,
"Chicago, lUs., August 25th, 1900.
"Mr. Alexander Eodgers,
"#220 Johnson Street, Chicago, Illinois.
"Dear Sir: 1. The National Storage Company hereby proposes to issue îts
storage warrants to the order of yourself or to such order as the accepter
hereof may hereafter direct, upon personal property consisting in part of Field
Seeds to be stored in the premises known as #220-#230, Johnson Street, Chi-
cago, Illinois.
"2. AU of the above named premises, or such portions thereof as may from
time to tlme be required, shall as and when required be leased to the Na-
tional Storage Company. Said premises are to be designated as National
Storage Company's Warehouse Premises Number 281.
"3. Rates, Terms and Conditions whlch shall govern the storage of prop-
erty or Issue warrants under this proposai are as follows:
"On property valned at $10,000 or less, the charge for th'e flrst calendar
month or fraction wlll be $7.50, for each succeeding month or fraction $7.50,
and for each additlonal $1,000 or fraction, the rate will be $.75 per month.
"AU traveling expenses and other incidental expenditures Incurred while
oonductlng the business under this proposai, and ail costs of placing property
in store, such as measuring, weighing, tallying, surveying, platting or drafting,
etc., will be added to above charges. A certifled mémorandum must be ren-
dered, showing laarket value of the property placed in store on which storage
charges are to be based.
"4. Substantlal fences, gâtes, partitions, doors or other forms of enclosure,
for encloslng or protecting property, for which warrants of this Company bave
been or may hereafter be issued, shall be constructed and kept In repair by
accepter hereof, and If n'ot so constructed or repaired upon request, this Com-
pany Is hereby authorized to forthwith construct or repair same, and place
any cost therefor as a charge agalnst the property enclosed or protected
thereoy.
173 125 FBDBIBAL BBPORTEB.
"5. Any aBd every lease exeeuted !n pursuance of thia proposai «hall, npoB
written Qotice dellyered to the National Storage Company by the accepter
hereof, be duly cancelled and the premises surrendered only wh«n and after
ail warrants Issued under, upon or by reason of any and every application
exeeuted by, snch acceptor, shall hâve been delivered to this Company under
terme and conditions of this proposai and sald warrants.
"6, ït Is understood unless otherwlse provlded In wrltlng, that this propo-
sition under its terms contemplâtes, tliat the quantlty of grain which may be
received for storage, shall be determined by a measured bushel standard.
Grain will be received by weight and so accounted for, charges for weighlng
by this Company's représentative to be pald by acceptor hereof.
I "7. Storage cliarges are duc and payable as elected by this Company, at
time of deMvery, monthly, or at close ofeach calendar quarter. It is pro-
vlded, that if for any cause delivery, of property be made on whlch storage
charges hâve not been paid* the remainlng property will be held Uable for
same and ail other charges whlch may hâve accrued. The costs for delivery
of property when attended by superintendence of this Company are not rated
as storage charges. Such cost and other contingent expenses will form basls
for additional charge. Surrender of warrants and payment of charges to date
of such surrender will not cesse or terminale storage charges until property
bas been accepted, and Belease Permits hâve been signed by party authorized
to recelve the property surrendered, and permits hâve been received at office
of this Company.
"8. Should increased cost, or additional services, or risk. In référence to
said propM'ty or warrants, be Incurred by reason of the sale or pledge of the
• warrants, and the property, covered thereby, then the rates on each warrant,
shall be su6h as shaîl be flxed by this Company, not exceedlng the rates
named therein.
"9. The serviceis of a capa,bie person satlsfactory to this Company must be
provlded to represent its Interests, such person shall also be acceptable to any
surety Company from whom indemnlty bond may be asked in adéquate
amount, and commensuratewlth value of property received by this company
and covered by its warrants. To defray cost of bond and services of sucb
custodian a charge agalnst the property wlU be made, unless otherwlse ad-
Justed.
"10. This Company reserves the right to recall and issue new warrant, for
remainder of «ny -«yarran^^havlng Sirefe or more endorsements thereon of
prbpcn-ty dellyèreà therêfrpm, àlfeo to recall and issue new warrant for re-
mainder o^, any warrant, at explf,àtion of bne year from its date, havlng one
or more endorseniëhjs thereon of péoperty delivered therefrom, provlded that
in either case the ■^uàràntêe atforded by enddrsers is not affiected thereby.
"11. It is understpod that while the ideptity pf each respective lot of prop-
erty received by this Company, shall ajways be malntalned, any surplus re-
mainlng after the delivery of àny certain lot or lots may be retained by the
Storage Company, ttiitil ail charges. ^repàifl,, and àll warrants issued in pur-
suance of this proposai. shall tiàye'bégnstîi'rendered and satisfled.
"12. It Is to be undierstiûo^' âJip, ,that shopld this Company at any time
hereafter, for any ^ reason diçeta,liliè premisel^ furnlshed fpr its occupancy in-
secure fot Its pùrposés, or, fisp any çàjj^ç ,be înterfered with in the possession
or removàl pf property coverecj 'tf^T; l'ta ' warrants, or be dispossessed of the
storage prèmiseS, 'whlcn are tioX?. oi^ m$,y;jbéi;èaftei: be leased to It, that it'is
hereby authorized, wlthont.nptice to holders oi! .warrants upon ail or any part
of*the property 'stored in sii.cjh pfejtaisès, tb proyide otlifir sùitable storage
premises, mové the property ï:herç|<),'and cause pollcies of, Insurance to Issue
thereon tb îté ovyii order in trust fbrânipUii,t!ot value shown by sald valua-
tioh memoranduin, or more at llis dlàcretloh; Àll costs pr expenses accruing
by means of such removal, interférence oç dlspossession, including Insurance
premiums, aria, licteased Jfen^tpàidbythïà; Company, for space occupied b.y
such propertjr; shàll ble cliatrgeable agalnst the property In addition to the
storage rate' àbûif é; specifled. Aiid If thè Samb or any other charges are àhd
remaln ùnpala iïÔi: nlnëty days ci" morè,thls; Company Is heréby authorized
to sell the property in the banner, legally proyidèd for enforcing warehoUae-
nken'B Iles, ahd shàll àpply the prOceeds of such tiàlë:"
IN KE KODGERS. 173
"First: To the payment of ail costs and expenses of such sale.
"Second: To the payment of ail sums due this Company under, upon or by
reason of thls proposai, and the overplus if any, shall be held for and upon
demand paid to the party or parties legally entitled thereto. When this Com-
pany shall hâve given the légal notice and sold the property as provlded there-
under; then ail warrants affected thereby shall be null and void as against
the National Storage Company.
"13. The Property delivered for purposes of storage must remain undis-
turbed untll warrants covering same are surrendered, received at office of
this Company in Chicago and 'Reiease Permits' duly received and counter-
signed by Custodian in charge and receipt signed for property by party au-
thorlzed to receipt for same.
"14. The acceptance hereof shall empower The National Storage Com-
pany to place its signs and marks upon the property and enclosure to sucb
au extent as shall fully protect possession in compliance with laws regarding
same, which signs and marks must at ail times remain undisturbed and un-
obscured.
"15. Upon conclusion and settlement of ail business under this proposai,
ail copies of original and duplicate papers, shall, upon request of this Com-
pany be cancelled and returned to it,
"Very respectfully, National Storage Co.,
"Accepted. By Walter Tod, Treasurer.
"Alex. Bodgers."
And thereupon the bankrupt executed a lease to the National Storage Com-
pany as foUows:
"Thls Agreement, Made this thirty-first day of August, in the year of our
Lord one thousand nine hundred between Alexander Rodgers, of
Chicago, County of Cook, and State of Illinois, party of the first part, and
National Storage Company, a corporation organized and existing under the
laws of the State of Illinois, party of the second part,
"Witnesseth: That the said party of the flrst part for and in considération
of the covenants and agreements hereinafter mentioned and contained, to
be kept and performed by the said party of the second part, its successors
and assigns, hereby does démise, lease, and let unto the said party of the
second part the following descrlbed promises, situated in the City of Chicago,
County of Cook and State of Illinois, to wit:
"Ail of the basement and second floor, the North Half (N. y<>) of the third
(3) and fourth (4th) floors and ail of the flfth (5th) and sixth (6th) floors of the
six (6) story and basement Brick Building situated at and known as #220
#222 #224 #226 #228 and #230 .Tohnson Street, for and during the term
of three years from and after the date of this Agreement (and so long there-
after as property remains thereon for which warrants of said Storage Com-
pany hâve been issued and are in force and effect) for a yearly rentaj of One
Dollar, and other good and valuable considérations, the receipt of which in
advance, is hereby acRnowledged by the party of the flrst part.
"This lease Is made upon the express conditions following, to wit:
"First. That the said leased promises shall be used and occupied exclusively
for the storage of Personal Property, and for the transaction of such othei'
business as may be connected therewith, or incident thereto, in pursuii of
any rights claimed in performance of dutles of said Storage Company as
Warehousemen.
"Second. That the said second party will not receive upon premises above
described any property for purposes of storage, after due notice in writing
bas been received by said Storage Company, from said flrst party, that termi-
nation of this lease is desired.
"Third. Said party of the second part its agent or agents shall, for the pur-
pose of inspection or removal of any property which may be located in
premises herein leàsed, be permftted easy and convenient passage at any and
ail times; through any part of the Hbutting premises that is or may herèafter
be occupied or controlled by said party of the flrst part.
"Fourth. Said party of the second part shall, for the convenient moving of
property to or from the above descrlbed premises, hâve f ree from cost of
17i
125 FEDERAL BBPOETBB.
opération the use of eleyators, tracks, cars, scales, scale house and any other
fixtures or appUances tbàt party of flrsj part now has or may açqulre during
tenu of thls lease, and shall be prlvileged to place any marks, élgns or other
évidences of possessipri whlçh It may deem necessary or désirable.
"Fifth. It Is understodd and agreed to by and between the parties hereto
that the 'moving of propëfty' shall Inelude thé complète delivery of same on
cars, wagons, or other means of transfer should party of the second part so
elect
"In Witness Whereof, the parties to thèse présents hâve hereunto set their
hands aiid sëals the day and the year first above wrltten.
"[L. S.] Alexander Eodgers [Seal.]
"ÎL. S.] National Storage Company [Seal.]
"By Walter Tod."
ITpon the exécution of the lease the National Storage Company tacked
on the walls of the several floors notices In white letters upon dark blue
enameled tin 3x7 Inches, there being eight of the signs, which vrere dis-
tributed to the several floors of the building. Thèse signs read: "Thls prop-
erty controUed by the National Storage Company as a public warehouse.
Warehouse premlses No. 281." Thèse slënS were placed seven or eight feet
from the floor on the side of the building and on the partitions between
the premlses in question and the north half of the building; but no signs
were plâced on the exteiior of the building. When the bankrupt desired a
storage warrant, he made application upon a blank form to the National
Storage Company as follows:,
"Application for Storage Warrant
"Chicago, IlL
"To the National Storage Company,
"Chicago.
"For the purpose of obtatnlng your Storage Warrants the subscrlber has
placed In your Warehouse premlses No. 281, located at Nos. 220-230 Johnson
St. Chicago, 111. the foUowlng property, to wit:"
"It Is hereby eertlfled that thls property belongs to the underslgned, Is in
good mercantile condition and free from lien or encumbrance. Said Storage
Warrants to be Issued to order of Alex Kodgers, In accordance wlth proposai
for Warehousing Contract dated Aug. 25, 1900, of which thls Application and
the Valuatlon Mémorandum bearlng same Warrant Numbers and of even date
herewith Is hereby made a part", accompanylng the same wlth a valuatlon
mémorandum as fdllows:
"Valuatlon Mémorandum.
"Chieago.
"National Storage Company.
"Boom 217, First Nat'l Bank Bldg., Chicago.
"To Alex Rodgers,
"#220 #230 Johnson St, Chicago.
Markjbt ,V alites
ri
A
rs 1
S
NumbeTS
Lot.
DXBCBIFTIOH 07 PbOPEBTT.
Datx
«H
o
a
s
*•
C3
*B
si
, >^
^
"The property speclfled on tlie above mémorandum which for purposes of
warehousing bas thls day ,been placed lu the possession of the National
Storage Comt)iiny, by the itibscrlber, Is the same as that entered on Applica-
tion for Storage warrant of corresponding warrant numbèr, and even date
herewith, and the underslgned hereby guarantees that the responsibility of
IN BE EOBGBE8. 175
the Storage Company, în event of loss of any property covered by warrants
enumerated, shall not exceed the values given above, nnless, before such loss
occurs, notice of change in value shall hâve been given to and acknowledged
by said Storage Company."
Thereupon, an employé of the company -w-ould Inspect the property speci-
fied in the application and valuation mémorandum, and .place upon the pile
a pasteboard tag of the form following:
"No disturbanee permitted whlle this card Is posted.
"Warehouse card. National Storage Company, dated
Warrant No Lot No Section No Pile No "
The Storage Company would then issue to the bankrupt a warehouse war-
rant or receipt in the form following:
"Warrant No Lot No National Storage Company, Office
217 First National Bank Building, Chicago, hereby acknowledges to hâve re-
ceived to weigh pounds, contained In Div
Sec floor at Its warehouse premises No. 281, located at 220 to 230
Johnson Street, Chicago, Illinois, and wiU surrender the same to the order
hereon of Alexander Rodgers upon payment of charges and delivery of this
warrant, at its office, Chicago, duly endorsed.
"It is agreed that this company is not responsible for loss or damage to
property oceasioned by fire, water, leakage, vermin, ratage, shrinkage, acci-
dentai or providential causes, riot or insurrection, frost or change of weather,
or from being perishable while in storage, and that this company shall, in
the custody of the above property, be the agent of the holder of this warrant.
"Record Book page Storage and charges as per contract on
file with this company.
"Chicago "
Thèse warrants the bankrupt would place at banks and with others as col-
latéral to loans made to hlm. When it was desired to remove seed for which
warehouse receipts had been obtained, application was made on a formai
prlnted blank, the warehouse receipt retumed and canceled, and a release
issued by the storage company to the bankrupt.
The storage coriipany had no warehouse of its own, only such as was leased,
as was the one in question hère. It had no keys to this building. The bank-
rupt alone had the keys, and access thereto was obtainable only through him.
The signs placed upon the walls of the building were obscured, and not read-
ily observable by reason of the fact that the piles of seed were higher than
the signs. After the lease he continued as before to carry on his ordinary
business upon the premises, maintaining an office with sundry clerks and
workmen upon the premises. He bought and shipped seed, cleaned the same,
and occasionally cleaned seed on which receipts were issued, taking it out of
the bags, cleaning it, and restoring and adding a sufflcient amount of other
seed to equalize the loss in the cleaning. Also, in some Instances, the bank-
rupt shipped out the property before the receipts were canceled; but the
storage company did not know of it. The bankrupt also, from time to tlme,
as the exigencies oî his business prompted, brought seed to the warehouse,
and substituted it for seed on which receipts had been issued, removing the
seed on which receipts had been issued, and replacing the tags on the bags
substituted. This was done in many instances, and sometimes several times
with the property covered by one receipt. Whether the storage company
knew of this custom of business is left somewhat doubtful by the évidence.
The storage company, bowever, had notice of the custom of the bankrupt to
clean the seed so placed in storage. The inspector of the storage company
called at the premises from one to flve times a week. Once or twice a week
he would check over the goods stored, and see that the tags were on the bags
and that the stock was ail right. The bankrupt hypothecated some of thèse
receipts with the First National Bank of Chicago to secure loans to the amount
of $12,000, and some of them with H. W. Rogers & Bro. to secure a loan of
$5,000, and he sold some of the receipts to other parties, receiving the fuU
value of the seed.
t76 125 FBDBBAL REPapTEB.
Upon tbe adjudication of bankruptcy, the receiver, at thc request of the
gênerai creflltors of the bankrupt, applied for an order for the immédiate sale
of the sfteflinthe warehouse; whereupon the First National Bank of Chicago
appeared and pleaded that the bankruptcy court was without jurfsdiction to
decree a sale of a certain part of the property, alleging, in support of its
plea, that It held warehouse receipts Issued by the storage company upon
certain speclâed parts of the property, whlch were duly indorsed by the
bankrupt, and delivered and pledged to the bank for moneys Ih good faith
loaned and advanced to the bankrupt; and daimlng that the property was
in the full possession and control of the National Storage Company, and was
not in the rlghtful possession Qf the receiver. A similar plea was flled by
H. W. Eogers & Bro., whô heïd warehouse receipts on certain other part of
the property to seeure a loan of $5,000. The National Storage Company aiso
appeared, denying the jurisdiction of the court to order any sale of the
property, settlng forth the property which at the time of the bankruptcy was
stored In the premises upon which it had issued warehouse receipts, and
clalming that it was in the actual possession of the property, and that its re-
ceipts entitled the holders thereof, upon présentation to It, to possession of
the property.
The matter was referred to a référée, who reported August 5, 1901, that
the bankrupt, by reason of the facts stated, was not, at the date of filing the
pétition or at tiie date of adjudication, in possession of the property men-
tioned in the answers, and that the receiver had not possession or right of
possession of the property; that the receipts of the National Storage Com-
pany were valld under the law of thestate of IlUnols, and were transférable
by Indorsement; and that the Indorsement of the receipts held by the several
parties answering constituted valid transfers to them of the property repre-
sented by such receipts; and recommeiïdlng that the pétition be dlsmissed
as respects ail property covered by the warehouse receipts. On the same
day the court entered an interlocutory decree which held that the receiver
reçoive and take possession from the bankrupt, peaceably, the property In
question, nàmely, the several lots of seed, set forth In the answers of the
First National Bank, H. W. Rogers & Bro., and the National Storage Com-
pany, in the warehouse; and, that the court had jurisdiction and possession
of that property in this cause; that the court sustained the objections and
exceptions to the report as to the jurisdiction and possession of the court:
and, it being deemed most advantageous to sell the seed In question at that
time, and the bank stipulating that it would sell and hold the funds derlved
from the sale of the seed subject to the furthër order of the court, it was
ordered that the First National Bank sell the seed at once, and report its
acts and doings in the premises to the court. The sale was had, and on
September 23, 1901, the court confirmed the sale, and the bank and Rogers
& Bro. flled their pétitions, clalming préférence and liens on the proceeds of
the sale reported by the bank, and the court ordered the trustée of the bank-
rupt and any parties In Interest to answer such pétition. The trustée and
James A. Patten, créditer, thereupon answered such pétitions, upon which
proof was taken, and on October 29, 1902, the court entered a final decree
eonflrming the report of the référée, except s6 far as the same found that
the bankruptcy court was without jurisdiction, decreed that the receiver had
not the right of possession to the property mentioned, but that the National
Storage Company had, and was entitled to thè same; and, reciting the sale
of the property by the First National Bank under the interlocutory order or
decree, the proceeds of which Wei^ In possession of the First National Bank,
dlstrlbuted the proceeds to that bank and to H. W. Eogers & Bro., aceord-
ing to their respective clalms. From which decree the trustée and James A.
Patten, a créditer to the amount of $34,000, appeal to this court
Newton Wyeth and Joseph E. Paden, for appellant.
Orville Peckham, Samuel Kerr, and Wallace Hickman, for appellee.
Before JENKINS, GROSSCUP, and BAKER, Circuit Judges.
JENKINSy -Circuit Judge (after stating facts as above). The court
below properly ruled that it had jurisdiction of the subject-matter.
IN EE nODGERS. 177
Its ofBcers acquired possession of the property In dispute from the
bankrupt. It is, indeed, claimed by the storage company that the
writings and the facts embodied in the statement of the case show that
it, and net the bankrupt, had possession prior to the bankruptcy ; but
the receiver had in fact acquired peaceable possession of the property,
and subséquent proceedings in the bankruptcy court upon pétition of
the présent objectors to the jurisdiction, by which the property was
sold by the bank under stipulation that it should liold the fund sub-
ject to the order of the court, placed the property and its proceeds
in custodia legis, and the court had the right to détermine the owner-
ship of the fund in its possession. Haven & Geddes Company v.
Pierek, Trustée (C. C. A.) 120 Fed. 244; In re Antigo Screen Door
Company, herewith decided, 123 Fed. 249. The policy of the law of
the State of IlHnois denounces ail secret liens upon property. They
are held to be constructively fraudulent as to creditors, and the prop-
erty, so far as their rights are concerned, is considered as belonging
to the one having the ostensible possession. Ketchum v. Watson, 24
111. 591; McCormick v. Hadden, 37 111. 370; Murch v. Wright, 46
111. 487, 95 Am. Dec. 455; Chickering v. Bastress, 130 111. 206, 22
N. E. 542, 17 Am. St. Rep. 309; Peoria Manufacturing Company v.
Lyons, 153 111. 435, 38 N. E. 661. And so property held upon condi-
tional sale is subject to attack, and may be held against the vendor
by creditors of the possessor ; and this upon the ground that to suf-
fer, without notice to the world, the real ownership to be in one per-
son and the ostensible ownership in another, gives a false crédit to the
latter, and in this way works an injury to third persons. It is said
in The Union Trust Company v. Trumbull, 137 111. 146, 180, 27 N.
E.33:
"There is no mode under our law, exeept by chattel mortgage duly acknowl-
edged and recorded, by which the owners of Personal property, retaining its
possession, can give another a lien upon it that can be enforeed as against
creditors and subséquent purchasers."
Although the rule is otherwise in other states with respect to condi-
tional sales (Harkness v. Russell, 118 U. S. 663, 7 Sup. Ct. 51, 30 L.
Ed. 285), we are in duty bound to defer to the law of the state in re-
spect of property within that state. Hervey v. Rhode Island Loco-
motive Works, 93 U. S. 664, 672, 23 L,. Ed. 1003 ; Dooley v. Pease,
180 U. S. 126, 21 Sup. Ct. 329, 45 L. Ed. 457. The transaction is not
changed by the form of the agreement under which it is cloaked, We
are to look to the real purpose of the contract, and not to the form
or the name given it by the parties. Murch v. Wright, supra ; Her-
vey V. Rhode Island Locomotive Works, supra.
We are thus brought to the considération of the real character and
purpose of the transaction between the bankrupt and the storage com-
pany. We are to ascertain the real intention of the contracting parties
from the whole agreement read in the light of the surrounding cir-
cumstances. The bankrupt was largely engaged in purchasing seed
upon crédit, storing the property purchased in his warehouse. He
occupied the premises as a place of business, maintaining an office
there, with clerks to assist in the management of the business, and
with porters to handle the seed. The premises were subject to a
125 F.— 12
178 125 ffBDEBAL REPORTEE.
rental of $250 a month. He arrangea with thestbragè' Company,
which had no warehotise of ils ôwn, that it would issue warehouse
warrants or receipts to the bankrupt for property upon tlie bankrupt's
premises for a certain small charge per month upon the value of the
property covered by the receipts. He executed a lease ■ of the prem-
ises to' the storage company, to continue so long as the bankrupt
should désire, and so long as property remained thereon for which
warrants or receipts had been isSued; and this without any payment
of rent bythe storage Company, the rental in fact being paid by the
bankruptj The storage Company neither required, nor was it given,
any key to the premises. The bankrupt remained in possession of
the premises as before the agreement, continuing to transaet his busi-
ness there as he had formerly done. There were certain signs placed
upon the différent floors 6f the building, indicating that the storage
Company controlled the premises. Thèse were small and obscure
signs, not likély to attract attention, and most of them hidden behind
the piles of bags of seed. 'No sign was displayed upon the exterior
of the building indicating âny proprietorship of the storage company,
or giving notice to the world that any other than the bankrupt had
possession ànd control. There was no open, notorious manifestation
of a change of possession, none was intended, and there was none in,
fact. Upon each pile of bags of seed for which the warehouse receipts
or warrants were issued there waS placed' a smaU tag, which might be
discovered upon careful search. The bankrupt substantially treated
this property as his own, at times going through the forms prescribed
by the storage company, and, whenever he found it necessary, ignor-
ing them. We do notîfiridthat the storage company had knowledge
of this action of the bankrupt, but it certainly knew that it was possible
under the circumstances for the bankrupt to do with the property as
he would, since it was left witliin his control.
It is difïicult for ils to look upon tliis transaction as a warehousing
of property. The storage company assumed no liability to the bank-
rupt, and assumed only such responsibility as the làw imposes upon it
with respect to those advancing money upon the faith of its warehouse
warrants or receipts. The name of the company is in itself, under the
circumstances, a false pretewse. It did not store property. It had no
premises upon which to store property. The bankrupt stored the
property, The bankrupt; paid the rental of the premises. It is true
that an agent of the storage company occasionally visited the premises
and inspected the property in a sort of a way, but exercised no super-
vision or control that wôuld prevent the bankrupt from doing with
it as his will might dictaté of his financial necessities might require.
We cannot but regard this arrangement as a subterfuge, a mCre device
to enable the bankrupt to hypothecate the warehouse warrants or
receipts, and so to raise mOney upon secret liens upon property in
his possession and under his control. The written agreement indi-
cates this. It is somewhat starthng to learn that a warehouse com-
pany should store goods of this character for another upon the prem-
ises of that other, taking compensation as for storage, not relàted
to the cost of storage, or to the expense of receiving and delivering
the property, not according to the space occupied by the property,
IN BE K0DGEE8. 179
but accordîng to the value of the property. The fact hère is patent
that the storage Company assumed to the bankrupt no Habihty, and
that the sole purpose was to issue warehouse warrants or receipts,
making such inspection only as, in its judgment, would protect it from
liabihty to third persons by reason of the issue of its warrants. To
uphold such a scheme would permit every merchant in the state, not-
withstanding the declared policy of the state to the contrary, to hâve
possession of large stocks, thereby inducing crédit, and to cover them
with secret liens, thereby deceiving creditors. It would, in efïect, per-
mit such merchant to pledge his entire stock without change of pos-
session, without record of it, and without notice to the world. Such
a scheme is disapproved by the law of the state of IlHnois, which in
this instance we are bound to uphold, however specious may be the
device or however attractive may be the form^ by which it is cloaked.
Such a scheme within the state of Illinois is constructively fraudulent
as to creditors, and voidable by creditors.
Nor can we uphold this transaction as a pledge of the property to
the bank and to H. W. Rogers & Bro. Actual or symbolical posses-
sion of Personal property in the pledgee is essential to its pledge. It
is true that when the actual delivery is to a carrier or warehouseman,
and bill of lading or warehouse receipt is given therefor, the transfer
of the instrument and its delivery to the pledgee is regarded in the
law as delivery of possession to the pledgee of the property repre-
sented by the instrument; but it is a necessary condition to the ex-
istence of such symbolical possession by the pledgee that the property
itself be in the possession of some person other than the pledgor.
Two différent persons cannot be in the actual adverse possession of
the same property or premises at the same time, and, as we find the
actual possession and actual control of the property in dispute to hâve
been in the bankrupt, the transfer of thèse warehouse receipts to bona
fîde holders for value, even without notice of the fact, cannot con-
stitute a valid pledge of the goods, as the storage company had not
possession and control of the goods. Union Trust Company v.
Trumbull, supra.
It is true that it is ruled by the Suprême Court of Illinois, in the
case last cited, that such transactions, being not in fact, but only con-
structively, fraudulent, are upheld against gênerai creditors, and are
only voidable by judgment or attaching creditors — as in the case of
an unrecorded chattel mortgage. In such case the lien of the un-
recorded mortgage, and the title in the case of a conditional sale, and
so also thèse storage warrants or receipts in the hands of a bona
fide holder for value, would be sustained, except as against exécution
or attaching creditors. It is also ruled that an assignée, under the
insolvent law of the state, takes as a volunteer, and subject to ail
liens and equities enforceable against his assignor. Union Trust Com-
pany V. Trumbull, 137 111. 146, 2"] N. E. 24; Hoover, Owens &
Rentschler Co. v. Burdette, 153 111. 672, 39 N. E. 1107; Schwartze v.
Messinger, 167 111. 474, 47 N. E. 719. The rule in some other states
of the Union with respect to the rights of an assignée under the state
insolvent law is différent, doubtless arising from the difiference in the
180 125 FEDERAL EBPOETER.
various insolyent laws. Some of thèse laws do not prevent suits by
creditors ; othèrs do. Under some statutes the assignée represents
only the assigïiorj ànd can assert only the right of the assignor. Un-
der others the assignée represents aiso the rights of creditors, and can
enf orce their rights without respect of the nght of the assignor.
We are therefore brought to the question whether, under the bank-
ruptcy law, the trustée takes solely in the right of the bankrupt, or
whether he also represents the rights which creditors hâve, and the
authority to enforce them; whether the pétition in bankruptcy is
merely the appropriation by the bankrupt of his property to his cred-
itors, or an assertion in behalf of creditors of rights which they had
independently of the bankrupt, and which he himself could not assert.
Notwithstanding some loose expressions in the décisions upon this
subject, we are satisfied, from a careful scrutiny of the act, that the
fîling of the pétition is something more than the dedication by the
bankrupt of his property to the payment of his debts ; that the trustée
is not only invested with the title of the property, but since, after
the iîHng of the pétition, the creditors are powerless to pursue and
enforce their rights, the trustée is vested with thejr rights of action
with respect to ail property of the bankrupt transferred by him or
incumbered by him in fraud of his creditors, and may assail, in be-
half of the creditors, ail such transfers and incumbrances to the same
extent that creditors could hâve donc had no pétition been filed. The
fiIing of thé pétition, 'followed by seizure and by adjudication in bank-
ruptcy, is a seizure of the property by the law for the benefit of cred-
itors, and an appropriation of it to the payment of the debts of the
bankrupt. It is a seizure of the property by légal process, equal in
rank to and of the sâme force and effect as by exécution or attach-
ment, This has been held by various courts of appeals, in which dé-
cisions we fully concuri ' In re Pékin Plow Company, 50 C. C. A.
257, 112 Fed. 308; In re Garcewich, 53 C. C. A. 510, 115 Fed. 87.
It is said by the Suprême Court in Mueller v. Nugent, 184 U. S. i,
14, 122 Sup. Ct. 275, 46 L. Ed. 405: "It is as true of the présent
law as it was-of that of 1867 that. the filing of the pétition is a caveat
to ail the world, and in fact an att^ichment and înjunction." m We
hâve assumed that the bank and H. W. Rogers & Bro. are bona fide
holders fOr value, and without notice, .pf thèse warehouse receipts,
giving therefor a full consider3t,ion. As ag-ainst.the bankrupt they
would be entitled tq protection, and \yquld he held to hâve the title
to the property ; but, thç issue of thèse warrants being constructively
fraudulent as, to çre;ditQrs of the bankrupt, their right must be held
subject to the claîms qf tl^e: creditors. Thèse warrants are not com-
mercial paper, and arç not protected by the law governing that class
of instruments. ■ ' . ^ , ,
The dectee is reversée, and the cause remanded, with directions to
decree for the trustée.
UNITED STATES V. BISHOP. l8l
UNITED STATES v. BISHOP.
(Circuit Court of Appeals, Eighth Circuit. September 7, 1903.)
No. 1,877.
1. Thial— Peeemptory Instructions— Reqdest of Both Parties— Questions
OP PaCT COKCI/UDBD.
Where, at the close of a trial by a jury, each party requests a
peremptory instruction in his favor, and the court grants one of tlie re-
quests, the parties are estopped from claiœing that any question should
bave been submitted to tbe jury. Ali disputed questions o£ fact are con-
clusively determined in favor of the successful party, and the only ques-
tions open to review in the appellate court are, was there any substantial
évidence in support of the court's finding of fact? and was there any error
in the déclaration or application of the law?
2. OusTOMs DuTiEs— Consignée of Qoods Ownbk fok Pubposes of Collection
— Relation to Consignor Immaterial.
The consignée of imported goods is deemed the owner for the purpose
of the collection of the duties thereon, under section 3058, Kev. St., as
amended by Act Feb. 23, 1887, c. 221, 24 Stat. 415 [U. S. Comp. St. 1901,
p. 2005], and it is no défense to an action against the consignée for such
duties that the consignor or any other party who, at the request or with
the consent of the consignée, procured the importation, failed to obey the
latter's instructions or to comply with the terms of the contract between
them.
8. Samb— FoRFBiTUHB FOR Undervaluation — Praudulent Intbnt Requisite.
Under section 82 of the tariff law of July 24, 1897, c. 11, 30 Stat. 212
[U. S. Comp. St. 1901, p. 1892], the fraudulent intent of the owner or of
his authorized agent in entering the imported merchandise is an indis-
pensable condition of the right of the government to forfeit the goods for
undervaluation.
4 Samb— Additional Duties for Undervaluation Recoverablb Without
Phoop of Fraudulent Intent.
But an action to recover the additional duties accruing upon an under-
valuation under this section of the law may be maintained against the
consignée without proof of any fraudulent intent by the owner, the con-
signée, or the agent in making the entry. Good faith and innocence con-
stitute no défense to such an action.
(Syllabus by the Court.)
In Error to the Circuit Court of the United States for the District
of Minnesota.
Charles C. Irloupt, for the United States,
Francis B. liart, for défendant in error.
Before SANBORN and VAN DEVANTER, Circuit Judges, and
SHIRAS, District Judge.
SANBORN, Circuit Judge. This is an action by the United States
to recover of James H. Bishop, a citizen of the state of Minnesota,
the duty upon a car load of calcium carbide, under section 7, c. 407,
of the "Act to simplify the laws in relation to the collection of the
revenues," approved June 10, 1890, 26 Stat. 134, as amended by the
"Act to provide revenue for the government and to encourage the
industries of the United States," approved July 24, 1897, c. 11, § 32,
30 Stat. 212 [U. S. Comp. St. 1901, p. 1892]. Section 32 of the tariiï
î S. 9ee Customs Duties, vol. 15, Cent. Dig. § 297.
182 125, FfflDEEAL BEPOETEE.
law of 1897 provides that section 7 of the act of June 10, 1890, c, 407»
26 Stat. 134, shall be amended so as te read as foUows :
"Sec. 7j Tbat the owner, consignée, or agent of any imported merchandise
whlch bas been actually purchased may, at the time when he shall make and
verify his written entry of such merchandlse, but net afterwards, make such
addition in the entry to the cost or value given In the invoice or pro forma
invoice or Statement In form of an Invoice, whlch he shall produce with his
entry, as in his opinion may raise the saœe to the actual market value or
Wholesale priée of such merchandise at the tlme of exportation to the tînited
States, in the principal markets of the cbuntry from whlch the same bas been
Imported; but no such addition shaU be made upou entry to the invoice
value of any Imported merchatidise obtalned otherwise than by actual pur-
ehase; and the coUector withln whose district any merchandise may be im-
ported or entéred, whether the same bas been actually purchased or procured
otherwise than by purchase, shall cause thé actual market value or Whole-
sale prlce of such merchandise to be appralsed; and if the appralsed value
of any article of Imported merchandise subject to an ad valorem duty or to
a duty based upon or regulated in any manner by the value thereof shall
exceed thè value declared In the entry, there shall be levied, collected and
pald, in addition to the dutieè iinposed bv law on such merchandise, an ad-
ditional duty Of one per centiim of thé total appralsed value thereof for each
one per centum that such appralsed value exceeds the value declared In the
entry, bpt the additional duties shall ohly apply to the particular article or
articles là èach Invoice that are so undervalued, and shall be limlted to flfty
per centum of the appralsed value of sflch article or articles. Such additional
duties shall not be construed to be pénal, and shall not be remitted, nor pay-
ment thereof In any way avoided, except in cases arising from a manifest
clérical efror, nor shall they bé refùndeâ In case of exportation of the mer-
chandise, or on ttny other account, nor shàll they be subject to the beneflt of
drawback; provlded, that If the appralsed value of any merchandise shall
exceed the value declared In the entry by more than flfty per centum, except
when arising from a manifest clérical error, such entry shall be held to be
presumptively fraudulent, and the colleetor of customs shall seize such mer-
chandise and proceed as In case of forfelture for violation of the customs
laws, and in any légal proceedlng that may resuit from such selzure, the
undervaluatlon as shown by the appralsal shall be presumptive évidence of
fraud, and the burden of proof shall be on the claimant to rebut the same and
forfelture shall be adjudged unless he shall rebut such presumptlon of fraudu-
lent Intent by sufflcient évidence. The forfelture provided for in this section
shall apply to the whole of the merchandise or the value thereof In the case
or package contalning the particular article or articles In each invoice whlch
are undervalued."
The title 34 of the Revised Statutes is entitled "Collection of Duties
upon Imports." Section 3058 of chapter 10 of that title as amended
by the act of February 23, 1887, c. 221, 24 Stat. 415 [U. S. Comp. St.
1901, p. 2005], provides that "ail merchandise imported into the
United States shall, for the purpose of this title, be deemed and held
to be the property of the person to whom the merchandise may be
consigned."
In the action before us the United States alleged in its complaint,
and the défendant, Bishop, deniedin his answer, that the latter im-
ported from St. Catharines, in the province of Canada, into the United
States, 300 iron drums or cans, 50 wooden cases, and 32,400 pounds
of calcium carbide; that the defendant's agent, Henderson, declared
the foreign value of thèse goods tq be $326; that the foreign value
was $1,106; that the goods were properly appralsed; and that the
duty on them, under section 32 of the tariflf law of July 24, 1897, c. 11,
30 Stat. 212 [U. S. Comp. St. 1901, p. 1892], which has been quoted
UNITED STATES V. BISHOP, 188
above, amounted to $829.50. Upon thèse issues Ihe case was tried
to a jury, and at the close of the évidence the government requested
the court to give to the jury a peremptory instruction to return a
verdict in its favor, and the défendant besought the court to per-
emptorily direct the jury that the plaintiff was not entitled to recover.
Thereupon the court instructed the jury to return a verdict for the
défendant, and the judgment upon that verdict is challenged by the
writ of error in hand.
The requests of both the parties to this action for peremptory in-
structions in their favor relieve us from the considération of the ques-
tion whether or not there was any issue of fact which should hâve
been submitted to the jury, and make the instruction of the court a
conclusive iinding in favor of the défendant on every question of fact
at issue in the case. Where each party requests the court to direct
the jury to find a verdict in his favor, he thiereby concèdes that the
case présents no question for the jury, waives his right to their dé-
cision of every issue therein, and requests the court to find the facts
and déclare the law. And when, pursuant to such requests, the court
accepts thèse waivers, and by its peremptory instruction détermines
the questions of fact and of law in favor of one of the parties, both
parties are estopped from assailing or reviewing its finding upon dis-
puted issues of fact, and are limited in the appellate court to a review
of the two questions, was there any substantial évidence to sustain
the court's finding of facts? and was there any error in its déclaration
or application of the law? Beuttell v. Magone, 157 U. S. 154, 157, 15
Sup. Ct. 566, 39 L. Ed. 654; The City of New York, 147 U. S. 72,
yj, 13 Sup. Ct. 211, 37 L. Ed. 84; Laing v. Rigney, 160 U. S. 531,
16 Sup. Ct. 366, 40 L. Ed. 525; King v. Smith, iio Fed. 95, 97, 49
C. C. A. 46, 48, 54 L. R. A. 708; The Francis Wright, 105 U. S.
381, 26 L. Ed. iioo; Merwin v. Magone, 70 Fed. "}•](), yjy, 17 C. C. A.
361, 362; Magone v. Origet, 70 Fed. 778, 781, 17 C. C. A. 363, 366;
Chrystie v. Poster, 61 Fed. 551, 9 C. C. A. 606; Stanford v. McGill
(N. D.) 72 N. W. 938, 952; Mayer v. Dean, 115 N. Y. 550, 22 N. E-
261, 5 L. R. A. 540; Provost v. McEncroe, 102 N. Y. 650, 5 N- E.
795-
In this State of the case the fîrst question for considération is
whether or not there was any évidence to support a finding in favor
of the défendant upon the issues of fact presented by the pleadings.
The act of 1887, 24 Stat. 415 [U. S. Comp. St. 1901, p. 2005], déclares
that for the purpose of the collection of duties ail merchandise im-
ported into the United States shall be deemed to be the property of
the person to whom it is consigned, and the act of July 24, 1897, c.
ïi> § 32, 30 Stat. 212 [U. S. Comp. St. 1901, p. 1892], provides that
the owner, consignée, or agent shall pay the duties specified. In
view of thèse provisions of the acts of Congress, there were but two
material issues of fact presented by the pleadings in this case, and
thèse were (i) whether or not the défendant, Bishop, was the party to
whom the calcium carbide was consigned; and (2) whether Or not
this calcium carbide was so uiidervalued that the $829.50 claimed in
the complaint was legally chargeable upon it as duties owing to the
United States. The testimony upon the second issue was uhcontra-
184 125 FEIDHBAL BEEORTEB.
diçted. It was that one; Henderson was the cashier of the Michigan
Central Railway Company, over whpse road the goods in question
were directed to be shipped to the défendant; that one of the duties
of his ofifice was to enter such goods in the office pf the colleçtûr of
customs ât Niagara Falls,. and to make the necessary déclaration as
agent for the consignée; that he had acted as agent for the défendant,
Bishop, for this purpose ip one or two ■ instances before, when the
défendant had been the consignée of merchandise imported from St.
Catharines ; that he reççived the bill of lading and inventory of thèse
goods, presented them to the coUector of customs, made a déclaration
as the agent of Bishop, and entered them at the value of $326, while
their actual value was $i,i0!6; and that the duties which became due
upon them under the provisions of the acts of Congress which hâve
been quoted amounted to $829.50. This évidence disposed of the sec-
ond issue, and left nothing there for the détermination of either court
or jury.
Upori the first issue Bishop testified that he did not order the goods
described in the complaint whicH were imported at Niagara Falls on
April 28, 1900, to be shipped to the United States, that he did not
make a contract to purchase them, that Henderson was not his agent,
and that he had no authority to act for him. But Bishop in other
parts of his testimony conceded, and the writings in évidence proved,
thèse facts: On April 10, 1900, the défendant sent to one Groves, in
St. Catharines, an order to ship him, duty paid* the car load of calcium
carbide described in the complaint in this action, and inclosed him
funds to pay for it. Pursuant to this order Groves consigned this
merchandise to Bishop, at Minneapolis, in the state of Minnesota, and
shipjed it by way of the Michigan Central Railway. He consigned it
to Bishop by reason of the latter's order of June 10, igoo. In the bill
of lading and the inventory he described it as 30,000 pounds of coke
and lime refuse, and 2,000 pounds of calcium carbide, when the entire
car load was composed of calcium carbide. It was this description
in the bill of lading and this invoice that misled Henderson at Niagara
Falls, caused the entry of the merchandise at the undervalution, and
the liability for the duties which the government seeks to recover in
this action. There is no other évidence nor is there any other fact in
this case material to its détermination. The évidence which has been
recited is conclusive to the effect that Bishop was the consignée of
the goods and that he became such by reason of his order to Groves to
ship them to him at Minneapolis. The fact that he was the consignée
clearly appears from the writings, and there is no évidence or testi-
mony which tends to deny it. The statute déclares that for the pur-
pose of collecting the duties the consignée shall be deemed the owner
of the goods imported, and there seems to be no escape from the con-
clusion that the défendant, Bishop, was Hable for thèse duties.
Counsel for the défendant contends, however, that notwithstanding
the fact that Bishop was the consignée, and notwithstanding the pro-
vision of the act of Congress that the consignée shall be deemed
the owner for the purpose of the collection of the duties, the de-
fendant is nût liable in this case, because (i) he was not in fact the
owner of the goods when they were imported, and (2) because he
UNITED STATES V. BI8HOP, 185
was innocent of any intention to violate the law. In support of his
position that the défendant was not the owner of the property at
the time of its importation, he calls attention to the fact that one of
the ternis of his purcliase from Groves was that the latter should
pay the duty, and that inasmuch as Groves failed to do so the de-
fendant was not obliged to accept and had not accepted the property
when it was imported sO that the title to it was then in the vendor.
There are two answers to this contention. In the first place, whether
Groves or Bishop was the owner of the goods when they were im-
ported, as between themselves, is not material in this action, because
under the act of Congress the consignée was the owner as between
the United States and the consignée, and the défendant was the
consignée. It may be and doubtless is true that a stranger cannot
by consigning goods to any one who has not in any way author-
ized or induced him to do so charge such a consignée, even in favor
of the United States, with liability for the duties upon the impor-
tation. But where the consignment is made, as in this case, at the
request or with the consent of the consignée, the latter cannot escape
liability to the government for the accruing duties because the con-
signer has failed to comply with some of his instructions or to per-
form some of the terms of a contract that may exist between them.
The very purpose of section 3058 of the Revised Statutes [U. S.
Comp. St. 1901, p. 2005] which déclares that the consignée shall be
deeraed the owner for the purpose of coUecting the cluties was to re-
lieve the government and the courts in proceedings of this nature
from investigating and determining the rights of the respective claim-
ants to the title and ownership of the property as between them-
selves, and this is its undoubted légal efïect. The government in its
attempt to collect the duties is interested in the importation only.
So far as the importation alone is concerned, Groves, in St. Cathar-
ines, was the agent of Bishop, in Minneapolis, who directed him to
ship the goods to the United States. The moving cause of the ship-
ment was the order of Bishop to send him the goods. It was this
order that induced the action of Groves, and the shipment of the
goods to this country, and the other relations of the consigner and
the consignée, became unimportant in this proceeding under the stat-
ute which has been recited. The consignée of imported goods is
deemed the owner under section 3058 of the Revised Statutes as
amended by Act Feb. 23, 1887, c. 221, 24 Stat. 415 [U. S. Comp. St.
1901, p. 2005], for the purpose of the collection of duties; and it is
no défense to an action for their collection against the consignée that
the consigner, or any other party who, at the request or with the con-
sent of the consignée, procured the importation, failed to obey the
latter's instructions or to comply with the terms of the contract be-
tween them. In the second place, it is by no means clear that Bishop
was not the owner of the goods as between hiraself and Groves at the
time of the importation, notwithstanding the fact that the latter had
failed to pay the duty. He had shipped the merchandise pursuant to
the order of Bishop, and had forwarded the bill of lading by which the
goods were consigned to the défendants so that Groves had parted
with their possession and their control. Concède that Bishop had
186. 125 J'BDEBAL BE|roi(TSB.
tljenght tp refuse to acceptthe goods and to renounce the purchase.
He had an equal right to accept them, to pay the duty himself, and
to reçover it from his vendor under his contract. There is a letter
in this record written by Bishop after the goods had been seized by
the goyernment which strongly indicates that he was inclined to
the latter cpurse if he had not actually adopted it. Meanwhile, and
jintil he did renounce the purchase, the possession, control, and title
of the property appear to hâve been in him as against his vendor.
The latter could not hâve recovered them if the défendant had in-
sisted upon holding them. '.'■■ '
In support of his second position, tïiat the United States cannot col-
lect the duties of this consignée because neither he nor his agent had
any intention to defraud the government, counsel cite U. S. v. 208
. Bags of Kainit (D. C.) 37 Fed. 326; 581 Diamonds v. U. S., 119
Fed. 556, 56 C. C. A. 122, 60 L. R. A. 595 ; and quote from the opin-
ion in the Cargo ex Lady Essex (D. C.) 39 Fed. 765, this sentence:
"A forfeiture of goods for a violation of the revenue laws will not be
imposed uniess the owner or his agent has been guilty of an infraction
of such laws."
There is, however, a niarked distinction between proceedings to
condemn for undervaluation and to forfeit imported goods and ac-
tions to coUectthe duties upon them which fall due by virtue of the
undervaluation. The Hne of démarcation between them is clearly
drawij iri section 3e of the tarifï law pf July 24, 1897, c. Ii, 30 Stat.
212 [U. S. Cpmp. St. 1901, p. 1892], and has been carefuUy ob-
served in the décisions of the courts. The first proviso in that section
clearly indicates that a fraudulent intent is indispensable to the
maintenance bf the action to forfeit, the goods. It déclares that if
the appraised value shall exceed, the value declared in the entry by
more than 50 per cent., except when arising from a manifest clérical
error, the entry shall be deemed td be presumptively fraudulent, that
the coUeçtor shall seize the merchandise, and that in any légal pro-
ceeding resulting from such seizure the undervaluation as shown by
the appraisal shall be presumptive évidence of fraud, and the goods
shall be adjudged forfeited uniess the claimant shall rebut the pre-
sumption 01 fraudulent intent by sufïicient évidence. There is no such
provision in the section regarding fraudulent intent in the proceedings
for the collection of the additional duties which it imposes. The
undervaluation is the sole condition of their accrual and collection.
Upon this subject the section provides that if the appraised value of
the imported merchandise exceeds the value disclosed in the entry the
additional duties shall be levied, collected, and paid, that thèse duties
shall not be construed as pénal, and shall not be remitted, nor shall
payment thereof in any wày be avoided, except in cases arising from
a manifest clérical error, nor shall they be refunded, nor shall they be
subject to drawback. Neither the guilt nor the innocence nor the in-
tent of the owner or of his agent formé any condition or élément of
the action to coUect thèse duties. The importation of the merchan-
dise and the undervaluation are the only essential facts which con-
dition the right of the government to recover the duties from the con-
signée under this section of the statute. The conclusion is irrésistible
KUTHEEPOED V. FOSTEB. 187
that under section 32 of the tariff lavv of July 24, 1897, c. 11, 30 Stat.
212 [Û. S. Comp. St. 1901, p. 1892], the fraudulent intent of the owner
or of his agent in entering the imported nierchandise is an indis-
pensable condition of the right of the government to forfeit the goods
for undervaluation. 581 Diamonds v. U. S., 119 Fed. 556, 564, 56 C.
C. A. 122, 60 L. R. A. c;95; Origet v. U. S., 125 U. S. 240, 8 Sup.
Ct. 846, 31 L. Ed. 743; U. S. V. i,i5o>^ Pounds of Celluloid, 82 Fed.
627, 27 C. C. A. 231 ; U. S. V. 208 Bags of Kainit (D. C.) 37 Fed.
326; The Cargo ex Lady Essex (D. C.) 39 Fed. 365.
But an action to recover the additional duties accruing upon an
undervak:ation may be maintained against the consignée under this
section, and under section 3058, Rev. St., as amended [U. S. Gomp.
St. 1901, p. 2005], in the absence of any fraudulent intent by the con-
signée, the owner, or the agent. Good faith and innocence constitute
no défense to such an action. U. S. v. 1,621 Pounds of Fur Clip-
pings, 106 Fed. 161, 162, 45 C. C. A. 263,264; Gray v. U. S., 113 Fed.
213, 216, 51 C. C. A. 170. This case falls under the latter rule.
There was no substantial évidence in support of a finding in favor
of the défendant, and the judgment below must be reversed, and the
case must be remanded to the court below for a new trial. It is so
ordered.
RUTHEEPORD et al. v. FOSTER et al.
(Circuit Court of Appeals, Eighth areult September 7, 1903.)
I No. 1,892.
1. WRONGFnii Death— Lord Campbell's Act— Bhrdbn to Show Act Causing
Dkath Wkongful.
In an action for damages resulting from a death caused by the wrong-
ful act of another, under Lord CampbeU's act, the burden is on the plain-
tiff in the flrst instance to show that the act whieh caused the death was
wrongful.
2. Samb— Evidence.
But the wrongfulness of the act Is not determlnable by the opinions
of the parties to the action, but by the law applicable to the act and to
the facts and circumstances whlch conditioned its performance. Some
acts are wrongful in themselves. The wrongfulness of others results
from the circumstances under whieh they were committed.
& Same — Plbading.
A déniai in a pleadlng that an act was unlawfully and wrongfully doue
Is futile. Such a déniai admits that the act was done, and présents no
Issue of fact.
4 Same— Phesumptionb.
A légal presumptlon arlses, from an assault and battery of a man by
another with a deadly weapon, that the act was wrongful; and when
such an act Is admitted or proved the burden is on the défendant to show
by a fair prépondérance of évidence facts and circumstances in justifica-
tion or mltlgation of it.
6. Same.
A légal presumptlon arlses, from the klUing of one human belng by
another, that the act was wrongful; and when the kllling Is admitted
or proved the burden Is on the défendant to establish by a fair prépon-
dérance of «vidence facts and circumstances in justification or mitlgatiou
of it
188 1^3 FSDEIBAL BSFORTEB.
8u Samb— Evidence.
At the dose of the évidence produced by the plalntlffs In an action
tinder Lord Campbell'S act the pleadings admitted and the testimony
proved that the deceased was klUed by blows upon his head, Inflicted by
one of the défendants wlth an axe. The défendants then introduced évi-
dence that thèse blows were struck to prevent the deceased, who had
flrst assaulted one of the défendants, from klUing him or inflictlng
serions bodily injury upon him. Seld, the court rightly instructed the
jury that the presumptlon of law from the admitted killing was that the
act was wrongful, and that the burden was upon the défendants to
establlsh by a fair prépondérance of testimony facts and circumstancea
constltutlng a Justification of the act,
(Syllabns by the Court.)
In Error to the Circuit Court of the United States for the Eastern
District of Arkansas.
Dan W. Jones (James W. Butler and Ernest Neill, on the brief), for
plaintilïs in error.
W. S. Wright and S. D. Campbell (W. A. Oldfield, Charles F. Cole,
and Jos. W. Phillips, on the brief), for défendants in error.
Before SANBORN and VANDEVANTER, Circuit Judges, and
SHIRAS, District Judge.
SANBORN, Circuit Judge. This is an action by the widow and
minor children of James Anderson Poster against George Rutherford
and Neill Rutherford to recover damages from them because they as-
saulted, battered, and killed Poster with an axe near his home in
the State of Arkansas in February, 1901. The action is based on Lord
Campbell's act (St. 9 & 10 Vict. c. 93) which was enacted in the state of
Arkansas in 1883. The portion of it material to the controversy in
this case reads:
"Wheneyer the death of a person shall be caused by wrongful act, neglect
or default, and the act, neglect or default is such as would, if death had not
ensued, hâve entltled the party Injuréd to maintaln an action and recover
damages In respect thereof, then and In every such case the person who, or
Company or corporation which would hâve been liable if death had not ensued,
shall be liable to an action for damages notwithstanding the death of the
party Injured and although the death shall hâve been caused under such eir-
cumstanees as amount In làw to a f elony." Mansf . Dlg. § 5225.
There was a verdict and judgment for the plaintiffs, and the chief
complaint of the trial is that the court instructed the jury that there
was a presumption of law that the killing of one man by another with
a deadly weapon was wrongful, and that when the killing was admitted
the burden of proof rested on those who committed it to establish the
facts which they had alleged in justification or mitigation of their
act. The portion of the charge assailed was in thèse words :
"The killing by the défendant Neill Rutherford havlng been shown, and In
façt admitted, by the answei;, the presumption of law is that it was wrongful,
and the burden is upon the défendants to show by a fair prépondérance of the
évidence that the assault upon Foster by the défendant in the manner in
which It was made appeared to him at the tlme so urgent and pressing that,
in order to prevent his father belng killed or receiving great bodily injury,
it was necessary to act as he did, and that Foster was the assailant, and that
the défendant Neill Rutherford's father had really in good faith endeavored
to décline any further contest with the deceased."
RTJTHERFOKD V. FOSTER. 189
A large portion of the briefs of counsel for the défendants is de-
voted to an argument and to quotations from opinions of courts to
establish the proposition that under Lord Campbell's act the plaintififs
cannot recover, unless the act of the défendants which causes the
death is wrongful, and that the burden is upon the plaintifïs in the first
instance to plead and prove the wrongful character of the act. Their
proposition is sound, and présents no question for discussion. But,
where the act is proved, its rightfulness or wrongfulness is to be tested
by the facts which are estabhshed and by the law, and not by the aver-
ments or the testimony of the parties to the controversy to the efïcct
that it was either rightful or wrongful. The question whether an
act is right or wrong is a question of law, and not of fact. Hence no
issue of fact can be raised by an averment in a pleading, on the one
hand, that the act is right, or, on the other, that it is wrong. Nor is
the testimony of witnesses that a given act is either lawful or unlaw-
ful ordinarily admissible to détermine that question. An allégation
that an act was unlawfully or wrongfully committed adds nothing to
the averment that the act was donc. A déniai that an act was wrong-
fully or unlawfully donc raises no issue of fact. It admits that the act
was donc, and expresses the opinion of the pleader that he had a right
to do it. Allégations and déniais in pleadings that acts averred were
rightful or wrongful présent no issue of fact, hâve no function, and
produce no légal efïect. They are the expressions of the opinions
of the parties with respect to their légal rights, and their opinions are
immaterial and futile in the pleadings or upon the trial of the action.
Tyner v. Hays, 37 Ark. 599, 603; Shirk v. Williamson, 50 Ark. 562,
9 S. W. 307; Lambert v. Robinson, 162 Mass. 34, 36, 37 N. E. 753,
44 Am. St. Rep. 326; Bliss on Code Pleading, §§ 327, 332, note 62.
The act which was the foundation of this action was the assault and
battery of James Anderson Poster by the défendants. Let us recall
hère the rule that there can be no recovery for this death unless, un-
der Lord Campbell's act, the plaintifïs established the fact that the
act of the défendants which caused the death was wrongful, so that the
party injured could hâve maintained an action if he had survived. But
surely no évidence is requisite to establish the wrongful character of
an assault and battery with a deadly weapon which produces death.
While a défendant is presumed to be innocent until he is proved to
be guilty, he is proved to be guilty when it is either admitted or proved
that he assaulted and battered the deceased with an axe so that he
died. The law never présumes that any man has the right to put liis
neighbor to death with a deadly weapon. Presumptions of law are
derived from the ordinary expérience of mankind and from the cus-
tomary course of human events. They are the statements of gênerai
rules deduced.from observation and expérience. Expérience and ob-
servation hâve taught that assaults and batteries with deadly weapons
which cause death are generally violations of the moral and of the
statute law, and hence the légal presumption has arisen that they are
wrongful, and the burden of pleading and proving facts which show
that one of them falls within an exception to the gênerai rule — that
for some extraordinary reason it is justifiable or excusable, and is not
governed by the légal presumption — is rightfully cast upon him who
190 125 FEDERAL KBPORTBK.
asserts that his assault was rightful. Ward v. Blackwôod, 48 Ark.
396, 465, 3 S. W. 624, 627; St. Louis S. W. Ry. Co. v. Berger, 64
Afk. 613,626, 44 S. W. 809,39 L. R. A. 784; Conway V. Reed, 66 Mo.
346, 3S3> 3SS. 27 Am. Rep. 354; Castle v. Duryea, *4i N. Y. 169.
In Ward V. Blackwôod, the Suprême Court of Àrkansas said, "De-
fendant âdmitted the assault and battery, and thereby necessarily con-
ceded the plaintiff's right to récover." In Conway v. Reed, 66 Mo.
346, 354, the Suprême Court of that state declared that : "Even in a
trial for murder, from a proof of the killing with a deadly weapon the
law implies an intent to kill, and then it is for the défendant to meet
this presumption with évidence showing that it was unintentional or
justifiable or excusable. 'From the simple act of killing the law will
présume that it was murder in the second degree.' State v. Holme,
54 Mo." 153." This quotation brings us to another proposition that
is important, if not décisive of the issue presented in this case. Coun-
sel for the défendants earnestly insist that the same presumptions
arise and the same rules govern the trial of this case that would gov-
ern the trial of a criminâl charge against the défendants for the killing
of Foster, except that the plaintiffs are not required to prove their
case beyond a reasonable doubt. Their position hère is well taken,
and the soundness of their proposition is conceded. What, then, is
the presumption that arises in criminâl cases from the simple proof
or admission that the défendant killed the deceased with a deadly
weapon ? The most learned, exhaustive, and décisive treatment of
this question which has Come under our observation may be found in
the opinion of Chief Justice Shaw in Commonwealth v. York, 9 Metc.
(Mass.) 93, III, 113, 119, 121, 43 Am. Dec. 373. By considérations of
public policy, by reason, by logic, by the citation of many authorities,
by quotations from many authors, he proves that the law both in
England and America had always been, and was when he wrote that
opinion, that the presumption Of murder arises from proof of volun-
tary homicide, and that when the killing is âdmitted or proved the bur-
den of proof is thenceforth upon the défendant to excuse or to justify
his act. Among the varions quotations from authorities which he
makes to establish thiS^ proposition, are thèse: Foster iti his Crown
Law, at page 255, said : "In every charge of murder, the fact of
killing being first proved, ail the circumstances of accident, necessity,
or infirmity are to be satisfactorily proved by the prisoner, unless they
arise out of the évidence produced against him ; for the law pre-
sumeth the fact to hâve been founded in malice until the contrary
appeareth. And very right it is that the law should so présume.
The défendant, in this instance, stândeth upon just the same ground
that every other défendant doth. The matters teriding to justify,
excuse, or alleviate must appear in évidence befbre he can avail him-
self of them." At page 290 he added: "I hâve already premised
that whoever would sheltef himself under the plea of provocation
must prove his case to thé satisfaction of his jury. The presump-
tion of law is against him till that presumption is repelled by contrary
évidence." And again, at page 313: "For ail volùntary felonious
homicide without a provocation is undoubtedly murder." In Leggf's
Case, Kelyng, 27, ône John Legg was indicted for the murder of
KUTHEBFORD Y. F08TBB. 191
Robert Wise, and "it was upon the évidence agreed that if one kill
another, and no sudden quarrel appeareth, this is murder, as in
Mackalley's Case, 9 Co. 67b. And it lieth on the party indicted
to prove the sudden quarrel." In i Hawk. c. 31, § 32, it is laid
down that "wherever it appears that a man killed another, it shall
be intended, prima facie, that he did it maliciously, unless he can
make out the contrary, by showing that he did it on a sudden pro-
vocation," etc. In 4 Bl. Com. 201, it is written: "We may take it
for a gênerai rule that ail homicide is malicious, and, of course,
amounts to murder, unless where justified, excused, or alleviated into
manslaughter ; and ail thèse circumstances of justification, excuse, or
alleviation it is incumbent upon the prisoner to make out to the sat-
isfaction of the court and jury." In i East, P. C. 224, 340, it is said
that, "the fact of kilHng being first proved, the law présumes it to hâve
been founded in mahce, unless the contrary appear; and ail the cir-
cumstances of accident, necessity, or infirmity are to be satisfactorily
proved by the prisoner, unless they arise out of the évidence produced
against hira." In The Queen v. Kirkham, 8 Car. & P. 116, 117, Cole-
ridge, J., says: "As soon as it is ascertained that one individual, in
the possession of his reason, has willfully taken away the life of an-
other, the law's fîrst presumption is that the party is guilty of mur-
der." "The law requires from him and will allow him to show that
there were some mitigating circumstances which alter the presumed
character of Ihe act." Chief Justice Shaw cited many other authorities
which demonstrate the fact that the law of England, Massachusetts,
New York, and New Jersey was in 1845, when that opinion was writ-
ten, that "when the fact of voluntary homicide is shown, and this not
accompanied with any fact of excuse or exténuation, malice is inferred
from the act; that this is a fact which may be controlled by proof,
but the proof of it Hes on the défendant; and, if not so. proved, it
cannot be taken into judicial considération." Commonwealth v.
York, 9 Metc. (Mass.) 121, 43 Am. Dec. 373. And this is the gênerai
rule in the United States to this day. Allen v. U. S., 164 U. S. 492,
494, 500, 17 Sup. Ct. 154, 41 L. Ed. 528; Silvus v. State, 22 Ohio
St. 90, 99-101; Brown v. State, 83 Ala. 33, 35, 3 South. 857; State
v. Holme, 54 Mo. 153, 161; State v. Underwood, 57 Mo. 49. The
conclusion is irrésistible that in criminal prosecutions the simple kill-
ing of one man by another with a deadly weapon raises the légal pre-
sumption that the killing was wrongful; and the same presumption
ought to prevail, and, as counsel for the défendants themselves insist,
does prevail, in a civil action involving the same act as in the crim-
inal action. The presumption ought to prevail in the civil action be-
cause it is right and reasonable, and because the law has a more tender
regard for life and liberty than for property. Conway v. Reed, 66
Mo. 346, 354, 27 Am. Rep. 354; Tucker v. State, 89 Md. 471, 479,
43 Atl. 778, 44 Atl. 1004, 46 L. R. A. 181 ; Brooks v. Hasiam, 65
Cal. 421, 4 Pac. 399; Darling v. Williams, 35 Ohio St. 58, 63.
In opposition to this conclusion counsel for the défendants below
cite the case of Nichols v. Winfrey, 79 Mo. 544, and make an argument
by analogy to the efïect that since, in cases for damages for death
caused by neglect, the acts themselves do not establish the négligence,
192 125 FEDERAL EBPORTEB.
but thi'turdéii'îs ôn tbe plaintiffs to prove it aliunde, so it must be in
aetiotis for damages caused by wrongful acts. The argument by
anâlogj^î However, fails for this reason: Some acts — for exattiple,
the kiîHng' ot injury of passengers by the opération ofrailroad trains
— are aCts of négligence per se, and a légal presumption that the actors
were ne^igent arises from the acts alone, and casts the burden of
showing that they were not the resuit of négligence upon those who
committed them ; while there are other acts that raise no such pre-
sumption, but call upon the plaintiffs for évidence of fâcts and circum-
stances surrounding thém to establish the fact that they were the resuit
of 'négligence. In the same way there are acts that are wrongful in
themselves, and from' which a légal presumption of unlawfulness arises,
which throws the burden of proof upon those who commit them, while
there are other acts which raise nO such presumption, and which leave
the burden upoii the plaintiffs to prove facts and circumstances which
show their wrongfulness. ' An assattlt and battery with a deadly wea-
pon which produces the^ deàth of the victim is of the former class, of
the same class as an injury to a passenger while riding upon a train,
and frorn it the presumption of wrong arises which casts the burden
of estâblishing a justification or an excuse for it upon the perpetrator.
Nor is the décision of the Suprême Court of Missouri in Nichols v.
Winfrey more persuasive. It is said in the opinion in that case that
a général déniai of an allégation of a pétition that a défendant, "with
force and arms, violently, maliciously, unlawfully, and wrongfuUy,
without any just cause, did shoot the said James Steinbeck," without
more, sufficiently pleads a justification of the killing to admit évidence
that the act was done in défense of the perpetrator and of his home,
in which the deceased was assaulting him, and that the shooting
and killihg of a man raises no légal presumption of wrong. 79 Mo.
549, 550. In other words, the effect of this opinion is that the légal
presumption in the state of Missouri is that the shooting and killing of
a human being is right and lawful, and the burden is on his victim
or his next of kin to prove that it was wrong to kill him. If the rule
of pleading announced in this opinion prevails in the state of Missouri,
that fact is not material in the action at bar, because this action is gov-
erned by the rule whjch prevails in the state of Arkansas, to the efïect
that such a déniai présents no issue of fact. Tyner v. Hays, 37 Ark.
599, 603 ; Shirk v. Wtlliamson, 50 Ark. 562, 9 S. W. 307. The ex-
traordinary rule of law that there is no légal presumption that the
voluntary killing of a human. being with a deadly weapon is wrongful
is deduced in the opinion frôm the illogical rule of practice to which
attention has been called, and, as the premise from which the con-
clusion was drawn does not exist in this case, the conclusion does not
follpw. Moreover, there are many décisions of the Suprême Court of
Missouri which are not in accord with the view of law expressed in
Nichols V. Winfrey, and which plainly and repeatedly déclare that from
the simple act of killing the law présumes wrong; nay, even that it
présumes murder in the second degree. State v. Gassert, 65 Mo.
352, 354; State v. HtJlme, 54 Mo. Ï53; State v. Hudson, 59 Mo. 137;
State v. Foster, 61 Moi 552; State v. Kring, 64 Mo. 594; State v.
Làne, Id. 319. It is true that în the later case of State v. McKinzie,
EUTHEBFOED T. F08TEB. 193
102 Mo. 620, 628, 15 S. W. 149, the Suprême Court of Missouri over-
ruled that portion of the décisions which hâve been cited which dé-
clares that the law présumes murder in the second degree from the
simple act of killing, but it is not held in this later décision that there
is no presumption of law in Missouri that the voluntary killing of a
human being with a deadly weapon is wrongful. A careful examina-
tion of the various décisions of the Suprême Court of that state con-
vinces that the rule stated in Nichols v. Winfrey is not the law of that
state ; and, if it was, it is so irrational, so subversive of the fundamental
principles of a government which was instituted and is maintained
primarily to prctect the person and the liberty of the citizen, so
obnoxious to a wise and fair administration of justice, and so at war
with the established and prevailing rule upon this subject in the other
States and in the nation, that both reason and authority would compel
us to repudiate it.
From the principles and authorities to which référence has now
been briefly made the following déductions material to the question
involved in this case may be fairly drawn.:
The burden is on the plaintiffs in the first instance, in an action un-
der Lord Campbell's act, to plead and prove that the act which caused
the death of the person injured was wrongful, or was an act of négli-
gence.
An answer which dénies that a given act was wrongfully or unlaw-
fully donc admits its performance, and raises no issue of fact for trial.
The légal presumption is that an assault and battery of an individual
with a deadly weapon, which causes his death, is wrongful, and the
burden is on the défendant to plead and prove matter in justification
or mitigation of the deed.
The légal presumption is that the killing of one man by another is
wrongful, and the burden is on the défendant to plead and prove mat-
ter in justification or mitigation of the act.
The test of the legality of the instruction of the court which is
challenged in this case will be found in the correctness of its applica-
tion of thèse rules to the facts developed by the pleadings and the
évidence in the case. We turn to the record for thèse facts : In
their complaint the plaintiffs alleged that George Rutherford and Neill
Rutherford unlawfully made an assault upon Poster, and willfuUy,
maliciously, wrongfully, wantonly, and negligently killed him "by
means of the said Neill Rutherford then and there striking him with
an axe," "the said George Rutherford then and there being présent,
aiding, abetting, encouraging, and advising the said Neill Rutherford
to do and commit the acts aforesaid." George Rutherford, in his
answer, denied that he, with his son, Neill, "unlawfully made an as-
sault" on Poster, "or did willfully, maliciously, wrongfully, wantonly,
and negligently kill the said James Anderson Poster by means of the
said Neill Rutherford then and there striking the said Poster with an
axe," and denied that he was présent aiding, abetting, encouraging,
and advising his son, Neill, to do and commit the acts complained of,
and to strike and kill Poster. He then averred that Poster wrongfully
assaulted him, and placed his life in such imminent péril that it became
necessary, in order to save his life or to prevent his receiving great
126 F.— 13
194 125 FEDERALi jBBPORTERi •
bodily harm, for ,his son, Neill, to-.defend hirti, and for that puf pose
Neill Struck and killed Foster with an axe. Neill, Rutherf or dmade a
separate answer, but liis déniais and his plea of justification are in sub-
stantially the same form. The only déniai in thèse pleadings in respect
of the assàult, battery, or killing is aidenial that they were willfuUy,
malioiouslyj wrongfuUy, wantonly; and negligently donc. But a dé-
niai thafc. an act is wrongfully or unlawfully done, as we hâve seen, ad-
mits the doîng of the act, and raiseS rio issue of fact. Tyner v. Hays,
3^ Arki 599, 603. Hence the answërs admitted that .the défendants as-
saultedîand killed Foster by meansibfthe strokes of an axe inflicted
by Neill Rutherf ord, and containedno» déniai of the act which was the
foundation of the action. Stripped of theiruseless verbiage, the aver-
ments and déniais of the pleadings, so far as they relate to the killing,
were (r) an averment in the complaint that the défendant assaulted and
killed Foster by the strokes of an axe inflicted by Neill Rutherford;
(2) a confession in the anSwers that the défendants assaulted and killed
Foster with an axe ; and (3) an averrrient in the answers that Foster
had first assaulted George Rutherford and put his life in such immi-
nent danger that it was necessary for Neill to kill him fo prevent
the death or serious bodily injury of hisfather. Where was the bur-
dën of proof under thèse pleadings? ■ Chief Justice Çhawin Powers
V. Russell, 13 Pick. 69, yj, said that where the proof on both sides ap-
plies to the same: issue or proposition of fact, the party whose case
requires the establishment of that fact has ail along the burden of
proof, âlthough the weight in either scale may at times preponderate.
"But where the party having the burden of proof gives compétent and
prima facie évidence of a fact, and the adverse party, instead of pro-
ducing proof which would go to négative the same proposition of fact,
proposes to show another and distinct proposition, which avoids the
effect of it, there the burden of proof shifts and rests upon the party
proposing to show the latter fact." The fact which the plaintifïs'
case required the estabHshment of was the assault, battery, and killing.
The défendants admitted that fact. Instead of producing proof to
négative it, they proposed to show another — a distinct — ^proposition,
which would avoid the effect of it; that is to say, the first assault by
Foster. Hence, when the answers had'been filed, and the killing ad-
mitted, the burden of proof shifted, and rested upon the défendants
to èstablish the dangerous assault which they pleaded in justification
of their act. • ■
When the case came on to trial the 'plaintifïs stdod on the admis-
sions of the défendants. They proved simply that Foster died on
account of the wounds upbn his head, that George Rutherford ad-
mitted that he had killed him, and that before his death Foster had
provided his family with goods ofthe value of about $500 a year.
Heréthey rested. No évidence of any justification or excuse for the
assault, the battery, or the killing crept into the plaintifïs' case.
Thereupon the défendants' introduced évidence in support of their
défense that Foster had made the first assault, plaintiffs produced
rebutting testimony, and the case wënt to the jury under the in-
structions of the court. When thèse instructions were given, there-
fore, the case stood in this way : The assault, battery, and killing of
KUTHEKFORD V. POSTEE. 195
Poster by the défendants were admitted ; there was a légal presump-
tion that every assault and battery with a deadly weapon which pro-
duces death is wrongful, and, when such acts are proved or admitted,
the burden is on the perpetrator to prove matter in justification or
mitigation by a fair prépondérance of the évidence. There was a
presumption of law that the killing of one human being by another
with a deadly weapon is wrongful, and that the burden is on him who
comraits the act to prove his justification or excuse by a fair pré-
pondérance of évidence. The charge of the court referred to the
case before it, and must be read with a due regard to the facts which
that case disclosed. It disclosed a case in which an assault, battery,
and killing of Poster with a deadly weapon by the défendants had
first been admitted, and the défendants had then produced évidence
that Poster first assaulted the défendant George Rutherford. The
court instructed the jury that the presumption of law was that the
killing by the défendant Neill Rutherford was wrongful. The killing
to which he referred was the killing with the axe, which had been ad-
mitted by the answer and proved by the évidence. The instruction of
the court that the law presumed that such a killing was wrongful, and
that after it was admitted the burden of proof to establish its justifica-
tion was upon him who asserted it, was in accord with sound reason
and the great weight of authority, and was the statement of a just
and salutary rule of law.
The instructions of the court informed the jury that one condition
of a justification of the killing was that "Poster was the assailant,
and that the défendant Neill Rutherford's father had really in good
faith endeavored to décline any further contest with the deceased."
This déclaration is criticized (a) because it is contended that there
was no évidence of a contest between George Rutherford and the
deceased, and (b) because it does not contain the rule that, when an
assault is so fierce that it is apparently as dangerous for the assailed
to retreat as to stand, it is not his duty to retreat, but he may stand
his ground, and, if necessary to save his own life or to prevent great
bodily injury, may slay his assailant. But there is ample évidence in
the record of this case of a contest between George Rutherford and
the deceased, and while the rule of law of the omission of which de-
fendants' counsel complain is not found in the paragraph of the charge
which they hâve quoted, and to which they excepted, it was clearly
given to the jury in another part of the charge, so that there is no
Sound reason for any exception to the instructions of the court upon
either of thèse grounds.
There was no error in the trial of this case, and the judgment below
is alfirmed.
, 196! 125 FBQBKÂIi BSFOSTBB.
ST. LOUIS COTTON COMPRESS CO. v. AMERICAN OOTTON CO.
(Circuit Court o£ Appeals, Eighth Circuit. September 7, 1903.)
No. 1,913.
L Jddgmbnt of CiBoniT Coukt— Whbn Revibwable bt Suprême Court and
BT Circuit Court of Appeals.
The act creating the Circuit CoUlrts of Appeals (Act Mareh 3, 1891, e.
517, 26 Stat. 826 [U. S. Comp. St. 1901, p. 488]) gives to the Suprême Court
jurlsdictlon to direcliy review a judgment of a Circuit Court whIcU sus-
tains an objection to ite jurisdiçtion and dismisses the suit on that grouud,
and the Circuit Courts of Appeals hâve no jurisdiçtion to review such a
Judgment.
2. 8ame— Service of Sdmmons.
Such a judgment, founded on the Inadéquate service of a summons in
a suit pending in a state court before the case was removed to the United
States Circuit Court is directly reviewable by the Suprême Court, and
the Circuit Court of Appeals has no jurisdiçtion to review It
8, Samb—Appeal— Review.
The Suprême Court has jurisdiçtion under the act creating the Circuit
Courts of Appeals to directly review questions involving the jurisdictioQ
of the Circuit or District Courts which are common to ail courts (such as
the service of a summons) to the same extent and In the same manner
as It has jurisdiçtion to review questions peculiar to the fédéral courts
as such (such as diverslty of citlzenship and amount In controversy).
4. Same.
The Suprême Court has jurisdiçtion to directly review the jurisdiçtion
of the Circuit Court to the same extent and in the same manner in case's
In which the jurisdiçtion of that court as a fédéral court is based solely
on diverslty of citizenship that it has la cases in which such jurisdiçtion
is founded on other grounds.
(Syllabus by the Court.)
In Error to the Circuit Court of tlie United States for the Eastern
District of Missouri.
F. N. Judson and Joseph W. Lewis, for plaintiff in error.
Allen C. Orrick (G. A. Finkelnburg, Charles Nagel, and Daniel
N. Kirby, on the brief), for défendant in error.
Before SANBORN and VAN DEVANTER, Circuit Judges, and
SHIRAS, District Judge.
SANBORN, Circuit Judge. This writ of error challenges a judg-
ment of the Circuit Court vfhich quashed the return of the service
of a summons upon the défendant, the American Cotton Company,
and dismissed the action against it on the ground that the Circuit
Court had acquired no jurisdiçtion of the défendant. The plaintifif,
the St. Louis Cotton Cbmprèss Company, a corporation of the state
of Missouri, filed a pétition in the circuit court of the city of St. Louis
in the state of Missouri to recover $32,379.60 from the défendant be-
low, the American Cotton Company, a corporation of the state of New
Jersey. A summons was issued, which was served on H. G. Krake,
an employé and agent of the défendant. The case was removed to
the United States Circuit Court for the Eastern District of Missouri
IF 3. Review of jurisdiçtion of Circuit Courts, see note to Eicelsior Wooden-
Flpe Co. v. Pacific Bridge Co., 48 0. O. A. 351.
ST. LOUIS COTTON COMPKESS CO. V. AMEKICAN COTTON 00. 197
on the ground of diverse citizenship. The défendant appeared spe-
cially in that court, and moved to set aside the service of the summons
and to dismiss the action for want of jurisdiction of the défendant, be-
cause at the time of the service it had no office and was transacting
no business in the state of Missouri, and had no officer, agent, ôr
employé in that state authorized to represent it or to transact any
business for it there. This motion prevailed, and it is the judgment
which granted it and dismissed the action that this writ of error was
sued out to reverse.
The plaintifï is met at the threshold of the investigation in this court
by a motion to dismiss its writ of error upon the ground that the Cir-
cuit Court of Appeals has no jurisdiction to hear or détermine the
question which it présents. That question is, did the United States
Circuit Court acquire jurisdiction of the défendant by virtue of the
service of the summons on Krake before this case was removed from
the state court?
Act March 3, 1891, c. 517, 26 Stat. 826 [U. S. Comp. St. 1901, p.
488] , which created the Circuit Courts of Appeals, provides in section
5 (26 Stat. 827 [U. S. Comp. St. 1901, p. 549]) that "appeals or writs
of error may be taken from * * * the existing Circuit Courts
directly to the Suprême Court * * * jn any case in which the
jurisdiction of the court is in issue," and in section 6 (26 Stat. 828
[U. S. Comp. St. 1901, p. 549]) that the Circuit Courts of Appeals
"shall exercise appellate jurisdiction to review by appeal or writ of
error final décision in the * * * existing Circuit Courts in ail
cases other than those provided for in the preceding section of this
act, unless otherwise provided by law." If, therefore, a writ of error
could hâve been taken from the Suprême Court directly to the Circuit
Court to review the question hère presented under section 5 în this
suit, this is not one of the other cases of which this court is given
jurisdiction by section 6. Dudley v. Board of Commissioners of Lake
Co., 103 Fed. 209, 43 C. C. A. 184. The rules for the distribution
between the Suprême Court and the Circuit Courts of Appeals of the
cases involving the jurisdiction of the Circuit Court were formulated
by the Suprême Court in U. S. v. Jahn, 155 U. S. 109, 115, 15 Sup.
Ct. 39, 39 L. Ed. 87, and were adopted by this court in Evans-Snider-
Buel Co. V. McCaskill, loi Fed. 658, 660, 41 C. C. A. 577, 579. The
first of thèse rules is that the act creating the Circuit Courts of Ap-
peals does not give the Circuit Courts of Appeals jurisdiction to
/■eview a judgment of a Circuit Court which sustains an objection to
its jurisdiction and dismisses the action on that ground, but the plain-
tifif should hâve the question of jurisdiction certified, and take his
writ of error or appeal directly to the Suprême Court. Counsel for the
plaintifï insist that the case in hand does not fall within this rule. In
support of this contention they persuasively argue (i) that it is only
when the dismissal in the Circuit Court involves the jurisdiction of that
court as a fédéral court that the Suprême Court has exclusive juris-
diction to review it, and (2) that the Circuit Courts of Appeals hâve
jurisdiction to review a dismissal for lack of jurisdiction in every case
in which the jurisdiction of the Circuit Court rests solely on diverse
citizenship; and they truly say that this case does not iqvolve the
198 125 FEDERAL REPORTER.
jurifidiction, of the United States Circuit Court as distinguished from
the jùrisdiction of any otiier court, and that its jurisdiction of the con-
troversyas a fédéral court is founded solely on diverse citizensliip.
The concesision must be made that, if eithçr of their prenuses is Sound,
their conclusion logica^ly f ollows.
In support .of their first proposition counsel chiefly rely upon the
opinions of the Suprême Court in Smith v. McKay, i6i U. S. 355,
16 Sup.' Ct. 490, 40 L. Ed. 731 ; Blythe v. Hinckley, 173 U. S. 501, 19
Sup. et. 497, 43 L,. Ed. 783 ; Mexican Central Ry. Co. v. Eckman,
187 U. S. 429, 433, 23 Sup. Ct. 211, 47 L. Ed. 245: and Huntington
V. Laidley, 176 U. S. 668, 679, 20 Sup. Ct. 526, 44 L. Ed. 630. Smith
V. McKay was a suit in equity. The défendant had moved to dismiss
it on the pleadings upon the ground that the complainant had an adé-
quate remedy at law. The court denied this motion, and after a final
decree an appeal was, taken directly to the Suprême Court, and the
question whether or not the complainant had an adéquate remedy at
law was certified to that court as a jurisdictional question under sec-
tion 5 of the act of March 3, 1891. The Suprême Court deçided that
it was not such a question, but that it presented an issue on the merits
arising in the progress of the cause, whiçh the Circuit Court had plen-
ary jurisdiction to hear and détermine. In Blythe v. Hinckley, 173
U^ S. SOI, 504, 506, 507, 19 Sup. Ct. 497, 43 L. Ed. 783, a suit in equity
was dismissed by the Circuit Court on the.grounds (a) that the ques-
tions presented by the complainants had been conclusively determined
by the state courts, and (b) that the complainants had an adéquate
remedy at law., An appeal from the decree was taken directly to the
Suprême Court, and that; appeal was dismissed for the reason that
the décision of the Circuit Court was not that it was without jurisdic-
tion of the subject-matter or of the parties to the suit, but was that
the facts disçlosed by the complainants were insufficient to constitute
a cause of action in equity. In Mexican Central Ry. Co. v. Eckman,
187 U. S. 429,432, 23 Sup. Ct. 211, 47 L. Ed. 245, a guardian who was
a résident and citizen of the state of Texas, and whose ward was a
résident and citizen of the state of Illinois, brought an action in the
United States Circuit Court for the District of Texas against the
Mexican Central Railway Company, a corporation of the state of
Massachusetts, and recovered a judgment. A writ of error was sued
out of thé Suprême Court to reverse it, and the Circuit Court certi-
fied that the jurisdictional question whether the citizenship of the
guardian or that of the ward should çontrol had arisen in the case.
The Suprême Court took jurisdiction, and decided this question. In
Huntington v. Laidley, 176 U. S. 668, 679, 20 Sup. Ct. 526, 44 L. Ed.
630, the Circuit Court dismissed a bill in equity on the ground that
it was without jurisdjctioo because a question arose in the case wheth-
er or not certain proceedings in the state court rendered the rights
of the plaintifï res adjudicata, but it did not hear or décide that ques-
tion. The Suprême Court reversed the decree on a, direct appeal, and
held that the question whether or not the proceedings of the state
courts had conclusively determined the rights of the plaintifï was not a
jurisdictional question, and that it was the duty of the Circuit Court
to hear and détermine it upon its merits. There are expressions in
8T. LOUIS COTTON C0MPRB8S CO. V. AMEEICAN COTTON CO. 199
some of the opinions in thèse cases to the effect that the jurisdiction
referred to in section 5 of the act creating the Circuit Courts of Ap-
peals is the "jurisdiction of the Circuit and District Courts as such"
(Mexican Central Ry. Co. v. Eckman, 187 U. S. 432, 23 Sup. Ct. 212,
47 L. Ed. 245), and that "appeals or writs of error may be taken
directly from the Circuit Courts to this court in cases in which the
jurisdiction of those courts is in issue — that is, their jurisdiction as
fédéral courts — the question alone of jurisdiction being certified to
this court" (Blythe v. Hinckley, 173 U. S. 501, 506, 19 Sup. Ct. 497,
499, 43 L. Ed. 783). But thèse statements hâve never been crystallized
into a settled proposition of law, and they hâve never formed the
basis of any décision. There is no décision of the Suprême Court
which goes farther to sustain the contention of counsel for the plain-
tifï than those which hâve been reviewed. They do not détermine the
question before us for considération. They fall far short of holding
that the question whether or not a court has acquired jurisdiction of
a défendant by a proper service of a summons is a question in-
volving the jurisdiction of the Circuit Court within the meaning of
section 5 of the act of March 3, 1891. That section does not limit the
questions of which it treats to those which condition the jurisdiction
of the fédéral courts as such as distinguished from those which condi-
tion the jurisdiction of ail courts. It is broad and gênerai in its terms.
It contains no exception, and, as the Congress made no exception,
the légal presumption is that it intended to make none, and it is not
the province of the courts to enact one. Shreve v. Cheesman, 69
Fed. 785, 786, 16 C. C. A. 413, 414; Madden v. Lancaster Co., 65 Fed.
188, 12 C. C. A. 566, 573 ; Morgan v. City of Des Moines, 60 Fed. 208,
8 C. C. A. 569; Mciver v. Ragan, 2 Wheat. 25, 29, 4 L. Ed. 175;
Bank v. Dalton, 9 How. 522, 526, 13 L. Ed. 242; Vance v. Vance, 108
U. S. 514, 521, 2 Sup. Ct. 854, 27 L. Ed. 808; St. Louis, I. M. & S.
Railway Co. v. B'Shears, 59 Ark. 244, 27 S. W. 2. This section dé-
clares that appeals and writs of error may be taken directly to the
Suprême Court "in any case in which the jurisdiction of the court is in
issue." How can it be successfully maintained that the jurisdiction of
a national court is not in issue when the défendant challenges it on the
ground that no proper service of a summons upon it has ever been
made?
The Jurisdiction of a court is the right to hear and détermine a con-
troversy between parties who hâve been legally brought before it for
the purpose of securing a décision of the issue. The question whether
or not the controversy is such that the court has the power to décide
it conditions jurisdiction of the subject-matter of the litigation. The
question whether or not one of the indispensable parties to the issue
has been legally served with a summons to litigate it conditions the
jurisdiction of the parties. And it is as essential to a lawful judgment
that the court should hâve jurisdiction of the parties as it is that it
should hâve power to hear and décide the controversy in issue. And
hère is the dividing line between the cases cited by the counsel for the
plaintifï in error in which the Suprême Court held that no jurisdiction-
al question was involved and the case before us. In those cases the
subject-matters were within the jurisdiction of the court, and the
200 125 FBlDiaRAIi BEPOBTER.
parties had been properly brought before it. The questions were not
whether or not the court had the right to hear and détermine the
issues presented by tbe cases, but whether or not upon a hea,ring and
considération of them the complainants were entitled to relief. Where
the complainants failed in the Circuit Court and the Suprême Court
refused to review their failure, they failed, not for want of jurisdiction
in the trial court, but fo^ want of equity, for want of ^acts constituting
causes of action, for want of merits in their cases. In the case at bar
the plaintiff has failed, not for want of merits in its cause of action,
but for want of jurisdiction, for lack of power in the Circuit Court
to hear or to détermine the contrpversy between it and the défendant,
because the latter has never been legally summoned to a trial of the
issue. The questions in the former cases were whether or not, in the
valid exercise of their jurisdiction, the courts had rightly decided the
questions determined by them. The question in this case is whether
or not the Circuit Court had the power to hear or to détermine any
of the issues tendered by the plaintifï. The questions in the former
cases were not jurisdictional questions, and the question in this case
is a jurisdictional question, within the plain meaning of section s of
the act creating the Circuit Courts of Appeals.
This conclusion fînds strong support in some of the late décisions
of the Suprême Court. In Shepard v. Adams, i68 U. S. 6i8, 623,
18 Sup. Ct. 214, 42 L. Ed. 602, the défendant challengedi the jurisdic-
tion of the United States District Court of Colorado on the ground
that no légal summons had been served upon it. The court over-
ruled the objection, and rendered judgment for the plaintifï. There
was no other question in the case, and the défendant sued out a writ
of error from the Suprême Court to reverse the judgment. ^He was
met there by the same objection, founded on some expressions in the
opinion in Smith v. McKay, 161 U. S. 355, 16 Sup. Ct. 490, 40 L. Ed.
731, which is interposed to the motion to dismiss this writ ; that is to
say, that the question whether or not there was due service of process
is not one which involves the jurisdiction of a fédéral court as such,
but one common to ail courts, and hence that it is not a jurisdictional
question within a proper construction of section 5. The Suprême
Court overrujed this objection, took jurisdiction of the case under the
writ, and decided it on its merits. Counsel for the plaintifï in error
seek to distinguish this case from that in hand in this way : They sug-
gest that the question in that case was a question of the jurisdiction
of the fédéral court as such because the summons was issued in an ac-
tion pending in that court, while in the case at bar the summons was
issued and served while the case was pending in the state court. But
in Conley v. Mathieson AlkaH Works, 23 Sup. Ct. 728, 47 L. Ed. 11 13,
and Geer v. Mathieson Alkali Works, 23 Sup. Ct. 807, 47 L. Ed. 1122,
two cases were presented to the Suprême Court, one an action at law
and the other a suit in equity, in which the summonses had been served
while the suits were pending in the state court. The cases were
subsequently removed to the United States Circuit Court on the
ground of diversity of citizenship. In that court they were dismissed
because the summonses were not legally served upon the Mathieson
Company. A writ of error was sued out of the Suprême Court to re-
BT. LOTJIS COTTON 0OMPBE8S OO. T. AMEEIOAN COTTON CX). 201
verse the judgment at law, and a direct appeal was taken to that
court from the decree in equity. The Suprême Court took jurisdiction
of both cases, and determined the jurisdictional questions presented
by the insufficient service of the processes upon their merits under
section 5 of the act of March 3, 1891. Thèse cases présent facts sub-
stantially similar to those which condition the case in hand, and they
are practically conclusive of the question before us. It is true that no
objection to the jurisdiction of the Suprême Court was made in thèse
cases, but the Suprême Court has not exhibited so rapacious a disposi-
tion to review cases in which its jurisdiction was doubtful since the
establishment of the Circuit Courts of Appeals, as to inspire any con-
fident belief that it would hâve failed to perceive its lack of jurisdiction
in thèse cases without any prompting, if any such lack had existed.
Our conclusion is that the Suprême Court has jurisdiction under
section 5 of the act creating the Circuit Courts of Appeals to review
by writs of error or appeals taken directly to that court from the
United States Circuit Court every question which involves the juris-
diction of the latter court, whether that question is peculiar to the
fédéral courts as such or common to ail courts, and that the question
whether a summons was legally served on a défendant is such a juris-
dictional question whether it was served while the action was pending
in the state or in the fédéral court. Shepard v. Adams, i^ U. S.
618, 623, 18 Sup. Ct. 214, 42 L. Ed. 602; Conley v. Mathieson Alkali
Works, 23 Sup, Ct. 728, 47 L. Ed. 11 13; Geer v. Mathieson Alkali
Works, 23 Sup. Ct. 807, 47 L. Ed. 1122; Evans-Snider-Buel Co. v.
McCaskill, loi Fed. 658, 41 C. C. A. 577 ; Dudley v. Board of Com-
missioners of Lake Co., 103 Fed. 209, 43 C. C. A. 184; Davis &
Rankin Bldg. & Mfg. Co. v. Barber, 60 Fed. 465, 9 C. C. A. 79 ; Cabot
V. McMaster, 65 Fed. 533, 13 C. C. A. 39; U. S. v. Severens, 71
Fed. 768, 18 C. C. A. 314; Hays v. Richardson (C. C. A.) 121 Fed.
536.
The second objection to the dismissal of the writ is that the
Circuit Courts of Appeals are given jurisdiction by section 6 of the
act creating them to review ail jurisdictional questions which arise
in the Circuit and District Courts of the United States in cases in
which their jurisdiction is based solely on diversity of citizenship.
A careful reading of section 6, however, discloses no such grant of
power. Upon this subject that section provides only that the Circuit
Courts oî Appeals "shall exercise appellate jurisdiction to review
by appeal or writ of error final décision in the * * * existing
Circuit Courts in ail cases other than those provided for in the prc-
ceding section of this act, unless otherwise provided by law, and the
judgments or decrees of the Circuit Courts of Appeals shall be final
* * * in ail cases in which the jurisdiction is dépendent entirely
upon the opposite parties to the suit or controversy being aliens and
citizens of the United States or citizens of différent states." But it
is only in cases not provided for by the preceding section that the
Circuit Courts of Appeals are given appellate jurisdiction, and no
case in which jurisdiction of the Circuit Court is in issue falls in the
class of cases not provided for by section 5. Therefore, under the
first rule in Evans-Snider-Buel Co. v. McCaskill, ici Fed. 658, 41 C
202 ' 125 fBPBJjSAL BEPOETEK.
C. A. 577, the Circuit Cpurts of Appeals hâve no jurisdiction of any
case involvingi the. jurisdictioJj of the Circuit Court where that court
has dismissgditbe suit upon thc/iground of lack of jurisdiction. Sec-
tion 6 does provide that in cases in vl^hich the jurisdiction of the Cir-
cuit Court is fpunded on diversàty of citizenship the judgments and
decrees pf the Circuit Courts df Àppeals shall be final. But this pro-
vision in no way limits the jurisdiction of the Suprême Court under
section S, nor does it enlarge the appellate jurisdiction of the Courts
of Appeals. The very question was before the Suprême Court in the
Mathieson Alkali Works Cases, 23 Sup. Ct. 728, 47 L/ Ed. — ,
and 23 Sup. Ct. 807, 47 L. Ed. — — , although it was not suggested
or discussed. The jurisdiction of the Circuit Court in those cases was
founded solely on diverse citizenship, yet the Suprême Court exercised
jurisdiction to review the question whether or not the summonses
were legally served on a writ and an appeal from the Circuit Court
directiy to the Suprême Court. The act of Congress itself and thèse
décisions point unerringly to the conclusion that questions involving
the jurisdiction of the Circuit and District Courts in cases in which
their jurisdiction as fédéral courts rests solely on diversity of citizen-
ship are reviewable by the Suprême Court, under section S, to the
same extent and in the same manner as questions involving the juris-
diction of those courts in cases in which their jurisdiction as fédéral
courts is based upon other grounds.
The cases of American Sugar Refining Co. v, New Orléans, 181
U. S. 277, 281, 21 Sup. Ct. 646, 45 Iv. Ed. 859, and Ayres v. Polsdorfer,
187 U. S. 585, 23 Sup. Ct. 196, 47 h. Ed. 314, do not lead to a différent
resuit. The question there considered was the jurisdiction of the
Circuit Courts of Appeals to hear and détermine constitutional ques-
tions arising in cases in which the jurisdiction of the Circuit Courts
was founded on diversity of citizenship. The jurisdiction of the Cir-
cuit Courts over the subject-matters and the parties to the suits was
not challenged or in issue in those cases, and, as the Suprême Court
well said in Ayres v. Polsdorfer at page 595, 187 U. S., page 200, 23
Sup. Ct., 47 L. Ed. 314, "as to sucfa questions other rules apply than
those we hâve expressed in this opinion," As the rules stated in
those opinions bave no application tO' the question in hand, it is use-
less to review or discuss them.
The resuit is that this writ of error was sued out to review a judg-
ment of a Circuit Court which sustained an objection to its jurisdiction
and dismissed the action on that ground, that the Suprême Court had
jurisdiction to review that judgment by writ of error direct to the Cir-
cuit Court, and thereforç this court has no such jurisdiction. Dudley
V. Board of Com'rs, 103 Féd. 209* 43 C. C. A. 184.
The writ of error must accordingly be dismissed, and it îs so oif-
dered.
M'lOUGHLIN V. AMERICAN CIECULAB LOOM 00. 203
McLOTJGHLIN V. AMERICAN CIECULAE LOOM CD.
(Circuit Court of Appeals, First Circuit. October 6, 1903.)
No. 464.
1. LiBHL— ACTIONABLE WORDS— PUBLICATION TBNDINO TO InJIIRE BUSINESS.
A letter addressed by a manufacturing concern to its agent for the
sale of a conduit for electric wires, who was engaged generally in the
business of installing electrical plants by contract and wiring buildings
tlierefor, falsely charglng that in bis use of such conduit he had violated
the rules o£ the Insurance companies, whlch letter was sent to the In-
surance companies and agencies in the city where the addressee was in
business, and to his competitors in business, is not privileged, and, while
not libelous per se, is susceptible of a defamatory meanlng from whlch
damage mlght naturally resuit, and is actionable if spécial damage Is
properly alleged and proved.
a. Samk— Action— Pleading Spécial Damage.
An allégation of loss of business and employment by plaintifif, a con-
tracter, as a basis for spécial damages, In a déclaration In an action for
libel, although it does not set eut the names of the persons who were
deterred from employing him, nor show that they were unknown, is
nevertheless good against a demurrer whlch does not specify such objec-
tion, under the Massachusetts practice act (Eev. Laws, c. 173, § 15).
8. Same.
The sufficiency of allégations of spécial damage in a déclaration for libel
considered.
In Error to the Circuit Court of the United States for the District
of Massachusetts.
John L. Hall (Charles F. Choate, Jr., on the brief), for plaintifï in
error.
Samuel K. Hamilton (Théodore Eaton, on the brief), for défendant
in error.
Before COLT, Circuit Judge, and BROWN and LOWELL, Dis-
trict Judges.
LOWELL, District Judge. The amended déclaration in this case
was as foUows :
"The plaintiff says he is, and since 1891 bas been, doing business as an elec-
trical contractor in the city of New Orléans, in the state of Louisiana. That
his business consists malnly in the installation of electric wires and plants
under contract in the city of New Orléans and vicinity. That the défendant
is a corporation, established under the laws of Maine and doing business in
the city of Boston and state of Massachusetts, engaged in the gênerai manu-
facture of electric wires and tubes used in buildings, and especially in the
manufacture of a conduit for the transmission of electrlcity, known as the
'Circular Loom Conduit.' That on and before the Ist of April, A. D. 1899, the
plalntlfC became the selllng agent for the défendant in the city of New Orléans
and vicinity, for the purpose of introducing and establishing the sale of the
défendants product, viz., circular loom conduits.
"On or about the 28th day of August, A. D. 1899, the défendant published,
by sending to the trade in whlch the plaintiff was engaged, the varions In-
surance companies and agencies in New Orléans, namely, the manager of the
Underwriters' Inspection Bureau of New Orléans, to the Newman-Spranley
Company, and by sending to Vincent Grey, and other persons whose names
are now unknown to the plaintiff, with whom the plaintiff was not dealing
and with whom the défendant had no business relations, but who were rivais
of the plaintiff, a false and malicious libel concerning the plaintiff, a copy
wbereof is bereto annexed.
204 ^ 125 FBDBEAIi BEPOBTEBi
"That In conséquence of sald act of the défendant the plaintiff was greatly
injured In hls business. That he has been depriyed of the selling agency of
the defendant's product, the clrcular loom conduit. His crédit has been im-
paired, and, he has been put to great inconvenience and loss thereby. That
he hàs been unable to undertake work and contracts which, but for the «rt
of the défendant, he would hâve obtalned. That he has lest commissions tm
sales upon the product of the défendant, which, but for the act of the défend-
ant, he would hâve made, and that he has been caused to suffer great mental
anxiety and dlstress, for which the plaintifC claims spécial damage."
"[Oopy Annexed.]
"American Oircular Loom Company,
"Chelsea, Mass., U. S. A., August 28, 1899.
"T. S. McLoughlln, Esq., New Orléans, La. Dear Sir, — You are aware that
we hâve sent our Mr. Klrkland to New Orléans to make an original investiga-
tion of the controversy betwéen yourself and the Board of Underwrlters. Mr.
Kirkland has returned and has made to us the report of such Investigation.
It appears, beyond controversy, that you are using, and bave been using, our
clrcular loom conduit, flot only under the conditions and in the places where
it is permitted by the rules, -butàiso In places and under circumstances where
it is prohibited by such rules. We désire to Impress upon you the fact that
this Company submits Itself tothose underwrlters' rules; that such rules havo
been framed with its consent And acquiescence, and that we cannot, and will
not, place ourselves in opposition to the exécution of those raies as written.
"Under thèse circumstances, we think it necessary to advise you that unless
you are willing to handle our material In aceordance with our wlshes, and in
accordance with the rules of the Board of Underwrlters, our business rela-
tions must cease, as we cannot afCord to hâve any person connected with us
who pute us in hostility to an organlzatiori with which we are in entire
sympa thy.
"y our Immédiate answer to this letter Is requested, and we expect you in
that letter to define yoUr future policy in regard of the subject matter of this
communication.
"We deem it proper to hotlfy you that we hâve sent a copy of this letter
to the Board of Underwrlters, to the varions Insurance companies operating
in New Orléans, and to such other persons as we hâve deemed it advisable
to communicate with. ,
"Very truly yours,
"American Clrcular Loom Company,
"A. T. OlaTk, Treas."
To this the défendant demurred as f ollows :
"And now cpmes the défendant, and- demurs to plaintlfC's amended déclara-
tion, and for causes of dé)^up"er shows that sald déclaration does not state
a légal cause of action, and'ts not substantially in accordance with the rules
of chap^er 17S, p. 1549, of tli,e Keylsed Laws of Massachusetts, and the par-
ticulars in which said déclaration is alleged to be defective are as foUows:
That sald déclaration does^ not allégé that the défendant published any writing
defaihat^pry to plaintiff's chafiiçter or réputation, and that the letter set forth
in plaîntiff'B declaratlpp as conlaining a .false and maliclous libel does not
contain èîijr matter ,libeïoils,,pf' or defamatory to the plaintifl; that sald
déclaration Is alleged to bé for à. false and maliclous libel of said plaintiff by
said def etidant, but that s^id déclaration does" not set forth any matter that
is or may be construed t(> be à false a^^d-nialicious libel, or in any way
libelous of said plaintiff; thftt Sàid déclaration allèges as spécial damages
matters which are not propérly^ the subject of spécial damages; and that the
conséquences whlth are alleged to hâve happened on account of the publica-
tion of the letter as alleged In said déclaration cannot be reasonably held to
be the natural and probable ponsequencpa of the publication of said letter."
The plaintiff did not contend strenuously that the language com-
plained of was libelous p'er Se, without, allégation and proof of spécial
damage. Some distinctions applied in an action for defamation are
m'LOUGHLIN V. AMEKICAN CIRCULAR LOOM CO. 205
higlily technical, and hâve been adversely criticised even by judges
who applied them. The gravamen of an action for defamation is dam-
age to the réputation of the plaintifî, naturally arising from a false
report. See Odgers on Libel and Slander (3d Ed.) 95 ; Morasse v.
Brochu, 151 Mass. 567, 25 N. E. 74, 8 L. R. A. 524, 21 Am. St. Rep.
474. Speaking generally, where the false report and conséquent dam-
age to the réputation are shown, an action will lie unless the occasion
be privileged. From some sorts of false report the law présumes con-
clusively that damage has followed, and the plaintifî need neither al-
lège nor prove it. Hère the language is styled libelous per se.
Logically or not, the conclusive presumption of damage arises from
some written words, where it does not arise if the same words are
merely spoken. Odgers, 3 ; Thorley v. Kerry, 4 Taunt. 355. Ex-
cept where this presumption exists, spécial damage to the plaintiff's
réputation must be alleged and proved to hâve been the actual and
natural resuit of the language used. In an action of defamation, the
distinction between injuria and damnum — injury to the plaintifï's répu-
tation and damage arising from the injury — is particularly hard to
draw. Some language is deemed injurions without proof of damage,
and damage is conclusively presumed to hâve followed the injury;
other language is deemed injurious to the réputation only where dam-
age has actually resulted. .Probably two diverse théories hâve tended
to govern the action: First, that A. is responsible for defaming B.
in the ordinary sensé of defamation — language libelous per se; sec-
ond, that A. is responsible to B. for the damage naturally resulting
from the lies told by A. about B. — spécial damage. See Ratcliffe v.
Evans (1892) 2 Q. B. 524. It may be that an action for defamation,
strictly speaking, is properly maintainable only under the first theory,
while under the second the action should be spécial on the case. But
in this country, at any rate, the two théories hâve not been difiEerenti-
ated. In a few critical cases they may lead to results quite différent,
but in gênerai the law is that above stated. An accurate and readily
applicable définition of written language, libelous per se, does not
exist, and some well-established distinctions may rest on history
rather than on logic. Webb's Pollock on Torts, 290. The language
hère complained of, if spoken, would not support an action without
proof of spécial damage. In the absence of innuendo and further col-
loquium, we do not deem that this language, though written, is libel-
ous per se.
Défendant contends that the language set out is in no sensé defam-
atory. and so is not actionable, though spécial damage has followed.
We need not hère consider the case of language, in no ordinary sensé
defaniatory, which yet produces damage as its natural resuit. It
is actionable in a community of honest men to say falsely that one
is a thief. Is it actionable in a community of thieves to say falsely
that one is an honest man, provided spécial damage naturally results
trom the false statement? This question need not be answered hère,
because we are of the opinion that the language hère used is suscepti-
ble of a defamatory meaning. In substance it was this: That the
plaintifî had installed electric wires contrary to the ruies of the New
Orléans Board of Underwriters. The letter thus charged the plaintifî
20ei 125 FBpi^RAIi RBFOBTEB.
with vîolatîng the ruies of the insurance companîes, and it îs matter of
common knpwledge that the owner of a house wired in a manner not
permitted by thèse rules may well be unable to insure it. As most
house- owners désire insurance, and wish that their electric wires
should be.so arranged^as to make insurance possible, the plaintiff's
évidence, admissible under the allégations of his déclaration, might
warrant a Jyry in finding that the defendant's letter suggested that the
plaintifif so conducted his business as to make inadvisable his employ-
ment by pne having the ordinary desires of a householder. There
is no conclusive presumption that damage results from the language
used, and so that language is not libelous per se, Damage is a
natural and proximate resuit of the language used, and so the language
is actiqnable if damage actually foUows. The déclaration is inarti-
ficially drawn. The colloquium is defective, and the innuendo alto-
gether wanting, but the letter is so easily susceptible of a meaning
injurions to the plaintifï in the conduct of his business as to make it
actionable if spécial damage is properly alleged and proved. The com-
munication was not privileged. Had the publication been only to the
plaintifï, there would hâve been no libel, but the letter became libel-
ous when published to outsiders. If the communication to them were
treated as privileged, then one might libel his enemy with impunity
by publishing generally a communication qriginally addressed to the
person defamed. It follows that, if spécial damage has been suf-
ficiently alleged, the demurrer must be overruled.
The allégations of spécial damage appear to be thèse: (i) That
the plaintiff has been greatly injured in his business ; (2) that he has
been deprived of the selling agency of the defendant's product, the
circular loom conduit ; (3) that his crédit has been impaired ; (4) that
he has been put to great inconvenience and loss thereby ; (s) that he
has been unable to undertake work and contracts which, but for the
act of the défendant, he would bave obtained ; (6) that he has lost
commissions on sales of the defendant's product; (7) that he has been
caused to suffer great mental anxiety and distress.
As has been said, loss of business and employment is a natural,
though not a necessary, resuit of the publication; but the défendant
has urged that the allégation of ioss is not spécifie enough, and that
the names mi^st be set out of those persons who were deterred from
employing him. In Trenton Ins. Co. v. Perrine, 23 N. J. Law, 402,
415, 67 Am. Dec. 400, it was said :
"The gênerai rule certalnly Is that where the plaintiff allèges, by way of
spécial damage, the loss of customers In the way of his trade, or the refusai
of friends and acquaintances to associate with hlm, or the loss of marriage,
or the loss of service, the names of such customers or friands, or the name
of the person w'ith whom niarrlage would hâve been contracted or service
performed, mnst be stated. But the rulei is relaxed when the Individuals may
be supposed to be unknown to the plaintiff, or where it Is impossible to speclf y
them, or where they are so numerous as to excuse a spécifie description on
the score of inconvenience."
See Ratclifife v. Evans (1892) 2 Q. B. 524; Evans v. Harris, i H.
& N. 251. Hère it is not apparent that the names were unknown to
the plaintifï, and there is no allégation to that efïect. But this objec-
tion, viz., failure to give namès, is not specified in the defendant's
CAMPBEUi \. AMEKICAN ALKILI CO. 207
demurrer. The provisions of section 15 of the practice act (Mass.
Rev. Laws, p. 1553, c. 173), are peculiarly applicable to a case like this.
If this defect had been pointed out by the demurrer, the plaintiff might
hâve asked leave to amend. Without determining that the defend-
ant's objection would not hâve prevailed, had it been raised by a
demurrer sufficiently spécifie, we hold that the objection is not fatal
when not specifically stated in the causes of demurrer. Morasse v.
Brochu, 151 Mass. 567, 573, 25 N. E. 74, 76, 8 L. R. A. 524, 21 Am.
St. Rep. 474. If the défendant desires, he may still ask the court be-
low to order the plaintiflf to furnish the names of the persons upon
whose failure to employ him he chiefîy relies for proof of spécial dam-
age.
The other allégations of spécial damage are insufficient. (2) and
(6) were abandoned by plaintifï at the argument because not the
natural resuit of the language used. They charge a loss by the
défendant of the plaintiflf's business, which could not hâve been the
resuit of the libel. (3) Does not set out how the plaintifï's crédit
was impaired, and impairment of crédit without further averment is
not sufficiently shown to be a natural resuit of the libel. (4) is stated
too vaguely, and perhaps was meant merely to reinforce (3). (5) is
so vague as to be unintelligible. Why was the plaintiff unable to
undertake work, and what difiference is intended between undertaking
work and obtaining it? Perhaps this spécification was intended
merely as a restatement of (i). As to (7), no connection between the
libel and the damage is shown. On proper motion, thèse allégations
may perhaps be stricken out, but the demurrer must be overruled.
The judgment of the Circuit Court is reversed, the demurrer of the
défendant to the amended déclaration is overruled, the case is remand-
ed to the Circuit Court for further proceedings not inconsistent with
our opinion passed down this day, and the costs of appeal are awarded
to the plaintiff in error.
CAMPBELL T. AMERICAN ALKILI CO.
(Circuit Court of Appeals, Thlrd Circuit September 15, 1903.)
No. 2.
L CoBPOiUTiorrs— AssESSMKNTB ON STOCKHor.DEKs— Datb of Cali»
A resolution was passed by the directors of a corporation that a call
be made on the holders of partly paid stock on September 16th foUowing,
the same to be payable in Installmenfcs at specifled tlmes thereafter.
Eeld, that September 16tli was the date of the call for the purpose of
fixlng the llability of stockholders.
S. BaME— LlABILITY 01" STOOKHOJliDEK— TKANSFEH OF StOCK.
Both at common law and under the statutes of New Jersey a stock-
holder in a corporation is liable for assessments on calls lawf ully made
after he has been accepted by the corporation as a stockholder, and whUe
he stands registered as such on Its bocks, and he is not released from
■uch llablUty by a transfer of the stock after the call bas been made,
but before it becomes payable.
208 .. 125 FHDffiBAl. BBPOETEB.
ÏL SAitB— New Jbrset Statuts.
XJnder the corporation law pf New Jçr^ey, which provides (Sess. Lawa
1896, p. 283, S 18) that "every corporation shall hâve pbwer to crpate
two or inorê klnds of stock of such classes, wlth suCh resti-lctions or
qùaliflcations thereof as shalt be stated or exprêssed In the certificate
of Incorporation," a provisioaoïf- such certificate, also embodled in the
certlflcfttes of shares of partlaljjr paid preferred stock of a corporation,
that the holder pf such shares df record on the books of the corporation
Et the time of the maklng of an assessment thereon, and he only, shall
be liable for such assessment, is binding on such holder, and fixes hi»
Personal llabllity.
\ Samk— Rembdy fob Collection of Assbssmbnts— Right to Sue at Law.
A state statute glvlng corporations a lien on the shares of stockholder»
for jissessments, and authorizing a forfeiture and sale of the stock in
case of default, does not provide an exclusive remedy, but is cumulative,
and the corporation may, at Its élection, maintain an action in assumpsit
against the delUiquent stockholder.
6. Samb— Action to Recovbb Assessment— Dbfenseib.
The validlty of an order by the directors of a corporation maklng an
assessment on stockholders cannot be collaterally attacked by a stock-
holder in ftn action àgàinst him to recover the assessment.
In Érror to the Circuit Court of the United States for the Eastern
District of Pennsylvania»
F. B. Bracken and John G. Johnson, for plaintiff in error.
R. D. Brown, for défendant in error.
Before ACHESON, Circuit Judge, and BUFFINGTON and
KIRKPATRÏCK, District Judges.
KIRKPATRICK, District Judge. The American Alkili Company^
the plaintifif below, brought its action in assumpsit against William S.
Campbell, the plaintiff in error herein, and alleged: That it was a
corporation duly incorporated under the laws of the state of New
Jersey on April 29, 1899, with an authorized capital of $30,000,000,
of which $6,000,000 was preferred stock, consisting of 120,000 shares
of the par value of $50 each, and on which preferred stock there had
been paid to the company, by the original subscribers therefor, the
sum of $10 each. That on the I2th day of September, 1901, at a meet-
ing of the board of directors of said cotnpany, duly calléd and held, the
following resolution was adopted :
"Eesolved, for the purpose of providlng funds for the completion of the
présent works, the building of additlonal Works and providlng working capi-
tal, that a call of ten dollars upon each share df the preferred stock of the
company be made September 16, 1901, payable at the office of the company
in four installments as follows: First Inètallment, $2.50 per share, October
21, 1901; second Installment of $2.50 per share, payable January 21, 1902;;
third Installment of $2.50 per share, payable April 21, 1902; and fourth in-
stallment of $2.50 per share, payable auly 21, 1902."
The first installment called for by the above resolution was, at a
subséquent meeting of the board of directors, postponed until Novem-
bçr ,21, 1901, and that ^P|th the c^U made under the resolution of
September 12, 1901, and the postponement of the time of payment of
the first installment were ratified at a meeting of the stockholders of
H 4. See Corporations, vol. 12, Cent. Dig. § 390.
CAMPBELL V. AMEKICAN ALKILI CO. 209
the Company. That on September i6, 1901, the défendant below was
the holder of 5,100 shares of the preferred stock of the plaintiff Com-
pany, and that the same were duly registered and stood in his name
upon its books ; and that as such stockholder notice was given him of
tiie passage of the resolution of September 12, 1901, above set out,
and demand was made upon him for the sum due by him thereon.
We are of the opinion that this action is proper in form, and that the
déclaration sets out a good cause of action. Webster v. Upton, 91
U. S. 65, 23 L,. Ed. 384; Nashua Savings Bank v. Anglo- American
Land Mortgage & A. Co., 48 C. C. A. 15, 108 Fed. 764; Pullman v.
Upton, 96 U. S. 328, 24 L. Ed. 818. The afifidavit of défense admits
that on the I2th day of September, 1901, the défendant was the owner
of 5,100 shares of the preferred stock of the plaintiff corporation of
the par value of $50 each, upon which there had been paid $10 each—
300 of said shares having been acquired by him by original subscrip-
tion, and 4,800 by subséquent purchase ; that he continued to be the
holder of record of ail of said shares until October 3, 1901, when he
sold the said shares to one David S. Thomson, surrendered his cer-
tificates, and the said stock was transferred to said Thomson on the
books of the company, and new certificates for said stock were issued
to said Thomson by the company, and that thereby he became "re-
lieved and discharged of and from ail liability for any unpaid calls made
on said shares of preferred stock prior to the date of said transfer,
and for any calls which might be made or become due thereon after
said date"; that by virtue of the statutes of New Jersey (which are set
forth) and the principles of law established and followed by the courts
of New Jersey, a transfer of stock, followed by registry of transfer
and grant of new certificates, the subscriber and former owner of stock
is relieved from unpaid and future calls thereon; that the call de-
scribed in plaintifï's déclaration was abrogated by the subséquent
action of the directors September 25, 1901, and the stockholders on
October 30, 1901, whereby it was illegally permitted to reduce the
capital stock of the company by allowing shareholders paying the
call to exchange fîve shares of part paid preferred stock for two shares
of the same full paid. The affidavit also sets forth and ofïers to prove
certain acts in the organization of the company and its subséquent
workings, which make this call fraudulent.
The first question which présents itself is, what is the date of the
call? A call is defined in Cook on Corporations, § 104, to be "an
officiai déclaration by the proper corporate authorities that the whole
or a specified part of the subscription for stock is required to be paid."
The resolution of September 12, 1901 (set out at length supra) pro-
vides for a call September 16, 1901. In it both the date of the call and
the payments of the installments under it were fixed. It was the same
as if the call had been determined and made of that date. The resolu-
tion was only giving notice of what could hâve been done without no-
tice. That the résolution provides for the payment in installments is
évidence of the fact that the call was made as of a date antécédent to
that of the payment of thé installments. There was but one debt
created — that of $10 per share, and it was payable in four "install-
ments," which the Century Dictionary defines to be "partial payments
125 F.— 14
21Q 125 B-BDiEBAt EBPOETBB.^
on aceount of a debt due." To tisé tïie language of tKe leame'd Judge
in North American Company v. Bentley, 19 L. J. Q. B. N. S. 427. "We
cannot help thinking that a Call is made and a dèbt accrues in respect
of it, although the time for payment. may not hâve arrived." We are
of the opinion that the résolution of September I2th establishes the
date of the call as September î&, I901. This being so, and the trans-
fer of the stock to Thomson being made October 3, 1901, then did the
call of September i6th impose âny personal liability upon Campbell,
the défendant below, the then owner and registered holder o£ the
stock ; and, if Campbell thereby became liable, was this liability aflfect-
ed by bis subséquent transfer to Thomson, and the issue of a certifîcate
to him by the Company? In Upton v. Tribilcock, 91 U. S. 45, 23 L.
Ed. 203, it was held that "the original holder of stock in a corporation
is liable for unpaid installments of stock without an expressed promise
to pay them." And in Webster v. Upton, 91 U. S. 65, 23 L. Ed. 384,
this doctrine was approved, and the court went further, and said that
"the transférée of stock is liable îùr calls made after he bas been ac-
cepted by the company as a stockholder and bis name registered on
the stock books as a corporator." This liability exists so long as he
occupies that position and relation, and applies to ail calls made dur-
ing that period. The same obligation to pay, we think, arises also
from the terms of the New Jersey statute (Sess. Laws 1896, p. 284)
section 22 of which provides as foUows : "The directors of every cor-
poration nîay from time to time raake assessments upon the shares of
stock subscribed for, not exceeding in the whole the par value thereof ;
and the sum so assessed shall be pâid to the treasufer at such times
and by such installments as the directors shall direct." And section
40 of the àct makes the transfer books the test as to who are share-
holders. Under thèse provisions there is an implied promise by the
shareholder to pay the assessments, and beyond that is the equity to
contribute to the capital stock às'-a trust fund for creditors. Section
21 of the act provides as follows : "Each stockholder shall be bound
to pay on each share held by hiim the sum necessary to complète the
amount of such share." The transférée is vested, by substitution, with
the rights of the transferror to the Stock, but assumes also correspond-
ing obligations. Because the t#ansferror ceases to hâve a voice in the
management of the company, and has no longer any interest or owner-
ship in the property^ he is freed from further liability, and the trans-
férée is substituted and subjected to future calls by the corporation for
further aid to carry on its business and fulfill its corporate ends.
Campbell, the défendant below, being the registered holder of
S,ioo shares of preferred stock on September 16, 1 901, was liable, as
such holder, for any unpaid and uncalled for subscription thereon ; and
when such; call was made by resolution of September I2th as of Sep-
tember i6th, an obligation was then imposed on him to pay. Cook
on Corporations, § 256; Webster v. Upton, 91 U. S. 65, 23 L. Ed.
384; Pullman v. Upton, 96 U. S; 1328/24 L. Edi 818; Finn v. Brown,
142 U. S. 56, 12 Sup. Ct. 136^(33 I,. Ed. 936. But the transférée of
preferred stock duly registered o» the books of the company was liable
for after-assessments as provided in the certificates held by the de-
iendant. "After payment of ten dollars per share on the preferred
CAMPBELL V. AMERICAN ALKILI CO. 211
stock the subscribers thereto shall not be liable for any balance oî their
subscription excepting upon such shares as shall stand of record on
the books of the company in their name at the time when any subsé-
quent assessments or calls are made, but the holder of such shares of
record on the books of the company at that time and they only shall
be liable for the same." Section i8 of the act (Sess. Laws 1896, p.
283) provides that "every corporation shall hâve power to create two
or more kinds of stock of such classes, with such restrictions or quali-
fications thereof as shall be stated or expressed in the certificate of in-
corporation" ; wrhile section 8, subsec. 4 (Sess. Laws 1896, p. 280), en-
acts that "the certificate of incorporation shall provide a description
of the dififerent classes of stock, * * * with the terms on which
preferred shares are created." Under thèse provisions the conditions
referred to vi^ere properly embraced, and, as such, the défendant, by
having the shares standing in his name when the assessment was made,
obligated himself to pay the same. We are therefore of the opinion
that the call of September 16, 1901, created a personal liability upon
Campbell, the défendant below, the then registered holder of the
stock, for its payment, and that this liability was one of which he
could not rid himself by afterwards transferring his share. The trans-
fer of the stock by Campbell to Thomson, and the issue by the com-
pany of a new certificate to Thomson, did not relieve Campbell from
his Hability for the call. That liability had accrued September i6th,
when the call was made. It was complète and perfect, and the subsé-
quent transfer on October 3d was merely an act of accommodation to
enable the shareholder to sell and legally transfer his stock. There
was no expressed purpose of the shareholder or the company to affect
liabilities or rights then existing. It in no way inured to the benefit of
the company, nor could it serve to relieve the défendant of his obliga-
tions to the company.
Can this liability to pay be enfcrced by an action at law ? Doubtless
it can, unless the company is deprived of it by the remedy of forfeiture
provided by the statute. Where a right of action and a right of for-
feiture exist, it is manifest that the company cannot resort to both;
but where a personal Hability is imposed on a delinquent shareholder,
and the right to forfeit the share is also given, the law is clear that the
latter right is cumulative, and not exclusive. Ashton v. Burbank, 2
Fed. Cas. 26, 2 Dill. 435. "A grant of the power to déclare a forfeiture
for nonpayment does not by implication deprive the corporation of an
option of remédies." Cook on Corporations, § 124. It is put to its
élection, and may resort to either ; not both. It will be noticed that
the statute in this case is not mandatory, but permissive. The treas-
urer is not directed to sell, and can only do so when ordered by the
board of directors, and then he shall sell at public sale. There is no
obligation imposed on the directors to follow this remedy permitted
by the statute. The language is (section 23) : "If the owner of any
share shall neglect to pay any sum assessed for thirty days after the
time appointed for payment, the treasurer, when ordered by the board
shall sell at public auction such number of shares of the delinquent
owner as will pay ail assessments due from him." The statute itself
recognizes the pre-existing liability and delinquency of the shareholder.
212 125 PEDEKAL BBPORTEK.
The assessment was "due from him," and he was "delinquent." In the
meanwhile a right of action had accrued to the company for the col-
lection of the amount due, and this right could not hâve been in-
tended to be taken away by a continuance of the default, but to hâve
furnished additional optional remedy if the default continued for a
specified time. Under the law, generally, a corporation has a right
either to sell or forfeit. When, therefore, the New Jersey statute èx-
pressly conferred a right to forfeit, it only conferred a povver expressly
which had always existed impliedly without the statute. It is obvious,
therefore, that the express grant of an implied power of forfeiture of
stock should not be held to exclude the generally implied power to sue
for unpaid assessments, for both the right to forfeit and the right to
sue may impliedly exist concurrently at law.
Has the défendant, then, being liable for the assessment levied upon
the stock of which he was a registered holder on the books of the
company at the time of the call, shown any valid défense? We think
not. Doubtless a stockholder has a right to défend and resist a fraud-
ulent call, "but an ord'er of assessriiCnt, whether made by the directors,
as provided in the contract of subscription, or by the court, as the
successor in this respect, was doubtless, unless directly attacked, con-
clusive évidence of the necessity for making such an assessment, and
to that extent bôund every stockholder," Great Western Tel. Co. v.
Purdy, 162 U. S. 329, 1 6 Sup. Ct. 810, 40 L. Ed. 986. If, therefore,
a stockholder desires to attack an assessment, he must do so directly,
and not cdllaterally (EHzabethtown Gaslight Co- v. Green, 49 N. J.
Eq. 329, 24 Atl. 560) ; otherwise it might happen that one stockholder
might be released and another held, while the same légal liability at-
tached to each.
On the whole case we are of the opinion that the defendant's lia-
bility attached September 16, 1901, the date of the call; that he was
not relieyed of his liability by the transfer of his stock October 3,
1901; and that to the action hère properly brought he has no défense.
The judgment' of the Circuit Court is affirmed.
MULLER V. KEt,ys:.
(CIrcRit Court of Appeals, Third Circuit. September 24, 1903.)
' , ; V- , No. 8.
AtTOBNET AND CLIENT— VaLIDITI OP CONTRACT FOR CoNTUfÔENT PbB—
OuBSTioNS POB Jury. ^ , ^ ^
Plalntlff, a Swiss immigrant, who had been fn this cpuntry but abput
a month, and neither spobe nor understood Engllsh, w^s thrown from
a Street car, and sevei-ely and permaùently Injured. He was taken to a
hospital, Where' he remalned unconscious for two or three days, after
which for several mohths he continued In a highly ner.vous condition,
diagnosed as hysteria, :of such character aod severity that Ms only ac-
quaintance yiaa forbidden to talk to him, and ail communication with
him was throùgh à physician who spoke German and by means of writ-
Ing. His Injuries were of such character that after he had been conflned
in the hospital flve mohths, and after «xamlnations by its own physicians,
the traction company paid §10,000 as compensation, for his injuries with-
MXJLLEK V. KBLLT. 213
out suit or contest. Some 15 days af ter the Injury, plaintlff, through the
agency of the physiclan, who acted as interpréter, signed a writing by
which he employed défendant as tiis attorney, and agreed to pay him for
lils services one-half the amount recovered from the company. He did
not see défendant, and had never previously heard of him. He after-
■ward received as his share of the recovery some $4,500, and receipted
for the same before leaving the hospital. Subsequently he brought suit
against défendant to recover the $5,000 retained by the latter. Held, that
plaintiff was entitled to hâve submitted to the jury the question vphether,
under the circumstances shown, there was any contract with défendant,
and -whether, if so, it was falr and eonscionable; the rule of the fédéral
courts as well as the courts of the state being that such contracts will be
closely scrutinlzed, and if extortionate or unconscionable, or if obtained
by undue means, will not be upheld.
Dallas, Circuit Judge, dissenting.
In Error to the Circuit Court of the United States for the Eastern
District of Pennsylvania.
For opinion below, see ii6 Fed. 545.
Edward F. Hofïman, for plaintif! in error.
D. Webster Dougherty, for défendant in error.
Before ACHESON and DALLAS, Circuit Judges, and BUF-
FINGTON, District Judge.
BUFFINGTON, District Judge. Jean Muller, the plaintifï in
error, a Swiss immigrant, landed at Philadelphia in April, 1900. He
spoke no English, liad no relatives in this country, and, indeed, no
acquaintances, save one Ghaul, with whom he boarded. He found
employment at Cramps' Shipyards. On May i8th he was forcibly
ejected from a street car while in motion by a conductor and badly
injured. He was removed to a hospital in an unconscious condition,
and so remained for two or three days. On his return to conscious-
ness he was in a pitiable state. As a resuit of his injuries he had
either become totally deaf or his mental condition was that of hysteria.
He was in so highly a nervous condition that he had to be forbidden
intercourse, He was communicated with by the doctor writing on
slips of paper. His mental condition was then and for some months
diagnosed as hysteria. Dr. Boj'er, of the hospital stafï, thought it
was hysteria, and the défendant himself testifîed that there was such
doubt among the physicians as to whether the plaintifï's injuries
were real or a case of hysteria that he procured the services of several
expert neurologists to ascertain that fact. Probably the most cogent
proof of the grave character of his injuries was that after five months
confinement in the hospital under treatment, and after examinations
of him made by its own physicians, the traction company paid, without
suit or contest, the very unusual sum of $10,000 as compensation for
the injuries inflicted on him. Mr. Duane, the counsel for that com-
pany, characterized it "as the strongest case in favor of the plaintifï as
regards damages which has ever been referred to me by the Union
Traction Company, It was for that reason I was willing to pay the
very unusual sum of ten thousand dollars in settlement." When the
plaintifif regained consciousness he was in a highly nervous and hys-
terical state. When his boarding master Ghaul saw him several days
214 125 FEIDBBAL BBFOETBIt.
later, whicli was naar the date of the power oî attorney în question,
the plaiWtifï could not talk tp him without crying, and his condition
was such tliat the attendant physician had to forbid Ghaul talking with
him. Indeed, one witness who visited him so late as September
testifîed that Dr. Kiefïer, the hospital surgeon in chargé of plaintiff.
then had him secrète himself sd thàt he could see the condition of the
plaintiff imobserved, and that he saw him moving along leaning his
whole weight against the walls. He was wholly dépendent for comv
munication with others on Dr. Kiefïer, who spoke German, and
communicàted by writing on slips of paper. The nature of the in-
terpreting services so rendered wag testified to by Brodt, a claim ad-
juster of the traction company, who visited the plaintifï, and con-
versed with him through the doctor, who suggested that he be paid
by the company $25 or $30 for interpreting and keeping counsel from
seeing the plaintifï. It was also in évidence there was later deducted
from the amount paid by the traction company $150 for his (Kiefïer's)
services as interpréter. In this state of affairs, some 15 days after the
accident, and when, if his testin;iony is believed, he was unsuccessfully
requesting to see the Swiss consul for consultation, the plaintifï, with-
out knowihg or even seeing the défendant, is alleged to hâve made,
through the agency of Dr. Kiefïer, an agreement with the défendant
for a contingent fee, the outcome of which agreement was to allow
the latter to charge the sum of $5,000 for alleged services, to pay Dr.
KJeffer $150 for services as interpréter, to pay physicians for exam-
ining the plaintiff to qualify themselves to testify as to his mental
and physical condition $255, and to leave the plaintiff, after deduct-
ing $66.25 for witness and court costs, the sum of $4,528.75 as his
share of the $10,000 paid by the traction company to the défendant
as compensation for Muller's injuries. The évidence indicates that
the plaintiff is permanently disabled, and that upon the sum paid by
the traction company dépends his future livelihood. After leaving
the hospital and procuring counsel through the intervention of the
Swiss consul, Muller brought suit against the défendant, his former
attorney, to recover the balance; but at the close of the testimony the
case was taken ; from the jury and binding instructions given against
him, the court holding, in effect, that the plaintiff was concluded by the
written agreement to pay the contingent fee, and by his written receipt
for the balance paid him just before he left the hospital. The refusai
of the court to submit the case to the jury is hère assigned for error.
After careful considération, we are of opinion the assignment should
be sustained. The agreement was not only between counsel and
client; it was for an unusual and very large amount; it was made
without the parties meeting; it was arbitrarily iixed by counsel, with-
out knowing the extent of the plaintiff's injuries, without information
from him as to the circumstances or facts of the case; it was made
by the client without any information of the character, standing,
ability, or reliability of the counsel, under the statement of the doctor,
in whom he would naturally hâve ail faith, that he would hâve to pay
such fées to any American lawyer; it was made, if the plaintiff's
testimony was believed, under the belief that he was engaging another
lawyer, who had been recommendcd by Ghaul; and not only was it
MULLEE V. KELLT. 215
made by one ignorant of our language and procédure, but it was made
with a sick and shattered man, sufïering from the eflfects of a most
serious accident, and of whose mental balance and capacity there was,
to say the least, grave question. Under such circumstances, we
think the question was not one of changing a written contract, but
whether, under the circumstances, there was any contract between
theni. The counsel admitted receiving the money. He sought to
défend against payment of the unpaid balance by showing a contract
for this large sum, made under the circumstances recited, with his
cHent. In view of the attendant facts and circumstances of this case,
we think the plaintiff had, under the authorities, a right to hâve that
question determined by a jury. Now, in this case, we discard for
présent purposes ail questions of ethics and the grave temptations to
professional misconduct agreements, such as the présent are prone to
foster, and assume the right of counsel, under proper conditions.
to make such bargains. But conceding the right to so contract, as
was donc in Taylor v. Bemiss, iio U. S. 45, 3 Sup. Ct. 441, 28 L. Ed.
64: "This, however," as was there said by Mr. Justice Miller, "does
not remove the suspicion which naturally attaches to such contracts ;
and where it can be shown that they are obtained from the suitor by
any undue influence of the attorney over the client, or of any fraud or
imposition, or that the compensation is clearly excessive, so as to
amount to extortion, the court will in a proper case protect the party
aggrieved." In Pennsylvania the rule is the same. In Shoemaker
V. Stiles, 102 Pa. 553, it was said: "The parties were attorney and
client. The relation gave rise to great confidence, and the attorney
is presunied to hâve the power to strongly influence his client, and to
gain by his good nature and credulity, and to obtain undue advantages
and gratuities. Hence the law often déclares transactions between
them void which between other persons would be unobjectionable.
Unless the transaction was fair and conscionable, it is deemed a con-
structive fraud." And in Chester v. Barber, 97 Pa. 463: "That an
attorney may make any contract he sees proper with his client in
regard to his compensation, and acting in his own behalf, and with
référence to his own property, is not denied. AU that the law will do
in such a case is to scrutinize the transaction, and see that it is fair,
and that no unconscionable advantage has been taken either of the
necessities or the ignorance of the client." The gênerai consensus of
opinion is summarized in 5 Am. & Eng. Ency. Law (2d Ed.) p. 828:
"It may be stated as a well-grounded rule that a contract for a con-
tingent fee must be made in good faith, uberrima fides, without sup-
pression or reserve of fact, or apprehended difïiculties, or undue in-
fluence of any sort or degree; and the Compensation bargained for
must be absolutely just and fair, so that the transaction is character-
ized throughout by ail good faith to the client." Indeed, in the case of
Herman v. Metropolitan Street Ry. Co. (C. C.) 121 Fed. 184, where
an attorney claimed 50 per cent, for the recovery of $500 in an acci-
dent case, under an agreement for a contingent fee, Judge Lacombe
went to the length of saying that a fee of such proportion was in itself
in that case unconscionable. He there said : "The court is not satis-
fied that such a contract was made, but, if it were, it was so utterly
216 125 VEDERAL fiEPOBTEB.
unconscionable as to be void. Mattêr ôf Fitzsîmons (Sup., First
Dept., Dec, 1902) 79 N. Y. Supp. 194. The action was to recover
damages for injuries resultiiig from an ordinary street accident — a
collision between a car and a truck. To cOnstrain or persuade a client
into an agreement to give half the recovery, and to pay ail the dis-
bursements, for preparing and trying such a case, îs an abuse of con-
fidence, which, in the langfuage of the caseis cited, it would not be in
the interest of public policy or professional ethics to approve." Under
thèse circumstances, and in view of the facts and circumstances of this
case, and the testimony that the fee charged was far in excess of the
value of the services rendered, we think the plaintiff was entitled to
hâve the jury pass upon his mental capacity at the time to enter
into an agreement of this character, and to "scrutinize the transaction,
and see that it was fair, and that no unconscionable advantage has
been taken either of the necessities or the ignorance of the client"
(Chester v. Barber, supra) ; to ascertain whether the transaction was
fair and conscionable (Shoemaker v. Stiles, supra) ; and, if the com-
pensation was so clearly excessive as to amount to extortion, to pro-
tect the party aggrieved thereby (Taylor v. Bemiss, supra). The
plaintiflf having been deprived of his constitutional right to a jury-
trial, the case will be reversed, and a venire de novo awarded.
DALLAS, Circuit Judge (dissenting). A contract for a contingent
fee is valid. Wylie v. Coxe, 15 How. 415, 14 L. Ed. 753 ; Wright v.
Tebbitts, 91 U. S. 252, 23 L. Ed. 320; Stanton v. Embrey, 93 U. S.
548, 23 L. Ed. 983; McPherson v. Cox, 96 U. S. 404, 24 L. Ed. 746;
Taylor v. Bemiss, iio U. S. 42, 3 Sup. Ct. 441, 28 L. Ed. 64. Where
a party to such a contract allèges that he lacked contractual capacity
when he made it, the burden of sustaining that allégation rests upon
him, precisely as it would with respect to any other contract. There-
fore I cannot agrée that the trial court should hâve permitted the
jury to set aside the written contract which was admittedly made in
this case, upon évidence that the plaintiflf below was nervous and hys-
terical, but without any proof that he was incapable of comprehending
what he was doing, and in the face of testimony which, as I think,
clearly shows that he was not.
I do agrée that it is the duty of the courts to scrutinize such trans-
actions, and I may be permitted to add that, in my judgment, this
duty should be rigorously discharged. If it be found that the attor-
ney has exercised undue influence over the client, has been guilty of
fraud, imposition, or extortion, or has in any manner abused the con-
fidence which pertains to the relation of attorney and client, the party
aggrieved ought tO be, and in a proper case will be, protected. But,
as I read it, this record discloses no testimony that the attorney
against whom this suit was brought did any of thèse things. There-
foré I think the leamed judge was right in directing a verdict for the
défendant, and that the judgment which was entered should be af-
firmcd.
BUKLEIGH V. ÏOEEMAN. 217
BTJRLEIGH et al. v. FOEBMAN.
(CSrcult Court of Appeals, First Circuit. September 22, 1903.)
No. 472.
1. Bankrdptct— Appbalablk Ordehs.
FoUowing Union Trust Co., Petitloner (C. C. A.) 122 Fed. 937, a court
of banlsruptcy bas undoubted power to marshal assets in the hands of
a trustée, as between partnership and individual creditors, in tbe exer-
cise of its équitable jurisdictlon conferred by Bankr. Act July 1, 1898,
c. 541, § 2, 30 Stat. 545 [U. S. Comp. St. 1901, p. 3420]; and when, m
the course of such proceedings, a distinct and separable Issue is raised
between parties Intervening, involvlng substantlal rights, and which mlght
arise at common law or in equlty, the case présents a controversy within
the meaning of section 24a, and an appeal lies from the order made
thereon under such section to the Circuit Court of Appeals.
Appeal from the District Court of the United States for the District
of Massachusetts.
Addison C. Burnham (Albert S. Hutchinson, of counsel), for ap-
pelants.
Bancroft Gherardi Davis, for appellee.
Before COLT, PUTNAM, and ALDRICH, Circuit Judges.
PUTNAM, Circuit Judge. This is an appeal from a decree of the
District Court for the district of Massachusetts. The proceedings
arose out of the bankruptcy of the copartnership of E. C. Hodges &
Co., and the question involved is an issue between the creditors of the
copartnership and the creditors of one of the copartners, Hodges, rela-
tive to the title to the proceeds of seats at the Boston and the New
York Stock Exchanges, and at the Chicago Board of Trade, and cer-
tain notes and shares of stock of the Wheelman Company. AU thèse
assets stood in the name of Hodges ; but the creditors of the copart-
nership claim that they, in fact, belonged to it. A decree was entered
that the property constituted joint assets. Thereupon this appeal
was seasonably taken. The appellants are Charles B. Burleigh and
the Washington National Bank, creditors of Hodges, and Freeman
Hutchinson as trustée of the joint and several estâtes. There is only
one appellee, Henry G. Foreman, a creditor of the copartnership.
Of course, in strictness, Burleigh, the Washington National Bank,
and Foreman should hâve been required to intervene in the litigation
each in behalf of himself and of ail other creditors of the same class.
Unless interventions are made in that way, it cannot be clear that ad-
judications are conclusive against any creditors except those nominally
parties to the proceedings. However, no point is made on that ac-
count, and, on the record as it stands, we are not required to assume
that there are any joint or several creditors except those before us.
The proceeding seems to hâve commenced with the filing of ac-
counts by the trustée as required by law, crediting the assets in dis-
pute to the individual estate of Hodges, and praying, in several peti-
ir 1. Appeal and review in bankruptcy cases, see note to In re Eggert, 43
C. C. A. 9,
2J8 _ 125 FEDERAL BEPORT.BB.
tions and amended pétitions, that dividends should be ordered on that
basis. Thereupon, Foreman filed several answer s to the pétitions,
solely in his own behalf as stated, without any apparent authority from
the court to intérvene, if ariy was needed. Burleigh and the Washing-
ton National Bank, in like manner, filed pétitions praying that the
assets should be marshaled as now claimed by them. The record con-
tains a number of pétitions and amendments, in various stages, be-
fore the ultimate issues were framed. The resuit was that there was
an order directing reformed pleadings, which clearly recognized the
standing as litigants of the creditors who took this appea,!. The
District Court, having, as we hâve said, decided that the assets in ques-
tion belonged to the copartnership, entered accordingly a decree which
fully disposed ôf that issuey and which, therefore, so far as this sub-
ject-matter is concerned, was final. Thereupon, Burleigh, the Wash-
ington National Bank, and Hutchinson as trustée appealed, as we
hâve said, against Foreman only.
The appellee now moves to dismiss the appeal for several reasons,
only one of which has been relied on at bar. That is as foUows :
"The matter sought to be brouglit before this court on appeal Is net withln
the terma of section 25a, and is not a controversy In bankruptcy proceedings
withln the meanlng of section 24a of the bankruptcy act."
Section 2 of the bankruptcy act of July i, 1898, c. 541, 30 Stat. 545
[U. S. Comp. St. 1901, p. 3420], enumerates certain matters over
which the courts of bankruptcy are invested with jurisdiction at law
and in equity. This gives them undoubtëd cognizance of the marshal-
ing of assets in the possession of the trustée in proceedings like that
underlying this appeal, as was fully explained by us in Union Trust
Company, Petitioner (C. C. A.) 122 Fed. 937. In this respect the Dis-
trict Courts are not within the prohibition of Bardes v. Hawarden
Bank, 178 U. S. 524, 20 Sup. Ct. 1000, 44 h. Ed. 1175, and of décisions
which hâve followed that case, but their powers are analogous to those
exercised by equity courts in marshaling and distributing assets which
hâve come within their control and into their custody. When, how-
ever, the equity courts assume a jurisdiction of that character, it is
a fundamental rule, so far as the fédéral tribunals are concerned, that,
whenever any party intervening raises a distinct and separable issue
or controversy involving substantial pecuniary rights, an appeal lips.
Pursuing that analogy, an appeal should be allowed in the présent case.
A construction of the bankruptcy act of 1898 which would lead to a
différent conclusion would be monstrous. It would give a single
judge absolute power over questions of fact concerning estâtes in bank-
ruptcy, no matter how immense, while no such power exists in any
other branch of the fédéral judicial jurisdiction. Such a résuit should
not be accepted unless the statute furnishes some express provision in
that direction, clear and positive. None such exists.
The relief given by the bankruptcy act of 1898 to litigants dissatis-
fied with the conclusions of the District Court are distinctly threefold:
First, there is an appeal provided in section 25, with référence to the
spécifie matters named therein. This was needed if an appeal was
to be allowed, as the matters to which it relates could arise in bank-
BURLEIGH V. FOEEMAN. 219
ruptcy only. Second, section 24b gives the several Circuit Courts
of Appeals jurisdiction "to superintend and revise in matter of law the
proceedings of the several inferior courts of bankruptcy within their
jurisdiction." Third, section 24a invests them "with appellate juris-
diction of controversies arising in bankruptcy proceedings from the
courts of bankruptcy from which they hâve appellate jurisdiction in
other cases."
Notwithstanding the limited form of expression in section 24b, the
appellee maintains that its provision for revision relates to ail matters
covered by section 2 of the act of 1898, exclusive of ail other methods
of relief. It is true that, when a statute vests a new jurisdiction and
simultaneously enacts a spécifie remedy, it ordinarily excludes by im-
plication ail others. Nevertheless, this is not a universal rule, as is
very peculiarly illustrated with référence to the construction of that
clause of section 5 of the act of March 3, 1891 (26 Stat. 826), estab-
lishing the Circuit Courts of Appeals, which provides an appeal to
the Suprême Court in cases in which the jurisdiction of the court be-
low is in issue. It is the settled construction of this statute that,
contrary to the usual rule to which we hâve referred, the losing party
in a Circuit Court or a District Court may take to the Suprême Court
the question of jurisdiction in accordance with this provision of stat-
ute, or, notwithstanding the ordinary impHcation arising from the
spécifie grant of this method of rehef, he may take the entire case,
including the question of jurisdiction, to the Circuit Court of Appeals.
So with référence to this provision of the bankruptcy act of i8g8, on
which the appellee relies, it is not unreasonable to hold that a dissatis-
fied litigant may appeal as to both the law and facts, or may, where a
question of law is concerned, take the less expensive and the more
summary manner of raising that alone by a revisory pétition. Cer-
tainly, no détriment could corne therefrom, because, in the latter case,
the party aggrieved waives ail questions of fact which is for the ad-
vantage of the winning party in the court below. Such certainly has
been the practical construction of this statutory provision, because, in
many cases before us, and also in some cases before the Suprême
Court, revisory pétitions hâve been considered without objection, even
where the issue was clearly of an adversary character, and, in accord-
ance with the rule of Bardes v. Hawarden Bank, not within the juris-
diction of the court of bankruptcy except by the consent of both
parties thereto. But this case rests on a more substantial basis.
The appellee maintains that we early decided this question in his
favor. This is not maintainable in view of the express caution which
we hâve given the bar in several cases, among the rest in Hutchinson
V. Otis (decided on May 22, 1902) 115 Fed. 937, 941, 53 C. C. A. 419,
in Hutchinson, Trustée, v. Otis, Wilcox & Co., Hutchinson, Peti-
tioner, and Osborne, Petitioner (decided by us on September 4, 1902)
123 Fed. 14. We need not refer to thèse opinions at length, because
they leave it clear that there has been no formai décision by us of the
issue now before us. In the same vein, on a revisory pétition in
Franklin A. Chase et al., Petitioners, 124 Fed. 753, we passed down
on June 18, 1903, an opinion sustaining the pétition, although the
issue therc was of an adversary character, and might hâve been forced
220 125 FBDIIRAL IBEPOKl'EB.
into a formât suit on the rule of Louisville Trust Company v. Comin-
gor, 184 U. S. 18, 22 Sup. Ct. 293, 46 L,. Ed. 413.
Neither has the Suprême Court expregsly ruled on the proposition
beforç us. It has, without question, permitted cases to corne before
it based on revisory pétitions to the Circuit Courts of Appeals with-
out comment on this topic, White v. Schloerb, 178 U. S. 542, 20
Sup. Ct. 1007, 44 L. Ed. I183; Bryan v. Bernheimer, 181 U. S. 188,
21 Sup. Ct. 557, 45 h. Ed. 814 ; Wall v. Cox, 181 U. S. 244, 21 Sup.
Ct. 642, 45 L. Ed. 845 ; Mueller v. Nugent, 184 U. S. i, 22 Sup. Ct.
26g, 46 L. Ed. 405 ; Louisville Trust Company v. Comingor, 184 U. S.
18, 22 Sup. Ct. 293, 46 L. Ed. 413, already cited; Metcalf v. BarRer,
187 U. S. 165, 23 Sup. Ct. 67, 47 L. Ed. 122; Page v. Edmunds, 187
U. S. 596, 23 Sup. Ct. 200, 47 L,. Ed. 318; and Clarke v. Ivarremore,
188 U. S. 486, 23 Sup. Ct. 363, 47 L. Ed. 555. In thèse cases it has
proceeded so indiscriminately on the foundation of a revised petitior
to a Circuit Court of Àppeals as to give much color to our proposition
that in many cases parties considering themselves aggrieved may pro-
ceed either by such a pétition or by appeal. Wall v. Cox and Louis-
ville Trust Company v. Comingorj ubi supra, were clearly cases of an
adversary character, and So far beyond the jurisdiction of the District
Court unless by consent, in accordance with the rule in Bardes v.
Hawarden Bank, that the party aggrieved certainly had a right of ap-
peal. On ail fuies of law, if he had seen fit to exercise it. We hâve
searched carefully the late décision of the Suprême Court in Hutchin-
son V. Otis, 190 U. S. 552, 23 Sup. Ct. 778, 47 L. Ed. 11 79, without find-
ing any light on this particular topic.
But, clearly, "proceedings of the several inferior courts of bank-
ruptcy" and "controversies arising in bankruptcy proceedings," as to
the latter of which appeals to the Circuit Courts of Appeals are ex-
pressly allowed, may take on entirely différent characters. The Su-
prême Court has clearly recognized the distinction in Bardes v. Ha-
warden Bank, ubi supra, at page 536, 178 U. S., at page 1005, 20 Sup.
Ct., and 44 L. Ed. 11 75, and again in Denver First National Bank v.
Klug, 186 U. S. 202, 205, 22 Sup. Ct. 899, 46 L. Ed. 1127. We hâve
cxplained this in Hutchinson v. Otis (C. C. A.) 123 Fed. 14.
The subject-matter of this appeal is not in any way peculiar to
bankruptcy. Questions çfmarshaling assets between a copartnership
and individual partners arise at common law, but oftener at equity.
In the présent case the controversy is governed entirely by the princi-
ples of the common law and the rules of equity, and it is, therefore,
for the reasons we hâve given, of an essentially aifferent class from
the matters as to which section 25a allows appeals. It is involved
in the présent "bankruptcy proceedings" simply because it arose in
them, within the meaning of the citation already made from section
24a of the statute of 1898. The question involved is not, in any
proper sensé of the word, a mère proceeding in bankruptcy ; and there
is no reason, either in the theory of the law or in the express language
of the stattite, why relief should be limited to that kind which is af-
forded only with référence to such proceedings.
^ The motion to dismiss the appeal is denied.
DUNN V. TBAIN. 221
DUNN T. TRAIN.
(Circuit Court of Appeals, First Circuit. September 29, 1903.)
No. 461.
1. PlBDQBS — VALIDITY — SUFFICIENCT OF DeI-IVERY.
By an agreement a paper eompany was to dellver ail the product of
its mill to plaintiffs, who were its selling agents, as security for ad-
vances which were made to it by plaintiffs, and such deliverles were
made as fast as ttie goods were manufaetured to a designated agent for
plaintiffs, who was also an employé of the eompany, and the product
when se dellvered was plaeed by itself on tUe premises of the eompany,
and was thereafter controUed by the agent, who shipped it from time
to time for sale when ordered by plaintiffs. B«ld that, under the rule
that there must be both delivery and continued possession to constitute
a valid pledge as to third parties, there was such actual delivery and
continued possession by the pledgees as to render the pledge valid as
against an assignée in insolvency of the eompany, with respect to the
goods on hand in the custody of the agent when the assignée was ap-
pointed.
2. Samb — Recbipts.
A pledge is not invalidated because no receipt was given the pledgor
for the goods when they were actually dellvered to an agent of the
pledgee, although they remained on the premises of the pledgor, nor
because on a transfer of possession by the agent to a successor he took
no receipt for the goods.
8. iKsoLVBNcy — Validitt dp Transfebs— Buhdbk of Pkoof.
To entitle an assignée in insolvency under the statute of Alaine to in-
voke the provisions of such statute making void transfers of property
by the insolvent within four months to one havlng reasonable cause to
believe him insolvent, or in contemplation of insolvency, or for the pur-
pose of giving préférence to pre-existing debts, such assignée must estab-
llsh by proof the facts which bring the transaction in question within
the terms of the statute and make It applicable.
In Error to the Circuit Court of the United States for the District of
Maine.
Charles F. Woodard, for plaintifï in error.
George E. Bird (William M. Bradley, on the brief), for détendant in
error.
Before COET and PUTNAM, Circuit Judges, and ALDRICH,
District Judge.
AEDRICH, District Judge. This case involves an agreement or
pledge under which the plaintifif below, as selling agent of the Ban-
gor Pulp & Paper Company, had advanced money largely in ex-
cess of the value of the replevied goods, and one which contemplated
that the material in question — bundles and rolls of paper already
finished into paper from pulp, and such as should from day to day
be finished — should be delivered to the plaintifï, now the défendant
in error, as security for the sums so advanced. There is no question
hère as to the considération or as to the actual good faith of the
parties, neither is there any question about the intention of the parties
to create security by pledge.
This case must therefore turn upon the question of delivery and
acceptance, or, in other words, upon change of possession. We as-
222 125 ffBOESBAL BBPOBTBB.
sume that it was necessary to the création of a valid pledge, as against
third parties, that it must hâve been intended that possession should
change frqin the pledgor to the pledgee, and that, possession being
changed, it must be preserved by the pledgee through a rétention of
such dominion over the property as the rules of law require.
This we assume, at the outset, to be an essential élément of such
an agreement where the question of right is to be determined between
the pledgee and a bona fide purchaser or attaching créditer, and for
this case we may assume such to be the rule as between a pledgee
and an assignée in insolvency. Casey v. Cavaroc, 96 U. S. 467, 24
L. Ed. 779. Having assumed this, as contended for by the plaintifï in
error, the citations from the Maine statutes and the authorities fail
to apply, for the reason that they are directed against situations where
a change of possession does not exist ; and it résulta, therefore, that
the only question left to that side upon this branch of the case relates
to the sufiSciency of the delivery and acceptance. In other words,
did the parties, intending to make the pledge effective, do enough to
answer the requirements of the law ?
It being a question of intention, and a question whether the change
in the situation of the property was such as to be notice of a change
of possession, it was, under the circumstances, largely a question of
fact, to be determined under rules of law.
The learned judge who heard the case below has found that the pa-
per manufactured at the time of the agreement — 350,000 pounds at
2 cents a pound — was billed to the pledgees by the Bangor Pulp &
Paper Company, and that theBangor Pulp & Paper Company received
from the pledgees $6,500, and receipted for the same ; that the paper,
so billed and receipted for, remained in the custody of the agent of
the pledgees at the mill of the Bangor Pulp & Paper Company at
Orono, Me., an agent whom the parties agreed upon for that purpose,
and who was an employé of the paper company; that, by arrange-
ment of the parties, the paper thereafter manufactured was also put
into possession of the pledgees in the same way to secure the liens for
advances made thereon from time to time, and that it ail remained in
the hands of the agents of the pledgees, subject to their orders; and
that thereafterwards, to the end that the situation might be made more
secure for the pledgees, the Bangor Pulp & Paper Company, on the
3ist day of August, 1895, sent a communication to Train, Smith &
Co., the pledgees, as foUows :
"Boston, August 31, 1895.
"Messrs. Train, Smith & Company — Gentlemen: In your order to keep your
gênerai lien unimpalred and, at the same time, to save the freight on the
goods, we agrée to dellver each day to your agent hère, Mr. John H. Kline,
the flnlshed product of our paper mlU, taking his receipt therefor. Thèse
goods are to remain In his possession as your agent and may be kept In store
by him In our basement wlthbut charge until shlpped by him in your name.
"We are to allow Mr. Kllne to act as your agent. Very truly yours,
"Bangor Pulp and Paper Company,
"Chas. W. Waloott, Asst. Treasurer."
It was further found as fact that from the said 3ist day of August
the paper Company for a time delivered to Mr. Kline, under this ar-
rangement, ail the finished product of the mill, the place of such de-
DtJNN V. TBAIN. 223
posit being accessible from other portions of the mill; that paper thus
deposited remained where it was deposited in the mill, apart by itself,
not confused with any other paper, until December 30, 1895, at which
time the paper Company had constructed a new storehouse, and there-
upon the paper which had been already delivered and deposited in
the basement and shipping room of the mill, as above stated, was
transferred to the new storehouse, and remained under the care of
Gedney, who had been appointed the agent of Train, Smith & Co.,
where it remained apart from ail other paper until replevied ; that the
several agents who had been appointed for the purpose of holding
possession and taking delivery, when ceasing to act for the pledgees,
made no formai delivery to their successor, but left the pile where it
was and as it was, each successor adding to the pile the product as it
was delivered to him; that no distinguishing marks had been put
upon any of the paper ; that part of the deliveries were receipted for
by the agent, while others were not, but the paper for which receipts
had not been given was placed daily with the paper for which receipts
were given, and the same was taken charge of by the agent.
The learned judge ruled that the plaintiffs below became pledgees
of the paper so set apart and deposited with their agents, with power
and right to sell ail or any portion of the same and crédit the proceeds,
and that the pledgees were entitled to hold such paper under gênerai
advances actually made; that paper delivered without receipts and
taken into the control of the plaintififs' agents was afïected with the
pledge the same as that receipted for.
We think the learned judge was right. The substantial question,
as we hâve said, is whether there was a sufficient delivery and accept-
ance of the property. There is no rule of law that a delivery or change
of possession shall be established by a receipt. There may be a valid
delivery and acceptance, or, in other words, a change of possession,
without a receipt. The real question being whether there was a suf-
ficient delivery and change of possession, the receipts, such as were
given, were merely évidence upon that question, and there was no
error in including the property not receipted for, provided the facts
in other respects were sufficient to warrant the holding.
We assume, of course, as we hâve already said, and in accordance
with the cases cited by the plaintifif in error from the décisions of the
Suprême Court of Maine and of the Suprême Court of the United
States, that, as against third parties, a delivery of possession is essen-
tial to a valid pledge or lien, and that continued possession is likewise
essential, and thus the situation at once résolves itself into one where
the real question is whether, upon the facts disclosed by the findings,
we should say, as a matter of law, that the facts did not warrant the
fîndings below.
Thus, the necessity of delivery and continued possession being as-
sumed, we must consider whether, upon the facts disclosed, the
situation was such as to require this court to say that the findings as
to delivery and possession were not warranted by law. In this con-
nection it must be observed that the gênerai and spécifie findings,
together with the rulings and the judgment thereon, to say nothing
of presumptions which ordinarily go with gênerai findings and judg-
224. 125 FEDEBAL. EBi'OETEE. '
ment, sufiiciently show that the learpcd judge below treated delivery
to the pledgees and continued possession by them as essential élé-
ments of a valid pledge. The whole theory of the findings proceeds
upon the idea that the parties understood a change of possession to be
necessary, and that they undertook to create such a change, and that
the judge who tried the case considered such a change essential.
Upon thfe question whether possession was maintainedj if acquired,
it will be seen that there is no fînding that the pledgees abandoned
such possession of the property as they had, and, indeed, the record
discloses no évidence tending to show an intentional relinquishment
of such possession as they had. Oh the contrary, the évidence and
the finding show that, through their agents, they continued to exer-
cise dominion over the property. And, if it were a question whether
the findings were justified by the évidence, it would apparently be
found that there is no évidence of an abandonment of the dehvery
and possession which the pledgees daim to hâve per'petuated through
their agents from Kline down through to Gedney.
We are not aware of any absolute rule of law which would render
actual possession and dominidn inoperative, and a pledge invalid
because the keeper selected to protect the property was in the employ
of the pledgor. Such a bailee or keeper was in the employ of the
manufacturers in Sumner v. Hamlet, laPick. 76; and even, as said
in Casey v. Cavaroc, 96 U. S. 467, 24 L. Ed. 779, temporary possession
may be in the pledgor himself as spécial bailee without defeating the
légal possession of the pledgee. Neither is there any absolute rule
of law that, where one keeper succeeds another, formai delivery shall
be made to the successor. Of course, enough should be donc to
identify the property, and to show that dominion and control over
the property were assumed by the successor, and this suflSciently
appears; for the learned judge below has said that the pile being left
where it was, and as it was, the successor added to this pile the prod-
uct as it was delivered to him. Nor is there any absolute rule of
law which requires property pledged to be removed from the premises
of the pledgor. It is enough if the facts sufificientiy show that the
goods are actually set apart in the keeping of the spécial bailee, with
authority to notify third persons that they are held in pledge, and to
remove the goods, if found necessary for the safety of his principal.
Resuming considération of the substantial question, which relates
to the sufficièncy of the delivery, the gênerai rule is that the delivery
must be such as to pass property, and this rule is apparently satisfied
by depositing thé article pledged orsold in somè suitable place for
the pledgee or keeper to take away when he chooses, and the delivery
may be either actual or constructive. There iS no occasion, however,
to deal with the doctrine of constructive delivery, for the goods hère
were actually delivered in pursuance of an agreement and upon a
valuable considération actually advanced.
The Maine Case of Merrill v. Parker, 24 Me. 89, while not strictly
in point, as there were no third-party interests, is still a strong case for
the défendant in error upon the question of sufficièncy of change in
possession, because there an impoirtant thing remained to be donc by
the buyer, who was to call and pay for the goods which had been bar-
DUNN V. TRAIN. 225
gained for and set aside in the seller's shop; still it was held that
enough was donc to pass the title.
Of the cases which we hâve examined as illustrating the principle
involved in the question we are considering, that of Sumner v. Ham-
let, 12 Pick. 76, would seem to apply itself to the situation more closely
than any other. See, also, Thornd'ike v. Bath, 114 Mass. 116, 19 Am.
Rep. 318.
Of course, where the property pledged is not removed from the
premises of the pledgee, the fact of actual delivery and of actual con-
trol and dominion by the pledgee or itS agent should clearly and un-
mistakably appear, and, the fact being so established, the requirements
of the law are answered. In this case it is distinctly found that the
dehvery or deposit was actually made to the pledgee, and that domin-
ion over the property was exercised by the pledgee through its agents
down through to Gedney, when, in December, as distinctly found by
the learned judge below, the paper which had been already delivered
and deposited in the basement and shipping room of the mill was
transferred to the new storehouse and remained under the care of
Gedney, who had been appointed the agent of Train, Smith & Co.,
where it remained apart from ail other paper until replevied.
Now, as to the question of the efïect of insolvency proceedings.
Some part of the goods replevied were delivered within four months
of the assignment and of the insolvency proceedings; but they were
delivered in pursuance of an agreement entered into more than four
months before, and we must assume, from the gênerai fînding and
judgment, ùpon money actually advanced in good faith, and not upon
reasonable cause to believe or in contemplation of insolvency, or for
the purpose of giving préférence to a pre-existing debt, or in fraud of
the laws of Maine relating to insolvency. We cannot upon writ of
error go into the question of fact whether the Bangor Pulp & Paper
Company was actually insolvent or whether the pledgee had reason to
believe that it was in a failing condition. The statute in question is
not operative in the hands of an assignée in insolvency against an
actual transaction of this kind, unless he establishes in the proper court
the facts contemplated by the statute as showing conditions under
which it will become effective. This the assignée has not donc.
There are no findings against the pledgees upon the questions of
fact necessary to make the statute operative in the hands of the as-
signée, while the gênerai findings, the rulings, and the judgment carry
the presumption that the facts contemplated by the statute were found
against the assignée. This being so, we are not called upon to exam-
ine the question whether insolvency proceedings would affect or im-
pair the delivery of goods within four months, under an agreement,
prior to such period, made in contemplation of insolvency, as a
préférence to secure a pre-existing debt upon reasonable cause to be-
lieve insolvency, or in fraud of the insolvency laws of Maine.
Upon the findings, we think there was no error in the rulings as
to the insolvency phase of the case.
Having sustained the position of the court below as to the right of
possession by the pledgees, there is, we think, no occasion for dis-
125 F.— 15
226 125 FBDBBAL .EBPOBTBB.
cussiiié^>àt length 'the questions riaised by the fifth assîgnment, for ît
is clear enough, the pledge being valid and the right of {lossession on
thç: part ofithe pledgeès rbeing established as an existing and con-
tinuihg, rightj that the claim of possession on the part of the assignées
prior to the date of the writ, without discharging the lien or pledge by
paying or tendering the amount due, was wrongful.
The judgment of the Circuit Court is affirmed, and the défendant in
error is to recQver costs ôf appeal.
In re BOSTON DRY GOODS CD. et aU
In re'KOYES BROS.
(dlrcult Court of Appeals, First Cirqult October 13, 1903.)
' : Nô. 463 (Original).
1. Bankbdptcy— Pétition fob Revision— Sufficienct of Record.
On a pétition to revise In matter of la* the proceedlngs of a district
Court In bankruptcy, In order that It may appear by the record that the
issues raised were presented below, and for other reasons, findlngs which
Involye distinct propositions of law, or spmething as a sùbstltute therefor.
are necessary, and they can'not be supiilièd by a mère opinion of the
court. Whllë' Ih some cases involvlng issues of a substantlal character
justice may requlre a relaxation of the rule, or the considération of Issues
not presented to the original tribunal, such course will not be followed
where the qu'estions ràlsed relate merély to matters of fortn or administra-
tion, and no toaterial détriment to the estate can resùlt from the action
complalned of.
Pétition for Revision of Proceedings of the District Court of the
United States for the District of Massachusetts, in Bankruptcy.
Frank H. Stewart, for petitioners.
Jeremiah Smith, Jr., pro se, and Ralph S. Bartlett, for George G.
Stratton and thirty-one other creditors.
Before COLT and PUTNAM, Circuit Judges, and ALDRICH,
District Judge.
PUTNAM, Circuit Judge. Tl^is is a pétition .under the bankruptcy
act oî July I, 1898, c. 541, § 24b', 30 Stat. 553 fU. S. Comp. St. 1901,
p. 3432], by sundry creditors of Noyés Bros., Ihcprpprated, bankrupt.
Our jùrisdiction is, of course, limited to matters of law. The object
of the pétition is that we shbuld revise the détermination of the Dis-
trict Court with référence to the élection of trustées of the bankrupt
estate. It was brought by several creditorg wbo voted for one Mr.
Spring for trustée, and who constituted the majority in number of
those présent a,t the meeting whose claims had been allowed. The
référée adrnitted ^îind canvassed yotes alleged to hâve been thrown by
other creditors, whose claims had been allowed, for a board of three
trustées. Thèse, as their votes were canvassed, constituted a majority
111. Appeal and review in bankruptcy cases, see note to In re Eggert, 43
0. C. A. 9.
m EB BOSTON DEY GOODS CD. 227
in amount ; . so the référée determined that there was no élection, and
appointed one of the respondents sole trustée. His action was con-
firmed by the District Court. The petitioners claim that their votes
elected Mr. Spring trustée, and object to the canvaSsing made by the
référée, and to his appointing the présent respondent trustée, and, in
fact, to his appointing any trustée.
It was observed in Falter v. Reinhard (D. C.) 104 Fed. 292, 295,
as to Mr. Zinn, whose choice as trustée was ultimately set aside in
part for the very reasons which are urged in this case, that there could
be no Personal objection, and that he was a reputable citizen and a
business man of acknowledged ability, whose competency for the po-
sition was not questioned. We must observe that the same may
properly be said about ail the persons who were candidates for that
office in the case before us. Moreover, there is no évidence and no
suggestion that any substantial détriment would corne to the estate
as the resuit of thèse proceedings, whichever way they may be deter-
mined.
Ordinarily, with regard to revisory pétitions of the class to which
the one at bar belongs, we hâve made due allowance for the facts
that the bankruptcy act of July i, 1898, gives no spécifie directions as
to the practice with référence thereto, and that our rule 36, framed
concerning the same, should be regarded as tentative, having been
designed especially to secure prompt administration, and with a lack
of expérience on the part alike of the bench and the bar. Yet, of
course, it must be admitted that we are not expected to look through
the whole record for the purpose of ascertaining the issues intended
to be. laid before us, and we are not Justifîed in doing so with regard
to conflicting or obscure statements. It must also be admitted that
ordinarily a record conforming strictly to the purpose of the statute
would présent to us simply, clearly, and unequivocally issues of law,
to the like efïect as by bills of exceptions, by proceedings without a
jury, under sections 649 and 700 of the Revised Statutes [U. S. Comp.
St. 1901, pp. 525, 570], by proceedings in the Suprême Court in
causes of admiralty and maritime jurisdiction, while appeals lay from
the Circuit Courts to the Suprême Court as provided in the act of
February 16, 1875, c. 77, 18 Stat. 315 [U. S. Comp. St. 1901, p. 525],
and by proceedings certifying causes to the Suprême Court as pro-
vided in section 6 of the act of March 3, 1891, c. 517, 26 Stat. 826 [U.
S. Comp. St. 1901, p. 547], establishing the Circuit Courts of Appeals.
While, with référence to a proceeding of the class before us, there i?
nothing which especially directs the District Court with regard to find-
ings of fact or statements of conclusions of law, as do some of the stat-
utes to which we refer, yet the varions décisions of the Suprême
Court as to those statutes must be studied for a proper understand-
ing of the substantial requisites of a record like that at bar. More-
over, while as to some matters of a substantial character justice may
require that jurisdiction be taken on appeal of issues not presented
to the original tribunal, yet, as we will see, there is nothing of that
kind in the case before us ; and, in order that it may appear by the
record that issues raised on appeal were presented below, findings of
228 125 FE3DEEAL RBEOETKB,
fact which involve distinct propositions of law, or something else as
a substitute therefor, are necessary.
The pétition in the présent case was filed, as we hâve said, by one
class of creditor*, making the truistee a respondent, as also one of
the other «lass of creditors by name, and it also assumed to make 31
others respondents, without naming them, ail in the same class as
the creditor specified. , The answers. make some objection to this
description of the 31 other creditors; but this was not followed up,
and ail we need say is that we do not now assume to approve the form
of the pétition in this particular or to disapprove it.
The record intends to raise two leading questions. One is, what
powers has the court in canvassing votes for a trustée alleged to hâve
been procured or solicited by the bankrupt, and how far should it
exercise them, and according to what rules. The second is whether
an attorney was properly allowed to represent creditors who were
not personally présent at the meeting. As to both of thèse questions,
the allégations of the pétition are in the form of statments by way of
inducement, and therefore they are neither positive, direct, nor full.
There are departures between the allégations in the body of the péti-
tion and the seriatim statement of the claimed errors of the District
Court, and further departures between each of them and the certifi-
cate of the référée as to the questions which arose before him. The
pétition is also erronepus ,in that it assumes that the opinion of the
learned judge of the District Court states the "findings, rulings, and
orders" of that court, so that it may be brought before us to enable us
to ascertain the questions of law involved. The greater number of
the alleged errors are based on this hypothesis. A mère opinion is, of
course, no part of the record. There are no findings of the District
Court in any proper sensé of the word, and ail we hâve in lieu thereof
are such admissions as may be found in the answer, which do not in
any way touch the substantial difficulties, and the certificate of the
référée, ail the essential parts of which are as foUows:
"The votes of certain creditors for the choice of a trustée were challenged
on the ground that the prqof of thelr claims and the authorization of appear-
ance theréon by the attorney had been obtalned through the sollcltation of
the bankrupt by its treasurer, David W. Noyés, and Its attorney, Amos L.
Hatheway, Esq., one of the receivers, for the purpose of procuring the élec-
tion of the latter as one of the three trustées, for whom the votes veere cast.
The other candidates on this ticket were Jeremlah Smith, Jr., Esq., also one
of the receivers, and "Victor J. Loring, Èsq., counsel for one of the larger cred-
itors, neither Of whom participa ted In sueh sollcitation as was made. The
évidence upon the question was very brief, and is herewith transmitted with
the exhibits. As I could not flnd that any undue influence had been exerted
jipon thèse creditors, nor any imprpper inducements ofEered them to procure
the proofs of théir claims, and, the matter being one in my discrétion, I ruled
that they shoùld be allowed to vote, and their votes were received accordingly.
"Further objection was made to the réception of certain of thèse votes
which had been signed byi creditors who were not présent in person at the
meeting, though an appearinçe had been entered for ail of them by attorney,
by Indorsement of his namp upon their respective claims. The canvassing of
the votes being in progress, and no reàult having been declared, I permltted
thè attorney for thèse creditors to amend their votes by substitutlng his own
name as attorney, and casting the votes as such. The resuit of the ballot
was that the three candidates vpted for by thèse creditors had a majority
in value of the claims which had been proved and allowed, while the candi-
IN BB BOSTON DRT G00D8 CO. 229
date of the other credltors, Mr. Pluinmer C. Spring, also one of the receivers,
had a majority in number. No request belng made by any one that anotber
ballot be taken, I declared there was no élection, and appointed Mr. Smith
as trustée, from which said ruUng parties hâve petitloned for a review by
the judge."
As we hâve already said, the petitioners assume that the opinion of
the learned judge of the District Court states the "fîndings, ruiings,
and orders" of that court. This, as we hâve said, forms no part of
the record, se that there are no fîndings of that court in any proper
sensé of the word. The decree of the court is gênerai in its terms,
not containing any findings, but merely affirniing the judgment and
orders of the référée. The record discloses no application to the
District Court for spécifie findings of fact, so that, in ail respects, the
record is as the petitioners saw fit to make it.
We are therefore left to the certificate of the référée to ascertain
from it, if we can, the issues which are intended to be presented.
It suggests two issues. One is with référence to the solicitation, in-
ducement, and influence of the bankrupt with regard to the élection
of trustées; the other relates to permitting an attorney to enter an
appearance for the respondent creditors, and further permitting the
amendment of their votes by inserting his name as attorney and
casting the votes as such.
As to the first issue, the certificate transmits the oral évidence with
référence thereto, together with the exhibits before the référée. It
is possible that, on searching through the évidence and the exhibits,
we might find a spécifie issue of law involved, and the same is the
fact with référence to the second issue. Of course, the matter of the
admittance by the référée of an attornev to appear before him pré-
sents no spécifie formalities which necessarily raise an issue of law.
The practice in the District Court in Massachusetts is for référées to
admit attorneys to appear without any formai authorization. This
is allowable and proper, because it conforms the practice of the référée,
as it should conform, to the practice of the court itself. This is to
admit members of the bar of the Circuit Courts and District Courts to
appear on oral applications, according to the practice which prevails
alike in the state courts and in the fédéral courts. Shaw v. Bill, 95
U. S. 10, 24 L. Ed. 333.
In this particular case we do not feel called on to exercise the
liberality with référence to the practice on pétitions of this character
which we hâve sometimes exercised, for the reasons which we hâve
already stâted. If it involved substantial interests, we might make
the "due allowance" which we hâve said we hâve ordinarily made,
and endeavor to sift out from the record the issues of law, if it pré-
sents any. We might feel called on to do this even in cases which
could be said to relate to the mère administration by the District Court
of the bankruptcy statutes. But the case at bar is not merely ad-
ministrative in its character; it relates to a subject-matter as to which,
as we hâve already said, there is no suggestion of any practical détri-
ment that would come to the estate from the détermination of the Dis-
trict Court to which the pétition relates, even if, strictly speaking, that
détermination should hâve been otherwise than what it was. It would
230 125 FBDE3RAL EBPOETBE.
be detrimçntal to the authority of the District Court, injurious to its
administration of the bankruptcy statutes^ and involve thé numerous
and useless delays which those statutes evidently hâve been framed
to avoid, if, in administrative matters where no substantial interests
are concerned, we became meddlesome beyond what the law requires
of us. ThisJ observation applies particularly to this case, to the extent
that we ought riôt to take jurisdiction over propositions ôf the char-
acter submitted to us, which the record does not cleârly show were
brought specifically to the attention of the District Court, as we hâve
already explained. Therefof e we are of the opinion that, if the peti-
tioners desired to raise the issues which they hâve sought to présent,
they should hâve held themselves bound by the strict rules applicable
to pétitions of this charâcter; and that, in this particular case, we
ought not undertake to revise the fîndings and conclusions of the
référée, which hâve been solemnly afïirmed by the District Court, on
a record which confuses the issues of law and fact as they are confused
in the one before us.
The authority given by the référée to thè attorney for the respon-
dent creditors to amend votes was clearly properly exercised accord-
ing to the libéral rules touching amendments which prevail in bank-
ruptcy proceedings, and, indeed, it would be the same even under the
rules of the common law.
The petitioners raise an objection based on the statement of the
référée as to the matter being one in his discrétion. At the most,
this was surplusage, because his action was prima facie justified by
his statement preceding it. The expression can hardly be construed
as the petitioners construe it, because it is unreasonable to conclude
that the référée determined that the matter was within his discrétion
in the larger sensé of the Word. The District Court did not so con-
strue it, because it afifirmed in terms "the orders and judgment of
the référée," and used no expression to justify any suggestion that
it intended to approve the exercise by him of mère discrétion. At
ail events, it is especially plain, on the cômmpnest rules of practice
relating to appellate proceedings to which we hâve referred, that the
record should make it clear that a verbal criticism of this charâcter
was brought directly to the attention of the court of the original juris-
diction before it was sought to be made the basis of a revisory pétition,
and there is nothing whatéver of that charâcter in the case at bar.
Let there be a decree dismissing the pétition, with costs for the
respondents.
EUMFOKD CHEMICAL WOEKS V. NEW TOKK BAKING POWDEB CO. 231
EDMFOED CHEMICAL WOEKS v. NEW YORK BAKING POWDER 00.
et aL
(Circuit Court, S. D. New York. August 27, 1903.)
L Patents— Inventiok— Change in Pobm of Material.
Merely changlng the forin or condition of a substance by mechanlcal
means, by grinding or reducing It to a finer Btate, or conversely by pro-
duclng It In a granular instead of a powdered form, does not make It a
new article, In the sensé of the patent law, where it remains unchanged
in composition and propertles.
2. Samb— Bakinq Powdeb.
The Catlln patent. No. 474,811, for a baklng powder or préparation of
the usual composition, but in which the phosphorlc acid élément Is In
granular form essentlally free from pulvérulent material Instead of In
a flnely pulverlzed condition, as In prior compounds, the purpose belng
to render it less subject to atmospheric change, so that it may be put
np in less expensive packages, is void for lack of patenable invention, in
the absence of proof that the product of the patent possesses différent
propertles In use than those of the prlor art
In Equity. This cause cornes hère at final hearing upon pleadings
and proofs. The bill is in the usual form for injunction and account-
ing, infringement being charged of United States letters patent 474,811
to Charles A. Catlin (assigner to plaintiff), May 17, 1892, for baking
powder.
Philip Mauro, for complainant.
Briesen & Knauth (Paul Bakewell, of counsel), for défendants.
LACOMBE, Circuit Judge. The spécifications are more than
usually full, and an extended quotation from them will sufficiently pré-
sent the questions whose décision seems controlling of the main issue
in the case. The patentée states that his —
"• • • invention relates to that class of baklng préparations In which
the active add agent is, either in whole or in part, some form of phosphorlc
acid or acid phosphate,
"Under the gênerai head of baking préparations may be included, flrst, the
ordinary baking powder, composed of a mixture of the phosphorlc acid élément
wlth a carbonate or bicarbonate as active agents; second, the phosphorlc
acid élément, when put up alone, as Is sometimes done, without the carbonate
or bicarbonate; third, préparations In which the phosphoric acid élément and
carbonate or Its équivalent are put up in separate packages, to be mixed
before use; and, fourth, préparations known as 'self-raising flour,' 'qulck-
raising flour,' 'prepared flour,' and by varions names, in which the phosphoric
acid élément and carbonate are mixed by the manufacturer wlth flour in
proper proportions for use in making bread.
"Broadly stated, the présent invention consista In the production of a bak-
lng préparation In which the phosphoric acid élément Is In a practlcally unl-
form granular condition, free from pulvérulent phosphatlc material. This
granular phosphorlc acid material constltutes a new product or article of
manufacture, possesslng pecuUar and distinctlve propertles and characteristics
of great value for the purposes stated, as will be herelnaf ter explained.
"As Is well known to those famillar wlth such matters, préparations of the
klnd above referred to, as ordinarily prepared, whlle possesslng the highest
dietetic value and leavening efflclency, possess, nevertheless, the property of
serions détérioration when freely exposed to atmospheric humidity, compelling
the manufacturer to employ extraordinary and expensive means In packing
to protect them from this influence.
232; , > ;. : : .7 v;,, J25 FEDERAL BEPORïBR. ;
"Heretofore It has been the aim of the manufacturer to produce the phos-
phatlc élément in tho. 'înest pulvérulent condition possible, believing that tlius,
and tliué Ôàly, botild highest effleieficy be obtained. I hâve dlscovered, how-
ever, that the fine pulvérulent conditlon'of the commercial phosphatic powders
is not necessar7,,|to highest efficience in the leavening quality, but is rather
detrimental to It. Indeed, the results of my expérimenta' fiavedemonstrated
that, when a baking powder having the phosphatic élément in a granular con-
dition Is used in place of one containing that élément mainly in a flne pulvér-
ulent forni, tlje leaifening efficiency of the .préparation Is , ma.terially aug-
mentée, while at the sanie time the détérioration quallty is retarded, iC not
entirely. oVeççome. The çeason for the increased eiflciency will be readily
undèrstboa when we tàke" into considération the f act that within limlts a
somewhat slow évolution of the leavening carbonic acidgas is désirable, in
order th^t tpomuch of It may not escape from the dough dtiring the mixture
and knèadlng; before the îoàf is placed in thé bven, but ratheT that a con-
sidérable pw of It shàli: remain to be ev6lved during the, baking process,
that the ilougli may be àt Its Iflghest expansion when hardehed by the baking
into the pétmanent cellûl^ structure of the finished loaf. The slow évolution
quality 1? not possessed In a marked degree by phosphatic baking powders,
as heretofore prepared, and espécially Is It lacklng when the phosphatic élé-
ment èmployed is bf a highiy acidulôus çharacter. thls la due to the ready
solubility of the acid agent In its flnely powdered condition, whiCh, of course,
brings It Into rapld reactfon with the alkaline bicarbonate, and causes the
rapld évolution of Its gas; When, on the eontrary, the partlcles of the acid
are In a eoarôe condition, solution and conséquent reaction are retarded. In
practice I hâve found, therefore, that by givlng to the phosphatic élément of
the baking powder a unlformly coarse condition the property of slow évolution
of the gas is Increased, and a conséquent marked Increase in baking efficiency
is obtained. In this respect, therefore, the new product possesses a distinct
advantage over phosphatic powders heretofore made and used.
"As Is well-known, acid phosphates possess naturally a highiy déliquescent
property, and this to such a degree when reduced to a anely povrdered state
aad exposed to variable atmospheric conditions that they at times greedily
absorb moisture, and thereby acquire of themselves alone (or impart to any
mixture of powders of which they form a considérable proportion) a sticky,
clammy condition. Thia abaorption of the aald élément, when packed sépa-
ra tely In the usual flne condition, causes a recrystallization of the powder,
which in such case hardens into a caky erystàlline mass, unsuitable for the
use intended. Moreover, such a powder or mixture of powders is difflcult
to pour either In or out of any smaU-necIied réceptacle, and Is espécially diffl-
cult to measure out in thé quantitles in which baking powders are used. ïhis
objectionable quality in phosphatic powders, I hâve found, does not attach
to any serious extent to the new graniilar préparation. The reason for this
improvement is.plainly apparent when we take into considération the fact
that In the same weight of materlal the surface exposed to the atmospheric
Influence is greatly Increased the flner Its pulvérulent condition. • ♦ *"
The spécification proceeds:
"The Improved keeping quality of baking powder mixtures containing the
acid phosphates in a unlformly granular condition is due partly to the reduced
déliquescent property of the acidulated material in sudh condition, already
referred to, and partly to the greatly reduced number of points of contact
which such granular acidulated material présents to the carbonate, with which
it is in admixture. In proportion to the weight èmployed. Ahother reason for
this Is the Increased size of the Interspaçea between the active partlcles due
to this granular condition, which permlts, when a flne diluent is èmployed,
of a more complète Introduction of sald diluent between thèse partlcles and
their 'isolation from eaeh other."
The patentée next describes the method of preparing his product,
which is acidulated phosphate so reduced by grinding that it will sift
through a No. g silk boit, but not through a No. i6 silk boit. The
BïmFOBD CHEMICAL WOBKS V. NEW TOKK BAKING POWDEE 00. 233
évidence shows that theretofore the material had been used as it
came through a No. 9 boit, containing granules of the size of the pat-
ent, mixed with so large a proportion of fine particles that it was not
essentially free from pulvérulent (powdered or dust-like) material, but,
on the contrary, was characteristically pulvérulent. The patentée
States, however, that he does not restrict himself to the method of
production described nor to the particular size of granules set forth.
The claims are :
"(1) A baking préparation containing pliosphoric acid or Its compounds In
granular condition, essentially free from pulvérulent phosphatic material, sub-
stantially as described.
"(2) A baking préparation composed of a phosphoric-acid élément in gran-
ular form, essentially free from pulvérulent phosphatic material, in admixture
with a carbonate or bicarbonate, as set forth."
The évidence produced by the complainant shows, more forcibly
even than the spécifications indicate, that the object sought to be
attained was the production of material which would better resist the
deteriorating efïects of moisture in the atmosphère, and could thus
be kept without losing its efficiency, both when packed in its commer-
cial réceptacles and when more freely exposed during domestic use.
The spécification correctly states that existing préparations "possessed
the highest dietetic value and leavening efficiency." That does not
necessarily mean that they were not susceptible of improvement in
those particulars ; but the investigations of the patentée were directed,
not to such improvement, but to prevent their "serious détériora-
tion- when freely exposed to atmospheric humidity, compeUing the
manufacturer to employ extraordinary and expensive means in pack-
ing to protect them from this influence." The patent fuUy, clearly,
and accurately sets forth the difficulty which existed in dealing with
such highly déliquescent material "when reduced to a finely powdered
State," and the sole remedy suggested is its réduction to a state not
finely powdered, but uniformly granular (or containing only a negligi-
ble quantity of the powder), so that less surface is exposed to the
atmosphère and to the carbonate with which it is in admixture. The
évidence indicates that the phosphoric acid élément was not, thereto-
fore, used in a condition so free from pulvérulent material, and that the
change of form has decreased the absorption of moisture, and thus
prevented détérioration during the period it is kept before being put
to use. But the difficulty with sustaining a patent for such a change
of form produced by mechanical division is found in the propositions
laid down by the Suprême Court (affirming the Circuit Court, i Ban.
& A. 497, Fed. Cas. No. 9,607) in Glue Co. v. Upton, 97 U. S. 6, 24
L. Ed. 985. Thàt case presented the converse of the one at bar.
There the absorption of moisture by the glue was accelerated by in-
creasing its fragmentary division; hère the absorption of moisture
by the phosphatic material is retarded by decreasing its fragmentary
division. The évidence indicates that in decreasing that division Cat-
lin reversed the practice of his predecessors, and that the resuit has
been to enable the manufacturers to market efficient phosphatic ma-
terial alone, or combined with the carbonate, in more economical
packages; but it is not perceived how, under the décision cited, the
23ik , . . 125 FEDEEAL EBPOHTBB. ;
patent can be sustaiinçd unless the différence of forra effects some
altération or improven^ent in the; properties of thernaterial.
That this difficulty woiijd be enoountered in sustaining a patent for
his Nos 9 to No. i6 grapules seems to hâve been fully appreciated by
the patentée, or, rather, by his patent soliciter, who carefully prepared
the spécifications, appar-ently to avoid such difficulty by indicating that
the patentee's investigations showed that réduction to the granular
State, essentially eliminating the powder, afifected the properties of
the composition.
It is frçquently stated in the specificaticins that the new product pos-
sesses peculiar and distinctive properties. It is asserted that the
fine pulvérulent condition of the commercial baking powder is rather
detrimental to the highest efïîciency in- the leavening quality, while by
using the same in a granular condition the leavening efficiency of the
préparation is materially augmented. ; The reason for this is pointed
out at some lengthjn a passage which will be found in the quotation
supra, and which ascribes the resuit to the slower évolution of carbonic
acid gas during mixing, kneading, and baking. "In practice," says
the spécification, "I haye found that by giving the phosphatic élément
a uniformly coarse condition the property of slow évolution of the gas
is increased, and a conséquent marked increase in baking efficiency
is obtained."
If this were ail so, there would be no difficulty in granting the prayer
of the bill, for infringement is plain, and the various other défenses —
anticipation, abandonment, and prior use — are not especially persua-
sive. But the record does not sustain the statements in the spécifica-
tion. IiTiterrogated specifically as to whether there is a greater slow-
ness of évolution of carbonic acid gas obtained by the granular condi-
tion of tbÊ phosphate, the expert called by complainant says that he
does not know. There is not a scintilla of évidence to show that
the product of the patent has commended itself to the public as making
better bread. The évidence of the principal disinterested witness
called from the trade (Clotworthy) is to the efïect that between the
complain9.nt's fine powder (sold in bottles) and the granular compound
of the patent he has never discovered ^ny diflference. There is con-
sidérable testimony as to experiments made by complainant's em-
ployés to detenrfine, whether the phosphatic material in granular form
would dissolve readily enotigh in the dough to perf orm its office by
combinatioh with the bicarbonate. Sometimes the results of thèse
experiments were satisfactory, sometimes not ; black specks, or black
and yellow spots, appearingto spoil theappearance of the loaf. The
oniy evidaice to sustain, ttip .proposition that the substitution of gran-
ules for powder augmentée! the leavening efficiency is given by the
patentée himself. Hesays:,
"The fine condition gives an even, velvety structure, whlle the other gives
a more dec,iç|edly porous and more attractive structure to the bread. • * •
The efEects of granulation in the ultimate results appeared to me to glve a
very much Éiorè présentable loàf , though perhaps not to ail others, than ^here
the ma terials were In fine condition."
This statement is but the pardonable exaggeration of the inventer,
jutho has given time and thought through several years to his experi-
8ALMON V. RUKAL INDEPENDENT SCHOOL DI8T. 235
ments, and who, with conspicuous honesty and frankness, admits that
others think differently. The efïect produced on the court by an ex-
amination of the testimony is that the most which can be said is that
the substitution of a granular mechanical division for a pulvérulent
mechanical division of the phosphatic material does not so change Its
properties as to destroy or impair its leavening efïiciency. That such
efïiciency is augmented is not proved. Under the principles laid down
in Glue Co. v. Upton, supra, the b'ill must be dismissed, with costs.
On Rehearing.
(October 3, 1903.)
Ali the points raised on this application for rehearing were before
the court, and were carefully considered before décision at final hearr
ing. This court may hâve erred as to the conclusion that Glue Co.
v. Upton, 97 U. S. 3, 24 L. Ed. 985, was controUing of the case at
bar, but it did so only after considération of ail that is now presented
as ground for reaching a différent conclusion.
The pétition for reargument is denied.
SALMON V. RURAL INDEPENDENT SCHOOL DIST. OF ALLISON et al.
(Circuit Court, N. D. lowa, W. D. December 27, 1902.)
1 Parties— Action on Municipal Bonds— Title of Pi-AiNTrap.
Under Code lowa, § 3459, requiring actions to be prosecuted In the
name of the real party in Interest, one to whom negotiable municipal
bonds, transférable by delivery, bave been delivered as agent for the
purpose may sue thereon in his own name, being vested with the légal
title, although in such case the action is subject to any défense which
exists against the bénéficiai owner of the bonds.
3. Municipal Bonds— Estoppbl by Récitals— Actual Notice op Invalidity
Bï HOLDBR.
A holder of bonds Issued by a school district, which were In them-
selves in excess of the constitutional limit of the district's indebtedness,
and contained no récital that they were issued in conformity to the
Constitution, who obtained the issuance In exchange therefor of new
bonds containlug such récital, could not rely thereon to valldate the new
bonds In his hands.
S. Bame— Illkgalitt in Inception— Bdrden op Provikg Want of Notice.
A holder of bonds issued by a school district lllegally and without
considération has the burden of proving that he acquired the same for
value, and without notice of their invalidity, to entitle him to recover
thereon.
4 SAMB— ESTOPPEL BT ReCITALB— BONA PlDB HOLDERS.
A holder of bonds of a school district, which were issued iUegalIy and
without considération, and were in themselves in excess of the con-
stitutional limlt of the district's Indebtedness, procured new bonds to be
issued in exchange therefor, containing a récital that they were issued
In accordance with the Constitution of the state, which récital was not
contained In the original bonds. There was no proof that he purchased
the original bonds for value and without notice of their Invalidity, and
he had actual knowledge that the récital in the new bonds was untrue.
Beld, in actions thereon by transférées, that one who obtained title by
If 3. Bona flde purchasers of municipal bonds, see note to Pickens Tp. v.
Post, 41 C. C. A. 6.
See Municipal Corporations, vol. 36, Cent Dig. § 2006.
236 133 FEDERAL RBPOETEB.
descent from the original holder could not recover, but that, as agalnst
one ■who tiras sbown to hâve been a bona flde purchaser for value and
wlthoiit notice, the district was estopped by the récitals that the bonds
were Issued in eompllance with the statutes and Constitution of the state.
At Law. Action on bonds and coupons issued by the indépendant
school district pf Riverside. Jury trial waived, and case submitted to
the court,
From, the évidence submitted and the stipulations signed by the
parties the court finds the facts to be as follows :
(1) The plalntiff, Charies B. Salmon, is now, and was when this action
was begun, a citizen of the state of Wlsconsin, and the défendants the rural,
iudependent school districts of' AlUson and Jackson were when this action
was brought, and now are, corporations created under the laws of the state
of lowa, and the amount Involved In the action exceeds the sum of two
thousand dollars, exclusive of Interest and costs.
(2) ITnder the laws of lowa then In force, -the Independent school district
of Riverside, , la Lyon county, lowa, was organized for school purposes in
the year 1872, and contlnued its corporate existence until the year 1886,
when the territory comprisirig 1;hat district was dlvlded Into two districts,
DOW known as the rural independent district of Alllson and the rural In-
dependent district of Jackson, and by opération of the laws of the state of
lowa sald last-named districts succeeded to the property and llabilities of the
former Independent school district of Klverslde, two-thirds of the llabilities
being chargeable against the district of Allison, and one-thlrd against the
district of Jackson.
(3) The value of the taxable piopefty, as shown by the state and county
tax lists of Lyon countj', lowa, within the boundarles of the Independent
school district bf RiVersIde, waS as follows foi^ the several years named:
1872 ..^.... ...;:..,.. ?43,99û 32
1873 , , 68,307 01
1874 .'. 68,890 83
1875 70,435 64
1876 : 70,706 96
1877 : 57,247 58
1878 72,175 97
1879 , ; , . 47,220 00
1880 ...;., 44,571 00
1881 "......'.... , 44,033 00
1882 49,170 00
As shown by the tax lists of Lyon county in the year 1880, there was ex-
empted from taxation property to the amount of $22,494 under the provisions
of the- timber culture acts of the state of. lowa, which sum is not included
■in the value of. the taxable property of the district for that year as given
in the above coiumns.
(4) The bonds declared on }n this action are the followlng: No. 32, Dated
April 1, 1881, due April 1, 1891, amount $500; No. 29, Dated July 1, 1881,
due July 1, 1891, amount $500^ No. 38, Dated July 1, 1881, due July 1, 1891,
amount $500; No. 22, Dated Nbvember 5, 1881, due November 5, 1891, amount
$1,000; No. 23, Dated November 5, 1881, due November 5, 1891, amount
$1,000; No. 62, , Dated February 15, 1882, due February 15, 1892, amount
$100; No. 4, Dateà March il, 1882, due March 11, 1892, amount $1,000; No.
5, Dated March 11, 1882, due March 11, 1892, amount $1,000; No. 6, Dated
March 11, 1882, due March 11, 189â, amoupt $1,000; No. 24, Dated March 11,
1^82, due March 11, 1892, amount $1,000; N'o. 34, Dated March 11, 1882, due
March 11, 1892, amount ,$1,000. And are payable to " or bearer," or
to "— or order." The signatures to the bonds and coppons are the
genulne signatures of the persons slgnlng the same, and thèse persons, when
their signatures Vfere attached to the bonds and coupons, held the offices in-
dicated by theIr signatures In the independent school district of Riverside;
of Lyon county, lowa.
SALMON V. RURAL INDEPENDENT 8CHOOL DIST. 237
(5) That bond No. 32, dated Aprll 1, 1881 , for $500, was issued as part of
a séries of four bonds, numbering from 31 to 33, for $500 each, and one
numbered 51, for $200.
(6) Xhat bonds numbered 29 and 38, for $500 each, dated July 1, 1881,
were part of a séries numbered from 1 to 40, inclusive, and aggregating in
amount $25,700, issued in pursuance of a resolution adopted by the board
of directors of the independent school district of Riverside, and spread upon
the records of said board, in the terms foUowing:
"Riverside, Lyon County, lowa, June 2], 1881.
"Board of directors of the independent school district of Riverside met at
the school district at call of président, members ail présent. The foUowing
resolution was passed: Whereas, E. E. Carpenter cornes before this board
with bonds of said district bearing 10% interest, and ofCers to surrender to
said district upon the issue and delivery to hlm new bonds of said district
bearing 7%; the old bonds being taken at TO cents on the dollar, bonds is-
sued in the year 1873, on bonds issued in 1887 or later at par, in exchange
for new bonds of said district: Therefore it is resolved by this board that
they issue the bonds of said district for Riverside, and said bonds shall be
issued by the président and secretary and delivered to the treasurer, to ex-
change as above stated. Said bonds shall number as follows: Bonds Nos.
I, 2, 3, 4, 5, 6, 7, 8, for one thousand dollars each; and bonds Nos. 9, 10,
II, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31,
32, 33, 34, 35, 36, 37, 38, and 39 for five hundred dollars each; and bond No;
40 for $200; and shall bear interest at 7 %, payable semiannually, on the
first day of January and July of each year; the above deseribed bonds
were issued and delivered to the treasurer for exchange. It is further re-
solved that the treasurer be authorized to exchange any bonds in his pos-
session for old bonds of said district at 50 cents on the dollar, and be a!-
lowed 2 % commission for refundiug such bonds, as provided in the resolu-
tion of July 30, 1880. Board adjourned at call of président.
"G. W. Stoops, Président."
(7) The bonds in suit, numbered 22 and 23, dated November 5, 1881, for
$1,000 each, were part of a séries numbered from 18 to 30, inclusive, for
$1,000 each, and were issued pursuant to a resolution adopted by the board
of directors of the independent school district of Riverside, reading as follows:
"Whereas, P. A. Keep came before thé board with a proposition to settle
with the district some bonds of said district which he held at the rate of
50 cents on the dollar, and to exchange new bonds drawifag 7 % interest, not
counting the accrued interest: Now therefore it is resolved, by the board,
that they issue bonds to the amount of $12,000, and exchange the same with
the aforesaid F. A. Keep, and allow the treasurer 2 % for exchange as pro-
vided in the resolutions of July 30, 1880. Therefore the secretary and prési-
dent [is] authorized to issue the amount, and the président to turn over to
the treasurer and take his receipt for the same. The following nUmbers
were issued: 18, 19, 20, 21, 22, 23, 24, 25. 26, 27, 28, 29, 30. ail for $1,000.
There being no further tiusiness, adjourned, at call of chairman.
"G. R. Matthews, Secy. G. W. Stoops, Président."
(8) The bonds in suit numbered 4, 5, 6, 24, and 34, dated Jlarch 11, 1882,
for $1,000, each formed part of a séries numbered from 1 to 39, inclusive,
issued in pursuance of a resolution of the board of directors of the inde-
pendent school district of Riverside, and spread upon the records of the,
board in the following terms:
"Riverside, March 11, 1882.
"Board of directors of independent district of Riverside, Lyon county,
lowa, met at the schoolhouse in said district oii the llth day of March, 1882.
The following resolution was passed: Whereas, C. W. RoUins came before
the board with a résolution to settle with the district some bonds of said
district which he held to the amount of $72,000.00, at 50 cents on the dollar,
and take in exchange new bonds, drawing 7 % interest, not counting accrued
Interest: Now, therefore, it is resolved by the .board that they issue bonds
to the amount of $36,000.00, and exchange the sam« with the aforesaid C.
238 i 125 FHDEBAIi EEPOBTBB. ,J .
W. Eolllns, and also to allowt the treastirer 2 % for exchanglng, as provided
In resolutions of June SO, 1880. ^Theref osé the secretary and président Is
authorized and dlrected to tum over to the treasurer, and takp hls receipt
for the saloei, sald bonds to be! nutobered as foUows: 1, 2, 3, é, 5, 6, 7, 8,
9, IQj 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22> 23, 24, $1,000 each; 25, 26,
27, 28, $500 each; 29, 30, 31, 32, $1,000 each; 33, 34, $500 each; 35, 36, 37,
38, 39, $1,000 each. Theïe being no further business, adjourned subject to
the call of the chairman." i
(9) Xhat the secretary's record of the proceedings of the board of directors
of the mdepéndent school district of Riverside shows that beglnning with
July 12, 1877, and endîng wlth March 11, 1882, the followlng amounts of
bonds weré ordered issued:
July 12, 1877, refunding bonds $ 5.000 00
Dec. 15,1877, " " 6^000 00
July 1,1878; " " 8,300 00
July 16,1878, " " ..i. 80O 00
Dec. 19,1878, " " ...1,60000
June 21,1879, " " s^ 500 00
July 15,1879, " " .. iS,200 00
Sept. 11,1879, " " ■.. =1,600 00
Oct. 15,1879, " " 5,200 00
July 10,1880, " " .. 3,300 00
July 3,1880, " " 5,00000
June 10,1880, " " 10,000 00
July 30,1880. " " 4,500 00
Dec. 4,1880,- " " 10,500 00
April 6,1881, " " 1,700 00
June 21, 1881, " " 23,700 00
Nov. 5*1881, " " 13,000 00
Feb. 15,1882, " " ..;.... 20.500 00
Marchll,1882, " " 36,000 00
Total $160,400 00
(10) That the hlghest valuatlon of the taxable property within the llmlts
of the independent school district of Elvérsi de during Us existence was that
of the year 1883, being In the sum of $98,168, the valuatlon for the year
1884, the last year of the district, being $97,575.
(11) That duripg the existence of the independent school district of Eiver-
slde there bad been erected witjiln its boundaries two schoolhouses, and no
more, of the total value of $1,500.
(12) That the assessed valuatlon of the property within the rural inde-
pendent district of AUison for the year 1885 was $72,974, for the year 1899
was the sum of $141,510, for the year 1900 was the sum of $146,086, and
for the year 19OI was the sum of $149,699.
(13) That the assessed valuatlonj'Of- the property within the rural inde-
pendent district of Jackson for the sieai; 1885 was the sum of $31,431, for
the year 1899 was the sum of $81,788, for the year 1900 was the sum of
$83,603, and for the year 1901 was the sum of $82,479.
(14) That at the several dates when thè bonds and coupons sued on were
Issued in the name of the independent sChool district of Riverside and prior
thereto the sald district of RiverSlde wfts indebted in amounts largely in
excess of 5 per cent, of the taxable property within said school district,
without ineluding in such Indebtedness the several bonds Issued under date
of April 1, 1881, July 1, 1881, November 5, 1881, February 15, 1882, and
March 11, 1882.
(15) That prier to June 21, 1881, thére were judgments rendered and out-
standing against the Independent school district of Riverside In the aggrègate
sum of $6,500j whlch thé records of the courts shbwed were outstanding and
unpaid at the several dates When thé bonds in suit were Issued, and prior
to the division of the district of Riverside judgments amountlng to $3,887.94
were rendered against it, ail of whlch Judgments hâve since been paid off
by the défendant districts.
aàLMON V. BUKAL INDEPENDENT SCHOOL DIST. 239
(16) At the time of the division of the district of Riverside tliere were
outstanding judgment bonds issued by the district upon which judgment was
rendered in the district court of Lyon county, lowa, against the défendant
districts, in the sum of $4,479.62, which judgment bas since been paid by
the défendant districts of AUison and Jackson.
(17) That none of the bonds in suit were issued or used in the payment
or refunding of any judgment bonds Issued by the Independent school dis-
trict of Riverside, or in payment or funding of any judgments against said
district.
(18) The plaintiff herein, CJharles B. Salmon, is now, and v?as when this
suit was brought, the bénéficiai owner of bonds Nos. 62, 5, 22, 23, 29, and
34, declared on, together with the coupons belonglng thereto. The remaining
bonds and coupons declared on are now, and were when this suit was
brought, the property of Mrs. Cora Andrews, and the same were by her
glven in charge of plaintiff for collection, he being her agent for that pur-
pose, and being under obligation to accouut to Mrs. Cora Andrews for the
proceeds, if any, realized from said bonds and coupons.
(19) The bonds and coupons of which the plaintiff is the bénéficiai owner,
as stated In the last finding, became the property of plalnUfC in the latter
part of the year 1884, at which time the plaintiff bought the assets of the
Citizens' National Bank of Baloit, Wis., includlng the , bonds and coupons in
question, the same being turned over by the Citizens' National Bank to the
plaintiff at their face value.
(20) The bonds and coupons owned by Mrs. Cora Andrews came to her
from her father's estate, James A. Ohapman, who died about the year 1890.
or possibly later, the exact date not being proven. James A. Chapman re-
sided at Beloit, Wis., and at the time of the issuance of the bonds sued on
was a director In the Citizens' National Bank of Beloit, Wisconsin.
(21) With the exception of bonds No. 32, dated April 1, 1881, for $500, and
No. 62, for $100, dated February 15, 1882, the several bonds sued on were
issued and came into the possession of James A. Ohapman and the Citizens'
National Bank of Beloit, Wisconsin, under the following circumstances: One
E. E. Carpenter, in the years 1881 and 1882, and for some years previous
therefo, had owned and managed a private bank, under the name of the
Sioux Valley Bank, at Beloit, Lyon county, lowa, and had dealt largely in
the bonds issued by Lyon county and other counties in northwestern lowa
and by the school districts in thèse counties. Previous to the year 1881 the
said Carpenter had sold to the Citizens' National Bank of Beloit, Wis., and
to James A. Qiapman, negotiable bonds Issued under the name of the Inde-
pendent school district of Riverside to the amount of $8,000 or over, and
had personally guarantied the payment thereof . Thèse bonds did not con-
taln a récital to the efCect that they were issued in accordanee with the
Constitution of the state of lowa, or that they were withln the Ilmit of in-
debtedness flxed by the Constitution with respect to municipal Indebtedness.
In the month of April, 1881, Carpenter was visiting at the house of James A.
Chapman In Beloit, Wis., and at that time Ohapman and Carpenter dis-
cussed the question of the advisability of getting an exchange of the bonds
then held by the Citizens' National Bank and James A. Chapman, issued
In the name of the Independent school district of Riverside, which bonds
were not then due, for new bonds which should contain a récital Intended
to avoid the efCect of the 5 per cent, limitation on the debt creating power
of the district contained in the Constitution of the state of lowa. It was
flnally agreed that Carpenter should undertake to secure an exchange of the
bonds held by the Citizens' National Bank and James A. Chapman, he being
authorized to reduce the Interest on the new bonds to 7 per cent., the old
bonds bearing 10 per cent., for new bonds containing the proposed récital;
it being furthçr agreed that if the proposed exchange of bonds was secured
Carpenter was to be released from bis guaranty of the payment of the bonds
so exchanged. In pursuance of this arrangement, C?arpenter brought about
an exchange of bonds, receiving for the Citizens' National Bank, of the bonds
sued on. Nos. 5, 22, 23, 29, and 84, aggregating $4,500, and for James A. Chap-
man bonds Nos. 4, 6, 24, and 38, aggregating $3,500. In issuing the new
bonds, forms were used which as originally printed did not contain any ré-
cital with respect to the Constitution of the state, but bef ore the slgning of
240 125 FEDBKAI. EHPOKTER.
the bonds sned on there was writteû ïn on the face of tbe bond the words,
"and In aeeordance wlth the Constltxitlon of said state."
(22) The purpose of the exehange of bonds thus made was as stated by
the said Carpenter In his testlmony, -wlierein, In reply to the question, "What
was the object in exchanging those bonds for new bonds drawlng 7 % ?" he
answered, "The object on my part was to get rid of my guarantee, and the
object on the part of Mr. Ohapman wae tO'get the statement that they were
issued in acooudance with the Gonstltùtion."
(23) During the year 1873 there had been issued in the name of the inde-
pendent gchool district of Biverslde bohds to the amount of $150,000 or more
which wëte "f rauduient and without considération, and during the period
beginning with July 12, 1877, and ending with March 11, 1882, there were
issued bonds in the aggregate sum of $160,400, and it does not appear that
the said Independent school district of Elverside received any considération
theref or.
(24) At and prior to the tlmes when E. E. Garpenter efCected the exchange
of the bonds owned by the Oitizens' National Bank and James A. Ohapman
for tbe bonds now In suit, as Set forth in finding No. 21, the said Carpenter
had knoWledge of the fact that the bonds of 1873 were without considéra-
tion, and had been issued tO the amount of $150,000, and he also knew of
the issue of bonds betwéen 1877 and 1881 of at least $25,000, for which, in
*hp 'nnguage of said Carpenter, no falr considération was received by the
district
viu) Accordlng to the teStimony of B. E. Carpenter, the bonds owned by
James A. Chapman and the Oitizens' National Bank, and by him exchanged
for the bonds In suit, were partly of the issues of 1877, 1878, and 1873.
(26) It does not appear that the independent school district of Riverside
received any considération in any fofm for the bonds for which the bonds
in suit were exchanged.
(27) Bond No. 32, dated April 1, 1881, Tbecame, by Its terms, due and pay-
able on April 1, 1891, more than 10 years before this suit was brought.
(28) Bond No. 62, dated February 15, 1882, for $100, Is the property of
plalntlff. It contalns no récital to the efCect that it was issued in aeeord-
ance with the Constitution of the state. At the date of its Issue the inde-
pendent school district of Riverside was indebted in an amount largely in
excess of the constitutlonal limits. It Is not now shown that the said school
district of Riverside received any considération for the Issuance of this bond.
(29) On the backs of the several bonds sued on there is printed chapter
182 of the Acts of the 18th General Assembly of the State of lowa, and the
bonds and coupons are of the gênerai form shown in Exhibits A, B, and 0,
attached to the pétition in this case, and the bonds and coupons sued on,
havlng been introduced in évidence, are hereby made part of thèse findings
ol facts.
(30) The amount of the bonds owned by the plaintiff, and Included in this
suiti Is four thousand and six hundred dollars ($4,600). The amount of the
coupons sued on, and not barred by the statute of limitations, is three hun-
dred four and oo/ioo, dollars ($304.50) The total interest due on the bonds and
coupons at six per cent per annum, up to December 80, 1902, is three thou-
sand two hundredand forty-seven and so/ioo dollars ($3,247.35). The total
amount due on the bonds and coupons of which the plalntlfC is the béné-
ficiai owner, inclùding interest np to December 30^ 1902, Is the sum of eight
thonsand one hundred and flfty-four ànd so/^oo dollars ($8,154.85).
Quick & Carter, for plaintiff.
O. J. Taylor and E. C. Roach, for défendants.
SHIRAS, District Judge (àfter stating the facts as above). The
6rst question presented for détermination in this case is whether the
action in the name of the plaintîfï can be maintained on the bonds
which are the property pf Mrs. Cora Andrews, it being claimed on
part of the défendants that thé ptovisions of section 3459 of the Code
of lowa, declaring that actions must be prosecuted in the name of
SALMON V. EtTKAL INDEPENDENT SCHOOL DI8T. 241
the real party in interest, forbids bringing a suit in the name of an
agent. In Abell Note Co. v. Hurd, 85 lowa, 559, 52 N. W. 488,
the State Suprême Court, in construing this section of the Code, de-
clared the law to be "that the party holding the légal title of a note or
instrument may sue on it, though he be an agent or trustée, and
liable to account to another for the proceeds of the recovery, but
he is open in such case to any défense which exists against the party
beneficially interested." The fact, therefore, that the plaintifï in this
case is the agent of the bénéficiai owner does not prohibit bring-
ing the action in his name, and the delivery to him of the possession
of the bonds, which in efïect are payable to bearer, with the authority
to enforce the collection thereof, clothes him with sufficient title
to maintain the action in his own name. Village of Kent v. Dana,
100 Fed. 56, 40 C. C. A. 281 ; O'Brien v. Smith, 68 U. S. (i Black)
99, 17 L. Ed. 64.
The second count in the pétition is based upon bond No. 32, for
$500, dated April i, 1881, and which by its terms came due on April
I, 1891. As this action was not begun until June 19, 1901, more
than 10 years had elapsed after the maturity of the bonds before the
bringing of the suit, and the bar of the state statute of limitations,
pleaded by the défendants, defeats recovery thereon.
With the exception of bond No. 62, dated February 15, 1882, the
remaining bonds sued on were those which were obtained in exchange
for other bonds owned by the Citizens' National Bank and by James
A. Chapman under the circumstances detailed in finding No. 21.
Would thèse bonds be valid in the hands of the original owners
thereof ?
It is certainly clear from the évidence that when Carpenter, as
the agent of the Citizens' National Bank and James A. Chapman,
undertook to bring about the exchange of bonds, thèse parties well
knew that the amount of bonds held by each party was in excès s of
5 par cent, of the taxable property in the indépendant school district
of Riverside, and therefore knew that the bonds to be issued to them
under the contract of exchange would be in excess of the constitu-
tional limit of 5 per cent, on the assessed value of the property in
the district. As shown by the valuations of property within the
district as set forth in finding No. 3, the district could not in the
years 1880, 1881, or 1882 incur an indebtedness equal to $3,500 with-
out exceeding the constitutional limit ; and certainly when Chapman,
acting in his own behalf and on behalf of the Citizens' National Bank,
of which he was a director, arranged with Carpenter that the latter
should take the bonds owned by himself and the bank, which amount-
ed to $8,000, exclusive of interest, and exchange them for new bonds,
he knew, as a matter of fact, that the bonds to be exchanged repre-
sented an amount largely in excess of the légal limit of indebtedness,
and he well knew that if the proposed exchange was carried through
the amount of bonds to be issued to himself and the bank would be
largely in excess of the constitutional limit, and therefore it is not
open to Chapman or to the bank to claim that they in good faith
took the bonds in suit relying on the récital therein contained that
they were issued in accordance with the Constitution of the state.
125 F.— 16
242 ; 125 FHDBBAIi BBPQBTER.
Furtbermo.re, in procuring thé issuance of thèse bonds, Carpenter
actçd iaS tb€ agent of the parties owning the bonds, and he well knew
that the àmotiÀt of bonds be was purposing to ôbtain was largely in
excess of 'thei limit of indebtednèss prescribed by the Constitution,
and, furtheirmore, that the bonds already issued in the name of the
district greatly exceeded the légal limit. Under thèse circumstances,
it would not be open to the bank or to Chapman to daim that they
took the bonds in suit in good faith, and relying on the récital therein
contained that the same were in accordance with the Constitution
of the State. They knew that this récital was nôt true, and it was
by their own procurement that this récital was placed in the bonds,
and therefore it Would not vaHdate.the bonds in their hands. If it be
said that in fact the bonds sued on were exchanged for the other
bonds held by the bank and Chapman, and therefore did not increase
the indebtednèss of the district, the question is whether it is shown
that the boflds Originally held by thèse parties were valid and en-
forceable against the district.
The évidence shows that thèse bonds were, in amount, in excess
of the légal limit of indebtednèss; that they did not contain any ré-
cital to the efïect that they were in accordance with the Constitution
of the State ; that the district had not received any considération there-
for; and that, in efïect, they were illegally and fraudulently issued.
If the présent action had been brought by the bank and James A.
Chapman on the bonds originally held by them, a recovery could
not hâve beën had thereon under the évidence adduced in this case,
for the r^asons (i) that the amourtt of bonds held by each of the par-
ties was in excess of the limit imposed by the Constitution of the
State upon the debt creating power of the district, and the bonds con-
tained no récitals estopping the ; district from relying upon this dé-
fense; and (2) that the évidence showed that the bonds were issued
without considération, and were in fact illégal in their inception, thus
casting the burden on the holders of the bonds of showing that they
were in fact innocent holdèrs thereof for value.
Under the settled rule, the parties were bound to take notice of the
constitutional limitation, upon the power of the district to create
indebtednèss, and of the amount of the taxable property within the
district as shown by the tax lists ; and, as the bonds taken and held
by them were id excess of the légal limits, they ^could not be held to
be valid and enforcéable unless à state of facts were proven which
would except them out of the cdnstitutional prohibition, and this has
not been done. Furthèrmore, as the bonds held by them were in
fact without considération and fraudulently issued, the burden would
be shifted to them .of provjng : that they were innocent holders for
value thereof. !:);;■ ..'■•' ' "': > : - ■.!,
.Thus, in Collins v. Gilbert,: 94 ;Ui S. 758, 761,-24 L. Ed.. 170, the
ïUle is stated tobethat, "if it bealleged and proved that the instru-
ment had its inception in illégaUty or fraud, a presumption arises
from that proof that the plaîntîflE took iti without value; or, in other
words, it so far shifts the btirden of proof that, unless the plaintifï
gives satisfactory eviderice that he gave value for the same,' the dé-
fense will prevail." i ." ; '.
SALMON V. BUEAL INDEPENDENT SCHOOL DIST. 243
The évidence fails to show with clearness what the considération
was, if any, for the original transfer of the bonds, and therefore it
must be held that if this action was in the name of the Citizens' Na-
tional Bank and James A. Chapman upon the bonds exchanged for
those in suit, a recovery thereon could not be had for the reasons
stated. The fact, however, that the bonds sued on would be invalid
and nonenforceable if sued by the original holders does not neces-
sarily defeat the suit as it now stands, provided it be shown that the
présent holders of the bonds, or either of them, are innocent holders
for value of the bonds owned by them. Being bonds issued in ex-
change for other bonds, the municipality issuing them is estopped
from pleading the constitutional inhibition against an innocent pur-
chaser for value, this being the rule established by the repeated déci-
sions of the Circuit Court of Appeals for this circuit. Independent
School District v. Rew, m Fed. i, 49 C. C. A. 198, 55 L. R. A. 364;
Fairfield v. Rural Independent School Dist., 116 Fed. 838, 54 C. C.
A. 342.
With respect to the bonds owned by Mrs. Cora Andrews, it is not
shown that she paid value for them, or that she ever purchased them ;
the inference from the évidence being that she inherited them from
her father, James A. Chapman. The exact date of his death is not
proven, and it may be the fact, therefore, that the title or right to
thèse bonds, which were issued in 1881 or 1882, and matured in 10
years from their date, did not pass to Mrs. Andrews until after their
maturity. It not appearing that she became the owner of the bonds
before they became due, and it not appearing that she paid value
therefor, it cannot be held that she is an innocent holder for value
of the bonds in question, and therefore the same défenses are avail-
able against her as would be open to the défendants if the action
was in the name of James A. Chapman, and, as already held, he could
not, if living, maintain the action thereon, and therefore there can be
no recovery on the bonds and coupons belonging to Mrs. Andrews.
With respect to the bonds owned by Charles B. Salmon, and sued
on in his own right, the évidence shows that he became the owner
thereof before maturity and for value ; and, although in amount those
bonds exceeded the constitutional limit of 5 per cent, of the taxable
property in the school district, yet as they were issued as refunding
bonds, and recite that they were issued under the provisions of chap-
ter 132, p. 127, of the Acts of the i8th General Assembly of the state,
I am compelled to hold, under the rulings of the Circuit Court of Ap-
peals in the cases already cited, that a recovery thereon can be had
upon the bonds, and also upon ail coupons maturing since June 19,
1891, as the statute of limitations bars recovery on ail the coupons
c'oming due more than 10 years before this action was commenced.
The total amount now due on the bonds and coupons owned by
the plaintifif is the sum of $8,154.35, and for two-thirds of this amount,
being $5,436.22, judgment will be entered in his favor against the
rural independent district of Allison, and of this judgment $3,066.66
will bear interest at the contract rate of 7 per cent., and $2,369.56
at 6 per cent. For the remaining one-third of the total sum due on
the bonds and coupons, being the sum of $2,718.11, judgment in favor
344 125 FEDEJEAL KEPORTER.
of the plaintiff will be entered against the rural independent schooî
district of Jackson, pî which amount $1,533.66 will bear interest at
the contract rate qf 7 per cent., and $1,284.41 at 6 per cent. Of
the total taxable costs, pne-half is adjudged against the plaintifif, two-
sixths against the rural independent district oî Allison, and one-sixth
against the rural independent district of Jackson.
OCCIDENTAL CONSOLIDATED MIN. CO. v. COMSTOCK TUNNEL CO.
(Circuit Court, D. Nevada. September 8, 1903.)
No. 708.
1. Nbw Tbial— Excessive VERDicri
A court will not interfère with a verdict assessing damages, which
it waS exclusively wlthin the province of the Jury tb détermine, unless
the amount is so ex>C9SSive as to indleate ^passion or préjudice on the
part of the jury, and cannot be accounted for in any other manner.
2. Damaoes-tBbbach op Contract— Supficienct of Proof.
While remote or spéculative damages, based solely on conjecture, are
not reeoverable for breach of a confract, the plaintiff is not preeluded
from recovering such gênerai damages as are shown by the testimony
to hâve neeessarily Bèsulted from the breach, although the amount may
not be made so clear aod, certain that it can be exactly coimputed.
8. Samb— Evidence OF General Damaoes.
The fàct ,that, as, tlie resuit of breach of eontracts by défendant, plain-
tiff was prévented from working its mine without great loss, expansé,
and inconvenience, goes to the matter of gênerai damages arising from
the breacJiv'and waS'proper for the jury to take into considération in
determining the actjjalfl^ss to plaintiff, exercising their best judgment as
to the aaiount of such 4osa; .
■ At Law. On motion for new trial.
See rii'Fëii:'ï3S. " '^- /• ■
W. E^ K. Deal, for plaintifï: ' '
. W. T. B,4ggètt and F. M. Huffaker. for défendant.
I HAWLEY. District Judge (orall^). It was claimed by défendant
upon the motion for new triai that the court erred in instructing the
jury as to the measure of damages which the plaintiff was entitled to
recover, if the jury should find in its favor. I am of opinion that the
instructions givenûpoh this point were as favorable to the défendant
as'the làw Avôuld warrant. No exceptions were taken to the charge
of the court asto the measure of dapiagës; It is true that in one por-
tion of thé charge the Word "de<iuct"was inappropriately used, but
it is mahifèSt thàt, notwithstanding this, ihadvertence, or improper use
of the Word, thè jury coùld not hâve béen misled thereby. The only
debatable point, to my mirid, raised by the motion for new trial, is
the claim made by defendatit that the verdict of the jury is contrary
to the instructions given by* thé court aïs to the measure of damages
iff this: that the amount is excessive, and cannot be sustained, be-
càuse it cannot be âccotinted fôY or reached urider any principle
announced by the court in its charge.
H 1. See New Trial, vel. 37, Cent Dlg. S 153.
OCCIDENTAL COXSOLIDATED MIN. CO. V. COMdTOCK TUNNEL CO. 2i5
Conceding that the amount of the verdict is larger than the court
would hâve given if the cause had been tried by it without a jury,
this fact alone ought not to induce the court to grant a new trial.
The matter of assessing the damages is, in cases of this character,
exclusively within the province of the jury to détermine, and the
court should never interfère with the verdict, unless the amount is
so excessive as to indicate passion and préjudice on the part of the
jury, and cannot be accounted for in any other manner.
The court, in considering this question, must not lose sight of the
gênerai character of the action. If the principles of law announced
by the court as to the right of the plaintifï to recover under the con-
tracts are correct, then the jury had many things to consider in regard
to the gênerai damages that might be given. The suit was brought
to recover actual damages in the sum of $27,292.25, and for gênerai
damages in the sum of $100,000, alleged to hâve been sustained by
the breach of the contract on the part of the défendant, "in that by the
said wrongful acts of said défendant, and by the violation by it of
said contracts, said plaintifï bas been deprived of the right to drain,
mine, and work its said claims on said Brunswick Iode by means of
said Sut^ro tunnel and said Zadig drift." If the verdict cannot be sus-
tained by the évidence, it ought to be set aside, but if the jury kept
within the limits of the évidence, and the verdict is not so strongly
against the prépondérance of the évidence as to indicate to the judi-
cial mind that it was only reached through passion or préjudice or
improper motives of any kind, and no error of law occurred, the ver-
dict should not be interfered with by the court. Any other conclusion
would impair the right to a trial by jury, guarantied to ail litigants in
actions of this character. Cramp & Sons S. & E. B. Co. v. Sloan
(C. C.) 21 Fed. 561.
It may be that it would hâve been erroneous for the court to hâve
instructed the jury that, in the event of finding a verdict for the plain-
tifï, interest should be added to the amount the plaintifï had expended ;
but I am not prepared to say that the jury, in the exercise of itS; discré-
tion, had no right to consider the question of interest in assessing the
damages. Lincoln v. Claflin, 7 Wall. 132, 139, 19 L,. Ed. 106. While
the plaintifï could not recover remote or spéculative damages based
solely on conjecture, it is not deprived from recovenng such gênera!
damages as are shown by the testimony to hâve been necessaril)' oc-
casioned as the resuit of the breach, although the amount may not be
made so absolutely clear and certain as to be easy of computation.
As was said by the court in Wakeman v. Wheeler & Wilson M. Co.,
loi N. Y. 205, 209, 4 N. E. 264, 266, 54 Am. Rep. 676:
"One whQ violâtes his contract with another is liable for ail the direct and
ik'oximate damages which resuit from the violation. The damages must be
not merely spéculative, possible, and imaginary, but they must be reasonably
certain, and siich only as actually follow, or may follow, from the breach of
the contract. ïhey may be so remote as not to be directly traceable to the
breach, or they may be the resuit of other intervening causes, and then they
cannot be allbwed. They are nearly always involved in some uncertainty and
contingency. Usually they are to be worked out in the future, and they can
be determtned only approximately, upon reasonable conjectures and probable
estimâtes. They may be so uncertain, contingent, and imaginary as to be
incapable of adéquate proof, and- thén they cannot be recovered, because they^
246 V 125 FEDERAL EEPOETBR.
cannot bei prpved, But ï^hen It Is certain that damages hâye been caused
by,a breach of contract, and tbe only uncertainty Is as totljeir amount, there
Can rarely be good reason for refusing, on account of suçh uncertainty, any
damages whatever for the bréach. A person vlolating iiis contract sbould
not be pei'taitted entirely to^ escape liability because the amount of the dam-
ages which he has caused is uncertaln."
It is tisually the right èf the party complaining of the breach of the
contract "to prove the nature of his contract, the circumstances sur-
rounding, and following îts breachi and the conséquences naturally
and plainly traceable to it, and théh it is for the jury, under proper
instructions, as to the rules of damages, to déterminé the compensation
to be awarded for the breach. When à contract is repudiated, the
compensation of the party complaining of its répudiation should be
the value of the contract. He has beçn deprived of his contract, and
he should hâve, in lieu thereof, its value, to be ascertained by the appli-
cation of rules of law which hâve been laid down for the guidance
of courts and jurors." Holt M. Co. v. Thornton, 136 Cal. 232, 235,
68 Pac. 768; Shoemaker v. Acker, 116 Çal. 23g, 245, 48 Pac. 62, and
authorities there cited ; Blagen v. Thompson, 23 Or. 24c, 254, 31
Pac. 647, 18 L. R. A. 315 ; Railroad Co. v. Rodgers, 24 Ind. 103.
The object of the law in awarding damages is to make amends or
réparation by putting the jjarty injured in the same position, as far as
money can do it, as he wbuld hâve been if the contract had been per-
formed. Iron Co. v. Teaford, 96 Va. 373, 31 S. E. 525; Burrell v.
N. Y. S. S. S. Co., 14 Mich. 34. "The fact that the value of a con-
tract or the advantage to be derived frorn it is contingent — that is,
that the expected advanfàge dépends on the concurrence of circum-
stances subSequently to transpire, and which may by possibility not
happen— is not an insuperable objection to recovering damages for its
loss. * * * The nature of the contingency must be considered.
If it is purely conjectural^ and cannot be reasonably anticipated to hap-
pen in the usiial course of things, it is too uncertain. There must be
proof legâlly tending to show and sufficient to satisfy the jury that it
would happen." i Suth. on Damages, § 72. In actions of this char-
acter, "when a cause of action accrues^,, there is a right, as of that date,
to ail the conséquent dainàges which will ever ensue. They are re-
coverable in one action, if they can be proved, and only one can be
maintainèd. It may be btbught at any time after the accrual of the
right. The question is a practical and légal orie in each case, whether
the cause of action is df such a nature that the injurions conséquences
of the wroiïg'complained.pf can reach into the future, or whether any
subséquent damages wiU t»e owing to a continuons fault, which may
be the foundation of a new action." i Suth. on Damages, § 120.
Under this rule, it was admissible for the plaintiflf to show that it had
no other accessible means to reach its mine for the purpose of extract-
ing ore therêfrom than through the tunnel, except by sinking a shaft
from the surface. The testimony of Mr. Ross, as to the expense that
would be incurred in sinking a double compartment shaft with stations,
could not be considered âië' the correct measure of damages, because
the party might never sink such a shaft. It was too remote and
spéculative. But the:,fact that the mine could not be worked in any
other way than from the surface was a proper matter for the jury to
INDIANAPOLIS & N, Vf. I. CO. V. CONSOLIDATED T. CD. 24T
take into considération in determining what was the actual loss to the
plaintifï in being deprived of working through the tunnel, as provided
for in the contract.
One of the results of the breach of the contract was to prevent the
parties from working in the tunnel without great loss and expense
and inconvenience. This was a matter of gênerai damage, which the
jury had a right to take into considération, and assess it in accordance
with their best judgment as to what it would be.
If the amount of money which the plaintifï had advanced and lost
in round figures was $27,000, the interest on that amount would raise
it to about $35,000. This would leave but $15,000 for other gênerai
damages, and while the amount may seem to be large, still it cannot
be said that it does not come within the measure of damages which the
jury, in its discrétion, deemed to be just and proper.
The motion for new trial is denied.
INDIANAPOLIS & N. W. TRACTION CO. v. CONSOLIDATED
TRACTION 00.
CONSOLIDATED TRACTION CO. v. CITY OF CRAWFORDSVILLB et aL
(Circuit Court, D. Indiana. September 24, 1903.)
No. 10,219.
1. Injunction— Violation— Construction of Inteelocutort Ordbr.
A City filed a bill against a street railroad company to eujoln It from
iaylng tracks In the streets. The défendant flled a cross-bill against the
city and another company to enjoin the laying of tracks by the latter.
On the adjournment of a hearing on motions for preliminary Injunctions
on both bill and cross-bill the court entered an order In two numbered
paragraphs; the first continuing a restrainlng order entered on the
original bill, and the second restraining both the défendants and the
complainant in the cross-bill from laying tracks until the further order
of the court. Before the further hearing the original bill was dismissed,
and the défendant tberein dismissed its cross-bill as to the city. Beld
that, the controversy on the cross-bill being between the two companies
claiming conflictlng rights, the . second paragraph of the order related
solely to such controversy, and properly restrained both parties from tak-
ing any action to change the status; that sUCh order remained in force
and was violated by the construction of tracks by the complainant in
the cross-bill before any further hearing or order of the court.
In re proceeding for contempt against the Indianapolis & North-
western Traction Company, George Townsend, Clift Wise, W. N.
Harding, and William H. Johnston.
The city of Crawfordsville sued the Indianapolis & Northwestern Traction
Company in the circuit court of Montgomery cbunty, Ind., to enjoin that
company from constructing its railroad tracks in the streets ofthat city.
The traction company answered, and also filed a cross-complalnt a!gainst the
city of Crawfordsville and the Consolidated Traction Company. In this cross-
complaint the Northwestern Traction Company asserted a franchise to con-
struct its tracks in the streets of Crawfordsville; charged that the city had
subsequently and without right granted a franchise to the Consolidated Trac-
tion Company, which Impaired the obligation of the previous contract between
the city and the Northwestern Traction Company, ail In violation of section
10 of article 1 of the Constitution of the United States; and injunctive relief
248 125 FEDERAL HEPOETBB.
\vas asl^çd; ag^nst both the défendants to the crossjcomgl^înt to restrain
tbem from Mtérîerlng with tbe,JiMittliwestern Trçctlojo^ Coropany in the con-
structloniOf'ItB tracks In the sttéets of the dty of CràwfordsvlUe.
On the 23d of June, 1903, the hearlng was commenced în the Montgomery
circuit court of an application fdr a temporary injunction by the clty of
CrawfQrdSTiile on Its complaint against the Northwestern Traction Company,
and afso of an application by the Northwestern Traction Company for a tem-
porary injunction on its eross-complalnt against the clty and the Consolidated
Traction Oomparty. It developed tliat the hearlng could not be coneluded that
day, and the court ordered thè further hearing adjourned until July 6, 1903,
and atthe same tlme entered the folio wing order:
"It Ishereby ordered by the court upon Its own motion:
"(1) That the restrainlng prder heretofore granted by the Hon. Jere West,
judge ôf this court, on the 17th day of June, 1903, on the appllOation and com-
plaint of ^ the City of Crawfordsvllle vs. Indianapolls and Northwestern Trac-
tion Oompany.be continued.untll the 6th day of July, 1903, and untll the
further order 6t thls court, and that upon said day the application of sald the
clty of Crawfordsvllle for a temporary injunction hereln shall be heard with-
out further notice, and that the undértaking heretofore filed shall continue
as securlty to said défendant under this order.
"(2) That, upon the cross-complaint of Indianapolls and Northwestern Trac-
tion Company vs. The Clty of Crawfordsvllle and the Consolidated Traction
Company, said défendants to said cross-complaint, and each of them, and thelr
respective offlcers, agents, and servants, upon the exécution by the cross-
complalnant of the undértaking réqulred by law, be severally restrained from
t^king aay action to change and from changing the présent status of the
matters embraeed in sald cross-complaint as they now exist, and that the
said Consolidated Traction Company be restrained from entéring upon and
constructlng, or attempting to construct, Its said street railroad upon East
PJke Street, Elston avenue, and Main street, or any part thereof. In the clty
of Crawfordsvllle, until the 6th day of July, 1903, and until the further order
of this court, and that upon sald 6th day of July, 1903, the application of the
sald Indianapolls and Northwestern Traction Company for a temxwrary in-
junction hereln be heard wlthout further notice, and that untll said last-
mentloned, date, and until the further order of this court, the Indianapolls
and Northwestern Traction Coinpany, Its offlcers, agents, and servants, and
employées, be, and it and they . are hereby, restrained from constructlng,
or attempting to construct, any Street railroad upon any of the streets, ave-
nues, alleys, bridges, and public places in the clty of Crawfordsvllle, or any
part or portion thereof."
On ïuly 6, 1903, and before the hearing of the applications for temporary
injunctlons was resumed, the 'c^ty of Crawfordsvllle dlsmlssed its complaint
against the Northwestern TracpJon Company, and that company dlsmlssed
Its cross-complaint against the clty. Thereupon the Consolidated Traction
Company immediately flléd its pétition and bond for a remôval of the cause
pendlng against it on the cross-complaint of the Northwestern Traction Com-
pany to this court, and an ordet of removal was entered by the Montgomery
circuit court. The transcript of the record from the Montgomery circuit court •
was flled In this court on the 8th day of July, 1903, and on the 13th day of
the same month the Northwestern Traction Company flle^ Its motion to re-
mand the cause. . , ,'
Whilst this motion was stlU pendlng and undetermlnéd, to wlt, on July
27, 1903, the Northwestern Traction Company commenced the work of laying
Its railroad tracks In certain str§ets in the clty of Crawfordsvllle, and con-
tlnued the work! untll It had Cqnstructed 3,030 feet of track In Main street
and Elston avenue, and 1,591 feét of track in Plke street.
The Consolidated Traction Company flled Its verified pétition, praylng that
the Northwestern ^Traction Company and certain Indlvlduals named in the
pétition be requiré^ to show cause why they sbould not be adjudged guilty
of contempt, and that upon the hearlng of the pétition they be required,
within a short Urne, to be flxed by the court, to remove:from Main street,
Elston avenue, and Pike street ail the tracks that had J^ieen constructed in
those streets. Th^ motion to romand was overruled. A motion to quash the
INDIANAPOLIS <fe N. W. T. CO. V. CONSOLIDATED T. CO. 249
pétition and citation In the contempt proceedings was aiso overruled, and
tliat pétition was heard upon the answers of the respondents and upon wrltten
and oral testimony Introduced at the hearlng.
Harding, Hovey & Wiltsie, Elliott, Elliott & Xittleton, and Miller,
Elam & Fesler, for complainant.
John G. Williams and Crâne & McCabe, for défendants.
BAKER, Circuit Judge (orally). As I indicated when the motion
to quash the citation was overruled, in my judgment the efifect of the
division of the order into two separate paragraphs, separately num-
bered, was very çlear. The first paragraph stated that on the com-
plaint of the city against the Northwestern Company the Northwest-
ern Company was restrai.ned, and no other party was défendant to the
complaint of the city except the Northwestern. Upon the dismissal
of the city's complaint, of course the injunctional order that was based
upon that complaint fell with it. That is indisputable to my mind.
The second paragraph of the order is one continuons sentence,
showing that, on the cross-complaint of the Northwestern Company
against the city and the Consolidated Company, the city and the Con
solidated are restrained and the Northwestern is restrained. I was
unable then, and I am unable now, to view that in any other light than
a just term that the court had power to impose, and did impose, upon
a complainant whose complaint disclosed a controversy between it and
the ConsoHdated Company as to rights in the streets of the city of
Crawfordsville ; that is, the Northwestern wanted to hâve the hands
of the Consolidated tied pending an investigation of their respective
rights, because there was a conflict in interest between the two compa-
nies. In other words, both cannot occupy the same place at the same
time, and it appeared right on the face of the Northwestern's bill
that both of them were claiming rights that were in conflict. If the
Consolidated was not claiming anything that conflicted with the claims
of the Northwestern, it would be utterly idle and useless for the North-
western to ask any restraining order against the Consolidated; but
it was asked because the Consolidated was shown by the Northwest-
ern's bill to be making claims that were antagonistic to, and in con-
flict with, the claims the Northwestern was setting up in its bill. Un-
der such circumstances, I think any court, as a condition of tying the
hands of one antagonist, should compel the other to respect the status
also.
From the hearing to-day, I am convinced beyond any shadow of
doubt that Judge Elliott, Mr. Will Elliott, Mr. Harding, Mr. Hovey,
Mr. Wiltsie, and Mr. Johnston ail entertained the belief, in good faith,
that such was not the scope and efïect of the order, but that the order
"was simply an enlargement of the order which was made on the mo-
tion of the city of Crawfordsville. What Mr. Harding and Mr. Wil-
liam H. Johnston did in the way of driving spikes I look upon as
being fuUy as trivial as what the oldest citizen did in driving the first
spike on the first rail.
I will therefore discharge Mr. Harding and Mr. Johnston.
Mr. Townsend and Mr. Wise, I am satisfied beyond doubt from the
évidence, had no intention to disrespect any order that had been
250 125 PKDBRAIi BHPOKTBB.
entered Ify the Môntgomery circuit court; What they did was done
in good faith, ùpon the adviCe qf counselwht^ in good faith believed
that they were advising their clients correctly. I will therefore dis-
charge Mf. Tpwnsend and Mr. Wise.
Of course, what I hâve said with respect tb the attorneys and thèse
superintendentS would alsô acquit the - Northwestern corporation, so
far a.s any intention by it to yiolate a pending order of the Môntgom-
ery circuit court is cbncerriedj and I do acquit the Northwestern Com-
pany, as well as thèse indîvidtials, of any intentional violation of the
orderi But an order was in force, compelling both corporations ta
respect the'ètatus. That lias veeh violated. I will therefore not ac-
quit the Northwestern ôf the charge, but, finding no bad fàith, I will
assess nothing against it in the way of pùnishment. No acts that hâve
been dorieby it or in its behalf, I thirik, are worthy of any punitive
judgment; but in this proceeding the Consolidated Company is en-
titled to hâve the status restored, and also to be made good in respect
to its expense in calling this'rnatter to the attention of the court.
I will therefore fînd the Northwestern guilty of having violated a
valid injunctional order, ànd, as that injunctional order was made for
the purpose of compelling the parties to préserve the status, I direct
the marshal of this court to take up, at the expense of the Northwest-
ern Company, ail of the tracks that were put down by the Northwest-
ern Company in violation of this injunctional order; but I suspend
the opération of the order upon the marshal until the further order
of this court, and until the final hearing on the merits, unless, by
reason of some conduct on the part of the Northwestern Company, the
Consolidated Company shall make a motion for an early enforcement
of the order. I further direct the Northwestern to pay ail of the costs
of this proceeding, and to pay into Court for the use of the Consolidat-
ed Company, as a partial reimbûrsement of its expenses in bringing
this matter to the court's attention, the sum of $200.
THOKNTON v. INSURANCE COS.
(Circuit Court, M. D. Pennsylvania. October 8, 1903.)
Nos. 1 and 2, Oct. Term.
1. CliEBKS 01" CiBCDIT COUBTS— PbES— MakiNQ AND CbKTIFTING ReCOHD FOB
Appbllate Court.
A clerk of a circuit court is entitled to cliarge for making up and cer-
tlfying tlie record in a case in response to a writ of error at the rate of
15 cents for each folio of 100 words.
% Same— Pbinting Recobd
Ttiere is no statutory provision which authorlzes the clerk of a circuit
or district court to charge a f ee for printlng the record in a case for the
Circuit Court of Appeals, in. addition to the cost of printing, although hy
tbe fee bill adopted by the làtter court under statutory authority its own
clerk is entitled to such fee, and is also required by the raies to accept
any portion of the record of proper slze and type whlch may hâve been
printed by any other court.
8. C0ST8— Printhtg Recobd— Mistakb ov Clerk.
Where the clerk of a circuit court undertakes to hâve the record in a
case printed for use In the Circuit Court of Appeals, as permitted by the
THOBNTON V. INSURANCE C03 251
rules of that court, he is entitled to charge only the reasonable cost of
such printlng; and where, owing to his misconception of the tlme within
which the printing was required to be done, without consulting the par-
ties, he had the work hastened at an increased cost, when it was in fact
unnecessary, he cannot tax such Increased cost
Appeal by Défendants from Taxation of Costs.
M. J. Martin, for défendants.
R. A. Zimmerman, for clerk.
ARCHBALD, District Jiidge. It was the duty of the clerk, in
response to the writ of error, to make up and certify the record and
return it to the Court of Appeals, for wliich he is entitled to charge
at the rate of 15 cents for each foHo of 100 words. Mcllwaine v.
Ellington (C. C.) 99 Fed. 133. He is confined, however, to that which
he has so certified, and no more, and that is found in the first volume
of the record as printed, at the end of which his certifîcate appears.
It does not extend to the other two volumes, made up of the évidence,
which is no part of the record except as it is brought into it by bills
of exceptions duly noted and sealed. So far the matter is clear.
But there is more diiïiculty with regard to the printing. By the
rules of the Court of Appeals of this Circuit, the clerk of that court,
upon the filing of the transcript of the record, is to cause it to be
printed (Rule 23, § i ; Page's Rules, pp. 161, 162), receiving therefor a
fee of 25 cents a page, in addition to the cost of printing (Rule 31, § 7 ;
Page's Rules, p. 169). He is required, however, to accept any portions
of the record of proper size and type that may hâve been printed in
any other court (Rule 23, § 2; Page's Rules, p. 162) ; and this makes a
place for the practice which prevails in some of the districts of thc'
circuit, including this one, of having the clerk of the court from which
the record comes to do the printing. The clerk of the Circuit Court
performed this service in the présent instance, and claims a fee per
folio for it, and the question is whether he is entitled thereto. He
is not unless he can point to a statute which justifies the charge ; and
this, unfortunately, he cannot do. The fee of 25 cents a page vi'hich
is allowed to the clerk of the Court of Appeals is given him by the fee
bill which the act of Congress expressly authorizes that court to adopt
(Act Feb. 19, 1897, c. 263, 29 Stat. 536 [U. S. Comp. St. 1901, p.
557]) ; but there is no équivalent provision with regard to the circuit
or district clerk, nor any means by which the fee that is so provided
can be transposed and made to apply to either of them. The right to
it was raised and denied in the case of Doherty's Accounts, Bowlers'
Comptrollers' Décisions, 253, where a similar fee per folio for proof-
reading, in addition to the bill of printing, was disallowed. The clerk
is therefore confined to the cost of printing, the advantage that he
gets out of having it done being that he can use the printed copy in
certifying the record, thus saving himself the trouble and expense of
otherwise transcribing it.
But in undertaking to do the printing he is only entitled to what
it is reasonably worth, and this gives rise to another complication.
The ordinary price per page for such work does not exceed $1,
while the bill that is presented is for $1.25. This is sought to be
25^ 125 FBDBKAL KBPOBTEK* ;
jUstified on the ground that the printing had to be donc by a certain
timp, eritailing additional, labor and expense. But the action of
the çl«rk in this respect lyàs taken on his own responsibility with-
out Consulting with the défendants, and they are not answerable
for the expense of the extra efïort unless it was necessary; and that
it was not, it seems tô me, is clear. Thé writ of error was taken and
the citation allowed Eebrûary I4th last, and made retûrnable March
i6th, 30 days ahead, in accordance with the rules. As the March term
of the Court of Appeals began on March 3d, this apparently carried
the argument over till September, and the parties were so advised.
And, while the transcript of the record had still to be, filed by the
return dayin order to prèventthe case from being dismissed (Rule 16,
§ I ; Page's Rules, p, 155), the recofd did not hâve to be printed by that
time, the printing being only required in anticipation of the argument
(Rule 23, § I ; Page's Rules, p. 161). But the circuit clerk, misconceiv-
ing this, and cônfusing the, time for filing the record with the time for
printing, it, put the copy into the hands of the printer on February
28th, with a peremptory order to hâve it ready so that the record
could be lodged in printed form with the clerk of the Court of Appeals
on March loth, six days in advance of the return, day, according to
the supposed exigency Of ,the rule last cited. While it may hâve
been to the convenience of the clerk to combine the two acts, and to
certify the printed record as his transcript (to which, of course, there
is no objection), it was not necessary, and the défendants cannot,
therefore, be charged with the additional expense required to accom-
plish it. This question is not afifected by the subséquent steps by
which the case was advanced and an argument at the March term
secured. Thèse were ail taken after the order for the printing had
been given and executed ; and, as there was an abundance of time after
the case had been actually advanced to print the record at ordinary
rates, the extra charge cannot be maintained on the basis of having
contributed to that resuit, i
In accordance with thèse views, the clerk's fées are retaxed and al-
lowed as foUows:
For maklng up and certifying the record, 950 folios, at 15 cents each... $ 145
For printing 1186 pages at $1 a page 1,186
Total $1,331
UNITED STATES ëx rel. KINGWOOD COAL CO. T. WEST VIRGINIA
NORTHERN K. 00. et al.
(Circuit Court, N. B. West Virginia. October 15, 1903.)
Interstate Coumbkce — Distribution of Coal Cars to Mines et Hailroad
Company.
Under the provisions of section 3 of the Interstate commerce law it is
the légat duty of a rallroad Company, in furnishing cars to coal mines
along its Une, where a limited number only can be supplled, to dlstribute
the same Impartlally, wlthout unjust discrimination or favoritlsm; and
Buch distribution should be based on a disinterested and intelligent
examina tlon by experts of the différent mines, and upon a considération
UNITED STATES V. WEST VIRGINIA NOKTHEKN E. CO. 253
of ail the factors which go to make up their capacity, both actual and
potential, the most important belng the number of worklngs and their
capaeity for production, the equipment In use for handllng and loading
the product being secondary, because it may be readily and quickly in-
creased if necessary to meet the requirementa.
S Bame— Unjcst Discrimination.
Evidence considered, and htld to show that the distribution of cars
by a railroad company between coal mining companies on its Une of road
was made upon a basis which gave an undue préférence to certain com-
panies, and operated to the undue préjudice and disadvantage of the
relator company, in violation of section 3 of the interstate commerce law.
Suit on Relation for Violation of Interstate Commerce L,aw.
J. W. Davis, V. G. Robinson, and J. J. Davis, for relator.
C. G. Sprout, P. J. Cragan, and John H. Hait, for respondents.
GOFF, Circuit Judge. This proceeding was instituted under the
provisions of the act of Congress of February 4, 1887 (24 Stat. 379,
c. 104), amended March 2, 1889 (25 Stat. 855, c. 382), and February
8, 1895 (28 Stat. 643, c. 61 [U. S. Comp. St. 1901, p. 3154]). On
the pétition of the Kingwood Coal Company, duly verified, the al-
ternative writ wras issued on the ist day of May, 1903. The answer
of respondents was regularly tendered and filed, issues joined, testi-
mony heard, and the case argued and submitted. By agreement of
ail the parties a jury was waived, and the questions raised by the plead-
ings were submitted for the fînding and judgment of this court.
Many witnesses were examined, documentary testimony offered, and
counsel has been fully heard. The court has carefully considered, and
at least endeavored to digest, the évidence, and to properly apply it
to the law applicable to the facts found.
The relator is a corporation engaged in the mining and shipping of
coal in Preston county, W. Va., on the line of the West Virginia
Northern Railroad company, one of the respondents. The Irona
Coal Company and the Atlantic Coal & Coke Company, also re-
spondents, are likewise engaged in mining and shipping coal, their
mines being located on the line of their co-respondent, the West Vir-
ginia Northern Railroad Company, the three mines mentioned being
the only collieries so located and operated. It is charged irr the péti-
tion filed by the relator that the respondent railroad company, in
the transportation of the coal mined at said mines, and entering into
and becoming part of the interstate commerce of the country, has
been, and was when the pétition was filed, discriminating in favor of
the Atlantic Coal & Coke Company and the Irona Coal Company,
and against the Kingwood Coal Company. It appears that the West
Virginia Northern Railroad Company is not the owner of any of the
cars used on its line for the transportation of coal, but that ail such
cars are furnished by the Baltimore & Ohio Railroad Company, over
the tracks of which such coal ultimately reaches its markets. After
such cars are delivered to the West Virginia Northern Railroad Com-
pany, they are distributed among the mines along its line under the
superintendence of its gênerai manager. Under the pleadings the
matter to be determined by the judgment of this court is, did the West
Virginia Northern Railroad Company, in distributing the cars so re-
254 125. FEDERAL REPORTER.
ceived by it from the Baltimore & Ohio Raiiroad Company, make a
just àlldtment of thein among the three mines mentioned, or did it
So'aBSigti'them aS to unlawfully discriminate in favor oî two of them
as againSt the other one?
It was and is the duty of the West Virginia Northern Raiiroad
Company to so manage its business with ail three of the coal mines
located bn and shipping coal over its line in the same relative and im-
partial wày, so as to show no favoritism to either one of them ; there-
by exercising the power and discrétion confided to it, so as not to act
in a manner the resuit of which would necessarily build up one at the
expense of the others, or advance the interest of two to the détriment
of the third, It is quite évident that raiiroad companies can, by the
improper distribution of cars among competing coal companies, build
up some of them and make them prosper, while at the same time it
tears down and eventually destroys others. Hence the wise provision
of the ilaw that no favoritism shall be shown, and that no unjust dis-
crimination will be permitted. The relator insists that on May i,
1903, it was discriminated against by the West Virginia Northern
Raiiroad Company — ^that it should then hâve received at least 33^^
per cent.iôf the tonnage of the cars furnished to said company by the
Baltimore & Ohio Raiiroad Company, when in fact it received much
less than that allotment, the other two mentioned mines receiving at
the same time much more than their just and équitable share. We
are nowto deal with conditions as they existed on and subséquent to
that date, : considering previous incidents only as they may tend to
elucidate matters as they, in fact, were when the pétition was fîled.
It is quite clear that the output of a coal mine is largely controlled
by the number of raiiroad cars available for use in sending its coal
to market. Prudent and: economical management requires that no
more coal be mined at any time than can be promptly sent to market,
and hence it foUows that the absence of a sufficient number of raii-
road cars in which to transport its output removes the incentive that
otherwise would exist to increase the production of a mine. I find
that at the time this suit was instituted the cars distributed by the
West Virginia Northern Raiiroad Company were apportioned on a
basis virtually as, follows, viz., to the Kingwood Coal Company, 17
per cent. ; to the Atlantic Coal & Coke Company, 27 per cent. ; and
to the Irona Coal Company, 56 per cent. This allotment was founded
on a ratjng of the capacity for output per day of the mines as follows,
viz., 400 tons to the Kingwood Coal Company, 600 tons to the At-
lantic Coal & Coke Company, and 1,250 tons to the Irona Coal Com-
pany. Was this method of distribution a proper one? Did it pro-
duce that jtist and équitable resuit çontemplated by the statute appli-
cable thereto? Was it free from unfair discrimination" and was it at
least approximately correct ? The agreed method of car distribution
that had existed down to and for a time subséquent to the first ship-
ment of coal from the mines of the Atlantic Coal & Coke Company —
the mine lasit opened for business — was no longer in force when, at
the instance of the relator, this proceeding was commenced, but at
that time the officiais of the West Virginia Northern Raiiroad Com-
pany, for reasons of their own, arbitrarily determined the method of
UNITE1> STATES V. WEST VIRGINIA NOETHERN E. CO. 255
distribution, and made the allotments thereunder, and it is such action
on the part of that company that this court, in deciding the issues
herein joined, is required to pass upon.
I am of the opinion that in reaching a proper basis for the distribu-
tion of railroad cars it is necessary that an impartial and intelHgent
study of the capacity of the difïerent mines be made by compétent and
disinterested experts, whose duty it should be to carefully examine
into the difïerent éléments that are essentially factors in the fînding
of the daily output of the respective mines which are to share in the
allotment. Among the matters to be investigated are the foUowing:
The working places, the number of mine cars and their capacity, the
switch and tipple efHciency, the number and character of the mining
machines in use, the hauling System and the power used, the number
of miners and other employés, the mine openings, and the miners'
houses. No one of thèse various and essential éléments can safely
be said to be absolutely controlling, though likely the most important
of them ail are the real working places, the available points at which
coal can be profitably mined. At each true working place a certain
quantity of coal, to be determined by the thickness of the seam and
conditions peculiar to the difïerent coal fields, can be excavated and
removed during stated periods of time ; and so it follows that, if other
essentials are adéquate, the daily output of a mine can be computed
by the number of its available working places. If the working places
in a mine can provide a larger quantity of coal than the mine cars can
haul, or the tipples can load, or the machines used and the miners
employed can remove, then at that mine, during the time that such
conditions exist, the daily output should be gauged by a careful in-
vestigation of the éléments so tending to restrict its production.
But even in instances of this character it is essential that a compre-
hensive study of the true status of the mine be made; otherwise un-
just discrimination will ensue, with the inévitable resuit of irréparable
injury to the mine so treated. If, for instance, it should appear dur-
ing the inspection that the tipple had sufïered an injury, or had been
entirely destroyed, the presumption would be that it would be re-
paired or replaced immediately, and for the purpose of car distribution
the mine should be rated as if the tipple were intact, though during
the temporary disability its quota of cars would neither be needed nor
furnished. Again, if the inspection should disclose the fact that the
working places would produce and the tipples could load more coal
than the mine cars could haul, still, if the number of such cars were
sufïicient to move the coal required to load the limited number of
railroad cars assigned such mine, then the capacity of the mine for
output should be ascertained from the number and character of the
working places — there being no other defîciency than mine cars — for
no mine should be required to keep on hand a greater number of
mine cars than are necessary to move the coal required to utilize
the tonnage allotted to it, for the supply of mine cars can be without
delay increased should such tonnage be enlarged. Indeed, the entire
supply of mine cars might either be disabled or destroyed, and still
the mine itself, in ail other respects, remain in perfect condition — a
temporary suspension of shipping capacity existing, but its real al-
256 / 125 FEDERAL EBPOBTHB.
lotmeat for transportation purppses remaining the same. If the tip-
ple capajcity pf; the mine is found tp exceed the maximum power of
its working places, it would certainly be improper tprate that mine
by sueh capacity, even if its mine cars and switch facilities relatively
wprked ■yvith its tipple. And if Ijhe mine car supply were in excess of
the requirements oJE its working places, or of the ability of its tipple,
or of its allotment of railroad cars, it would be an injustice to other
mines, where such condition? did nqt exist, if such exççss pf mine cars
were calculated to theirlimit in thç rating for distributipn pf railrpad
cars.
Whpn mines hâve been working for some time, npt to the limit of
their capacity, but on an output based on a restrictied allotment of
railroad cars, and a new inspection is taken from which to make the
distribution pf railroad cars for future use because of changed condi-
tions, then such previous facjts and the results naturally following
therefrom should be: fjpted with discernment before the maximum
capacity of such mine far future output; is announced. If this is not
donc, the mine is apt to be discriminated against, even though such
was not intended, and mines where such conditions did not exist
will, under the new allotment,. develop themselves much f aster than the
mine which had theretofore been restricted in its output. If the rail-
road management withholds cars frpm a mine, it thereby, tp a cer-
tain extent, retards its develppment, while, pn the other hand, if such
managetnept discriminâtes , in fàvor of a mine by allowing it more
cars than its proper rating entitles itto, the resuit is the rapid and
abnprmal develppment of that mine, to the préjudice pf those com-
peting with it. It is therefore évident that, if équitable ruies are
not obseijyed, the power that controls the railroad car supply can
foster one inine at the expense of anpther, or can build up one locality
while it is tearing dowp another. Hence it is greatly to be desired
that this power of control should not be dominated by an interest in
the output and profits of any of the mines subject to its jurisdiction,
for, as has been most expressively said, "if self the wavering balance
shake, it's rarely right adjusted." ;
The capacity of a cpa.1 mine for rating purposes is the amount of
coal it is able to place in the railroad cars in a given time, and that
dépends on its working places, the thickness of its coal seams, its
switches, wprkrnen, mine cars, and: tipples, its gênerai equipment,
and its management. The output of a mine is the amount of coal it
in fact places in the railroad cars for shipment, and that is regulated
by the number of such cars it is able to secure, prpvided its gênerai
equipment is efficient; and it may be and generally is less than its
capacity, but can never exceed it. It is on account of thèse matters
and those similar in çharacter — ^of fréquent occurrence in the mining
régions — that no ironclad rule can be established with safety for the
disposition of the questions we are now considering, and so it is that
no separate élément of amine's capacity can be said to certainly con-
trol its output, which can in fact only be determined by the careful
observation pf impartial experts who hâve worthily and discrim-
tnatively studied and applied the cpnditions applicable thereto.
From thèse observations we deduce the rules that should govern
UNITED STATES V. WEST VIRGINIA NOKTHEKN K. CO. 257
the situation confronting us in the présent case, and when we prop-
erly apply them the judgment now to be entered suggests itself. As
to the working places in the three mines mentioned, while there is
some confusion concerning them, there is no real conflict, as the
différence in the testimony regarding them is founded on the différent
views entertained by the witnesses as to what constitutes a working
place ; and hence, from their testimony, there is no real trouble in
finding what we may well call the basic facts which are décisive of
this controversy. BVom the testimony I find that at the time this
suit was instituted the Kingwood Coal Company could fairly count
and work at least 65 working places, the Irona Coal Company at least
103, and the Atlantic Coal & Coke Company at least 45. Thèse
working places, those available for mining purposes, were liable to
such changes as were occasioned by abandonment, by accident, by
development, and by the utilization of pillar spaces ; but for ail prac-
tical purposes necessary to their équitable rating said mines contained
the places mentioned respectively, and they hâve changed in fact but
little since then in number, though it seems that the pressure caused
by litigation has made it possible to présent them in a différent light.
That each mine possessed ail of the equipment required to handle ail
of the coal that could be mined from such working places is plainly
shown, and, that being so, it follows that the distribution of the rail-
road cars should hâve been on a basis that would hâve allotted to the
Kingwood Coal Company 31 per cent., to the Irona Coal Company
48 per cent., and to the Atlantic Coal & Coke Company 21 per cent,
of the cars allowed the West Virginia Northern Raiiroad by the Balti-
more & Ohio Raiiroad Company. And yet at the period mentioned
the raiiroad management made virtually the following apportionment
ofits cars: To the Kingwood Coal Company 18 per cent., to the
Irona Coal Company 56 per cent., and to the Atlantic Coal & Coke
Company 26 per cent. This allotment was not in accord with the
actual conditions then existing at those mines, and, as I see the facts,
it arbitrarily increased the numbers of cars that the Irona Coal Com-
pany should hâve received from 48 to 56 per cent., and the number
the Atlantic Coal & Coke Company was entitled to from 21 to 26 per
cent., while it unjustly reduced the number due the Kingwood Coal
Company from 31 to 18 per cent. The ratings of the différent mines
made by the experts sent for that purpose after this controversy
arose — one of which was adopted by the officiais of the West Virginia
Northern Raiiroad Company — were, to say the least, arbitrary and
unreliable, and they were founded upon mistaken data ; for instance,
48 working places for the Kingwood Coal Company, instead of 65 —
a misconception of the situation that, under the circumstances then
existing, should not hâve been made. The rating in force at the
mines mentioned on the day the relator filed its pétition in this case
was based upon a total daily capacity of 2,250 tons of coal, of which,
as has been shown, 400 were allowed to the Kingwood Coal Com-
pany, 1,250 to the Irona Coal Company, and 600 to the Atlantic
Coal & Coke Company ; and this in the face of the undisputed testi-
mony, admitted by the experts and conceded by the gênerai manager
of the West Virginia Northern Raiiroad Company, that the King-
125 F— 17
258 ) 125 FBÇERAL. KBPOKTEB.
wood; Coal, Company had ttien inore working places than had the
Atlantic Coal & Qoke Company. And when we recall the fact that
ail of the mJftes had ail of the mining paraphernalia requisité for the
excavating and) loadingof more coal than could be transported in
the railroad caps allottedto them respectively, the injustice of that
rating is not only indubitable, but amazing.
The pétition for: the writ of mandamus prays that the rçlator, the
Kingwood Co^l Company, be decreed to be entitled to 33 J^ per cent.
of the total car supply furnished by the West Virginia Northern Rail-
road Company to the coal minés located along its Une. The alterna-
tive writ was'based upon that allégation and prayer, and it may be
aroended, if desired by the relator, so as to confprm to the facts as
the court has found them to be, after which the peremptory writ may
issue requiring the défendant the West Virginia Northern Railroad
Company to cease giving préférence and advantage to the Irona Coal
Company and to the Atlantic Coal & Coke Company over the King-
wood Coal Company in the shipping and transportation of coal, and to
furnish to said Kingwood Coal Company without discrimination, and
upon conditions as favorable as those given to other shippers, the full
supply of cars due it under existing conditions, amounting in tonnage
thereof to at least 31 per cent, of the présent distribution.
MERCHANT BANKING CO., Limited, v. CARGO OF STBAMSHIP AFTON.
(District Court, S. D. New tork, October 8, 1903.)
1. SnippiNa— RiGHTS of Mortgaqee— Preishts.
The mortgagee of a ship wiicli is left in possession o£ the owners, on
subsequently taking possession under the mortgage, is entitled to the
frelghts thereafter comlng due, whether or not they were earned in whole
or in part before he went into possession; but he is entitled to such
freights subject to such engagements as the owners hâve previously en-
tered into In respect to the foyage, they having the right to full control and
to make any contracts necessary for the opération of the vessel so long
as they rem9.ined in possession.
2k Samb — CoNTBACTS Made bt Mortgagor m Possession.
The owners of a steamshlp, who had given a mortgage thereon, but
who remained in possession, chartered her for a voyage; the charter party
providing for advancements to a stated amount by the charterers to the
master, the same to be deducted on final settlement of freights. By
subséquent agreement, at différent ports during the voyage further ad-
vances were made to the toaster as required by hlm, for which receipts
signed by hlrn were Indorsed on the charter, statihg that the money was
drawn against f relght. On reachlng the port of delivery the mortgagee
, took possession of thé vessel. Held, that it was compétent for the parties
to the charter to enlarge the provision for advances, and, having done
so, such action was binijing on the mortgagee, who, on subsequently
taking possession, was entitled tq recover from the charterer only the
balance of the freight due after déduction of ail the advances.
Butler, Notraan, Joline & Mynderse (Frederick M. Brown, of coun-
sel), for libelant.
Clark & Veeder (Charles C. Burlingham, of counsel), for claimants.
MEECHANX BANKING CO. V. CARGO OF STEAMSHIP AFTON, 259
HOLT, District Judge. This is a libel against the cargo of the
steamship Afton and the freight moneys arising therefrom, to recover
the sum of $8,737.55. I" December, 1900, the firm of McLaren &
McLaren, of Glasgow, owners of the steamship Afton, executed a
mortgage on the steamer to the libelant, the Merchant Banking Com-
pany, Limited, of London, to secure a running account and advances to
be made thereafter. The mortgage was duly recorded at Glasgow, but
the mortgagee did not go into possession of the steamer at that time,
the mortgagors continuing in possession. In July, 1902, McLaren &
McLaren chartered the steamer, which was then on a voyage to
Shanghai, to Shewan, Tomes & Co., the claimants in this suit, for
the return voyage from China to New York. The charter party
provided that the steamer should hâve a lien on the cargo for freight ;
that a lump sum freight of ^7,750 was to be paid on delivery of the
cargo; and that sufEcient cash, not exceeding £1,500, was to be ad-
vanced to the master, if required, at the loading ports, on account of
freight, the same to be deducted on final settlement of freight. Dur-
ing the voyage, at différent ports in China, the master called for and
received from Shewan, Tomes &. Co. the agreed sum of £1,500, and
also additional advances, amounting to £1,803. 8s. 4d, the équivalent
in American currency of $8,737.55. For thèse additional advances,
receipts, signed by the master, were indorsed on the charter party,
stating that the money was received as advance freight, or, in some of
the receipts, as advance against freight, to be collected from the first
payment of the charter money. When the steamer reached New
York, the libelant, the Merchant Banking Company, Limited, took
formai possession of the steamer under the mortgage, on which there
was then due about £110,000, and which was then in default. Subse-
quently the cargo was delivered, and the freights collected by Shewan,
Tomes & Co. under an arrangement which preserved to the Merchant
Banking Company, Limited, its rights as mortgagee in possession
for the balance of the charter freight. On the final settlement between
the Merchant Banking Company, Limited, and Shewan, Tomes & Co.,
Shewan, Tomes & Co. retained for their own reimbursement said sum
of $8,737.55, which they had advanced to the master of the steamer,
and paid over the balance to the bank. This action is brought to
recover the amount so retained.
The owners of a ship, who hâve executed a mortgage upon her, so
long as the mortgagee does not go into actual possession, retain full
control of the vessel; and any contracts or obligations which are
necessary for the opération of the vessel bind the mortgagee, unless
they substantially impair his security. If a mortgagee goes into pos-
session, he is entitled to the freights thereafter coming due, whether or
not they were earned, in whole or in part, before he went into posses-
sion ; but he is entitled to such freights subject to such engagements
as the owners hâve previously entered into in respect to the voyage.
The charter party provided that the master should not be entitled to
draw more than £1,500 on the voyage against freight money, but in
the course of the voyage it became necessary for him to draw, and he
did draw, an additional £1,803. The receipts show that the agreement
260 125 FBDEJBAL BBFORTSa.
was that ït was drawn against freight, the same as the ii,SOO author-
ized by the charter. The parties to the charter had a right to modify
the provision restricting the amount to be drawn by the captain to
£1,500, and they did so; and the agreement which they entered into
in that respect before the mortgagee went into possession was, in my
opinion, binding upon the mortgagee when it took possession. Liver-
pool Marine Crédit Co. v. Wilson, 7 Ch. App. Cas. 507; Kimball v.
FarmersV etc., Bank (Super. Buff.) 11 N. Y. Supp. 730; Keith v.
-Burrows, 2 App. Cas. 636; CoUins v. Lamport, 34 L. J. Ch. 196;
Jones on Chattel Mortgages, §§ 546, 548. The cases of Brown v.
Tanner, L. R. 3 Ch. App. 597 (1868), and Tanner v. Phillips> i Asp.
Mar. Cas. 448 (1B72), on which the libelant relies, were cases in which,
in addition to the mortgage of the ship, a formai assignment of the
freights to be earned was made, which I think distinguishes those cases
in a very material respect from this case.
My conclusion is that thè libel should be dismissed, with costs.
McPAELAND v. CONSOLIDATED GAS 00.
(Circuit Court* S. D. New York. August 24, 1903.)
1. Plbadisg— Bill of Particulars— Kew York Practice.
A plalntlff, in an action for a Personal injury, required on motion of
défendant to fumlsh a bill of particulars under the statute of New York,
■where he had previougly obtained extensions of time to serve such bill.
On Motion for Bill of Particulars.
James W. Osborne, for plaintifï.
ïheron G. Strong, for défendant.
HOLT, District Judge. It is diiEcult to harmonize the cases in
which it has been held that bills of particulars should be given or
should not be given in négligence suits. They appear to hâve been
ordered much more freely in cases brought by the person injured than
in cases brought by the personal représentatives of the person injured.
I think that among the cases cited those most similar to the case at
bar hâve ordered bills of particulars to be furnished. Wilson v.
American, etc., Co., 56 App. Div. 527, 67 N. Y. Supp. 508 ; Myers v.
Albany Ry. Co., 5 App. Div. 596, 39 N. Y. Supp. 446; Field v. N. Y.
Central Ry. Co., 35 Mise. Rep. m, 71 N. Y. Supp. 220. The fact,
too, that the plaintifif repeatedly obtained extensions of time in order
to serve a bill of particulars is of considérable weight, as tending to
prove an acquiescence in the propriety of the claim that one should be
delivered.
My conclusion is that the motion should be granted.
IN BE FILEB. 261
In re FILER.
(District Court, S. D. New York. April 27, 1901.)
1. Bankrdptct— Provable Debts.
A clalm for money obtained by the bankrupt from the claimant by
fraudaient means, of such cbaracter that the claimant might waive the
tort and sue on an implied eontract, Is provable in bankruptey.
2. Sahb.
Where a bankrupt who was in the employ of a firin of brokers caused
them to purchase stocks on false and flctitious orders purporting to hâve
been given by customers, such purchases being in tact intended for his
own benefit, the firm had the right to treat him as the principal in the
transactions, and to prove the debt agalnst him In bankruptey, as one
for money pald at his request and for his use.
8. Same.
A clalm against the estate of a bankrupt for sums of money obtained
by him from the claimants, while in tbeir employ, by forging indorse-
ments on checks and cashing the same, by taking cash from the drawer,
and by inducing them to purchase stocks on false and flctitious orders,
cannot be denled allowance, as an unliquidated demand, where the
amounts taken from and paid ont by the claimants are certain.
4. Bame— Prefebences.
Where a bankrupt caused a firm of brokers to purchase stocks for his
benefit, which they held as collatéral security for the money advanced
in maklng the purchases, the sale of such stocks by them within four
months prior to the bankruptey for the purpose of liquidating his ac-
count did not create a préférence, requiring the firm to surrender the
sums received for the stocks before proving their debt in bankruptey.
In Bankruptey. On review of décision of référée allowing the
daim of Kohn & Co.
The following is the opinion of Dexter, référée (April lo, 1901) :
Kohn & Co., bankers and brokers in the city of New York, présent a
verified claim agalnst the above-named bankrupt in the sum of $80,248.21,
arlslng out of the following transactions: William B. Filer was the book-
keeper and cashler of the claimants, and as such abused the confidence
placed in him, and by varions fraudulent acts obtained moneys from his
employers, and mlsappropriated the same to his own use. The first three
items of indebtedness, amounting to $12,000, inclusive of interest, are based
upon the taking of that amount of money by means of checks of Kohn &
Co. Intrusted to the bankrupt, and paid to him upon forged indorsements;
the bankrupt concealing his thefts by false entries upon the books of ac-
count of the firm. The fourth, flfth, and sixth items of indebtedness are
based upon the taking by the bankrupt of specified amounts of money from
Kohn & Co., aggregatlng $3,696, and dlfCer from the first three items only
in the manner of taking; the money having been taken from the cash drawer
of Kohn & Co., instead of from the firm's bank account, and similarly con-
cealed by false entries In the firm's books. The seventh item of indebted-
ness is the largest part of the claim, amounting to $70,593.91, and is based
upon moneys laid out and expended for account of said bankrupt in the
purchase of stocks and bonds, which the said bankrupt caused the firm to
purchase upon the false and fraudulent prêteuse that such purchases had
been ordered by divers customers of the firm, whereas in fact no such pur-
chases had been ordered by thèse customers, but the purchases were caused
to be made by the bankrupt with the intention on his part of appropriating
to his own use the bonds and stocks, or the profits to accrue from the sub-
séquent sales thereof. It is aiso based upon services rendered in making
the purchase and sales of such stocks and bonds at the customary rates of
charge for brokers' commissions. To this proof of debt, preliminary ob-
jections hâve been flled by certain creditors upon the grounds: First, to
262 125 FHDBKAL REPORTHR.
each and every Item of sald claim on the ground that the same Is not a
debt whlch may be proved as prqvided in the United States bankruptcy law;
second, to each and every item of said clalm on the ground that the same
is unliquidatçd; third, to each and every item of sald daim on the ground
that said Kohn & Oo., alleged creditors, hâve received préférences vrhlch hâve
not been surrendered.
Khe -objection that the debts due Kohn & Co. are not provable in bank- ■
ruptcy must be overruled. The several debts are susceptible of two con-
structions: They may be treated as contracta impUed in law, or as claims
based upon a tort. It Is well settled that where a clalm arises ex dellcto,
but is also of such a character as to constitute a claim on the theory of
quasi contract, the debt is provable in bankruptcy. Thé creditor has the
élection to VFalve the tort and sue in contract. In re Hirschman, 4 Am.
Bankr. R. 715, 104 Fed. 69; In re Lazarovic, 1 Am. Bankr. R. 476. I can
add nothing to the well-eonsidered opinion In Re Hirschman.
As to the items of the account exclusive of the seventh and largest item,
it Is apparent that the proof of debt speciflcally allèges that the bankrupt
received the moneys obtained by the checks and from the cash drawer. The
claim as to thèse items is elearly based upon a claim for moneys had and
received by the bankrupt to the use of the clalmants.
As to the seventh item of indebtednessrt-that the sales were for account
of sald bankrupt — I am of the opinion that the claim speciflcally allèges a
good cause of action In the nature of contract, and is provable in bank-
ruptcy. There is a distinct allégation that the brokers laid out and ex-
pended for the account of the bankrupt divers and sundry sums for the
purchasie of divers and sundry stocks. The remalnlng portion of the claim
is merely evidential, and sets forth the manner in whlch the firm were in-
duced to purchase or siibscrlbe and pay for thèse bonds and stocks. The
objecting creditors strenuously urge that the claim as stated is purely a
cause of action for damages caused by the fraudulent représentations of the
bankrupt. I cannot accède to this contention. Thls is not a case of where
a third party makes représentations as to the flnancial responsibility and
crédit of a proposed veudee, knowlng the statements to be false. In such a
case It may be that the vendor, who parts with hls goods on the faith of
such représentations, may recover his loss from the party making the false
représentations, and sue In tort. I take It In thls case that the bankrupt
could, at the élection of the flrm, be treated as the principal. It was for
them only to make the élection of remédies. They hâve chosen to treat this
fraudulent account as made for the bankrupt's account. The fact that he
used thé names of bona flde customers of the flrm does not, In my opinion,
alter the case, any more than if he had used entlrely fictitious names. The
fraud was the Indueing cause of the transaction, but the transaction itself
wàs cléàrly as stated in their clalm, namely, an expenditure for account of
thé bankrupt. He cannot be heard to question thls disposition of the mat-
ter, as li is the one most favorable to him. . Nor can the customers whose
names were fraudulently used as a cover for the bankrupt's opérations be
prejudlced. There was no prêteuse that tbe bankrupt was the agent cf thèse
customers. He was merely an employé of their brokers, and no contractual
relations could exist towards third parties, arising from thls employment
It Is coDtended by the clalmants that in order to constitute an implied con
tract, uhder thls case, there must be an unjust enrlchment of the person
whose promise is Implied. That is unquestlonably true; but If the account
was the bankrupt's— if he took whatever profits were made, or was putting
himself in a position to reap ail the beneflt from the account, as the prin-
cipal, at an expenditure of money for hls account by Kohn & Co. — this was
an expenditure for the bankrupt's use, ànd he dlstlnctly received a beneflt
from it, as a mattér of law. The fact that the money was lost in a spécu-
lation does not detract from the character of the demand, any more than If,
when the bankrupt drew the money out of the drawer, he had lost the money
from hls pocket. It may be stated as a gênerai proposition that a plaintiffi
can recover agalnst a défendant, as for money pald to hls use, to the extent
of the claim pald by thè plalntifC whiph should hâve been pald by the de-
fendant. Keener on Quasi Contracts, p. 396 et sëq.
IN EE FILER. 263
The second objection, that the daim is net provable for the reason ttiat it
is unliquidated, must also be overruled, as, in the View which I hâve talcen
of the transaction, the claim, as presented, Is for a liquidated amount. It is
absolutely certain what is due, and how much la due. No further com-
putation or any extrinsic évidence is necessary to show what that amount
is. The measure of damages is the aetual amount of money talcen, which
amount Is stated; but, even as an unliquidated account, it could stlll be
proven in bankruptcy. Bankr. Act July 1, 1898, c. 541, § 63, subd. "b," 30
Stat 563 [U. S. Comp. St. 1901, p. 3447]; In re Rouse, 1 Am. Ba-nlir. R. 393.
The thlrd objection Is that the claim Is not provable for the reason that
Kohn & Go. hâve received préférences whlch hâve not been surrendered.
The préférence that was obtalned by the attachment mentloned in the claim
bas been expressly surrendered, but the objecting creditor contends that it
appears on the face of the sehedules annexed to the claim that Kohn & Co.
received varions sums of money from Filer on account of purchases and sales
subséquent to the date of his absconding, when they knew that he was in-
solvent, and within a few days thereafter obtalned an attachment against
hls property. Some of thèse items to which my attention bas been called
are within the period of four months prier to the filing of the pétition. It
does not seem to me that thèse varions crédits fall within the category of
payments. They appear to be sales of stocks made for the purpose of show-
ing the amount of the indebtedness due from the bankrupt — in other words,
of statlng the account. The stocks were purchased, under the theory of the
claim, for the account of the bankrupt, and held by Kohn & Co. as collatéral
to the loan of the money used in their purchase. This is the usual theory
of brokers' purchases and sales. So far as appears, the stocks came into
the possession of Kohn & Co. before the bankrupt absconded. The fact that
they were sold subsequently for the purpose of liquldatiug his account does
not croate a préférence. It was merely a change of property from one form
to another — from stock to money — and the bankrupt transferred nothing
which would enable the creditor to obtaln a greater per cent, for his debt
than any other creditor, but the sale merely determined the amount of the
debt. Of course, upon the hearing upon the merits, if évidence is offered
to controvert this prima facie claim, and to show that a préférence was
created, a proper direction may be made according to the equities of the case.
For the reasons aforesaid, I overrule the objections to the claim of Kohn
6 Co., and allow the claim as proved.
The aboyé facts, with my opinion thereon, are certifled to the learned dis-
trict judge for his décision.
Nicoll, Anable & Lindsay, for claimants Kohn & Co.
Fleischman & Fox, for objecting creditors.
BROWN, District Judge. I hâve carefully examined the authori-
ties cited in opposition to the claim of Kohn & Co., in the seventh
paragraph, and do not think them applicable. I am of the opinion
that the referee's ruling was correct, on the ground that Kohn & Co.
had the right to treat the bankrupt as the principal in the purchase
of stocks which he had induced them to purchase under false and fic-
titious orders. The bankrupt was in fact the real principal. There
was no other. The purchases were by his order, and were intended
to be for his benefit ; and, on such facts, he would be estopped to deny
that he was the real principal, and an action in assumpsit would lie
as for moneys paid at his request and for his use. Bayley v. Wilkins,
7 C. B. 886; Westropp v. Solomon, 8 C. B. 345; Smith v. Ludio,
5 C. B. (N. S.) 587 ; Brittian v. Lloyd, 14 M. & W. 762 ; Perin v.
Parker, 126 111. 201, 18 N. E. 747, 2 L. R. A. 336, 9 Am. St. Rep. 571 ;
Id., 25 111. App. 465. Such a debt is provable in bankruptcy. On
the other points, also, I think the referee's ruling is correct.
261 125 FEDEBAL BfflFOBTEK.
ÏHE ÔITT OB' PÔRTSMOUTH.
(District Court, E, D. Vlrgîpia. July 28, 1903.)
L ShippinA— Injubt of Passbnger— Kkgligent PastbninO Oï" Vessei, to
Dock.
A steam ferryboat whlioU, whlle dlseharglng passengera on a dock or
float, byreason of being insufflciently seeured swung away from the float,
leavlng-a space of several inches, Is liabte' for an Injury to a passenger,
who in attemptlng to pass from the vessel, and In the exercise of due
care^ stepped into such space. or was thrown by the lurching of the
vessel, and fell between the vessel and dock.
3. DAMAètBÔ-^PtlRSONAI, InJURT— ÀmOUNT OF AWABD.
An award of $4,000 damages made to a woman passenger, who fell
while passing from a steam ferryboat and sustalned a severe spraln of
her ankle, and also a fradttire of the coccyx, which latter injury, as
shown by the médical testimony, was pétnaanent in character, and such
as would serlously affedt thë'n'ervous system of a weak, délicate woman,
and tend to make her an invalld and nervous wreck, was leasonable.
In Admirai ty. Suit for personal injuries to passenger.
Miller & Coleman, for libelant,
T. J. Wool and McLemdre & Corbitt, for respondent.
WADDILL/ District Judge. The libelant in this case seeks to
recover damages for personal injuries sustained by her, while travel-
ing as a passenger on the ferry steamer City of Portsmouth, plying
between the cities of Norfolk and Portsmouth, by falling between the
steamer and the iloat while leaving the steamer at its berth in the city
of Portsmouth. The libelant's case, briefly, is that on the night of
the loth of June, 1902, on leaving the steamer in the usual manner,
after it was supposed to hâve been made fast, she (the libelant), exer-
cising due care, and as other passengers were leaving, "by reason of
carelessness and négligence in mooring said steamer to said float or
dock, a large opening between the said steamer and the said dock was
caused by the said steamer backing from the side of the dock for a
distance sufficient to allow her to miss her footing, and to fall between
said steamer and said dock, where she hung until dragged from her
perilous position ; and by reason of her fall between said steamship
and said dock she was permanently injured about her back, body,
lihibs, and internally." Tlie respondent, the owner of the steamer,
dénies ail négligence on their part as to the mooring of said steamer,
or that there was any opening between the steamer and the dock;
and insist that the libelant received no permanent injury to her back,
body, limbs, or internally, and that, if she did, it was due to the negH-
gënce and carelessness of the libelant, aiîd on account of no fault of
respondent.
The case turns almost entirely upon a correct détermination of the
facts, since, whatever mây be the true çriterion of duty due by the
respondent to the libelant, it caftnot be doubted, if the condition of the
passageway provided for thè exit of passengers from tlie steamer was
as claimed by libelant, that the respondent failed in its duty to exercise
proper care for her on the ocÇasidn in question. The accident was an
unusual one, as well in the manrier in which it happened as in the ex-
THE CITT OF POETSMOUTH. 265
'tent of the injury sustained by the libelant. That the libelant did
fall, and as a resuit received serious injury, cannot be questioned.
To maintain the facts contended for by her, four eyewitnesses to the
occurrence were examined, three of whom were in no manner in-
terested, strangers to the libelant, who happened to be traveling on
the steamer, saw her fall, and pulled her up from between the float
and steamer; and two of them aided in taking her home, a short
distance away. Thèse witnesses appear to be entirely respectable
and intelligent, and by their manner of testifying and their gênerai
demeanor would carry conviction to the mind of any impartial person
as to the truthfulness of their several statements. They, in efïect,
say, that the libelant vvas leaving the steamer, the samehaving been
apparently made fast, and passengers invited to leave, quite a number
of pasengers having passed o£E before her ; that they observed libelant
suddenly fall, and sprang to her assistance, raised her up, and helped
her ofï the boat, one or more of them standing at the time with one
foot on the steamer, and the other on the float ; and they describe the
opening as sufîiciently wide to allow the libelant's limb to pass through
as claimed by her. One of them also testified that while the libelant
was being pulled out of the space between the boat and float, he saw
the man at the wheel pulling on the wheel, puUing the boat up to the
float, and that there was then an opening 8 or lo inches wide. The
libelant further testified that as she was stepping from the steamer
there was a sudden lurch of the boat from the dock, which threw her
violently back, her limb slipping between the steamer and the float,
striking her back against the boat, by which her body was greatly
bruised and her ankle sprained; that she did not, for the moment,
suppose that she was seriously hurt, though she felt faint when putting
her foot to the floor; and, although it was suggested that she get a
carriage, she insisted on walking to her home, and was assisted there ;
and that, though suffering great pain, she did not realize for several
days that she was seriously hurt. She is sustained in her statement as
to the steamer's lurching by at least one witness. The respondent
did not know of the accident at the time, and, indeed, heard nothing
of it until its ofificers saw an account of it in the papers on the next
day. Hence, although quite a number of witnesses were examined
for respondent, including the master of the steamer and two deck-
hands on duty at the time, the latter witnesses only testified generally
as to the landing of the boat, as they did not see or know of the oc-
currence at the time and until they saw it in the papers the following
evening. Two witnesses were examined by the respondent, both of
whom testified to the fall of Mrs. Carr, and described the manner in
which she fell differently from the libelant's witnesses, and indicated
that she stumbled and fell, as distinguished from falling between the
float and the boat; and the évidence of the master of the steamer
tends to establish that the float did not corne down to the level of the
deck of the steamer, so as to form an even surface, but that the
float was several inches higher than the steamer. Whatever may be
the précise manner in which the libelant fell, certain it is that the space
between the float and the steamer should not hâve been left in such
condition as that a passenger stepping from one to the other could
266 . 126 FBDERaii EEPOBTER..
fall betwéen the two, and the fléat itsèlf should iiot havé been left
• in stjch -condition that passengers woùW fall over it on leaving the
steamer. The évidence of respondent's witnesses» including the
ttiaster of the steamer, is not inconsistent with the fact of the lurch-
ing of the steamer, as claimed by the libelant ; as the master explains
in his évidence that, after the gâtés had been opened for passengers
to leave the steamer, the deckhand went to his wheel, and stayed there,
trying toheave in the isteamer, and it looked to him as ifhe could not
get it in ; and, further, that he (the master) was working the steamfer
ahead ufttil abbut 150 passengers had gotten ofï. From the whole
case, therefore, the court is satisfied, from the overwhelming pré-
pondérance of the évidence, that there was, either from the lurching
of the steamer, or the failure properly to moor the same, a space be-
twéen the steamer and the float, sufEcient for the libelant to step be-
twéen the two, and in which she did step, while passing from the
steamer, and sustained the injuries sued for.
The character of the injury sustained by the libelant is unusual, as
before stated. It was at first: supposed she had only sprained her
ankle, and probably wreriched her back ; but it subsequently developed
that the sprain of the ankle was ôf a serious character, necessitating
a plaster cast, and that the injury to her back, aside from the bruises
and wrench, consisted of a fracture of the coccyx — the coccyx being
described by one physician as the rudimentary tip of the spinal col-
umn, and a fracture of which, another of the physicians states, gener-
ally màkés an invalid for life, and that it usually sets up a painful con-
dition that lasts for years, making a nervous wreck of the party
afflicted, and tends, in dase of a female, to incapacitate her for future
child-bearing ; and that the treatment df such an injury was difficult,
and cotild only be entirely relieved by an opération, which was serious
in its character. The évidence further tended to show' that the libel-
ant was à nervous, délicate woman, predisposed to fainting attacks,
and therefore one susceptible to an injury of this nature; that the
injuries were of a kind that would afifect her nervous System, were
not easily discernible, and could, not be noticed on some occasions
withoUt a-ctual examinatibn-. Indeed, two highly reputable physicians
introduced by libelant testifîed that they could not. hâve judged of
the injuries at allwithout seeing for themselves, and one of them testi-
fied that at first,, by reason of the appearance of the libelant, before he
had made an examination, he wondered if the case might not be one
lOf blaçkmail; -but that her true condition by examination was, and
rcould easily be, ascertained by a skilled physician.
;; The character and extent of the injury wàs theimore beclouded by
: the fact that libelant's régular attending physician imrnediately after
thC: accident had the mifefortune, some six weeksafteif the occurrence,
to be assassinated by a crâzy patient* which deprived us of his evi-
dçnce, It sufficiently appeared thaty within a few dàys after the libel-
lant had fallen, the sprained ankle was placed in a plaster of paris cast,
and that for some six weeks thereafter she was confined to bed, suf-
fering great pain; and some two days before the death of the doctor
he removéd the cast, after which time another physifcian was called
in, who testified as to»her condition from thence on, as did members
THE CITY 01? ÇORTSMOUTH. 267
of the family and friends, ail of whom described the libelant as a gi-eat
sufferer at times, though on other occasions she was apparently well
and free from pain. It is clearly évident that the injuries tothe libel-
ant were painful and serious in character, and for which she is entitled
to recover in this case.
The respondent at the trial introduced two witnesses — one who
testified that the libelant at the time she received the injury was under
the influence of liquor ; and the other that the injury from which she
suffered was not caused by the accident on the steamer, but by reason
of a fall upon a chair in her home on the Sunday after the accident.
In référence to each of thèse défenses it may be said that they were
sufHciently important, if true, to hâve justified the respondent in
setting them up in its pleadings ; and, because of the failure to do so,
the court can but view them in the light rather of an afterthought
than otherwise, and it should not readily be assumed that such im-
portant omissions would hâve been made in the pleadings if there had
Ijeen any real évidence to support them. Thomas v. Winne (C. C. A.)
122 Fed. 396, 397. There is no évidence to support the suggestion
of drunkenness, and there is nothing to give color to the charge
further than that the libelant, on the night of the accident, while tak-
ing supper at a restaurant in the city of Norfolk, did take one, and
possibly two, glasses of intoxicants; the testimony being in conflict
whether there was one or two, and as to the character of what was
drank. The imprudence of this act on the part of the libelant may be
conceded, and it is to be regretted that in modem life the custom has
become too prévalent for reputable females to drink spirituous liquors
in public places. Such conduct is always hkely to be the subject of
unfavorable criticism, and the présent case is a striking illustration
of the unfortunate conséquences likely to flow therefrom. But the
idea of drunkenness on this occasion is entirely dispelled. The évi-
dence of those présent at the restaurant, as well as persons who saw
the libelant on the steamer, aided her when she fell, and assisted her
home, ail show the utter lack of foundation for this claim. Indeed,
the respondent's witnesses so entirely vindicate her from this charge,
that the fact of making the same tends rather to show that th^ pur-
pose was to otherwise reflect upon the libelant, rather than to main-
tain the défense of drunkenness.
So far as the injury by the fall on the chair is concerned, it is suf-
ficient to say that the évidence likewise fails to support this conten-
tion. While it is true the physician for the respondent saw the libel-
ant on several occasions at and about the time of the accident, and un-
der more or less embarrassing circumstances, as he admits, says that
the libelant on the Sunday night after the accident, when he called
to see her on account of an attack of hysteria, told him that she had
fallen in a paroxysm of pain, and hit her back on a chair, and hurt
her spine, this the libelant positively dénies, and explains that when
he came she was under the influence of morphine, and fainting with
pain ; that she informed him she was suffering terribly with her back,
in exactly the place she was struck on the ferry ; and that, instead of
saying what the doctor said, she said she was trying to pull a chair to
sit down — her limb then being in the plaster of paris cast — when
263 125 rBDBBAL BBFOBTBR.
she hurt herself again. If the statement, as testified to by the re-
spondent's physician, that she had fallen and struck ber back on a chair
and hurt her spine, were true, it by no means follows that she then
sustàined the severe injury to her coccyx, or that she had not previ-
ously sustàined the same; on the contrary, it is quite consistent that
the original injury had occurred, and hencie the serious effect of the
shght fall or jar from the chair. It is also apparent from the phy-
sician's évidence that he had not, previous to the latter fall, made any
examination that would tend to throw light upon this particular in-
jury, and that it was not until the Tuesday following the fall from the
chair that he made such examination, and as to the making of which,
taking into account the peculiarly délicate character of the examina-
tion, and what had occurred in référence to the doctor's previous con-
nection with the case, and what took place at the time as to whether
or not he should make the examination, it cannot be said that the doc-
tor is free from just criticism in making the examination at ail under
the circumstances. Aside from the improbability of the libelant sus-
taining the injury to her coccyx by a fall on the chair, the fact that
this défense is based upon the alleged statement of the libelant, made
when seriously sufïering as the resuit of the injury sued for, should
not lead the court quickly to adopt that theory, which appears not
to hâve been of sufficient importance to be set up in pleadings (Inland
& Sea-Board Coasting Go. v. Toison, 139 U. S. 551, 553, 554, " Sup.
Ct. 653, 35 L. Ed. 270) ; particularly as the doctor is most positively
contradicted both by the libelant and her. husband — the latter of whom
heard what occurred between them — as to some of the important fea-
tures of thecase.
The character of the injury has been quite fully considered, and it
only remains to détermine what damages should be allowed to the
libelant. This is a difficult question, one largely in the discrétion of
the court, and of peculiar delicacy in this case. Injuries afïecting the
nervous System are more or less serious; and their extent difficult of
ascertainmerit. . They are liable to be of uncertain duration and in-
tensity; and, in short, it is impossible to see and foretell just what will
be the resuit in such cases. With a woman of nervous tempérament,
and with injuries of the character sustàined in this case, it may be
treated as reasonably certain that she will not quickly recover from
them. Médical experts testified that "the injuries sustàined are ail
permanent in character, and from w'hich the libelant will sufïer ail of
her life, and tend to make her an invalid and a nervous wreck. An
award, therefôre, of $4,000, is thought only to be reasonable, and the
same will be allowed accordingly.
WHITriELD V. ^TNA LIFE INS. CO. 269
WHITFIELD V. ^TNA LIFE INS. 00.
(Cîircult Court, W. D. Missouri, W. D. November 2, 1903.)
No. 2,698.
L LiPK Insurance— Suicide— Epfect op Missouri Statute.
Rev. St. Mo. 1899, § 7896, which provides that "in ail suits upon poli-
cies of insurance on life liereafter issued by any company doing business
in tliis State, to a citizen of thls state, it shall be no défense that tbe
insured committed suicide, unless it sliall be shown to the satisfaction
of the court or jury trylng the cause that the insured contomplated
suicide at the time he made his application for the policy, and any stipu-
lation In the policy to the contrary shall be void," does not prohibit the
parties from contracting in an accident policy that a smaller amount shall
be payable thereon in case of the death of the insured from suicide thau
the amount expressed in the caption of the policy, and which is agreed
to be paid in case of death from an accidentai and involuntary cause;
and a provision in such a policy, nominally for $5,000 in case of death
resulting from accident, that, if death shall resuit from injuries volunta-
rlly Inflicted, the recovery shall be lùnited to $500, Is valid and enforce-
able.
Action on Accident Insurance Policy to Recover for Death of the
Insured.
Frank Hagerman, for plaintiflf.
Jones, Jones & Hocker and L. C. Boyle, for défendant.
PHILIPS, District Judge. The question to be decided is whether,
upon the agreed statement of facts, the plaintiff is entitled to recover
tiîe sum of $5,ooo, the principal sum designated at the head of the in-
surance policy, or the sum of $500, specified in the contract as the
sum recoverable where the death of the assured resulted from in-
juries voluntarily inflicted upon himself by a pistol shot. The déci-
sion turns upon the proper construction of section 7896 of the Revised
Statutes of Missouri of 1899, which déclares that:
"In ail suits upon policies of insurance on life hereafter issued by any
Company doing business in this state, to a citizen of this state, it shall be
no défense that the Insured committed suicide, unless it shall be shown to
the satisfaction of the court or jury trylng tho cause, that the insured con-
tomplated suicide at the time he made his application for the policy, and any
stipulation In the policy to the contrary shall be void."
It is conceded, in the absence of this express statutory provision,
that, at common law, suicide, voluntarily inflicted by the assured, would
constitute a complète défense to the action on the poUcy contract.
The statute in question simply déclares that "it shall be no défense
that the insured committed suicide," in a suit upon such policy. In
Logan V. Fidelity & Casualty Company, 146 Mo. 114, 47 S. W. 948,
II 1. Suicide as a défense to action on life insurance policy, see notes to
Insurance Co. v. Florida, 16 C. C. A. 623; Casualty Co. v. Egbert, 28 C. O.
A. 284.
27Q (i 025 FBDBEAL BBPORTEB.
the Suprême Court held that said section of the statute applies to an
accident policy on life; as well as to an ordinary life insurance policy.
As this statute is in dérogation of the common-law riglit of défense,
it is not to be extended beyônd the letter and spirit of the '• statute.
It does not undertake to déclare that under an accident policy, involv-
ing a great variety of accidents resulting in death, as does the policy
in question, parties may, not stipulate for the payment of a specified
sum in the event of deàth resulting from suicide. It simply déclares
that the fact of suicide shall constitute no défense to the suit. It is
to be presurtied that the term "défense" was employed by the Législa-
ture in its ordinary and natural import. By express provision of the
State statute (section 4160), it is declared that, in the construction
of statutes of this state, unless such construction be plainly répugnant
to the intent of the Législature or the context of the same statute,
"wôrds and phrases shall be taken in their plain or ordinary or usual
sensë ; bufc.technical words and phrases haying a peculiar and appro-
priate meaning in law shall be understood according to their technical
import." In law, "défense" is "that which is offered and alleged by
the party proceeded agàinst in an action or suit as a reason in law or
fact why the plaintiff should not recover or establish what he seeks ;
what is put forward to defeat an action." Black's Law Dictionary.
"The déniai of the truth or validity of the complaint. A gênerai as-
sertion that the plaintiff has no ground of action." Bouvier's Law
Dictionary.
To say that when the defefldant insists that, on the face of the very
contract sued on, its liability in case of suicide is limited to $500, is
some défense, and therefore is in contravention of the term "it shall
be no défense," is, with ail due respect, to juggle with mère words,
without regard to the meaning. The term "it shall be no défense" is
grammatically the équivalent of "it shall not be a défense." It means
no more and no less. In law, it means that the given fact of death
by suicide shall not bar an action on the policy. The statute does not
undertake to say that parties making a contract of insurance shall not
agrée upon the amount or compensation to be paid by the insurance
Company in the event of death resulting from suicide. Why parties
to such contract may not agrée upon a stipulated amount to be paid
in case of death resulting from suicide, as well as death resulting from
an accident on a railroad car, or occurring in a burning building
(which under this policy is made double the amount of the principal
liability), is not apparent. As said by the court in Baltimore R. v.
Voight, 176 U. S. 498, 20 Sup. Ct. 385, 44 L. Ed. 560:
"The right of prlvate contract is no small part of the liberty of the citizen,
and that the usual and most Important function of courts of justice is rather
to malntain and enforce cdntracts, than to enable parties thereto to escape
from their obligation on the pretext of public policy, unless it clearly appear
that tbey eontravene public rlght or the public welfare."
"No statute is to be construed as altéring the commbn law, farther
than its words import. It is not to be construed as making any inno-
vation upon the common law which it does not fairly express." Shaw
V. Railroad Company, lOi U. S. 565, 25 L. Ed. 892.
WHITriEJ.i) V. iETNA LIFE INS. 00. 271
In Hadden V. CoIIector, 5 Wall. 107-111, 18 L. Ed. 518, the court
said :
"What is termed the policy of the government with référence to any par-
ticular législation is generally a very uncertain thing, upon which ail sorts
of opinions, each variant from the other, may be formed by différent persons.
It is a ground much too unstable upon which to rest the judgment of the
court in the interprétation of statutes."
So in Scott V. Reid, 10 Pet. 524-527, 9 L. Ed. 519, the court said:
"Where the language of the act is expliclt, there is great danger in de-
parting from the words used, to glve an effect to the law which may be sup-
posed to hâve been designed by the Législature. • • * It is not for the
court to say, where the language of the statute is clear, that It shall be so
constrUed as to embrace cases, because no good reason can be assigned why
they were excluded from its provisions."
The only hmitation in the language of the statute in question is
that, in case of death resulting from suicide, it shall constitute no dé-
fense against liabilit}' on the policy ; that is to say, it shall not defeat
a right of recovery to the extent of the sum stipulated for in the pol-
icy. The innovation, in short, made by the statute, was to eut ofï a
défense based upon the fact that the assured committed suicide, with-
out undertaking to interfère with the right of contract between par-
ties sui juris as to the extent of liability in case of death resulting from
the spécifie cause.
The purpose of fixing in the caption of the poHcy a principal liabil-
ity of $5,000 becomes évident, under a policy like the one in question,
which provides that, in case of certain physical disabilities resulting
from accidentai causes, there shall be a specified amount per week.
Under such provision, if there were no principal liability expressed,
as the disability would be continuous, as in case of the loss of a hand
or foot or an eye, the recovery might run on without limit during the
life of the insured, and in the aggregate far exceed the sum of $5,000,
the principal sum.
The Suprême Court of this state has not construed the statute in
question in the particular hère involved. The Logan Case, supra,
does not bind or control this court, except in so far as the question
involved in that case was determined by the Suprême Court, which
was simply whether or not the section of the statute above quoted
applies to the instance of death by suicide on an accident policy, as
well as to other life Insurance policies. Under the well-recognized
rule that the language employed by courts in construing statutes can
hâve no binding efïect in other litigation, beyond the essential matter
considered and determined in the former case, any discussion by the
court in the Logan Case must be restrained to the fitness of the mat-
ter under considération.
The décision of the Court of Appeals of this state in Keller v.
Travelers' Insurance Company, 58 Mo. App. 557, is not binding upon
this court, as it is not a court of the highest jurisdiction in the state.
It is not maintainable that the statute in question establishes any
public policy of the state, beyond its expression ; that is, that suicide
shall constitute no défense against liability of the company on an ac-
272 125 PBDBRAt RBPOETBB.
cident însurance policy. As aiready suggested, the statute does not
undertake to' déclare that an insurance company may not issue a
policy of insurance by which the parties agrée, in case of death re-
sulting frora suicide, what the aaiount of recovery shall be. I cannot
perceive why the Législature should deem it contrary to the public
policy of the state to permit the insured to agrée with the insurance
company by contract that, in the event of death resulting from a vol-
untary act of suicide, what anaount should be paid by the insurer.
Looking at the language of the statute, and taken in its légal, tech-
îiical sensé, in my humble opiiiion nothing more was intended than
that, in view of the fact that insurance companies under like policies
had successfully interposed as a complète défense against any liability
that the insured had taken his own Hfe; hereafter no such défense
should avail to defeat a recovery. As the Législature has gone no
further in the assertion of the state policy, the courts ought not to
undertake by mère judicjal assertion to extend the opération of the
statute.
In reply to the suggestion that the foregoing construction of the
statute would authorize a practieal évasion of its spirit, by recogniz-
iflg the right of the coutracting parties to limit the amount of re-
covery to $1, it should be enough to say that illustrations are often
dangerous in the construction of statutés. It is sufficient for the court
to décide the particular case on trial. It is hardly conceivable that a
party aware of his rights under the statute — ^and the law présumes him
to be cognizant thereof— would consent to accept as compensation
for such loss the sum of $i ; and, if he, should, it would be for the
court to décide whether such inconsequential sum was not a prac-
tieal évasion of the spirit of the statute. The sum of $500, provided
for in this case, is a substantial sum; and as the pleading of the con-
tract in question, voluntarily entered into by the parties, goes merely
to the question of the amount of the recovery, and not to defeat a
recovery, my conclusion is that the plaintiff is only entitled to recover
the sum of $500.
WASHBUBN-CEOSBT CO. V. WILLIAM JOHNSTON <fe CO. 2(3
WASHBTJRN-OROSBT CO. T. WILLIAM JOHNSTON & CO., Limited.
(Circuit Court of Appeals, First Circuit October 13, 1903,)
No. 466.
1, Appeal— IlEvrKw— Ekroe not Appkctins Restjlt.
The liability of a défendant, a cairier, for tlie loss of goods by flre,
depended on its négligence after their receipt. Tlie jury were Instructed
that, as matter of law, under the évidence, tUere had been a dellvery to
It of a portion of the goods sued for; and the évidence showed that the
goods were ail together, and the question of négligence was the same as
to ail. There was a gênerai verdict for défendant. Helâ, that such ver-
dict was necessarily based on a finding that défendant was not négligent,
and that any error in the nilings or instructions on the question of the
dellvery of the remaining portion of the goods was without préjudice to
plaintiff.
2. Shipping — Exemptions bv Bill, of Lading — Bukden dp Proop.
Where bills of lading exempted the carrier from liability for loss or
damage to the goods while on wharf, awaiting shipment, by flre or flood
"not happening through the fault or négligence" of the carrier, to entitle
the shipper to recover for such a loss he has the burden of proving that
it occurred through the carrier's fault or négligence.
8. Bamb— Construction dp Bill of Lading.
A clause in a bill of lading providing that merehandise on wharf,
awaiting shipment or dellvery, shall be at shipper' s risk of loss or damage
by fire or lîood, must be given the meaning the language plainly expresses,
and is applicable where the goods were burned after being placed on the
•wharf, but before shipment.
In Error to the Circuit Court of the United States for the District
of Massachusetts.
Henry M. Rogers and John Lowell, for plaintifif in error.
Addison C. Burnham (Carver & Blodgett, on the brief), for défend-
ant in error.
Before COLT, Circuit Judge, and BROWN and LOWELL, Dis-
trict Judges.
BROWN, District Judge. This is a writ of error to review the rul-
îngs of the Circuit Court in an action at law for the recovery of the
value of certain flour shipped at Minneapolis on what are known as
the "Western Transit Company bills of lading." The goods were "to
be carried to the port of East Boston and thence by Johnston Une of
British steamships to the port of London, England." They were de-
stroyed by fire on September 4, 1895, at Pier i of the Boston & Al-
bany Railroad at East Boston, Mass.
Clause 9 of the bills of lading is as foUows :
"Also, that merehandise on wharf awaiting shipment or dellvery be at
shipper's risk of loss or damage by fire and/oj flood, not happening through
the fault or négligence of the owner, master, agent, or manager of the vessel."
The jury were instructed that, upon the évidence, there had been
a dellvery to the défendant carrier of 1,500 sacks of flour. The ques-
tion whether there had been a delivery of the remainder of the flour
(10,300 sacks) was submitted to the jury.
If 2. See Carriers, vol. 9, Cent. Dig. § 725.
125 F.— 18
274 ■'•■'"' " " 125'FBtiBRii;- reporter/' ■'"■'■■"■■■'■ ■
Various ç^i^eptions were t^^eo by the plaintiff f p the ruiings of tHe
court OJl thë question of dèlivery, but thèse are immaterial, and do
not require considération, since we are of the opinion that the record
discloses a gênerai verdict in the defendant's favor on the issue of
négligence.
As there was a direction thât 1,500 sacks had been delivered, as
thèse and the' sacks whose dèlivery was in dispute were , similarly
situated on the pier, and as the évidence as to négligence related to
the entire lot, without distinction between the 1,500 sacks and the
10,300 sacks, the verdict was a direct finding that the défendant was
not proved to hâve been négligent as to the 1,500 sacks which had
been delivered; and this finding as to a part of an entire lot of goods
similarly placed shows conclusivèly that the plaintiff could not hâve
been harmed by any ruiings as to the dalivery of the 10,300 sacks.
Whether the jury found in the plaintifï's favor ôh the question of
the dèlivery of the 10,300 sacks of lîour does not appear from the
record. If they did, this availed the plaintifï nothing, since the jury
ftiuSt also hâve found that the défendant was not négligent. If they
did not, the plaintifï was nOt harmed by any ruiings which assisted
in this resuit, for, had the finding been the other way, the défendant
must still hâve prevailed on the issue of négligence. Tweed's Case,
16 Wall. 505, 517, 21 L. Ed. 389; Brobst v. Brock, 10 Wall. 519,
528, 19 L. Edl' 1002 ; Walker v. Fitchburg, 102 Mass. 407.
A further assignment of error is:
"That sald court erred In charging the Jury that, to récpver In this suit,
the plaintiff must show by the burden of the case that this loss was dcca-
sioned by the ne^gence of the défendant"
We are of the opinion tliat the instruction is supported by the
weight of authority. Transportation Co. v. Downer, 11 Wall. 129,
20 £. Ed. 160; Railroad Company v. Reeves, 10 Wall. 176, 189, 190,
19 L. Ed. 909; Clark v. Barnwell, 12 How. 272, 13 L. Ed. 985; Crow-
ell v. Union Oil Co., 107 Fed. 302, 46 C. C. A. 296.
While in the présent case the exemption is of "loss or damage
by fire ^^/ài' ûooà, not happetliiig through the'fault or négligence
of the owner, niaster, agent, or manager of the vessel," and in Trans-
portation Co.-v. Downer the exemption was of "dangers of Iake navi-
gation," wearei,of the opinion thât the latter case cannot be distin-
guished by the fact that the présent exception contains the express
wôrds, "not happening through thè fault or négligence of the owner,"
etc. A gênerai exemption of fire, as a matter of construction, is lim-
ited to cases not happening through négligence. Therefore there
is no substantial difïerence between a clause in which the limitation
is impliedby; légal rules of çdristrùction, and a clause m which the
limitation appeàfs in express iahgUage. Bank of Kèntucky v. Adams
Express Cov,!93 U. S. 174, i8l> 183, 184, 186, 23 L. Ed. 872; Cali-
fornia Ins. Co. v. Union Compress Co., 133 U. S. 387, 415, 10 Sup.
Ct, 365, 33 L,. Ed. 730; Compania de Navigacion Ea Flécha v.
Brauer, 168 U. S. 104, 123, 124, 18 Sup. Ct. 12, 42 E. Ed. 398.
We are also of the opinion that the court properly refused the re-
quest for an instruction that clause 9 of the bill of lading is inopera-
FIDELTTT TRUST CG. V. NEVv" TOKK FINANCE CO. 2iU
tive and void as applied to the facts cf this case. The contention tliat
this clause is applicable only to water-borne goods is inconsistent
with its express terms, and that the merchandise was on the wharf
awaiting shipment is not disputed. We see no justification for con-
struing this clause as applicable only to merchandise held by the
steamship company as warehouseman. Such is not the import of the
language, according to its natural and usual interprétation.
Upon the whole case, we find no error of the Circuit Court which
calls for a reversai of the judgment.
The judgment of the Circuit Court is affirmed, the défendant in
errer to recover costs in this court.
FIDELITT TRUST CO. v. NEW YORK FINANCE 00.
(Circuit Court of Appeals, Tliird Circuit. September 15, 1903.)
No. 25.
Trusts— Unsuccessful Attempt by Settlok to Rbvoke— Rights of Ched-
ITOBS.
Wliere an active trust created by a voluntary conveyance of property
to a trustée by a deed which gives future bénéficiai Interests in the prin-
cipal of the fund to others than the settlor, although reserving to him a
présent interest, has been sustained as valid and Irrévocable by the
Suprême Court of the state in a direct attack thereon by the settlor, one
who became a creditor of the settlor long after the deed took effect, in
the absence of évidence of fraud in the création of the trust, cannot take
the corpus of the trust fund in exécution through garnishment proceed-
Ings In satisfaction of a judgment founded on such subséquent debt, but
can subject to the payment of his judgment only the income reaerved
and payable to the settlor.
S. Gabnishmbnt— RiGHTS AND Status OF Creditob.
An exécution attachment against a garnishee has no greater effect than
to place the attaching creditor in the same relation to the garnishee as
that previously occupied by the judgment debtor.
8. Same— Défenses by Gabnisheb— Gaknishment of Tbustee.
In garnishment proceedings against a trustée, vested with the légal
title to the trust property and chargea with active duties with respect
thereto, to subject the corpus of the property. In which beneficiaries other
than the settlor hâve an interest, to the payment of a judgment against
the settlor, the garnishee may set up any défense, légal or équitable,
which it might make against the settlor, and it is compétent for it to show
that the judgment was obtalned through collusion between the parties
for the purpose of defeating the trust
In Error to the Circuit Court of the United States for the Eastem
District of Pennsylvania.
Wm. M. Stewart, Jr., and R. C. Dale, for plaintîfï in error.
Russell Duane, for défendant in error.
Before ACHESON, Circuit Judge, and BUFFINGTON and
KIRKPATRICK, District Judges.
ACHESON, Circuit Judge. On the 26th day of June, 1895, by
deed executed on that date and duly recorded at Philadelphia, George
Van Hook Potter transferred to the Fidelity Trust Company (hère
the plaintiflf in error) certain mortgages and other securities, of the
276 125 FEDERAL REPORTE n.
value of $66,550, in trust to invest and reinvest Ihe same, to collect
and receive tlie income therefrom, and pay the net income quarterly
to the said George Van Hook Potter during his life, so that the same
should not be assigned or anticipated by him, nor be subject to or
liable for his debts, and without liability to exécution, attachment, or
légal process of any kind ; and in trust on his death to pay the prin-
cipal to such persons as he might by will appoint, and, in default of
such appoîntment, to his issue then living, "and should there be then
living no issue of the said George Van Hook Potter, then to pay,
transfer and set over the principal of the said trust estate to Marie B.
Potter and Blanche Van Hook Potter, in equal shares." By this
deed George Van Hook Potter, with respect to the sum of $12,000,
reserved the right, by writing under his hand and seal, to alter and
revoke the trusts thereby declared ; but it was expressly stipulated
that, except as to such sum of $12,000, the trust thereby created
should be irrévocable* The trust thus imposed was duly accepted
by the Fidelity Trust Company on the date of the deed. As to the
sum of $12,000, Potter exercised his power of revocation, and that
money was paid to him in divers amounts between the date of the
deed and July 15, 1897. By deed poil bearing date June 9, 1899,
Potter undertook to revoke and annul the deed of trust above men-
tioned. He then filed a bill in equity in one of the courts of common
pleas of Philadelphia to hâve the deed of trust declared revoked.
The court, however, being of opinion that the settlement effected
by the deed of June 26, 1895, was not and could not be revoked, dis-
missed the bill. From that decree Potter took an appeal to the
Suprême Court of Pennsylvania. That court afSrmed the decree
dismissing the bill, holding that the trust in question was valid and
irrévocable. Potter v. Fidelity, etc., Co., 199 Pa. 360, 49 Atl. 85. In
its opinion, delivered on May 13, 1901, the Suprême Court of Penn-
sylvania said:
"There was no évidence of fraud, Imposition, or mlstalve, and there îs no
room for doubt that the deed, when executed, expressed the délibéra te in-
tention of the settlor. AlthoUgh a young mail just cpming into possession
of his estate, he was fully capable of undèrstanding what he did, the reason
for it, and its efCpct. He took ample time, after the snbjéct of the création
of a trust was flrst suggested to him, to consider It before acting, and he had
the advlce of his mother and of his attorney. Clearly there was no misappre-
hensipn of facts, nor of the légal efCeCt oï the deed. The trust was an active
one, and by its express terms irrévocable, and there ha;s been no f allure of the
purpose of the settlement. * * * The rule is that a voluntary settlement
will be susfàined and enforced In favor of the beneflciaries, nnless it ia
shown that it was procured by fraud or imposition, or executed under a mis-
apprehenslon of the facts or of the law:. This case is within the rule."
On January 29, 1902, George Van Hook Potter executed, at Phila-
delphia, a voluntary confession of judgment to the Nevv York Finance
Company (hère the défendant in error);i^or the sum of $60,000, under
which judgment was entered in the Suprême Court of the state of
New York, for the county of New York, on the 3ist day of January,
1902. Thé Confession of judgment contains the following statement
over the signature of the defçndapt, Potter :
"This confession of, judgment is .for a debt now Justly due to the said
plaintiff from me, for money loaned to the said défendant at various limes.
FIDELITY TRUST CO. V. NEW YORK FINANCE CO. 2t l
to wit: Seven thousand ($7,000) dollars on June 20, 1899; the furtlier sum
of seven thousand ($7,000) dollars on June 19, 1900; the sum of forty thou-
sand ($40,000) on January 28, 1902; and the agreed sum of six thousand
($6,000) dollars for services rendered since June 20, 1899, to date."
Upon this judgment an action was brought in the court belovv by
the New York Finance Company against George Van Hook Potter,
and a judgment for $60,828.89 obtained against him on April 22,
igo2, for want of an affidavit of défense. On the same day an at-
tachment exécution on the judgment was issued summoning the Fi-
deHty Trust Company as garnishee.
Upon the trial of the issue iij the attachment proceeding, the
garnishee offered to show by specified évidence that the confession
of judgment by George Van Hook Potter, the défendant, to the
New York Finance Company, the plaintifï, entered in the Suprême
Court of the state of New York, the record of which forms the basis
of the judgment upon which the attachment issued, was obtained by
collusion between Potter and the New York Finance Company, with
the fraudulent intent upon the part of Potter to accomplish in this
indirect manner the revocation of the deed of trust executed by him
to the Fidelity Trust Company, which deed had been declared ir-
révocable by the Suprême Court of Pennsylvania, but the ofïer was
overruled. By direction of the court the jury found a gênerai ver-
dict for the plaintifï, and that the plaintifif hâve satisfaction of its
judgment for $60,828.89 against George Van Hook Potter out of
the securities held by the Fidelity Trust Company, as trustée under
the trust deed of George Van Hook Potter, subject to the point of
law reserved by the court, viz., "whether, under ail the évidence, the
court should hâve directed a verdict for the plaintifï for any less sum,
or a verdict for the défendant." Subsequently the court entered judg-
ment for the plaintifï upon the verdict.
As we hâve seen, in a direct attack by the settlor, Potter, upon
this trust, the Suprême Court of Pennsylvania sustained the deed of
trust, adjudging it to be valid and irrévocable. The fundamental
question then arising upon the facts appearing in this record is wheth-
er one who became a creditor of the settlor long after the trust deed
went into efifect, in the absence of any évidence of fraud, can take
in exécution, in satisfaction of a judgment founded on such subsé-
quent debt, the corpus of the trust fund, when the trust deed gives
future bénéficiai interests in that fund to persons other than the
settlor. This question, we think, must be answered negatively, upon
principle and authority. In Re Greenfîeld's Estate, 14 Pa. 489, 501,
the Suprême Court of Pennsylvania, speaking by Mr. Justice Bell,
said:
"Settlements lllîe that hefore us, reservlng a présent interest in the creator
of them, and carrying a future heneflt or bounty to other designated parties,
are very usual. If fairly made and carrled into efCect, unlnflueneed by fraud
or clrcumvention, they cannot be subsequently impeached, as is shown,
among other déterminations, by our case of Reese v. Ruth, 13 Serg. & E. 4.34."
It is now the firmly established doctrine in Pennsylvania that such
a voluntary settlemént is not impeachable by subséquent creditors
not at the time of the settlemént contemplated, and against whom no
278 125 FEIDEIRAL BBFOBTEB.
fraud was intended. Snyder v. Christ, 39 Pa. 499; Harlan v. Mag-
laughlih, 96 Pa. 293 ; Best v. Smith, 193 Pa. 89, 92, 44 Atl. 329, 74
Am. St. Rep.. 676. In Fellow's Appeal, 93 Pa. 470, 475, the court said :
"The title of a trustée under a deed of trust Is complète and Irrévocable
by the settlor, although the transaction be purely voluntary. Hill on Trus-
tées, 82. Nor doea the fact that the grantor reserved an Interest durlng life
In the proceeds of the property, and gave a future beneflt to other persons
named, glve an Implled rlght of revocation, Eeese et al. v. Ruth, 13 Serg. &
B. 434; Eckman v. Eckman, 68 Pa. 460. It controverts no rule nor policy
of law, but exécutes the Intention of the grantor. Lewln on Trusts, 137."
în Pennsylvania it is no longer open to question that, if the in-
tention of the grantor at the time he delivers a voluntary deed of
trust is to part with the légal title, the trust, in the absence of fraud,
will be enforced in favor of the beneficiaries, even though their enjoy-
ment of the estate is postponed until after the death of the grantor
in the deed, andi notwithstanding he has reserved to himself an inter-
est for life jn the trust estate. Wilson v. Anderson, 186 Pa. 531, 40
Atl. 1096, 44 I/. R. A. 542; Rynd v. Baker, 193 Pa. 486, 44 Atl. 551.
In the présent instance the two specifically named beneficiaries,
Marie B. Potter and Blanche Van Hqok Potter, hâve vested inter-
ests in the principal of the trust fund; and while it is true that their
interests are not presently enjoyable by them, and may be defeated
should George Van Hook Potter die leaving issue, or should he
exercise his reserved powcr of appointment by will, yet by no act of
Potter other than his exercise of that power can the interests of
thèse beneficiaries be divested. Perry on Trusts, § 250 ; Farwell on
Powers, 474; Hopkins v. Jones, 2 Pa. 69, 70. The Suprême Court
of Pennsylvania has decided that Potter has no gênerai dominion
over this trust estate, and that the settlement he made is enforceable
in favor of the beneficiaries. Potter v. Fidelity, etc., Co., supra. The
views expressed by that court in its opinion, we think, Icad irre-
sistibly to the conclusion that this attaching creditor cannot reach
the corpus of the trust estate, but can subject to the payment of its
judgment only the income reserved and payable to the settlor (Pot-
ter). We find a ruling to such efîect in the analogous case of An-
dress v. Lewis, 17 Wkly. Notes Cas. 270.
Upon the undisputed facts, it seems to us that the New York
Finance Company must be regarded hère as claiming through George
Van Hook Potter, and that, as against this garnishee, that company
has no higher rights than Potter himself had. The exécution attach-
ment, we think, had no greater efîect than to place this attaching
creditor in the same relation to the garnishee as that occupied by
the judgment debtor before the attachment was laid. Baldwin's Es-
tate, 4 Pa. 248. An attachment exécution is authoritatively declared
to be an équitable assignment of the thing attached; a substitution
of the creditor for the debtor to the latter's rights against the gar-
nishee. Reed v. Penrose, 35 Pa. 214.
The présent case is clearly distinguishable from Mackason's Ap-
peal, 42 Pa. 330, 82 Am. Dec. 517. The deed of trust there was for
the use and benefit of the settlor during his life, and on his death for
the use and benefit of his appointées by. will, and in default of such
FIDELITT TRUST CO. V. NEW TOEK FINANCE CO. 279
appointment for the use and benefit of those entitled to his estate
under the intestate lavvs. There was no named beneficiary other
than the settlor. To ail intents and purposes, the settlor continued
to be the bénéficiai owner of the entire estate. It did not appear
that there was any reason for the exécution of the deed of trust
except to protect the settlor's property from his future engagements.
Indeed, the sole design, as found by the court, was to give to the
settlor the full enjoyment and complète équitable ownership of his
property, and at the same time protect it from his creditors. More-
over, the deed creating that trust contained no provision against its
revocation. And, finally, the contest there arose after the settlor's
death, and was between his creditors and his appointée by will. Hère
we hâve an active trust which the Suprême Court of Pennsylvania,
in a contest between the settlor and the trustée, has sustained and
declared to be irrévocable by the settlor and enforceable in favor of
the beneficiaries.
The discussion might well end hère. But, if not necessary, it
seems^ to be proper, to notice briefly the assignment relating to the
rejection of évidence. The ofïer, in substance, was to show fraud
and collusion between the parties to the confessed judgment touch-
ing it, and the attachment proceeding under it, to overthrow this
trust. This garnishee is not a mère stakeholder, but a trustée in
possession of the trust property, clothed with the légal title, charged
with active duties, and responsible to beneficiaries. The purpose of
the proceeding was to seize the corpus of the trust property held by
the trustée. A stranger to a judgment may attack the same for fraud
and collusion when the enforcement of such judgment would be prej-
udicial to his pre-existing rights. Freeman on Judgments, § 335;
Rhoades v. Sehn, 4 Wash. C. C. 715, 721, Fed. Cas. No. 11,740;
Esty V. Long, 41 N. H. 103. We think it was compétent for the gar-
nishee to show that the attachment was a nullity as against the cor-
pus of the trust estate by reason of the fraud and collusion alleged
and proposed to be shown. Even if this défense could be regarded
as an équitable one, it was not for that reason inadmissible hère.
Schuler v. Israël, 120 U. S. 506, 510, 7 Sup. Ct. 648, 30 L. Ed. 707.
In that case Mr. Justice Miller, in delivering the opinion of the court,
after stating the right of a garnishee to set up any défense against
attachment process which he could hâve against the debtor in the
suit for whose property he is called upon to account, said :
"And, as a garnishee Is only compelled to be responsible for that which,
both In law and equity, ought to hâve gone to pay the principal défendant
In the main suit, he can set up ail the défenses in this proceeding which he
would bave In either a court of law or a court of equity."
We add, in conclusion, however,' that, independently of the rejected
ofifer, the case, upon the unquestioned facts, in our view, was with
the garnishee as respects the principal of the trust fund, and that only
the income thereof reserved to Potter was bound by the attachment.
The judgment of the Circuit Court is reversed, and the case is
remandcd to that court for further proceedings in accordance with
the views expressed in this opinion.
280 - 125 FEDBBAL BEPOETEB.
•FKABR T. WASHINGTON.
(Circuit Court ol Àppeals, Bightli Circuit October 8, 1S08.)
No. 1,836.
1. Ikdian Lbases— Efpbct op Curtis Act.
Act June 28, 1898, c. 517, 30 Stat. 495, known as the "Curtls Act,"^
which; gives the owner of Improsements on a lot in the Indlan Territory
a preferred right to purchase the same af ter it shall hâve been appraised,
dld not affect the obligation oï a white man, who was at the time of its
passage In possession of a lot under a leàse from an Indlan, to restore
possession to the lessor on the termina tion of the lease in accordance
wlth its terms. •
2. Landlord and Tenant— Rights of,Landi.ohd— Action ci- Unlawfui, De-
TAINEB.
A lessor who stipulâtes to pay the lessee the value of Improvements
made by him at the expiration of the term does not thereby disable him-
self from bringing an action of unlawful detainer, where the tenant at
the end of the term refuses to accept the payment tendered or to sur-
rendér possession, and cannot be required to first bring a suit In equity
to compel the lessee to accept such payment
3. Same— Statcte of Indian Terkitobt.
Manst Dig. § 4174 and. T. Ann. St 1899, § 2854), in force In the Indian
Territory, which proyides that an action by a landlord to recover pos-
session of the promises on account of nonpayment of rent shall abate on
a ténder of the rent due by the tenant before judgment, has no applica-
tion to an action to recover possession unlawfully withheld by the ten-
ant after the term has explred.
In Error to the United States Court of Appeals in the Indian Ter-
ritory.
C. L. Herbert, E. A. Walker, and H. M. Cannon, for plaintiff in
error.
C. C. Potter, C. B. Potter, and W. D. Potter, for défendant in error.
Before SANBORN, THAYER, and VAN DEVANTER, Circuit
Judges.
THAYER, Circuit Jucjge. This case originated in the Indian Ter-
ritory, and cornes to this court on a writ of error from the Court of
Appeals of that territory. The record discloses that J. C. Wash-
ington, the défendant in error, is a menjber of the Chickasaw tribe
of Indians, and a résident of the Indian Territory, and that on Janu-
ary i, 1898, he leased to James Fraer, the plaintiff in error, who is
not a member of any tribe of Indians, a lot of land 25 feet in width
by 140 feet in depth, which fronted on Main street, in the town of
Marietta, within the Indian Territory. By the ternis of said lease
the lessee acquired the right tq ocçupy the demised premises for the
term of one year from and after January i, 1898, with the right to
reijew the lease for anqther year at the expiration of the first term.
The lease contained a pr<?vision to the efifect that the lessor, Wash-
ington, could only repossess himself of thé demised premises on the
expiration of the lease by paying to the lessee, Fraer, the value of
the improvements which the lessee had made on the demised prem-
ises, and that upon making such payment he should be entitled to the
FRAER V. WASHINGTON. 281
possession of the property. The cotnplaint which was filed by Wash-
ington, who was the plaintiff below, was in the form of an action of
unlawful detainer, and alleged, in substance, that at the expiration
of the year 1898 Fraer, the lessee, declined to renew the lease for
another year; that the value of the improvements erected by him
during his term was the sum of $700; that on January 2, 1899, he
had tendered to Fraer, the lessee, the sum of $800 in payment for
his improvements, which was a sum more than they were worth,
but that the défendant had declined to accept the sum tendered, and
was wrongfully, unlawfully, and forcibly detaining the possession
of the property, and refusing to permit the plaintifï to enter upon
the same. Washington further alleged that after the refusai of the
défendant below tô re-rent the premises he had given the défendant
written notice to vacate the same and surrender the possession to
the plaintifï. The complaint also contained a tender of the alleged
value of the improvements and an ofifer to pay the sum tendered into
court. The trial below, which was before a jury, resulted in a ver-
dict and judgment in favor of the plaintifï, which judgment was af-
firmed on appeal by the Court of Appeals in the Indian Territory.
The judgment complained of is to the following eiïect: That the
plaintifï, Washington, hâve and recover from the défendant, Fraer,
the lot above described, situated in the town of Marietta, in the
Chickasaw Nation, and that the money theretofore deposited by the
plaintifï to pay for the . improvements which had been made on the
demised premises by the lessee be delivered to him.
The principal contention on the part of the plaintifï in error is to
the following effect: That an act of Congress approved June 28,
1898, after the lease now in question was executed (30 Stat. 495, c.
517), operated to destroy ail of the lessor's contractual rights under
the lease, and to extinguish whatever interest, possessory or other-
wise, he may hâve had in the demised premises when the lease was
executed. In other words, it is insisted, in substance, that, although
Washington, the lessor, may hâve been lawfully in possession of the
demised lot on January i, 1898, pursuant to the right of occupancy
accorded to Indians by the tribes to which they belonged, and may
hâve been induced to surrender such possession to the lessee for the
term of one year, in considération of the latter's promise to pay a
stipulated rent, and to restore the possession to the lessor at the end
of the term, provided he was paid the value of ail improvements
which he might erect in the meantime, yet the subséquent passage
of the act of Congress on June 28, 1898, commonly called the "Cur-
tis Act," not only released the lessee from ail of his promises made
to the lessor, but operated to vest the lessee with whatever rights and
privilèges incident to possession would hâve belonged to the lessor
had he not been induced to relinquish his possession to the lessee.
This claim is based primarily on sections 15 and 16 of the Curtis act
(30 Stat. 500, 501) and certain paragraphs of an agreement be-
tween the United States and the Choctaw and Chickasaw Indian
tribes, commonly termed the "Atoka Agreement," which is set forth
in the act of Congress, and as therein amended was ratified. 30 Stat.
505. 508.
282 325 FEDERAL EBPORTEE.
The fifteenth section of theact in question, after providing for the
appointment of a commission to survey and lay out town sites within
the territory occupied by the Chickasaw, Choctaw, Creek, and Chero-
kee tribês ol Indians, and to màke plats thereof, further provided,
in substance, that ail town lots should be appraised by said commis-
sion at their true value, excîuding improvements ; that separate ap-
praisements should be made of ail improvements thereon; that no
such appraisement should bç effective until approved by the Secre-
tary of the Interior; and that in case of disagreement by the members
of the conimission as to the value of any lot the Secretary of the In-
terior might fix the value thereof. It was further declared in the
same section that "the^ owner of the improvements upon any lot other
than fencing, tillage ,or tçmporary buildings, may deposit in the
United States Treasury, St. Louis, Missouri, one half of such ap-
praised value; ten per centutn within two months and fifteen per
centum more within six months after notice of appraisement, and the
remainder in three equal annual installments thereafter, depositing
with the Secretary of the Interior one reçeipt for each payment and
one with the authorities of the tribe and such deposit shall be -deemed
a tender to the. tribe of the purchase monçy for such lot." The same
section of the act further provided, in substance, that, if the owner
of such improvements on any lot failed to make deposit of the pur-
chase money in the manner aforesaid, then such lot might be sold
in the manner provided in the act for the sale of unimproved lots,
and that lots which were not improved should belong to the tribe,
and should be appraised, and that, after the approval of the appraise-
ment by the Secretary of the Interior and due notice, should be sold
to the highest bidder at public auction, by the commission, for not
less than their appraised value, unless otherwise ordered by the Sec-
retary of the Interior. Following thèse provisions, which are found
in the fifteenth section of the act, the sixteenth section declared, in
substance, that it should be unlawful for any person, after the passage
of the act, to receive for his own use or for the use of any one else
any royalty on oil, coal, asphalt, or other minerai, or on any timber or
lumber or any other kind of property whatsoever, "or any rents on
any lands or property belonging to any one of said tribes or nations
in said territory, or for any one to pay to any individual any such
royalty or rents or any considération therefor whatsoever," and that
ail royalties and rents thereafter payable to the tribe should be paid,
under such régulations as might be prescribed by the Secretary of
the Interior, into the treasury of the United States to the crédit of
the tribe to which they belonged.
We feel constrained to hold that the Curtis act did not affect the
rights of the parties to this litigation in the manner asserted and
above stated, When the lease was executed, Washington, the lessor,
being a member of the Chickasaw tribe of Indians, had the right to
occupy the demised premises according to the customs and usages of
his tribe. Fraer, the lessee, on the other hand, not being a member of
any Indian tribe, had no such right. He had at that time no interest
in the lot, either présent, future, or contingent, such as a court of
law would recognize or enforce ; and after the exécution of the lease
FEAEK V. WASHINGTON. 283
he could only uphold his right of occupancy, if at ail, by vîrtue of
the provisions of the lease vvhich he had succeeded in obtaining.
By accepting the lease and entering thereunder as a tenant of the
lessor, he certainly admitted the lessor's right of occupancy, and, ac-
cording to well-established rules of law, should be estopped from
denying it or challenging the lessor's power to make the lease. We
fail to perceive upon what ground the Curtis act can be said to hâve
released the lessee from his promise to surrender the possession of
the demised premises to the lessor at the end of his term, pursuant
to his agreement. The act contains no express provision that tenants
who had made improvements on leased property should be so released
from their engagements, and we are not inclined to insert such a pro-
vision by construction. It is true that the act concèdes to the owner
of improvements upon any town-site lot the préférence right to pur-
chase the lot after the town site has been surveyed and platted and
the lots hâve been appraised, on making certain specified payments
within a certain period ; but it does not appear in the présent instance
that any of thèse acts hâve been done, or that the time has arrived
when a purchase can be efïected. If it has arrived, it is by no means
clear that the lessee is the owner of the improvements which he made
during his term. The lease did not provide that the improvements
made by the lessee should be esteemed his property, but only that
"said property shall be delivered to said Washington upon his paying
or satisfying said James Fraer or his assignées for ail improvements
put thereon while the same was so rented to said James Fraer." In
other words, the lease secured to the lessee the right to retain pos-
session until the lessor had reimbursed him for moneys expended in
making improvements. In view of the known situation in the Indian
Territory it may be that the lessor, being a member of the Chicka-
saw tribe. and entitled to occupy the lot in controversy, put the lessee
in possession in the expectation that he would make certain improve-
ments for the benefît of the lessor and practically at his expense, so as
to entitle the lessor to purchase the lot, when the town site had been
located and surveyed and the lot had been appraised, according to the
plan outHned in the Atoka agreement, which had been executed be-
fore the lease was signed. In the absence of an express provision in
the lease severing the improvements from the realty and declaring
that they should be and remain the property of the lessee, it may well
be that they became a part of the freehold according to the gênerai
rule that one who erects a permanent structure on land makes it a
part of the land. It is unnecessary, however, on the présent occasion,
to détermine who, within the meaning of the Curtis act, is the owner
of the improvements that hâve been erected by the lessee, so as to
entitle him, when the proper time arrives, to purchase the lot. The
question now at issue is whether the Curtis act, as soon as it was
passed, relieved the lessee from his promise to restore the possession
of the lot to the lessor at the end of his term on being reimbursed
for his improvements. This question, in our judgment, should be
decided in the négative. It is certain, we think, that Congress did
not intend that white men who had obtained temporary possession
of tov/n-site lots or land in the Indian Territory from Indians by
284 125 FEDERAL KEPORTEK,
means of leases should make use of the possession se acquîred to se-
cure a fee-simple title to the demised property to the exclusion of In-
dian le^sors to whom they had covenanted to restore the possession.
Yet this would be the resuit if the efïect of the Curtis àct be as con-
tended hy the plaintifï in error. We are of opinion that the obliga-
tion of the lessee to restore possession remained the same after the
passage of the Curtis act as before, and that nothing would free him
from his contract obligation to surrender the possession of the de-
mised premises to his lessor, save, perhaps, a purchase of the lot under
the provisions of the Curtis act, after an appraisement thereof,
should he be allowed, on application to the proper authorities, to
make such a purchase. This court has heretofore held, in substance,
that the Atoka agreement did not hâve the efïect of annulling or ab-
rogating ail existing leases of town lots situated in the Choctaw and
Chickasaw Nations. , Ellis v. Fitzpatrick, 55 C. C. A. 260, 118 Fed.
430. The same view has been taken by the Court of Àppeals in
the Indian Territory. Ellis v. Fitzpatrick (Ind. T.) 64 S. W. 567,
568; Kempv. Jennings, Id. 616. Moreover, we are advised that the
Department of the Interior has ruled that, until town lots are dis-
posed of by the commission appointed pursuant to the provisions of
Act Cong. June 28, 1898, c. 517, 30 Stat. 495, "valid contracts made
by parties for renting lots are not afifected by said act." This ruling
was made by the departpent in response to an inquiry whether the
Curtis act absolved an occupant of a town-site lot, who had rented
the same from an Indian, of his obHgation to pay rent; and, while
the ruling in question is not an authoritative exposition of the law,
yet it is- entitled to great considération as expressing the views of
that department of the government which is charged with the admin-
istration of the Curtis act, and has doubtless given ail of its provisions
careful considération, besides being fully acquainted with the condi-
tions now: existing in the Indian Territory.
Another subordinate question which is presented by the record is
whether Washington, the lessor, can maintain an action of unlawful
detainer on the state of facts disclosed by his complaint, ail of which,
as we must présume, were established to the satisfaction of the court
and jury, or whether he should hâve pfoceeded in equity to compel
the lessee to accept payment for his improvements and convey them
to the lessor. It seems to be urged by the plaintifï in error that the
lessor should hâve obtaîned such a decree before suing in unlawful
detainer. With respect to this question we conclude that there was
no occasion for first seeking the aid of a court of equity. The ques-
tion of possession was the only one involved in the case. When the
lessee's term ended and the full value of the improvements made
by him was tendered, and he declined to accept the sum tendered or
to surrender possession of the demised premises pursuant to his cove-
nant, his possession was thenceforth wrongful; in other words, he
became guilty of an unlawful detainer, We do not understand that
an ordinary -lessor, who simply agrées with his tenant to pay him for
any improvements made on the demised premises during the term,
thereby disables himself from bringing an action of unlawful detainer,
prûvided the tenant, at the ^nd of his term, refuses to accept pay-
SMEEÏH V. PEKKI^^S & CO. 285
ment for his improvements and insists on holding possession. The
effect of such an agreement in a lease is not to give the tenant an
interest in the land which can only be divested by the decree of a
court of equity, but rather to impose on the lessor another condition,
to wit, the duty of paying for the tenant's improvements, or tendering
payment therefor, before he can be restored to possession. If the
question last noted was raised in the lower court in such a form that
it may be considered hère, we think it was riglitly decided.
The final contention on the part of the plaintifï in error is based
on section 4174 of Mansfield's Digest of the Statutes of Arkansas
(Ind. T. Ann. St. 1899, § 2854), which provides, in substance, with re-
spect to suits brought by a landlord to recover possession of property
on account of the failure of his tenant during his term to pay rent,
that, "if the défendant before judgment is given in such action, either
tenders to the landlord or brings into court where the suit is pending
ail the rent then in arrears and ail costs, ail further proceedings in the
action shall cease." It is claimed that about a year after this action
was instituted the plaintifï in error offered to deposit in court a suni
sufïicient to pay the rent of the demised premises at the rate of $25
per year for the years 1898, 1899, and 1900, and asked to hâve the suit
abated, which request was denied. The motion to abate the suit, the
évidence in support of the motion, and the order made thereon are
not made a part of the bill of exceptions, as they should hâve been
to obtain a review of the trial court's action on appea). Dietz v.
L,ymer, 10 C. C. A. 71, 61 Fed. 792. But, in any event, the section
of Mansfield's Digest which is invoked has no application to a suit
like the one at bar, where an action is brought against the tenant,
not to recover possession during the term for nonpayment of rent,
but to recover the possession of property unlawfully withheld by the
défendant after his term has expired. In the latter class of cases, to
which the suit at bar belongs, the statute invoked has no application.
No sufïicient reasons hâve been shown for the reversai of the judg-
ments below, and the same are accordingly afBrmed.
SMEETH et al. V. PEEKINS & CO., Limited, et al.
(Circuit Court of Appeals, Thlrd Circuit. September 15, 1903.)
No. 32.
1. Patents— CoNSTBDCTioN of Claims— Statbments of Préférable Mode of
Construction.
Features of construction which the speciflcation of a patent recom-
mends or describes as préférable do not thereby become essentlal parts
of the patent or limitations of the clalms.
S, Same — Inpringement—Bosh- Plates fob Blast Fdhnace.
The Scott patent, No. 452,618, for bosh-plates for fumaces, is valid
(excepting claim 6), and covers a meritorious invention, the essentlal
feature of which Is to provide separate recesses in the furnace wall in
which the bosh-plates are set, and from which they can be removed
freely, being so independently set as not to be affected by the expansloa
or contraction of the waU. Except as to clalm 7, the clalms are not 11m-
286 125 FEDERAL REPORTEE.
Ited to bosh-plates constructed internally with a tortuous water passage,
but cover any plate havlng a water passage extendlng through It for the
passage of a current of water. Claims 1 to 5 so cpnstrued, and held In-
frlnged.
Appeal ffom the Circuit Court of the United States for the West-
ern District of Pennsylvania.
James I. Kay, for appellants.
Marshall Christy and Wm. L. Pierce, for, appellees.
Before ACHESON and DALLAS, Circuit Judges, and KIRK-
PATRICK, District Judge.
ACHESON, Circuit Judge. This is an appeal from the decree of
the Circuit Court dismissing the complainants' bill in equity, brought
for an alleged infringement of letters patent No. 452,618, dated May
19, 1891, for an improvement in bosh-plates for furnaces, granted to
James Scott, and of which the complainants in the bill became owners.
The spécification of the patent states that the "invention consists
of an improvement in the setting of bosh-plates in the wall of a blast
furnace and in an improved construction of the bosh-plates them-
selves" ; that heretofore, for the purpose of preventing the corrosion
and destruction of the walls of a blast furnace, caused by the intense
heat in the furnace, "it has been customary to employhollow plates
built in the furnace wall, and provided with water connections, by
which streams of water through the plates may be maintained," but
that in the opération of the furnace thèse plates frequently crack,
and perrnit the water to leak from them, with injurious efifects par-
ticularly mentioned; that the broken plate must be removed as soon
as the leak is ascertained and located, but that a great amount of
labor is required to remove it, "since it nécessitâtes the digging it
out from thC; brickwork of^the furnace," which weakens and injures
the furnace structure, with loss of time, etc. ; that heretofore it has
been generally supposed that the reason for the breaking of the
plates was that they were burned out by the heat of the furnace, and
great care has been taken to keep up a constant stream of pure wa-
ter, and to construct the water passages so that they should not be
clogged by sédiment, which would render them more liable to be
burned"; that the inventor (Scott), hosjfever, has "discovered that
the breaking of the plates has been caused not so frequently by
burning as by the manner in which they hâve been set in the furnace
wall," the practic^ haying been. to build them directly in the wall,
with the bricks bearing on them from above and at the side and in
intermediate spaces,' so that when thé brickwork expands and moves
by reason bf the heat ôf thé furnace i.t stirains, the bosh-plates, and
frequently breaks or cracks t!hem. The spécification and drawings
describe and show the bosh-plates of the patent arranged in severail
horizontal séries around the bosh of the furnace, the plates being
made tapering in width and thickness and curyed; transversely on
their upper surfaces so as to hâve à gênerai wedge shape, and they
are set in arched recesses built for their réception in the furnace wall.
BMEETH V, PERKINS & CO. 287
The function of the arches, it is stated, is to support the furnace wall
over the recesses so that they shall not cave in when the bosh-plates
are removed, and so that the plates may be taken out and replaced
easily without other rebuilding than luting the intervening space with
clay. The boshes, it is said, should be of somewhat less dimensions
than the recesses. It is stated that by thus setting the bosh-plates
the wall of the furnace may expand and contract freely without crush-
ing the plates and causing them to leak. A number of the plates
of each séries, it is stated, "are connected by pipes, 12, the outlet of
one being connected with the inlet of the next, as shown in Fig. 2,
so that the water may pass in succession through the plates" ; and
that, when it is desired to remove any of the bosh-plates, its inlet and
outlet pipes are uncoupled, and then, because of the tapering shape
of the plate, it may be drawn out from its recess. To replace the
plate it is set again in its recess, luted with clay, and the water pipes
reconnected. It is stated that the facility of removal and replace-
ment of the bosh-plates which this improvement afïords is of especial
benefît in that it enables a leak to be located in case for any reason
one should occur.
After this gênerai description of the invention the spécification con-
tains the following clause:
"The preferred internai construction of the bosh-plates is illustrated In
Figures 6 and 7. Each consists of a hollow plate having water inlet and
outlet openings, 8 and 9, a partition, 10, forming a passage leading to the
rear of the plate from the opening, 8, and cross-diaphragms or baffle-plates,
11, which cause the water to travel in a circuitous course between the back
of the plate and the opening, 9. A very efiacient cooling action is thus af-
forded by the plate."
The claims of the patent are as follows :
"(1) In combination with a furnace, a water-cooled bosh-plate set In a re-
cess in the furnace wall, from which it is removable freely, said bosh-plate
having a water passage extending through It for the passage of a current of
water, and Inlet and outlet pipes, substantially as and for the purposes de-
scribed.
"(2) In combination with a furnace, a water-cooled bosh-plate set in an
arched recess in a furnace wall, from which it is removable freely, said bosh-
plate having a water passage extending through it for the passage of a cur-
rent of water, and inlet and outlet pipes, substantially as and for the purposes
described.
"(3) In combination with a furnace, a water-cooled inwardly-tapering bosh-
plate set In a recess In the furnace wall, from which it is removable freely,
said bosh-plate having a water passage extending through It for the passage
of a current of water, and Inlet and outlet pipes, substantially as and for the
purposes described.
"(4) In combination with a furnace, a water-cooled bosh-plate set in a re-
cess in the furnace wall, from which it is removable freely, and provided with
a surrounding casing or layer of clay, said bosh-plate having a water passage
extending through It for the passage of a current of water, and Inlet and
outlet pipes, substantially as and for the purposes described.
"(5) In combination with a furnace, a séries of encircling water-cooled bosh-
plates, set in recesses in the furnace wall, from which they are freely remov-
able, said bosh-plates having water passages extending through them for the
passage of water currents, and inlet and outlet pipes, substantially as and for
the purposes described.
"(6) In combination with a furnace, a séries of encircling water-cooled
bosh-plates set In arched recesses In the furnace wall, from which they are
288 125 FBOBBAL EEPORTEK.
freely remorable, and a band encifcllng the furnaee at the arches, substan-
tlally as and for the purposes described.
"(7); 4 holjow bosh-plate having at the front end an inlet opening and an
outtét bpenlng, a passage, 10, whlch extends to the rear of the plate ftom one
of sa'Id '6penlngs, and crosS-dlaphragm, 11, whlch extend alternately from op-
posite sldes wlthln the bosh-plate partially across the interlor cavity thereof ,
formtng a tortuous passage in sald cavity leadlng from the passage, 10, ta the
second of sald openings, substantially as and for the purposes described."
In disposing of this case the Circuit Court regarded the patent as
valid (excepting the sixth claim), and stated that in actual practice
the devjce of the patentée had proved to be "highly useful," With
thèse vièws we are in agreement. Hère we content ourselves with
saying that upon an attentive examination of the proofs we find no
reason to doubt either the validity of the patent (excepting claim 6)
or the great merit of the invention it disclosed.
The principal question involvèd in this appeal relates to the con-
struction to be given to the patent, and particularly to its first five
daims, which the court below held the défendants had not infringed.
As respects ihterior construction, the court, in its opinion, said that
the patentée proposed to change the old form of bosh-plate to a
plate "Êonstructed internally with a tortuous water passage." Now,
it is true that the spécification shows and describes an internai con-
struction of the bosh-plate whereby the water passing through it is
given a "circuitous course," by means of diaphragms or bafHe-plates '
placed in the cavity of the bosh-plate ; but the spécification expressly
States that this is "the preferred internai construction," and this
spécifie form is the subject-matter of claim 7. The terms of the
other claims are quite différent from the terms of the seventh claim.
The bosh-plate called for by the claims from i to 5, inclusive, is de-
scribed as "having a water passage extending through it for the
passage of a current of water, and inlet and outlet pipes." There is
no call in thèse claims for a "tortuous water passage," and no intima-
tion that: the water is to "travel in a circuitous course." The ex-
pressed purpose of the water passage is for "the passage of a cur-
rent of water" through the bosh-plate. The cooling of the plate
is what is aimèd at, and this object is éflfected whether the water
passes through the interior cavity of the bosh-plate from the inlet
pipe opening to the outlet pipe opening by the natural and unob-
structed course or travels in a circuitous course produced by inter-
posed diaphragms or bafïîe-plates. The patentée, indeed, conceived
the latter method to be préférable, but features of construction which
the spécification of a patent recommends or describes as préférable
do not thereby become essential parts of the patent, or limitations of
the claims. SewalL v., Jones, 91 U. S. 171, 185, 23 L. Ed. 275;
Krajewski v. Pharr, 105 Fed. 514, 518, 44 C. C. A. 572.
In Winans v. Denmead, 15 How. 330, 34i» 14 ^- Ed. 717, the court
said that:
"Whlle It Is nndoubtedly true that the patentée may so restrict his claim
as to cover less than what lié Invented, or may limit it to one particular form
of machine, excluding- ail "other forms, although they also embody his inven-
tion, yet such an interprétation should not be put upon his claim if it can
fairly be construed otherwlse."
SMEETH V. PERKINS & CO. 289
In Klein v. Russell, 19 Wall. 433, 466, 22 L. Ed. 116, the rule was
laid down that in construing a patent "the court should proceed in a
libéral spirit, so as to sustain the patent and the construction claimed
by the patentée himself, if this can be done consistently with the lan-
guage he has employed."
This spécification states that it has been "customary to employ
hollow plates built in the furnace wall, and provided with water con-
nections, by which streams of water through the plates may be main-
tained," but that, by reason of the plates being solidly set in the
brickwork, they were frequently cracked and broken by the expan-
sion and contraction of the furnace wall. The avoidance of this
evil was the main object of the invention. The inventor's remedy,
as disclosed with much fullness in his spécification, was to provide
in the furnace wall separate recesses in which the bosh-plates could
be set, and from which they could be removed freely. This was the
substance of the invention. Such was the view which finally pre-
vailed in the Patent Office, as we shall soon see. The spécial inter-
nai form of bosh-plate whereby the water is given a circuitous course
is altogether subordinate. It is explicitly declared to be only the
preferred construction, and it is covered by a spécifie claim.
We are not able to see that by the proceedings in the Patent Of-
fice the first five claims of the patent were limited to a tortuous water
passage in the interior of the bosh-plate, or to any structural water
passage formed within and extending through the cavity of the
bosh-plate. The facts, as disclosed by the file wrapper, are thèse:
In the original application for the patent the claims from i to S, in-
clusive, described the plate simply as "a. water-cooled bosh-plate."
This description, of course, included water-cooled bosh-plates in
whatever way the cooling was efïected by the use of water; for ex-
ample, by using jets of water or spraying with water, as in the pat-
ent to Jones, No. 205,274, which the examiner cited against the ap-
plication. The applicant then amended by inserting in the claims
the words, "Said bosh-plate ifcaving a water passage extending through
it for the passage of a current of water, and inlet and outlet pipes."
It will be perceived that a tortuous water passage is not hère men-
tioned, nor is any structural water passage extending through the
bosh-plate, and independent of its cavity, hinted at. The passage of
a current of water through the cavity of the bosh-plate is what wa?
required for the cooling, and this, it seems to us, is what the amend-
ment naturally- impHes. That the applicant and the Patent Office
both so understood this language appears, we think, on the face of
the file wrapper. The introduction of the words "and inlet and out-
let pipes" in the amendment has significance. The function of thesf
pipes is stated in the spécification thus : "A number of the plates oi
each séries are connected by pipes, 12, the outlet of one being con-
nected with the inlet of the next, as shown in Fig. 2, so that the watei
may pass in succession through the plates." The passing or circu-
lation of the water through the cavity of the bosh-plate, we think,
is the thing contemplated and expressed in the amended claims.
Upon a second rejection of ail the claims an appeal was taken to
the examiners in chief, who reversed the primary examiner. Their
125 F.— 19
290. 125 SBDBBÂL BESPORTEiR..
décision,, upbn whièh thè patent issued, contains this pregnant pas-
sage:' -:'„. ' ■, ■ :.; :■'
"The essence of the alleged Invention Is tbe setting o£ the bosh-plates In
thè furnacei %&1I sb as tô be rémovable freeiy therefrom, and so Independent
of the wall as not to share in Its expansions and contractions. The clainis
haye varying degrees of limitation, and claim 7 turns on a spécifie construc-
tion of bosh-plate."
"In Strdbel's patent, cited, thé bosh-plates are built 'ring-Iike Into the bosh-
wall of the fumace.' They are also air-cooled."
"Jones bas no bosh-plates proper, cooled by a water circulation through
the same, but open iron boxes, set into the brickwork of the furnace, and
cooled by sprays of water dtréqtèd ùpon their Inner surface."
"JEllicott's patent' is cited to'inéèt clalm 7, but it does not show appellant's
spécifie construction of bdsh-plate, nor do we deem it to be so suggestive
thereof as to .preclude invention. We flnd patentabillty, and reverse the
examiner's décision."
Our construction oî the amended claims by no meâns gives them
the broad scopé which the original claims had. The rejected claims
covered a water-cooled bôsh-plate in whatever way such cooling
was accompIisHèd. The amendment limits the claims to a bosh-
plate cooled b)^ the passage of a current of \Vater through the same.
We are unâblé tO concur in the view of the court below that the de-
fendants' bosh-plate does not come within the terms of the amended
claims. We think it does. The water enters the défendants' bosh-
plate by the înlet pipe and flôws under pressure through'*the interior
cavity of the plate to the outlet pipe. The plate theréfore has a
water passage extending through it for the passage oî a current of
water. So much even the défendants' expert admits. Confessedly,
the défendants' bosh-plate is set in a tecess in the furnace wall, from
which it is freely rémovable.
As to the sixth claim, it is enough to say that we think the court
below was right jn holding it invalid.
The deçree of the Circuit Court dismissing the bill is reversed,
and the cause is remanded to that court, with direction to enter a
decree in favor of the complainaht in accèrdance with the views ex-
pressed in this opinion.
L. E. WATERMAN 00. v. LOOKWOOD.
SAME V. LOOKWOOD et al.
(Carcult Court of Appeals, First Circuit. October 23, 1903.)
iNos. 446,44a
1. Patents— Invention— PouNTAiN Pbns.
The Waterman patent. No. 307,735, claims 1 and 2, for an ink duct
for a f ountaln pen, consistihg of a groove in a baï for conducting the
ink from the réservoir to the point of the pen, are void for lack of patent-
able Invention,
2. Sahe.
The Waterman patent, Ko. 293,546, for an Ink duct for a fountaln pen,
the novel feature conslsting of longitudinal fissures In the sldes or walls
of the groove for conducting the ink to tbe pen, held not inf rlnged as to
Claims 1 and 2, and void for lack of patentable invention as to clalm 3.
ti. E. WATERMAN CO. V. LOOKWOOD 291
Appeals from the Circuit Court of the United States for the Dis-
trict of Massachusetts.
For opinions below, see 123 Fed. 300, 303.
Fred C. Hanford (Walter S. Logan, on the brief), for appellant
Oliver R. Mitchell, for appellees.
Before COLT and PUTNAM, Circuit Judges, and BROWN, Dis-
trict Judge.
PUTNAM, Circuit Judge. Thèse two appeals were argued to-
gether. In each case the patent expired after the bill was filed in
the Circuit Court, so that, if the complainant prevailed, there could
be, at the most, only an accounting. No. 446 arises on patent No.
307,735, dated on November 4, 1884, issued to Lewis E. Water-
man on an application filed on June 28, 1883, and on patent No.
293,545, dated on February 12, 1884, issued to Mr. Waterman on
an appHcation filed on September 19, 1883. No. 448 is limited to
patent No. 293,545. Patent No. 307,735 purports to be for new and
useful improvements in fountain pens, and the claims in issue are i
and 2, as follows :
"(1) An ink duct for a fountain pen, consistlng of a groove in a bar on tlie
side next the pen, extending throughout its entire length on ttie same plane,
and communicatlng with the ink réservoir, for conducting the ink from the
réservoir to the point of the pen.
"(2) An ink duct for a fountain pen, consistlng of a groove In a bar extend-
ing throughout its entire length in the side which is to be next the pen and
on the same plane, and communicating with the ink réservoir, and of grad-
ually decreasing depth from the end which enters the réservoir to the end
near the point of the pen."
The learned judge who heard the case in the Circuit Court says
that claim i appears to be for nothing more than a groove or gutter
for taking ink from the réservoir to the point of the pen, and that
'claim 2 is différent from claim l only in the additional unpatentable
élément of gradually decreased depth. As to both claims the learn-
ed judge in the Circuit Court found no novelty. Using that ex-
pression to signify that neither claim contained patentable inven-
tion, we agrée with him. The proposition is so plain that we need
add nothing to this observation.
There are only three claims in patent No. 293,545, ail of which
are in issue, and which are as follows:
"(1) An ink duct for a fountain pen. consisting of a bar having a longi-
tudinal groove formed in Its surface and one or more longitudinal fissures in
the side or sides of said groove, substantially as set forth.
"(2) In a fountain pen, the comblnation, substantially as hereinbefore set
forth, of a barrel or ink réservoir, a tube connected therewith, an ink duct
supported within said tube, and consisting of a bar having one or more longi-
tudinal grooves formed in that portion of Its surface which is in proximity to
the pen, with one or more longitudinal fissures in the side or sides of said
groove or grooves, and a pen secured between said tube and ink duct.
"(3) A fountain pen having an Ink duct provided with one or more longi-
tudinal fissures formed in its walls for facilitating the passage of the ink
through said duct."
Claim 3 is only a restatement of the claims in patent No. 307,735,
and is disposed of by our observations in regard to them. With
292 125 FEDERAL BEPORTEB.
référence to the other daims there has been much discussion be-
fore us about capillary attraction. It appears from the record that
the matter of capillary attraction has been in the minds of several
persons engaged in the art of making fountain pens, both previously
to Waterman and since. However, neither the record nor the prop-
ositions submitted to us by the parties develop anything with référ-
ence thefeto on which wC can rely. There is no proof of any scien-
tific investigation of the opération of the various fountain pens in
this respect, and no witnesses haye been produced of the scientifîc
training and éducation requisite to enable us to give value to their
opinions. Moreover, capillary attraction appears only incidentally,
and in such way that it cannot be said that the inventer relied there-
on. The spécification first speaks of "the downward flow of ink by
gravity and through the action of capillary attraction in the act of
writing." Capillary attraction is thus so coupled with gravity that
it seems inconsequential, and suggests no definite conception. But,
whatever may be said, it is overruled by what appears later in the
spécification, as follows:
"The narrow slits or fissures, ee, which are made In the groove, d, and
which extend deeper into the feed-bar, C, than the bottom of the groove, d,
serve to facllltate the downward flow of the ink which first follows thèse
narrow channels, and thus the descending column of Ink is kept on that side
of the groove, the ascending column of air keeping on the other side of the
groove."
Therefore it is plain that the présent case cannot be said to in-
volve any peeuliarity arising in the direction of capillary attraction.
The true theory of his pen, so far as appreciated by the patentée,
can probably be said to be as follows : The fissures are so located,
as siiown by figure 2 attached to the spécification, that they He on
the under side of the groove when the pen is being used. Conse-
quently, we may well understand that the ink, while flowing to the
pen, naturally follows the fissures, and leaves the groove open for
the ascent of the air to the ink fountain. Of course, unless air is
admitted to the ink fountain, the pressure of the atmosphère would
keep the ink from descending. In other words, there is merely a
simple arrangement to permit the access of sufïicient air to the foun-
tain to balance the pressure of the extemal air.
There are in the arts, and, indeed, in the common uses of life aside
from the arts as technically understood, so many methods of con-
ducting fluids and of balancing the external pressure of the atmos-
pheric air, that there is left very little room for invention in référ-
ence thereto; so that any invention of this kind must be regarded
as narrow, and limited to the détails pointed out. Therefore thèse
claims must hâve a strict construction, even if the common methods,
to say nothing bf the arts, left the patentée anything as to which
he could claim invention. The learned judge who heard thèse cases
in the Circuit Court found that no respondent infringed, because
ail the respondents used separable reeds instead of fissures. The
respondents' methods of conducting fluids seem to hâve been known
extensively for indefinite lengths of time. The only exception is the
exhibit known as "A^." The difficulty of the complainant's case
DECECO 00. V. GEOEGE E. GILCHRI8T 00. 293
as to this, however, is that twice it admits that this exhibit is not
"strictly within the terms of claims i and 2," although it is said that
it is within daim 3. That claim, as we bave already said, is void;
and therefore it follows that the respondents could not hâve in-
fringed any valid claim.
On the whole, we conclude that claims i and 2 of patent No. 307,-
735, and claim 3 of patent No. 293,545, are void, and that claims i
and 2 of the last-named patent were not infringed. Therefore the
following judgments will be entered :
In No. 446—
The decree of the Circuit Court is afïîrmed, and the appellee re-
covers his costs of appeal.
In No. 448 —
The decree of the Circuit Court is afïirmed, and the appellees re-
cover their costs of appeal.
DECECO CO. V. GEOEGE E. GILCHRIST CO.
(Circuit Court of Appeals, First Circuit. September 29, 1903.)
No. 465.
L Patents— Inphingbment — Dépense op Anticipation.
That the deviee of a patent was in part antlcipated by a foreign
patent will not constitute a défense to a suit for infringement, where it
contains a patentable improvement over the foreign deviee, and défend-
ant bas used the improvement.
2, Same— Invention— Elimination dp Parts.
The mère simplification of a mechanieal deviee, wnen of a substantial
character, by the eUminatlon of parts which hâve long been in use, and
are expensive and burdensome in character, may amount to invention.
8. Same— Inpbingkmbnt — Water-Closbts.
The Frame and NefC patent. No. 425,416, for a water-closet, discloses
at least such an improvement upon the deviee of the Mann English pat-
ent, No. 577 of 1870, and that of the Buick patent, No. 383,038, as to
amount to patentable invention. Claims 1, 3, and 4 considered, and held
Infringed.
Appeal from the Circuit Court of the United States for the Dis-
trict of Massachusetts.
Frederick P. Fish and Marcus B. May, for appellant.
John R. Bennett, for appellee.
Before COLT and PUTNAM, Circuit Judges, and ALDRICH,
District Judge.
PUTNAM, Circuit Judge. This is a bill in equity, based on an
alleged infringement of the first, third, and fourth claims of letters
patent No. 425,416, captioned for a "water-closet," issued to Robert
Frame and Charles A. Nefï under date of April 15, 1890, on an ap-
plication fîled on December 23, 1887. The Circuit Court dismissed
the bill, and the complainant appealed.
f2. See Patents, vol. 38, Cent. Dig. § 25.
294 .... 125 ffEDEÇAIi EEPORXEB.
The daims arç as follows:
"(1) In a -watér-closet, the comblâatlon, with a bowl, of a siphon composed
of an toverteâ-U-sbaped pipe having commvinicating receiving and discharging
lUnbs, the jflner wall of the latter bejng provlded with an intégral abrupt
projection ïor déflectlng the water dropping thereon, said bowl belng the
only opening through whlch air or water is supplied, substantlally as set
forth. ■
"(2) In a water+closet, the copibination, with a bowl.of a siphon composed
of an lnveri»d-U-shaped pipe havlng .communlcatlng recpiving and discharging
limbs, the inner walI of the latter being provided iwith an Intégral abrupt pro-
jection for defleeting the water dropping thereon, and an air channel leading
from the top of the U-shaped pipe, one end opening Into the bowl in a sub-
stantlally vertical -plane, substantlally as set forth.
"(3) In a water-closet, the comblnatlon, with a bowl, of a siphon composed
of an Inverted-U-shaped pipe, the discharging limb of which is provlded with
a defleeting projection on its Interlor surface, substantlally as set forth.
"(4) In a water-closet, the combihation, with a bowl, of a siphon composed
of an Inverted-U-shaped pipe, the discharging limb of whlch Is provlded with
a defleeting projection on its Inner surface, said discharging limb being curved
forward undet the bowl, substantlally as set forth."
The spécification allèges that the patentées "invented a new and
usefui improvement in water-closets," which it states more particular-
ly as follows: ■
"Our improvement relates to the construction of water-closets, urinais, slop-
hoppers, etc., whlch hold water at a fixed level, belng the level of a permanent
overflow point, to be discharged on addltional water entering the bowl, by
slphonic action; and It consists of a new and Improved deVice for inducing
this slphonic action."
The spécification also describes some incidental improvements, to
which we need not refer. ■
It must be admitted that, for Various reasons which it is not nec-
essary to détail, siphonic action is regarded as the most usefui method
ôf operating water-closets; and it is, moreover, apparent that the
long arm of the siphon, which .is also the discharging limb of the
bowl of the water-closet, must be frée from ail obstructions to a quick,
fuU, and powerful vent. One other thing is apparent, namely : As
is too commonly the case in patent litigation, the supposed state of
the art is shown principally, if not entirely, by the introduction of
prior patents. Nevertheless, enough can be gathered from what ap-
pears in the record to make it évident that a water-closet working
successfully on the siphonic method, and yet of that compact construc-
tion which permits a convenient setting in place, and also diminishes
the opportunity of those accidents, arising from continuous use, in-
hérent in the çomplicated construction which the siphonic method
is expected to minimize, had long been sought for in the practical
art, but had not been thoroughly accomplished until by the ingenuity
of the inventprs to whom the patent in litigation was issued. It is
also apparent that the device of Frame and Neff went into immé-
diate and extensive use, and has, ever since so continued, and that
this arose not from merely fanciful and temporary causes, but by
reason of intrinsic merit. Indeed, on the whole, the record fully
sustains the presumption of patentability which arises from the issue
of the patent, so that we hâve no occasion to examine any question
except that of alleged anticipation by a British patent issued to John
DECECO CO. V. GEOKGE E. GILCHRIST 00.
295
R. Mann in 1870, No. 577, and by a United States patent îssued to
David D. Buick on May 15, 1888, No. 383,038.
The best method of approaching the question of alleged anticipa-
tion by Mann is to insert herein a copy of the complainant's exhibit,
laying side by side diagrams of the respective devices. The dotted
lines shown in this exhibit, and also the text, should be disregarded,
as they are not found in the drawings attached to Mann's patent.
Otherwise this exhibit reproduces each device with substantial ac-
curacy, so far as this case is concerned:
While ît cannot be denied that the Mann device was in fact operative
on the siphonic method, yet it is entirely plain, both from the drawing
and from the record, that Mann's closet was awkward, inconvénient,
and perhaps impracticable for proper adjustment in ordinary plumb-
296 125 FBDBEAL eepoutbb.
ingf, and that ît ôff ered' many points of developing weakness as the re-
sult of customary household use. Also it was probably too sluggish
for satisfactory venting. Therefore it is easy to perceive why it was
not adopted by the trade, as it was not, and easy to anticipate that
it would not havebeen.
On the one hand, in Packard v. Lacing Stud Company, 70 Fed. 66,
67, 16 C. C. A. 639, we explained why, under some circumstances,
a prior device cannot be rejected as an anticipation, although it has
not been perfected into a practical and merchantable machine. On
the other hand, the entire topic of inventive suggestions which hâve
not been put into useful opération, including what is commonly
known as "paper patents," is a difïicuh one, so that in each case a
practical rule of judicial deterniination can rarely be worked out,
except by a thorough and keen analysis of ail the surrounding circum-
stances. Perhaps the matter bas never been put more clearly than
in the conclusion of a discusdon as to the well-worn topic of who was
entitled to the- crédit of tbe practical discovery or invention of the
use of ansesthetics, found in Park's History of Medicine (ad Ed.) p.
312, as followsl
"Sir James Paget has summed up- the respective clalms of our four con-
testants In an article entitled 'Bscdpefrom Pain,' publlshed In the Nlneteenth
Century for December, 1879. He says: 'Whlle Long walted, and Wells
turned back, and Jackson was thlnklng, and those to whom they had talked
were nelther acting nor thlnklng, Mûrton, the practical man, went to work,
and worked resolutely. He gave ether snccessfully in severe surgical opéra-
tions, he loudly proclaimed hls deeds, and he compelled mankind to hear him.'
As Dr. Morton's son, Dr. J. W. Morton, of' New York, says, when writing of
hls father's clalm: 'Men used steam to propel boats before Fulton, electricity
to eonvey messages before Morse, vaccine virus to avert smallpos before
Jenner, and ether to annul pain before Morton.' "
This contains a Une of observation which is ordinarily just and
practical, and which, if applied to the présent casé, would probably
enable us to dispose of the alleged anticipation by Mann without
further considération. It is not now necessary, hbwever, to go into
this difficult topic.
The learned judge who decided this case in the Circuit Court
apparently laid stress on the proposition that the respondent could
not défend itself against a suit for infringement brought by Mann,
provided Mann's patent were iri vigor in this country. Even if this
were true, and even if the complainant, also, were in a similar posi-
tion with référence to Mann, it would not necessarily be décisive
of this case. This litigation is nàt with Mann or with Mann's patent,
but it is in favor of those who, in the most adverse view for them,
hâve improved on Mann, so that, if the improvement amounts to
invention, the respondent, if it:,has used the improvement, cannot
shield itself behind Mann. '
There may be, and there prbbably is, an underlying suggestion
applicable to both Mann and the présent inventors which is funda-
mental, and which was first put to use in this art by the formera We
are lacking, in this case, any explanation of the opération of either
device by any scientific person, capable of applying and making clear
the laws of pneumatics and hydraulics, each of which sciences are
DECECO CO. V. GEORGE E. GILCIIUIST CO. "97
hère involved in an occult manner. We are safe in assuming, how-
ever, that, when water falls through and out of a space whoUy or
partially confined, it takes with it a certain portion or the whole of
the inclosed air, and leaves either an atmosphère more or less rare-
fied or a vacuum. Both Mann and the présent inventors made use
of this fact in connection with the vent of the bowl, which, for the
présent purposes, is the longer limb of the siphon, for the purpose
of starting siphonic action. Mann found no method of accomplish-
ing this, except by the multiplied zigzag which the exhibit repeated
by us discloses. He does not state the principle of the opération;
bût, notwithstanding the claim made by respondent's counsel, which
is partially, if not entirely, supported by the opinion of the learned
judge in the Circuit Court, it is apparent that what he in fact devised
was a completion of a confined space by the création at the lower
border of it of a water plug, caused by the crowding together by
the zigzags of the rushing body of water which first came over from
the bowl. The claim of the respondent is that, both in Mann's closet
and ih the closet in litigation, the confined space was completed partly
by such clogging and partly by a film of spray. In the absence of the
scientific explanation which we say is not in the record, we are un-
able to find this proposition proved ; but it is not essential whether it
is or not, so far as the présent suit is concerned, although it might
be in the supposed case of a suit brought by Mann against the prés-
ent complainant. There can be little question that in Mann's closet
the substantial élément was the clogging or the water plug, though
this may hâve been supplemented by a film or films of spray ; but in
the complainant's closet the film of spray was assumed by the inven-
tors to be the "substantial thing, and, if there be any water plug, it is
only incidental. However, as we hâve said, none of thèse proposi-
tions, as to which, in the absence of proper scientific testimony,
we can reach only probable conclusions, prove to be essential.
Frame and Nefï, in their spécification, say as follows:
"G is a restriction in tlie course of the discliarging-linib for the deflection
of water flowing through this limb. It may be a ring or rim, or it may con-
sist of one or more projections on the same horizontal plane, or with one
higher than the other. The upper surface or surfaces may be on a horizontal
or an inclined plane."
Again, they say, as to the water descending through the dis-
charging-limb, that "a part of it strikes upon the restriction, G, is
deflected across its aperture, and forms a film or spray, which par-
tially confines the contained air above it in the siphon." This "re-
striction, G," is what is described in claim 3 as "a deflecting projec-
tion." The respondent bases a criticism on the word "restriction"
in the spécification, although it does not run into the claim ; but that
such a criticism is not justiiied, and that the word "restriction" should
not hâve been run into the claim, is clear from the fact that the ex-
tract we hâve made from the spécification shows that, instead of a
ring inside of the discharging-limb, one or more projections were sup-
posed to be sufficient. It cannot be doubted that Frame and Neflf
had no conception of restricting the area of the discharging-limb
with a view of producing a clogging or water plug, and it is also plain
298 125 FBDElBAIi BBFOBTBB.
that theîr conception was simply to oréatë a film, wîthottt any such
diminution of the areâ. ' Gertaiialy, whethèr What they did resulted
in merely a film, or partly-in a .film and partly'in a clogging, they
succeeded in their substantial coticeptionj which was to produce rare-
fied atmosphère sufiicient to iiiduce sif^onic action without obstruc-
tion to the full venting of the bowl, and with a combined quickly
acting and fuU-discharging resuit. Not only did they simplify what
Mann produced, but they simplified it to*a «tibstantial èxtent, and
in such way as to render practicable a compact construction, suit-
able for modem plumbing. They produced a quîcker siphonic action,
because it is plain that the film of spray, or whatever resulted from
the flowing water impinging upon a rim or projection, would be im-
médiate, while they left an unobstructed vent in the discharging-
limb of the bowl. Thus they not only acccomplished simplification,
but, with that, they produced such improved results as corivefted the
Mann device from an unmechanical closet, unsuitable for modem
plumbing, sluggish, and not a practical success, to one compact,
adapted to modem plumbing, quick, and frêe in its action, and ap-
parently in ail respects satisikctory to the trade.
As we hâve already indicated, it is not itripossible that Frame and
Neflf introduced anentirely new method /îf action, which might per-
ihaps be called à process, by substituting a film instead of a water
plug as a substantial élément, and that they thus so differed from
Mann that he did not anticipate them,- and that they could not be
said to infringe, if, as supposed by the Circuit Court, his patent were
in full vigor in the United Statçs when theirs was applied for. But
as wè hâve already said, in the absence of scientific proofs throwing
clear lighton thèse propositions, we thiiifeit suitable t'o support more
fully the view which we hâve suggested, that what ïi'rame and Neff
did was, in àny event, an imift'ovement on Mann, of such a character
as to rise to invention, and therefore suflficient în the présent litiga-
tion. It cannot be denied thât a mère simplification of a ver y sub-
stantial character, disposing of parts which hâve long been in use,
expensive and burdensome in their nature, and which the trade has
found no method of dispensing with, may amount to patentable in-
vention. To obtain absoluîé simplîcity is the highest trait of genius.
Hobbs Manufacturing Company v. Gooding, m Fed. 403, 406, 49
a C. A. 414-
■y] In Richards v. Chase Elevàtor Company, 159 U. S. 477, 486, 16
Sup. Ct; 53, 40 L- Ed. 2as, the opinion in behalf of the court says
that the, omissioniof jan eleiment in a combination may constitute in-
Y§ntion, if the) resuit of the riew combination be the same as before.
The context shows that this cohditional qualification was intended
to irjdicate that the resuit , should be iatleast as effective as before.
;In thaf particular case it appeared thait^the: omission of the élément
referredito wmà attended by a corresponding omission in the func-
itions of the device. It was also held, at page 487, 159 U. S., page
54, 16 Sup. Gti, 40 L. Ed. 225, that the entire combination was a
mère aggregation, so that in any event there was no invention. In
National Company v. Hedden, 148 U. S. 482, 489, 13 Sup. Ct. 680,
37 ly. Ed. 529, it was held that the omission of a feed roU did not, in
DECECO CO. V. GEORGE E. GILCHRIST CO. 299
that particular case, involve invention, in view of the fact that the
same function had been accomplished previously, although not so
perfectly, and although it was said on page 490, 148 U. S., page 684,
13 Sup. Ct., 37 L. Ed. 529, that the new machine was capable of
doing more work, and at less expense. Like ail cases involving
the question of invention, thèse turn on their spécial circumstances.
Lawther v. Hamilton, 124 U. S. i, 6, 8 Sup. Ct. 342, 31 L. Ed. 325,
related to a patent which was accepted as one for a process. It
might as well hâve been taken out for a machine, but, however this
may be, so far as the question we now hâve before us is concerned,
it is unimportant whether for a process or for a machine. There the
only claimed invention was the omission of certain muUer stones in a
machine for obtaining the oil from flax seed. The court held that
this was a "real improvement." It went further, and held that the
resuit was a new process. Either view of that case — that is to say,
that the omission of the muUer stones was a mère improvement, or
that it resulted in a new process — fits either view of the case before
us. The décision is explained in Crescent Brewing Company v.
Gottfried, 128 U. S. 158, 167, 9 Sup. Ct. 83, 32 L. Ed. 390, where
it was distinguished from the case then before the court, on the
ground that the omission of the muller stones produced more oil
and better oil cake ; that is to say, there was not only a simplifica-
tion of the mechanism, but a better resuit. It is entirely plain in each
aspect, for the reasons we hâve stated, that in thèse particulars the
case at bar is stronger in behalf of the complainant than was Lawther
V. Hamilton. It certainly contains marked éléments which are not
found in Richards v. Chase Elevator Company, nor in National Com-
pany V. Hedden. Hère we not only hâve simplicity, but a resuit
which first produced a satisfactory, practical water-closet, operating
on the underlying principle common to Mann, on the one side, and
to Frame and Neff, on the other, and this resuit accomplished by
what was clearly marked ingenuity.
This leaves us to consider the alleged Buick anticipation, which is
apparently easily disposed of. If Mann made use of a water plug,
ihstead of the spray claimed by Frame and Nefï, so much the more
did Buick. In his spécification, referring to the drawings, he says
that a certain number represents a contraction in the delivery pipe
of the bowl, by which its area is reduced ; and he adds, "In practice,
I reduce the diameter of a four-inch pipe to about two inches, leav-
ing the pipe full size above and below." He also says : "The rush
of the water practically seals the contracted part, even if the area
of said part be greater than the combined areas" of the inflow pipes,
"so that no air can pass up," and the contents of the bowl are
siphoned out. Reducing the diameter of a four-inch pipe to about
two inches diminishes the efflux three-fourths. This probably ob-
structed "the rush of the water" even more than Mann did. There
is a serions contest over the question whether Buick did, in time, pré-
cède Frame and Nefï; but we need not trouble ourselves with that,
because it is thus made plain that he was proceeding on the principle
on which Mann proceeded, and had some of Mann's essential faults
in an aggravated form. So that, although he testified that his closet
300 125 FEDERAL EEPOKTER.
gave satisfaction wherever it was used, yet it is apparent that it was
never adopted to any considérable extent, and long ago ceased to be
on the market. It is enough to sày that Frame and Neff improved
on both Mann and Buick, even if in a slightly différent manner as to
each.
The substance of Frame and Neff's invention is covered by claim
3. This claini introduces no tinnecessary élément to embarrass the
court in considering the question of infringement. Therefore in
touching on that question we liinit ourselves to it.
An inspection of respondent's closet shows clearly that it is so
merely a colorable imitation of Frame and Neff as to need no dis-
cussion. The fact that it is an infringement follows by necessary
implication from the testimony of respondent's expert. He starts
with an erronéous criticism, based on the word "restriction," which
we hâve already considered. Proceeding from that, he classes Frame
and Neff with Mann, stating that their device now in suit "will posi-
tively choke the discharging-limb by restricting its cross-area." We
hâve shown that, in the particular of restriction, Frame and Neff
differed from both Mann and Buick, and therefore respondent's ex-
pert is mistaken in his premises. He then proceeds, "It is évident
that the defendant's closet dues not hâve any such restriction, nor
any projection on the interior surface of the discharging-limb, but,
on the contrary, has the same area throughout its entire length."
It is the "same area" in the same way only that Frame and Neff hâve
the "same area" throughout the entire length of the discharging-
limb. It has the projection of Frame and Neff, although in a color-
able form; and it opérâtes in the same simple way as Frame and
Neff, and secures the same resùit, whether Frame and Neff produce
only a spray, or produce a spray with an incidental choking of water.
Rejectihg, thereforCj the premises with which this expert begins,
and whatever he has introduced that is cle&rly erronéous, the resuit
is that he indirectly shows that the two devices before us are prac-
tically the same,jand produce the; same substantial resuit. But, in-
deed, without this testimony,! itis, as we hâve already said, too pal-
pable from a mère inspection that the fespondent built with the com-
plainant before its eyes to neèd even what we hâve said on this topic.
Glaimi i and claim 4 differ from' claim 3 in merely nonessential mat-
ters. While, according to strict 'ruies of law, two distinct claims for
the same substantial matter, differing only in nônessentiàls, cannot
both be sustained, yét, out of regard to the frâilty of human methods
of expression, andithe varietyof viewsamong différent légal judicial
tribunals as to the construction of instruments of the ' character of
letters patent, and conceding, also; the difificulty of always correctly
defîning what one's invention reallyis, the practice has become settled
to allow the same substantial invention to be stated in différent ways,
very much as thè same cause of action, or the same offense intended
to be coveréd by indictment, are pérmitted to be propounded in dif-
férent counts, with a g'eheral verdict on ail of thém.
The'tiecrèe of the Circuit Court îs reversed; the case is remanded
to that court, with directions to enter a judgment for the complain-
^trbelow; and the. appeliant recôvers its côsts of appeal.
HOLMES V. SOUTHERN ET. CO. 301
HOLMES V. SOUTHERN Rï. CO. et al.
(Circuit Court, W. D. North Carolina. September 29, 1903.)
1. Rkmoval op Causes— Préjudice and Local Influence.
Section 2 of the judiciary act of 1887-88 (Act March 3, 1887, c. 373,
24 Stat. 553, Act Aug. 13, 1888, c. 866, % 2, 25 Stat. 434 [U. S. Comp.
St. 1901, p. 509]), authorizes the removal of a cause on the ground of
préjudice or local influence by any one défendant who is a citizen of
another state, although joined with another défendant who is a citizen of
the same state with plaintifC, and although there is no separable contro-
versy.
On Motion to Remand to State Court.
Smith & Valentine (Stanyarne Wilson, on the brief), for the motion.
Moore & RoUins, opposed.
SIMONTON, Circuit Judge. The action in this case was brought
in the superior court of Henderson county, and service was had on the
défendants. On i8th March, 1903, the Southern Railway, one of the
défendants, fîled its pétition in the Circuit Court of the United States
at Asheville, praying the removal of the cause into the said Circuit
Court on the ground of préjudice and local influence. Hearing the
pétition, the court granted the order, and the cause was thereupon
removed into this court, the order bearing date 30th March, 1903.
In September, 1903, the plaintiff gave notice of a motion to remand
the cause, whicli motion came on to be heard on 25th September.
The ground upon which the motion is based is that it appears by the
record that the Asheville & Spartanburg Railway Company, one of the
défendants, is a corporation of the state of North CaroHna, of which
state the plaintifï is a citizen and résident ; that, there being thus
citizens of the same state on both sides of the record, the cause can-
not properly be in this court, and must be remanded. It will be no-
ticed that the order removing the cause issued out of the Circuit Court
of the United States. It may well be doubted if the order can now be
reviewed and revised by another judge sitting in court or at chambers.
Crotts V. Southern Ry. Co. (C. C.) 90 Fed. i ; Parks v. Southern Ry.
Co. (C. C.) 90 Fed. 3. The order, however, was based on an applica-
tion ex parte, and was based upon the ground of local préjudice. The
présent m.otion takes no issue on this ground. It calls the attention
of the court to the want of diversity of citizenship, and on that ground
practically challenges the jurisdiction of the court. Besides this, un-
der the removal act (Act March 3, 1875, c. 137, 18 Stat. 470 [U. S.
Comp. St. 1901, p. 508]), if at any time it appears to the court that
it is without jurisdiction of a cause, it must forthwith remand it.
Ayres v. Wiswell, 112 U. S. 187, 5 Sup. Ct. 90, 28 L. Ed. 693. Un-
der the law as it formerly stood there could be no removal of a cause
from the state court to the fédéral court unless ail the necessary
parties on one side are citizens of difïerent states from those on the
111. Préjudice or local influence as ground for removal of cause to fédéral
court, see note to P. Schwenk & Co. v. Strang, 8 C. C. A. 95.
See Removal of Causes, vol. 42, Cent. Dig. § 123. ,
302 125 FBDBBAL BBFOBTEB. ;
other. Myers v. Swann, 107 U. S. 546, 2 Sup. Ct. 685, 2y L. Ed. 583 ;
Am. Bible Society v. Price, ïio U. S. 61, 3 Sup. Ct. 440, 28 L. Ed.
70; Cambria Iron Co. v. Ashburn, 118 U. S. 54, 6 Sup. Ct. 929, 30
L. Ed. 60; Rosenthal v. Coates, 148 U. S. 142, 13 Sup. Ct. 576, 37 L,.
Ed. 399. It is manifest, however, that this ruie did not effect the end
proposed in the rettioval of causes. Cbngress sought to secure to the
citizen of another state that impartial trial and unbiased verdict which
possibly he could not obtain in the state courts by reason of local in-
fluence or préjudice. To this end ' he could remove his cause to the
fédéral court. But if hîs right to remove was defeàted by the fact that
the plaintifï has associated with him as défendant a citizen of the
plaintifï's state, and he should be forced to trial in the state court not-
withstanding the local préjudice or influence, not pnly would he be
put at great disadvantage, and exposed to wrong, but his codefendant,
by reason of his association, might also be damnified. So, when Act
March 3, 1887, c. 373, 24 Stat. 552, corrected iri Act Aug. 13, 1888,
c. 866, 25 Stat. 433 [U. S. Comp. St. 1901, p. 508], was.passed, amend-
ing the law in important particulars, Congress, evidently seeing this
imperfection, provided that any défendant could hâve his cause re-
moved from a state court if he could satisfy the Circuit Court of the
United States that préjudice or local influence existed against him.
Now, this act repeals and supersedes ail existing acts on that subject.
18 Enc. Pleading & Practice 242, tit. "Removal of Causes," and cases
quoted. The same authority asserts that, although one of the Circuit
Courts (in Eighth Circuit) holds that, notwithstanding this act of 1887,
the law bas not been changed, accof ding to the weight of authority
any one défendant being the citizen pf a state other than that in which
the suit is brought, who is jointly sued with other défendants citizens
of the same state with the plaintifï, may remove the suit for préjudice
or local influence, even though there is no separable controversy be-
tween the plaintifï and tlie removing défendant. Very many cases are
quoted sustaining this statement. The question has never been
passed upon by the Suprême Court of the United States. In the ab-
sence pf a décision from this authoritative court, the conclusion
reached by Judge Dillon in his well-known and learned work on the
Removal of Causes can well commend itself. At section 48, in the
fifth édition of his work, Judge Dillon says :
"In regard to the parties entitled to remove a cause on the ground of préju-
dice or local Influence the act of 1887 Is In one respect much stricter than was
the statute of 1867 [Act March 2, 1867, c. 196, 14 Stat. 558]; for the last-
named act extended the rIght to the nonresident party whether he be plaintlff
or défendant. The new law conflnes It to the nonresident défendant only,
in pursuance of the gênerai policy of denylng the right of removal to plain-
tiflfs altogether. But In another respect the act of 1887 Is much more libéral
than Its predecessor; for whereas the law of 1867 requlred that in cases
where there were several défendants ail must possess the requisite citizen-
shlp (that Is, none of them mtiSt be cltlzene of the same state with the plain-
tifï), and ail must Join in a pétition to remove the cause on the ground of
local préjudice, now the act of 1887 extends the right to any défendant pos-
sessing the requisite citlzenshlp. 'Nor can the right of removal thus given
to any défendant havlng the prescribed citlzenshlp, with any respect for the
ordinary signiflcance of language, be construed to Include ail the défendants
and so be denled to any unless ail hâve such citlzenshlp.' Deady, J., In Fisk
V. Henarie (0. G.) 32 Fed. 417."
303
It follows, of course, from this that the nonresident défendant may
remove the cause on this ground, irrespective of the action of his co-
defendants, and it is not necessary that ail should join. It is further
to be remarked that the right of removal under this clause is not con-
fined to cases where there is a separable controversy between the
plaintifï and the défendant seeking the removal, as such cases are pro-
vided for by clause 3 of section 2 of the act and the proviso in clause
4 (24 Stat. 553 [U. S. Comp. St. 1901, p. 509]) in relation to remand-
ing as to résident défendants when the parties can be separated refers
only to a remand after the suit has been removed by the nonresident
défendant.
It has been also held (and, we think, rightly) that the provision
for a removal by any défendant on the ground of local préjudice is not
unconstitutional, although by virtue of the removal the Circuit Court
obtains jurisdiction of the entire case, which may include controversies
between the plaintifï and other défendants who are citizens of the same'
State with him. Whelan v. R. Co. (C. C.) 35 Fed. 849; Fisk v.
Henarie (C. C.) 32 Fed. 417. Nothing need be added to this reason-
ing.
The motion to remand is refused.
BUNEL V. O'DAY et al.
(Circuit Court, W. D. Missouri, S. D. October 6, 1903.)
No. 179.
1. Compromise of Suit— Validitt.
A compromise of suit between Impuled brother and slster, where the
question of legitlmacy of the sister is Involved, because of its scandalous
character is such a proper subject of domestlc adjustment as to invite
the favor of the court. If free from fraud, no matter how unjust the
défendant may hâve regarded the charge, or what différent resuit subsé-
quent developments might probably produce, it should stand. The value
consists in the release from an uncertaln position, wlth its anxietles,
from apparent danger, and from inévitable expenses and trouble. Such
compromises are especlally favored by the courts when of the nature
of family settlements.
2. Same— DuTY op Counsbl— Equitable Relief.
While it is the duty of counsel acting as guardian ad litem for a dé-
fendant to advise with and safeguard his client as far as he can in the
matter of a compromise agreement, yet when such client, on the ap-
proach of her majority, wlthout the connivanee or concurrence of her
counsel, séparâtes herself from him, and enters into a compromise agree-
ment wlth her adversary brother, neither law nor the ethics of the pro-
fession require that her counsel should go out and hunt her up and thrust
his advlce upon her; and where at the time of the consummation of the
compromise agreement, when she had attained her majority, he ad-
monishes her of the eflect of her act, and she nevertheless enters into
such agreement, she has no claims upon a court of equlty to interfère.
8. Same — Adversary Counsel.
The adversary counsel has a right to advise and assist his client to
the most advantageous compromise in his behalf, provided he neither
makes, nor causes to be made, to the adverse party, any false statement
of f act, with a view of Inducing such compromise in reUance upon the
truth of such statement He has the right to deal with the adversary at
arm's length.
304 125 rEDttBAL BBPOBTEB.
4. SAMHIr'lD'WDVB InFLUBNCB BY THB MOTHEB.
When one of the questions In suit la wliether or not the défendant la
Jhe daugliter of a former hijsband of the mother, tlie fact that the mother,
both prier to and during the pehdency of the lltigation, may hâve stated
to the daughter, in angéï, that she was hdt born In lawful wedlock, and
such imputation may haye been among the inducements Influencing the
daughter to compromise the suit, suçh fact would not warrant the court
in vacating the compromise without a judicial inquiry and ascertainment
as to ■whetlier such imputation was true or false.
5. Impeàchmknt ov Lbgitimact.
The fuie of law that when the marriage relation Is once proven to
exlst ûOthing shall be allowed to Impugn the legitimacy of the issue,
short of proof of facts showlng it to be Impossible that the husband could
be the father, Is not a concloslve présomption, but is one that disappears
when tlje truth appears. The proof to repel it is as to the degree.
6. COMPROMISK-^SUFFICIENCT OJf MeWTORANDUM CONTRACT— CONSTRUCTION.
Where a part of the considération to be paid by complainant for such
coinpromise was the sum of $10,000, to be placed with a named trust
Company, the Interest thereon to be paid tO the défendant during her
natural llfe, the fact that the written mémorandum of such undertaklng
does not express the considération therefor nor flx the tlme when such
depdslt shbuld be made does not render it nonenforceable. The considéra-
tion can be shown by paroi, and the law would imply that the deposit
should be made Ui a reasonable tlme, according to the surrounding cir-
cumstances; besldes, the cause belng yet pendlng in a court of equlty,
the court has plenary power, as a condition to the récognition of the
opération of the settlement, to require the deposit to be made in a given
ttme; and where the beneflciary of such deposit, before a reasonable
opportunlty has been aftorded the complainant to make such deposit,
gives notice of the répudiation of the entire compromise agreement, she
cannot complain that such deposit was not promptly made or could not
be enforced.
7. FoKEiGN JuuGMENT— Suit to Set Asidb— Joindbr op the Hdsband.
The fact that the busband is Jolned with the wlfe as a codefendant in
a suit in equlty to avold the effect of the judgment of a forelgn court,
adjudglng her to be equally entitled with the complainant to a share In
a certain trust fund, and to recover from her and her curator the prop-
erty, real and Personal, obtained by them under such alleged fraudulent
Judgment, does not require that he should join her In a compromise agree-
ment, or in an answer confessing the blll, as under the Missouri statute
she Is as to such property a femë sole, and as such can be sued alone,
either at law or in equltyj
8. Bamb— Cnoss-BiLL.
Where, pursuant to the terms of such compromise agreement, the de-
fendant wlfe conveys certain real estate to the complainant and other
real estate to complainant's coùnsçl in payment of bis fées, the request
of the défendants to file in the original suit a eross-bill bringlng such
counsel for the first time Into the lltigation, seektog to set aslde such
compromise and" deeds as hàtlng been fraudulently obtained, is denled,
as not belng properly wlthin the office of a cross-bill.
9. Attornet's Dcties.
The conduct of lawyers and retainers thrustlng themselves into lltlglous
strife, by becoming largely interested In the resuit, animadverted upon
by the court
(Syllabus by the Court
î 5. See Bastards, vol. 6, Cent Dig. § 5.
IT 6. Sufficlency of expression of considération in mémorandum withln stat-
ute of frauds, see note to Choate v. Hcogsti-aat, 46 G. C. A. 183.
BUI^EL V. O'DAT. 305
In Equity.
F. S. Heffernan, for complainant.
W. D. Tatlow and Allen & Rathbun, for défendants.
PHILIPS, District Judge. The complainant brought suit în
equity in this court to avoid, for fraud and perjury in its procure-
ment, a decree rendered by the Suprême Court of New York City,
State of New York, in a suit brought at the relation of the New York
Life Insurance & Trust Company (hereinafter for convenience called
the trust company), by which it was adjudged that the défendant Mary
was a legitimate child of one Charles Emile Bunel, deceased, father
of complainant, and as such legitimate child was entitled to share
equally with the complainant in a certain trust fund held by said
trust company, created by the father of said Charles Emile Bunel
for the benefit of said Charles and his heirs at law, the said Charles
having died.
The bill of complaint charges that said Mary was in fact a child
begotten in illicit intercourse between the mother of said child and
one Alfred Earles, who has since married the mother of said child.
The bill allèges that in October, 1884, in a suit instituted early in
that year by said Charles Emile Bunel for divorce from the said
mother, he was divorced from her on the ground of her illicit cohab-
itation with said Alfred Earles, resulting in the birth of said Mary,
after trial of the issues of fact in said suit; that while complainant
was a minor of tender years he was taken by his foreign guardian to
France, in Europe ; and that, when said trust company filed a bill
in equity in said Suprême Court of New York City for the ascertain-
ment and détermination of who were the benefîciaries of said trust,
certain named parties in southwestern Missouri, where said Charles
Emile Bunel and his former wife had resided, organized a conspiracy
for the purpose of having it made to appear that said Mary was the
legitimate child and heir of said Charles Emile Bunel, and was there-
fore entitled to share in said trust fund, and to that end they confed-
erated with the mother, Mrs. Earles, and with the counsel and guard-
ian ad litem of the said complainant in said suit in the Suprême Court
of New York City, and by false and perjured testimony, concocted
and gotten up by the conspirators, deceived, mislead, and imposed
upon the said court, whereby it was led into rendering the judgment
declaring that the said Mary was the lawful heir of said Charles Emile
Bunel, and entitled as such to an undivided equal part of said trust
fund with the complainant ; that under and by virtue of said judgment
a large amount of money and property had passed into the hands of
one John O'Day, as the curator and guardian of said Mary, then a
minor of tender years, who was appointed such curator and guardian
by the probate court of Greene county, Mo.
The supplemental bill of complaint charges that said John O'Day,
as curator aforesaid, was guilty of waste and misappropriàtion to his
own use of a large amount of property ostensibly belonging to his
ward, for which he had not accounted; that, on the death of said
John O'Day, his son, the défendant John O'Day, Jr., had been ap-
pointed by said probate court the successor as curator and guardian
125 F.— 20
306 125 KBRp&Aii ï^ffiPOBTBE.
of said Mary, and that he as such curator and guardian had corne into
and yet holds the possession, of a large amount of property, personal
and real, se cooiing tpisaid Mary as aforesaid. The bill seeks to hâve
said Mary and said last-riamed guardian and curator eiijoined from
further availing thernselyes of said fund and property, and for an ac-
counting with the curator, and for gçneral relief.
During the pendency of this litigation, and after both the complain-
ant and said, M^ry ^^^d attained their légal majority, to wit.on the i6th
day of October, 1902, the complainant and said Mary reached a com-
promise agreement of said litigation, by ,which said Mary was to and
did file her answer herein, under oath, admitting the material allegai-
tions of the bill. In considération of said agreement of compromise
the complainant conveyed to said Mary a life interestin 93 acres of
land on the Boulevard near the city of Springfîeld, Mo;, estimated to
be of the value of $9,300, and the home that said Mary now lives in,
in the city of Springfield, and an obligation on complainant's part to
deposit for her use and benefit the sum of $10,000 in said trust Com-
pany, the said Mary to draw semiannually the interest thereon dur-
ing her natural life, and alsp assumed the payment of certain indebted-
nesses of the said Mary.,
On the I2th day of.November, 1902, she filed with the clerk of this
court a motiçn, in the nature of a pétition, for leave to withdraw her
said answer, and for leave to file an answer, tendered with the mo-
tion, denying the allégations of the bill, and for leave to file a cross-
bill, also tendered, against the complainant and his counsel, Mr.
Heffernan, to set aside and vacate certain deeds made in exécution
of the terms of said con^promise. It appears from the file-mark of
the clerk that this answer and so-called cross-bill were iiled with the
clerk in vacation ; but, as this was done without leave of court, thèse
filings shouW be stricken therefrom by the clerk.
The said motion refera to the cross-bill, which charges, in efïect,
that said compromise agreement was procured by certain fraudulent
déceptions and; misrepreseptations, referred to hereafter in this opin-
ion. The court referred this matter to a spécial examiner, by consent
pf parties, to take the evidçnce bearing on thèse issues, and to report
the same to the court, which has been done. This évidence is dis-
tressingly and unnecessarily voluminous. It contains a mass of ir-
relevant and incompétent njatter, which would be unendurably burden-
some on the court to point ovt in détail. The abstracts of the évi-
dence furnished by the, ^-espeçtive counsel were so partial, unintelli-
gible, and unsatisfactory that, in, justice to himself and the parties,
the court took upon hinaself the labor of reading the nearly 700 type-
written pages covered by this évidence» which labor has consumed
much of the court's summer vacation. The court çannot refrain from
observing that one remeçjy for this growing evil in taking testimony in
such cases would be to dispense with stenographers, and to require
,the . lawyers ; to Write out their multiplied and repetitious questions
and answers,, încuiçating the useful lesfeon that expédition is a virtue
in judiçial inquiry.
I. The sole question for détermination by the court is whether or
not the answer filed by the défendant herein, and the compromise
BUNEL V. O'dAT. 307
agreement out of which it grew, were induced by reason of the im-
puted conduct of the complainant and others acting for and in con-
cert with him, within the settled rule that the undue infîuence must be
such "as amounts to overpersuasion, coercion, or force, destroying
the will power." Tibbe et al. v. Kamp et al, 154 Mo. 545, 54 S. W.
879. 55 S. W. 440; Riggin et al. v. Board of Trustées of West-
minster Collège et al., 160 Mo., loc. cit. 579, 61 S. W. 803; Wood v.
Carpenter et al., 166 Mo., loc. cit. 481, 66 S. W. 172.
2. It is charged on behalf of the défendant that she was deceived
by false statements made to her by her counsel and guardian ad litem,
Judge Robertson. It is claimed that after this court, at the October
term, 1902, overruled the demurrer interposed by the défendants to
the bill of complaint, that accidentally meeting her on the street near
the court building he informed her that the judge of the court had de-
cided her case against her, and that she understood, as far as this
court was concerned, the case had gone against her on the merits.
Judge Robertson's testimony respecting this occurrence was that he
simply informed her of the fact that the judge had overruled the de-
murrer; that in answer to her mquiry as to "What does that mean?"
and "How does it leave it?" he informed her that it simply meant
"that we hâve got a lawsuit on our hands, and we will hâve to go
to work and take the évidence and try the case on its merits" ; that
while he was explaining to her and her husband, in effect, that they
would hâve to prépare for trial, and could possibly get ready for it by
the next April term of court, Henry Kee, her husband, said, "Well, by
God, there was a shorter way than that to settle it ;" that he asked him
what he meant by the remark, to which he made no reply, and that
he (Robertson) inferred therefrom that they were going to try to
efifect a compromise, and he then said to them, "If you are antici-
pating a compromise of this matter, don't compromise without let-
ting me know anything about ît, for I expect that I can get better
terms on a compromise than you can ;" that they drove away, and he
saw no more of them until the day of the compromise. Little im-
portance can be attached to the testimony of Henry Kee respecting
this incident, for the reason that he places the interview as occurring
after the compromise agreement had been efifected, because he says
they discussed the terms of the compromise, and he fails to cor-
roborate the version of his wife. The court accepts Judge Robert-
son's version of this incident, because of the court's knowledge of him,
and especially for the reason of the internai improbability of her story.
Judge Robertson had pressed the demurrer with zeal and ability, and
when it was overruled in open court, in the présence of the bar, the
matter of the time for the fîling of défendants' answers was discussed,
and the order then made by the court overruling the demurrer grant-
ed leave to the complainant to amend his bill and to file a supple-
mental bill asking for injunctive relief, and granting leave to the de-
fendants "to file answer herein on or before the ist day of December,
1902, and that complainant reply thereto on or before the isth day
of December, 1902." It is utterly incredible that Judge Robertson
should immediately thereafter, on meeting his client just outside of
the court room, tell her that the court had decided the case on the
308 125 FEDERAL EEPORTEK.
merits agaitlst hêr. Her assertion that the complainant afterwards
told her the case had been decided against her by the court is con-
tradicted by the complainant, and is unenforced by any other fact or
circufflstance in the case. That the action of the court in overruHng
the démarrer precipitated and influenced the completion of the com-
promise is probable and natural ; and that the act of the complainant
in urging a compromise, as he had a right to do, if he employed the
adverse ruling of the court, was but argumentative, as the défendants
then apparently stood confronted with a long, tedious, annoying, and
expensive litigation. Few compromises of distasteful and distressing
litigation would stand if the employment of such persuasive argu-
ment were held sufficient to avoid them.
3. Another contention of the défendants is the charge that Judge
Robertson corruptly betrayed the interests of his client for a con-
sidération of $1 ,000, to be paid by the complainant on the completion
of the compromise; that, instead of loyally advising and counseling
his client in the premises, he joined with the complainant and his
counsel, Mr. Heiïernan, in a scheme to deceive, to persuade the de-
fendant Mary into the apparent amicable adjustment of the litigation.
The évidence, to my mind, utterly fails to warrant this grave charge.
The court finds, from the moral strength of the testimony, that prior
to the action of the court in passing on the demurrer the matter of
the compromise had been instituted between the complainant and
Mary. It progressed without the knowledge, counsel, or concur-
rence of Judge Robertson. The défendant Mafy did not even advise
him of its pendency. His knowledge of the negotiations came to him
from Mr. Hefïernan ; aild when so advised thereof he protested to
Mr. Hefifernan against its terms, and asserted that she should hâve
better terms. When hé was finally advised by Mr. Hefïernan that
the compromise agreement had been reached between the parties, with-
out his advice or concurrence, he held claims against the défendant
Mary for moneys advanced by him from time to time to meet the
urgent demands of herself and husband, amounting to about $400 or
$500, in addition to his fées for professional services in defending the
suit, and he insisted that he must be protected therèin, and suggested
that he thought, comparing his services with like services by other
lawyers in liké cases, that he ought to hâve at least a fee of $3,000.
Mr. Hefïernan then ififorfned him that as part of thé compromise
agreement the corhplainânt was to assume certain of Mary's indebted-
nesses, and that he was willing to assume the payment to Robertson
of $1,000, but no more, against which Robertson again protested as
insufficient, and aisserted that he would hold his client for the balance.
There is nothing of a tangible nature in the évidence to warrant any
fair mind in finding that this $i,oo3 was in the nature of a bribe, to
induce the acquiescence of Robertson in the settlement. He accom-
panied Hefïernan, his client, arid the notary public when they went out
to the home of the Earles to exécute the papers efifecting the compro-
mise agreement.
It is insisted by counsel for said Mary that it was the duty of Judge
Robertson, when he learried of the pending compromise, to hâve
sought out his client, ârld advised, counseled with, and safeguarded
BUNEL V. o'DAX. 309
her in the matter. The court does not understand that when a head-
strong and wayward client does not go to the office of her attorney
for counsel, but séparâtes herself from him at a distance in the coun-
try, without notifying him or inviting his counsel, that the ethics of
the légal profession demand that he should go and hunt her up, and
thrust upon her, uninvited, his interférence and counsel. That he
should hâve accompanied the parties to the Earles home, in the coun-
try, when informed that the settlement was to be consummated, was
reasonable and perfectly consistent with professional integrity. He
was interested in protecting himself against loss of the money he
had advanced Mary, in sole reliance upon her holding the property in-
volved in the pending suit, as well as to look after the matter of his
fées for professional services.
Mr. Helïernan, in conforraity with information conveyed to him by
his client of the terms of the settlement, had prepared and taken with
him, out to the Earles home, the answer to be filed by Mary and the
deeds conveying the real estate, as he understood the terms of the set-
tlement to require. When the papers were handed to Mary to be read
Judge Robertson asked her to go into an adjoining room with him,
and his testimony is, and is credited by the court, that he asked her
if she understood the purport and effect of the answer ; that she was
now of âge ; that if she made that answer she would thereby admit
her bastardy, and that her acts would be binding on her, and she
would give up ail her interest in the estate as the heir of Charles
Emile Bunel, etc. ; to which she answered, in substance, that she had
been in Htigation since she was six or seven years old, and she was
tired of it, and knew what she was doing or was satisfied with the
arrangement. Law and ethics exacted nothing more of her coun-
sel. She had agreed with her adversary without seeking Judge
Robertson's advice or accepting his admonition.
The matter of Judge Robertson's fee was discussed in the open at
this convention. On the refusai of the complainant to assume the
payment of more than $i,ooo thereof Robertson acquiesced, and the
complainant then paid him $ioo thereon, and stands bound for the
remaining $900.
4. Further préjudice is sought to be excited against Judge Robert-
son by reason of the fact that he thereafter filed an answer to the biU
on behalf of Henry Kee, without his knowledge or direction. After
the answer, signed and sworn to by the défendant Mary, was delivered
to Judge Robertson as their Counsel of record, without more, he
drew an answer on behalf of Henry Kee, which merely stated that the
défendant did not désire to answer further in said cause than to say
he was willing that the prayer of the bill be granted and decree ren-
dered accordingly, and filed both answers on the same day. In the
first place, as Judge Robertson assumed that the compromise made
was understood by and agreeable to his clients, he further assumed
that it was but in exécution of the terms of the settlement that this
formai answer should be filed by the other défendant. In the second
place, under the statute of this state, the real estate and personal
property in question was the separate property of the défendant
Mary, and. she held it as a feme sole, the personal property never hav-
310 125 FBDEEAIi KBPOBTEK.
ing been redueedtq possession bythe hi(sbap:d, Henry Kee. Sec-
tion 4340,: Rjev. St.iiMo. 1899. Ûnder the same statute (section 4335)
the wife, as to tjiis p^"operty and this proceeding, was a feme sole,
capable of transacting, business on her own account, of contracting
and being contraçted with, "to sue and be sued, and to enforce and
hâve enforced against her property syçh judgments as may be ren-
dered for or against her, ^nd may sue and be sued, at law or in equity,
with or without her busband being joined asi a party." Therefore, as
to the suit in equity, Henry Kee was a mère figurehead — a nonessen-
tial. The answer of the défendant wife, in légal efïect, eliminated
him from the contest. As she was the sole party in interest, when
she confessed the bill Judge Robertson, in récognition of th,e maxim
that "the sprout savors of the root and goes the same way," as-
surned.that Henry Kee followed his.wife out of court.
5. In respect of the imputation cast in the so-called cross-bill upon
the conduct of Mr. Heffernan in this transaction, it may be observed,
in the first place, that ail of the testimony intended to show the man-
ner of his getting into tfae relatiqn of counsel for complainant in this
litigation, and what fee he was to receive, and what methods he may
hâve sought to employ to win the suit, and the like, are entirely for-
eign to the issues on trial. The question hère involved îs, did he, in
subserviency to his client, employ means in bringing about the com-
promise agreement such as a court of equity ought to denounce as
deceptive and fraudulent, so as to entitle the défendant to hâve the
original litigation reinstated and the statu quo re-established between
the parties? As counsel for complainant, it was his right and duty
to assist his client to any advantageous adjustment which a court of
equity would not pronounce to be vicions. While the law would not
permit him to deceive the adversary litigant by any représentations as
to fact or law known to him to be false, or regardless as to whether
false or true, or to employ means desîgned or calculated to mislead
or deceive her, with a view to obtaining an unreasonable and unfair
advantage, yet as he was not her légal adviser, and she knew he was
adversary in the litigation, he was under no obligation in law to con-
sult her interests, or to disclose to her any information in his keeping
as the confidential adviser of his client. He had a right to deal with
the adversary at arm's length.
The évidence shows, to the satisfaction of the court, that Mr.
Hefïernan did not see or confer with the défendant Mary in person
before the day of the consummation of the compromise agreement.
He made no false statement or représentation to her to influence the
settlement. While it can well be inferred from the attending circum-
stances that he was advising with and kept informed by his client re-
specting the progress and détails of the compromise negotiations be-
tween him and said Mary, I fail to find from the évidence that he
advised or counseled his client or other person to make any false
statements or give any false assurances to her. At the time and place
of the consummation ofthe settlement he made no représentation
nor used any persuasion, so far as the évidence shows, to induce or
overpersuade her to exécute the deeds and the answer there presented.
The whole of the transaction there was conducted in the open, in the
BUNEIi V. o'dAY. 311
présence of the family and the parties. The évidence clearly enough
shows that the answer and deeds were handed to her for examination,
and that she looked over them and had opportunity to read them en-
tire, and expressed herself as familiar with the contents and as satis-
fied therewith. She swore to the answer, and acknowledged before
the notary pubHc in due form that she was famiHar with the contents
of the deeds.
6. There was one conspicuous circumstance connected with the
incidents of the transfer of the properties there made which persuades
the conclusion that she not only understood what she was doing, but
that she exercised her independent judgment. When one of the
deeds from the complainant to her, conveying a certain pièce of prop-
erty, was given her to read, she looked over it, and at once said she
did not want that property; that she was to hâve, or wanted in lieu
thereof, the 93 acres of land on the Boulevard, near Springfield ; and,
after a controversial colloquy between her and the complainant re-
specting this matter, he finally acceded to her préférence; whereup-
on Mr. Heffernan informed her that the 93-acre tract was subject to
a mortgage of $5,000 or more, and therefore was not so valuable
to her as the real estate expressed in the deed as it was prepared.
Notwithstanding, she insisted on the change, and thereupon Mr. Hef-
fernan, at the table, drew up the deed for the 93-acre tract of land.
The sequel would justify the inference that she either possessed some
inside information, or that she builded wiser than she knevv ; for the
défendant John O'Day, Jr., in his déposition herein testified that that
mortgage was held by his father, John O'Day, the former curator
and guardian; but as a matter of fact it was a satisfîed mortgage,
which he retained as was his custom, although satisfîed, and that it
was never intended to be enforced against the property. So that this
property was much more valuable than the pièce complainant under-
stood she was to hâve.
There is another circumstance connected with the incidents of
that day's transactions confirmatory of défendant Mary's freedom of
judgment. In discussing the matter of the $ro,ooo considération, she
suggested that she wanted that arranged just as in the case of a like
fund the complainant was to settle on their common mother, which
was to be placed by the complainant with the said trust company, the
interest thereon to be paid her during her natural life, as it would
secure to her a comfortable or certain income. This was accordingly
so arranged.
After the papers were duly executed by the respective parties they
separated in apparent peace and concord. The notary public took
the deeds to town, and after appending the proper certificates of ac-
knowledgment, with his seal of office, he delivered them to Mr. Hef-
fernan, and the answer was then turned over to Judge Robertson,
who, on the same day, filed it in the clerk's office. Mr. Hefïernan
iiied for record in the recorder's office the deeds made to the com-
plainant, and the deeds made by him to his mother for her home
place, and fhe deed taken by Hefïernan in satisfaction of, or as se-
curity for, his fées. The deeds to the défendant Mary, after their due
312 125 EEDEKAL RBPOBTEB.
certification by the notary- public, were turned over to Judge Robert-
son as lier counsel for her use and benefit,
7. Mrs. Earles. It is charged by the pronioters of this proceeding
that the defendant's motherj Mrs. Earles, confederated with complain-
ant to coerce this settlement. What did she do, as disclosed by the
évidence, which the court should undo? Her testimony is that she
in no way or manner employèd any persuasion or influence on Mary
to make this compromise. The utmost to be gathered from Mary's
entire déposition is that her mother had at some time or another inti-
mated or suggested to hçr that she was net the child and heir of
Charles E^ile Bunel. Conceding this statement to hâve been made
by the mother, the évidence shows that it was not of récent date.
Whatever.may justly be said in réprobation of the conduct and char-
acter of this .unfortunate. and weak woitian, Mrs. Earles, there are
some circumstances connected with the relation between her and this
daughter calculated to enforce the belief that there was a skeleton in
the closet of her domestic life, which she disclosed to this daughter
by suggestion long anterior to the institution of this litigation. This
wayward. girl, when she Was only 15 years old, against the wishes
of her mother, eloped with Henry Kee, himself a minor, to Oklaho-
ma territory, where they were married. Crediting the unsupported
testimony of the défendant, on their return home her incensed mother
intimated to- her that she was not the child of Charles Emile Bunel,
and that she and her husband were thereby induced, as a peace offer-
ing, to convey to the mother the home where the mother and her
husband, Alfred Earles, lived, the same place conveyed to the mother
as a life estate by the complainant as a part of the compromise agree-
ment. Mrs. Earles made oath to the bill of complaint herein, in
which said illegitimacy of Mary is charged. Therefore, if it be con-
ceded that Mrs. Earles repeated this information to the daughter, and
advised the settlement, can that fact suffice to annul the compromise?
Certainly not, unless the court is to assume that the fact claimed to
hâve been stated by Mrs. Earles was false, and made by her for the
purpose of coercing the settlement. How can the court say it was a
false statement in advance of the judicial inquiry and ascertainment
which is the^ substratum of the bill of complaint? The groundwork
of the pétition for divorce between Charles Emile Bunel and the
mother of the défendant Mary was the charge of adultery with Alfred
Earles, the fruit of which was the défendant Mary. This issue was
found for the husband, and it was adjudged by the court that the
allégation was true. With knowledge of the fact, which Mary claims
was communicated to her by her mother just after her marriage,
and prior to the institution of the présent suit or any negotiations
respecting a compromise, that her mother conceded her illegitimacy,
and that, therefore, a great wrong had been perpetrated upon the le-
gitimate infant child while in France, how can it be found by the court
that the reassertion of the charge by the niother pending the nego-
tiations for a settlement, if it be conceded, should vitiate the com-
promise? The very attitude of the mother, as disclosed by the bill
of complaint, should rather be held to hâve well warranted the défend-
BUNEL V, o'dAT. 313
ant in avoiding the possible resuit of the suit, which might, if success-
ful, leave the défendant Mary penniless.
8. There is no foundation in truth for the charge that the défend-
ant Mary was inveigled from her home in Springfield out to the house
of the Earles, the better to influence her in the matter of the com-
promise. The évidence shows that Mary had been ill with fever at
her home in Springfield for some time. Aside from Mrs. Earles'
testimony, the defendant's own sworn statement, as detailed by her
unassisted lips to her attorney in a pétition filed by her for divorce
from her husband, just after the consummation of the compromise,
showed that Mary was alone in this illness, shamefully neglected by
the indifférence of her husband, who the évidence clearly shows to
hâve been a. mère proletary — a shiftless pensioner upon this inherit-
ance of his wife ; and that Mrs. Earles, no matter what may hâve been
her past sins, yet had left within her breast a burning spark of mother-
hood, which took her to the bedside of her sick child, where she
kindly and assiduously ministered to her needs, while the husband in-
dulged his passion for vagabondism. As soon as Mary was able to
be moved, with her approval, she was taken to her mother's home for
récupération. The negotiations for. a compromise of the suit had
been conducted between her and the complainant evidently to a
tangible understanding prior to this illness, awaiting the attainment
of her légal majority for ifs consummation.
9. The Divorce Suits. It is clairaed for Mary that as a part of the
scheme to get her more completely under the influence of the Earles,
and the control of her property, she was overpersuaded by them and
others in the scheme to institute divorce proceedings against her hus-
band. The records show that during her short married life, of about
three years, she had brought three separate actions for divorce. As
two of them were anterior to the negotiations for a compromise, it
cannot be maintained that they had any effective connection therewith.
The burden of proof in this as throughout the présent controversy
rests upon the défendant. She is not corroborated in this assertion
by a single witness or attendant circumstance. The attorneys who
brought the last two of thèse suits testified that in person she de-
tailed to them the inculpatory facts alleged in the pétition. Not
only this, but the spécifications of ill treatment, neglect, and gênerai
worthlessness charged against the husband bear internai évidence of
having proceeded unaided from the mind of the wife. They disclose,
with particularity, acts of meanness and ill usage on the part of the
husband, occurring in the inner circle of their domestic life, which
persuasively indicate that they must hâve come alone from the wife.
She did not possess imagination enough to invent thèse détails, and
it would be remarkable that she could retell them by mère rehearsal
inspired by another mind. Ail thèse pétitions were sworn to by her
in the explicit and solemn form prescribed by the statute, as follows :
"This afifiant makes oath and says that the facts stated in the above
pétition are true according to the best knowledge and belief of the
plaintiff, and that the complaint is not made out of levity or by col-
lusion, fear or restraint, between the plaintiff and défendant, for the
mère purpose of being separated from each other, but in sincerity
314 125 rEDEBAIi EEPOBTEE.
and truth, for the causçs mentioned iji the pétition." Does she regard
such oaths as mère "wafer cakes"? If so, what respect can this court
haye for her testimony , in this case? After solemnly swearing to
such serious charges against her,hustand, that she could go back to
his bed rather évidence? a lack of moral sensé on her part, and the
overruling Power and influence of the husband over her. It can very
well be understood why the husband, Henry Kee, should take her
back and hold her, as he was a mère pensioner upon her inçpme. The
uncontradicted évidence is that when tjje last pétition was drawn, after
she was of légal âge, she was distînçtly advised by her counsel that the
former grievances complained of hâd been condoned by her subsé-
quent cohabitation with her husband;, whereupon she detailed to
her attorney the other acts of outrage upon lier by her husband, re-
cently committed, and protested that she would never again return to
him as she had done heretofore. The compromise had then been con-
summâted, and she was under no coercion. The testimohy <^f Judge
Robertson is that there had been njutual criminations and récrimina-
tions between this couple. Within a. short time prior to said October
term of this court, 1902, the husband had charged her with acts of in-
fidelity-^undue intimacy with other men. Yet within three days after
the last suit for divorce was filed' she and her husband were found in
the hands of the défendant O'Day, as hereinafter detailed, and the
divorce suit was again discontinued. What regard can the court hâve
for her uncorroborated statements?
10. I am persuaded from the évidence in this case that the présent
controversy would never hâve come to plague this court and the
public had. the défendant John O'Day, Jr., not interposed, inspired,
and fostered this further litigation. As the testimony discloses,
serious charges were préferred agai:ijst the firsti curator, the father of
the défendant John O'Day, Jr., for malversation in office as curator —
of having committed waste and misappropriation of the proceeds
of the property belonging to his yvard, for which an accounting had
been demanded. As soon as the compromise settlement came to his
ears, the défendant O'Day conveniently met Mary Kee and her hus-
band, and, after suggesting to them ' his conception that they had
fared badly in the settlement, he conducted them to a lawyer of his
chopsing, who is conducting this contest on behalf of the défendants.
The mailed hand of O'Day at once appears in the contest on the 20th
day of Octçber, 1902, when the Kees were conducted to his attorney,
and a hard and fast contract was drawn up by O'Day's attorney and
executed by the défendants, releasing and acquitting, with repetitious
particularity and most comprehensive légal terminology, the O'Days
from any and ail claims and demands, of whatsoever character, on ac-
count of the curatorship of John O'Day, Sr. The considération exu
pressed therefor was the sum of $900, to be paid to the said Mary
in monthly installments pf $75 each. The following excerpt from
the cross-examination of John O'Day, Jr., is significant : "Finally
she [meaning Mary] came over and her husband came aftervvards —
no, I belîeve they came together — and we made arrangements where
I was to let her hâve nine hundrçd dollars, or enough money to prose-
cute this case. * * * ghe talked about an attorney, and asked
BUNEL V. O'dAT 315
me about Mr. Allen, and I told her that Mr. Allen was a very good
attorney, and could be depended on — what lie said. She said that
she had had so much dealing with corrupt lawyers she was a little
'leary.' I told them they need not be afraid of Mr. Allen, and so I
took Mr. Allen over that evening, and that is when thèse contracts
were made — that evening or the next evening after that thèse con-
tracts were drawn up."
11. In passing, it is not impertinent to say that it cornes with little
grâce of consistency for the défendants to suggest in argument that
the complainant obtained an unconscionable advantage over the de-
fendant Mary in the settlement, in obtaining an assignment of any
claim she had against her curator for waste and misappropriation,
when this contract of release obtained by John O'Day, Jr., shows that
he estimated the matter at $900, doled out in payments of $75 per
month, and to aid in maintaining further contests between the com-
plainant and Mary. The évidence also shows that on the day he met
with the Kees he furnished them with money, and as soon as he got
the contract drawn up for the release of his father's estate, and he
knew the lawyers had also obtained a written contract from her by
which they were to receive one-third of ail that was recovered in this
proceeding, he spirited Mary and her husband away in a closed car-
riage, at the hour of midnight, and sent them to another county, and
tried to deceive the complainant's counsel as to their whereabouts.
The money to support the présent litigation has been furnished by
the défendant O'Day. When the court read this branch of the évi-
dence respecting the exécution of said two written contracts, one in
favor of O'Day and the other of the lawyer, two thoughts occurred :
One was with what little consistency can the defendant's counsel
claim, as they do in the tendered cross-bill, that when the défendant
Mary executed the compromise agreement and the answer she was so
debilitated and weak in body and mind that she was incompétent to
make such agreement, while within three days thereafter they had
her exécute the important and extreraely technical contracts which
were to absolve John O'Day, Sr.'s, estate from liability for his cura-
torship, and to pass one-third of the estate which might be recovered
in the litigation to the lawyer. The other reflection was, how much
shall it profit the défendant Mary in the end should this motion be
sustained?
12. No professional mind can read the examination of the défend-
ant Mary by her counsel without the impression that she was testi-
fying rather on a theory constructed for her than on facts known to
her. The questions were most leading and suggestive, and after a
fashion made the testimony more that of the questioner than the party
interrogated. When on cross-examination she was carried out of
this theoretical field she frankly stated that the terms of the settle-
ment were satisfactory to her if the $10,000 had been paid. The évi-
dence shows clearly enough that her dis satisfaction with the arrange^'
ment respecting this $10,000 originated after the settlement, and was
produced solely by the suggestions of the parties who got into this
case in the intecest of the O'Days. When questioned respecting this
matter, she said that the complainant had never made her a promise
316 125 FEDERAL REPORTER.
he did not fulfiU, except the one respecting this $10,000; that the
mémorandum did not say when it was to be paid; whereupon the
following questions and answers were made: "Q. Did you hâve any
idea that he was not going to do that right off? A. I didn't at the
time until I came to tovvn. Q. Who told you? A. Several différent
ones — Mr. Allen told rne for one. * * * He said it didn't say
when he was going to do it." The évidence also shows that the ar-
rangement respecting this $10,000, as expressed in the mémorandum,
was disGUSsed by and with the défendant Mary at the time the mémo-
randum was so drawn. Judge Robertson testifîed that he distinctly
advised her that she would not be able to check on this $10,000 fund
at will, and that she could only draw the income, and that it was said
in the course of the conversation that her husband could not get hold
of it to squander it, and she said that she understood it, and was satis-
fied to hâve it fîxed that way, just as the like arrangement for $10,000
for the benefit of her mother. The written mémorandum is in words
and figures as follows :
"Oetober 16, 1902.
"I glve to my half-slster, Mary Earies Kee, the use of ten thousand dollars
for anfl during her natural llfe, the money to be deposited with the New
York Llfe Insurance & Trust Company of New York City. She is to draw
the interest on same during her natural llfe.
"[Signed] H. Bunel."
As the mémorandum does not express any considération therefor,
it is perfectly compétent to show by paroi what the considération was ;
and, likewise, as the contract on its face does not pufport to express
the whole contract, that can be suppliéd by paroi. The very circum-
stances under which this' mémorandum contract was given are such
that the law itself would imply that the money should be deposited
with the trust company in a reasonable time. It does not He in the
mouth of the défendant Mary to complain that this money was not
deposited. Before the complainant, under the circumstances, had a
reasonable time in which to go to New York and make such deposit,
within three days of the completion of the compromise agreement, she
repudiated the whole transaction, and employed counsel to avoid and
set it aside, thereby notifying the complainant that she would not
accept this money. How can she then complain that it was not de-
posited? One cannot complain that a tender was not made after
notifying the obligor that he will not accept. Under such conditions,
the law would not exact that the complainant should hâve made the
deposit of $10,000 with the trust company, in fulfîllment of the pro-
visions of the contract when he would lose the benefit of the use there-
of, while the défendant was litigating with him, as the trust instru-
ment would hâve required that the interest thereon should be paid to
Mary.
Moreover, the parties are in a Court of equity, and the court has
jurisdiction both of the parties and the subject-matter ; and in the
exercise of its plenary pOwer for administering exact justice it can
and will protect the défendant against any possible loss respecting this
$10,000, by requiring the complainant, within a specified time, after
the défendant Mary shall hâve filed with the clerk of this court her
written notice of her willingness to accept the settlement, to deposit
BUNEL V. O'DAY, 317
said fund with the trust company. The court will retain jurisdiction
of this controversy until such indemnity is given or said sum is so de-
posited. This is ail that the défendant can in conscience exact.
13. It is suggested in argument by counsel for the défendant that
the bill of complaint does not state a cause of action on its face, for
the reason that it discloses the fact that during the period of gestation,
prior to the divorce between Charles Emile Bunel and his then vvife,
he had the means of access to her, and the law présumes the legit-
imacy of Mary. Without stopping to discuss the légal effect of such
fact on the compromise, it is suflicient to say that the bill does not
disclose a state of facts on which the presumption of legitimacy arises.
The rule of law, founded on the public policy, of maintaining the in-
tegrity and sanctity of the domestic relation, is that, when the mar-
riage relation is once proven to exist, "nothing shall be allowed to
impugn the legitimacy of the issue short of the proof of facts showing
it to be impossible that the husband could be the father." Patterson
V. Gaines et ux., 6 How. 550, 588, 12 L,. Ed. 553. This rule is ex-
pressed by Judge Sanborn in Adger et al. v. Ackerman et al., 52
C. C. A. 577, 115 Fed. 133, as follows: "Once a marriage is proved,
nothing can impugn the legitimacy of the issue short of proof of facts
which show it to hâve been impossible that the husband could hâve
been the father." The bill, as already shown, not only allèges that
on a trial of the issue joined between Charles Emile Bunel and his
then wife it was alleged, proved, and adjudged by the court that the
défendant Mary was the ofifspring of an adultérons intercourse be-
tween the wife and Alfred Earles, but it is also alleged that said
allégation is true, and that when said Mary was begotten the évidence
would show that Charles Emile Bunel was impotent — physically in-
capable of an act of procréation — and that from and after September,
1883, the period within which said child could hâve been begotten in
lawful wedlock, the husband was away from the wife, living several
miles from her, and that he did not at any time thereafter hâve access
to her person. As the presumption in question is not a conclusive
presumption, it is one that would disappear when the truth appeared.
The rule of law only imposes upon the party impeaching the legiti-
macy the burden of establishing the impossibility of procreative inter-
course. No matter, therefore, what the proximity of the husband to
the wife, if in fact he was impotent the presumption of his paternity
would falî. Equally so, no matter what the possible means of access
were, it would be compétent for him to show by indubitable évidence
that as a matter of fact he had no intercourse with her. In other
words, it would be simply a question for the court as to the degree of
such proof, within the rule, to satisfactorily overcome the presump-
tion of legitimacy. Whether or not the testimony of the physician
referred to in the bill of complaint as to the fact of impotency would
be reliable cannot aflfect the averment of the bill. Although "a coun-
try doctor," as contemptuously described in counsel's brief, he might
be as good a judge of the instrumentalities of procréation as the city
doctor.
14. It is a wholesome rule of law, equally founded in sound public
policy, that an amicable compromise of a litigation of the character
318 125 FEDERAL REPORTER.
of this shqixld be favored by the courts. No matter if, on further in-
vestigation or subséquent development, it should appear that the de-
fendant knew at the time that the demand was not well founded in
law or in fact, it would not afïect the vaUdity o£ the compromise. If
fairly obtained.it should stand. "The value consists in the release
from an uncertàin position, with its anxieties, from apparent danger,
and from inévitable expenses and trouble." Bishop on Contracts
(1887) § 57; Parker v. Enslow, 102 111. 272, 40 Am. Rep. 588; Flan-
nagan v. Kilcôme, 58 N. H.- 443 ; Little v. Allen, 56 Tex. 133 ; Allen
V. Bucknam, 75 Me. 352; Wehrum v. Kuhn, 61 N. Y. 623; Troy v.
Bland, 58 Ala. 197 ; Jones v. Rittenhouise, 87 Ind. 348.
This rule is especially applicable to family agreements and settle-
ments, which is expressed as foUows in 12 Am. & Eng. Enc. of Law
(2d Ed.) p. 87s :
"Family agreements and settlements are treated with especial favor by the
courts of equity, and eqiîities admlnlstered in regard to them which are not
applied to agreements generally, and this on the ground that the honor and
peace of familles make it just and proper to do so. Accordingly, it has been
laid down as a gênerai rule that a family agreément entered into upon the
supposition of a right, or of a doubtf ul right, though It af terwards turna out
that the right was on the other side, shall be blnding, and the right shall not
prevail against the agreément of the parties/'
And the gênerai rule is that the court will not inquire into the
adequacy or inadequacy of the considération, for the reason that it is
enough to support the agreément that there was a doubtful question
and the compromise was deliberately made. Smith v. Smith, 36
Ga. 191, 91 Am. Rep. 761 ; Owen v. Hancock, i Head, 573; Bellows
V. Sowles, 55 Vt. 391,-45 Am. Rep. 291; Naylor v. winch, i Sim.
& S. 555. Had this compromise settlement been consummated dur-
ing the minority of the défendant Mary, it would hâve been the duty
of the court to carefully scrutinize it and sedulously guard and pro-
tect her interests; and even though it was not consummated until
after her légal majority, and she was sui juris, it would be the duty of
the chancellof to see that it was free from fraud and intended imposi-
tion.
15. While the court may not, as it should not, shirk from any duty,
however burdensome or unpleasant, in administering justice and right
between the parties, no matter how reprehensible their conduct and
character may be, yet no judicial eye can scan this record without dis-
cerning the low state of morals of the two principal contestants, and
applauding, at least, their judgment in putting an end to the strife
by adjustment out of court, And this court ciannbt refrain from giv-
îng expression to the conviction, deepened by the exhibitions of
prodigality and depravity of the contending parties, that often no
greater misf ortune can b^fall children than great riches cast upon
them by gifts and inheritance. The intended benefîcence of the
father of Charles Em.ile Bunel in creating the trust estate in question
has proven but a curse to the beneficiaries. Neither pf thèse children,
as their testimony shows, submitted to the labor of acquiring an
éducation. They seem to hâve spurned the honors and dignities
which corne, from labor. The boy has been content to be a mère
parasite, to exist in idleness, and rot out in wantonness and riot;
BUNKL V. o'DAT. 31g
while the girl, aspiring to a share in the bounty of the trust, has grown
up with a roving fancy and unstable habits, illiterate and wayward,
contemning parental authority and respect, eloping when a mère child
and marrying a mère boy, who, in thoughtlessness, has eaten only
the bread provided through the wife's access to the claimed inherit-
ance. And in this case this condition of affaira is aggravated by its
demoralizing effect upon lawyers and hungry retainers, who became
80 largely interested in the spoils of the controversy that their per-
sonality is thrust conspicuously into the case. As to the O'Days,
while charging Heflfernan with getting on two sides of the contro-
versy, as respects them the évidence présents the spectacle of the
brother of the défendant O'Day standing in with Heffernan and claim-
ing a share of his large fee as counsel for the complainant, while aid-
ing by his testimony the interests of his father's estate, of which he is
a benefîciary heir, by trying to aid his brother in the attempt to upset
the compromise settlement. And after the disclosure of the contract
obtained by the défendant O'Day from the Kees, by which he ob-
tained the release of his father's estate from accountability for the
alleged devastavit and misappropriation of the ward's estate, he essays
in his déposition to palliate his situation by saying he is nevertheless
now willing to account to the ward for any wrong of his father's;
while Mr. Hefïernan, in his déposition, concèdes that he overgrabbed
in the amount of property he obtained from his client for his fee, and
expresses a willingness to make restitution.
i6. The cross-bill proposed to be filed herein by the défendants
Mary and Henry Kee makes F. S. Hefïernan a party thereto, for the
reason that the deeds executed in pursuance of the agreement in part
placed the title to some real estate in him. A cross-bill is in the na-
ture of a défense, and can only be filed between parties to the original
suit. It cannot bring in new parties into the controversy. "The
original bill and cross-bill are but one cause. It must be confîned to
the subject-matter of the original bill, and cannot introduce new and
distinct matters not embraced in the original suit. * * * a cross-
bill to make new parties is not only improper and irregular, but whoUy;
unnecessarv." See Thruston v. Big Stone Gap Imp. Co. (C. C.) 86
Fed. 485 ; Goff v. Kelly (C. C.) 74 Fed. 327; Lautz v. Gordon (C. C.)
28 Fed. 264; Johnson S. R. Co. v. Union S. & S. Co. (C. C.) 43
Fed. 331 ; Stonemetz P. M. Co. v. Brown, etc. (C. C.) 46 Fed. 851.
The cross-bill, therefore, tendered by the défendants is wholly inad-
missible.
The court will form the order of entry hereon requiring the deposit
to be made by the complainant of the $10,000 within a specified time
after the défendant Mary shall hâve signified her willingness to accept
the same, whereupon the compromise settlement shall stand; the
court retaining jurisdiction for such further order, etc., as shall be
proper and essential to the ends of justice.
82Q 125 FBBBBAL BEJFOBTEB.
NEW YORK & CtJBà. MAIL S. S. CO. V. UNITED STATES,
(blstrlct Court, S. D. New York. October 21, 1903.)
1. IÇTEHNAL RBVENCB— STAMP TaX ON ShIP'S MANIPESTS— CONSTITDTIONALtTT.
The provision of War Revenue Act June 13, 1898, c. 448, § 25, 30
Stat. 461, which imposes a graduated stamp tax on manifeste for clear-
ance of the cargo ot àny ship, vessel, or steamer for a foreign port, is
in violation of tlie constitutional provision prohibiting the laying of a
tax or ûaty on articles exported f rom any state, and vold. The manifest
is an essential part of, the ship's papers, required by law, and without
which foreign commerce cannot be carried on by séa, and a tax thereon
is équivalent to one on the cargo thereln declared.
On Demurrer to Pétition.
Curtis, Mallet-Prevost & Coït (Wm. Edmond Curtis, of counsel), for
petitioner.
Henry L,. Burnett, U. S. Atty., and Charles D. Baker, Asst. U. S.
Atty.
HOLT, District Judge. This is a demurrer to a pétition in a suit
agrainst the United States in this court under the act of March 3,
1887, c. 359, 24 Stat. 505 [U. S. Gomp. St. 1901, p. 752], commonly
known as the "Tucker Acti" The action is brought to recover $240,
the amount expended by the petitioner for stamps affixed to manifests
of cargoes exported from New York to Cuba in the steamers owned by
the petitioner. War Tax Act June 13, 1898, c. 448, § 25, 30 Stat. 461,
imposed the following stamp taxes on manifests:
"Manifest for custom house entry or clearance of the cargo of any ship,
vessel or steamer for a foreign port. If the registered tonnage of such ship,
vessel or steamer does not exceed three hundred tons, one dollar. Exceeding
three hundred, tons and not exceeding six hundred tons, three dollars. Ex-
ceeding six hundred tons, flve dollars."
The pétition allèges that such tàx on manifests violated the pro-
vision of the Constitution of the United States that "no tax or duty
shall be laid on articles exported from any state." The sole question
raised by the demurrer is whether sueh provision is unconstitutional.
The United States Suprême Court deeided, in the case of Fairbank
V. United States, 181 U. S. 283, 45 L. Ed. 862, that the stamp tax im-
posed by the same act on foreign bills of lading was, in substance and
effect, équivalent to a tax on the articles included in the bill of lading;
that it was therefore a tax or duty on exports, and was unconstitu-
tional.
I am unable to see any' difiference in princîple between a stamp tax
on a manifest and a stamp tax on a bill of lading. A manifest is a
déclaration of the entire cargo ; a bill of lading is. a déclaration of a
spécifie part of the cargo. A manifest is essentially a summary of
ail the bills of lading. If there is any distinction, it seems to me
that the constitutional prohibition of a tax on a foreign bill of lading
applies with still greater force to a tax on a manifest. Previous to
the Harter act (Act Feb. 13, 1893, c. 105, 27 Stat. 445 [U. S. Comp.
St. 1901, p. 2946]) there was, so far as I am aware, no statute of the
United States requiring bills of lading to be given. They were uni-
NEW TOBK * O0BA MAIL 8. S. CO. V. UNITED STATBS. 321
versally given, but they were a mère matter of business convenience,
and were based excluéively on contraçt. The stâtiites of the United
States, however, hâve always required that a sworn pianifest be fur-
nished by the master upon the clearance of any vessel from thîs coun-
try for a foreign port. Rev. St. U. S. § 4197 [U. S. Comp. St. igoi,
p. 2840]. A manifest is one of the ship's papers which must be pré-
sentée! to the collecter upon the entry of any vessel into the United
States. Rev. St. U. S. § 2790 [U. S. Comp. St. Supp. 1903, p. 1869] . It
is a part of the ship's papers, essential, on ail voyages, for the protection
of the ship and the owners of the cargo, which it is the duty of a master
to take on board and caref uUy préserve. 2 Parsons on Shipping, 3.
A voyage made without the regular ship's papers is presumably illégal.
In case of a seizure in time of war, the absei;ice of ship's papers is pre-
sumptively an adéquate ground for condemnation. 2 Parsons on
Shipping, 476. Prize cases, when no claimant appears, are ordinarily
heard upon the ship's papers and the évidence taken in preparatory. 2
Parsons on Shipping, 473. Any concealment Or spoliation of ship's
papers is a fact of great weight in prize cases. 2 Parsons on Shipping,
475. In short, while a bill of lading is ordinarily merely a convenient
commercial instrument, a manifest of the cargo is absolutely essential to
the exportation of property in vessels at ail. Congress could abso-
lutely put an end to any exportation whatever by a sufficiently high
tax on manifests, if it had the power to impose such a tax. If, there-
fore, a stamp tax on a bill of lading is a tax upon the property ex-
ported, a stamp tax on a manifest seems to me to be still more clearly
such a tax.
Moreover, in the dissenting opinion in Fairbank v. United States,
supporting the view that a tax on a bill of lading was a tax on a paper
or document, and not on the property exported, much stress was laid
on the fact that the tax imposed by the act on a bill of lading was an
unvarying amount (10 cents upon each bill), irrespective of the value
of the property. "The opinion states: "If Congress had gradûated
the stamp duty according to the quantity or value of the articles ex-
ported, there might hâve been ground for holding that the purpose
and the necessary resuit was to tax the property, and not the vellum,
parchment, or paper on which the bill of lading was written or
printed." Page 317. The provision of the act imposing a tax on
manifests did graduate the stamp duty, to a certain extent, according
to the capacity of the ship to increasé the quantity or value of the arti-
cles exported. If the registered tonnage of the ship did not exceed
300 tons, the tax was $1 ; if it exceeded 300 tons, and did not
exceed 600 tons, it was $3 ; and if it exceeded 600 tons, it was $5.
Without laying too much stress, however, upon this considération, I
think that the essential character of the stamp tax on manifests was
that of a tax on exports, in the same sensé in which a stamp tax on a
bill of lading was a tax on exports.
My conclusion is that the demurrer should be overruled, with leave
to the défendant to answer within 20 days.
125 F.— 2t
■ ' ' (I)îfelèt'C6ïrtt/'È. *bJ '^ànsii, fi; îtf Oetobèr fii, 1908;)
■■.••'-:> aîri:* îffiVji i:j;,r- ; viis ff •'.,.:,^. , 1.':.:,;,..,,, ■ .;,.;■;( ;,':; ■_
1. Civil jJÇiftBi5ST^'PowEB! îôf.jCongbesb lOjPBpirœcT— Çonstitctiona.litt of
.,8T/L'i'âl;^i.' •— ^,-^" ■- • ".•.,,■■ ■ ' •>■ ...,■■,.>
' Çipnetésy tii^è'tte' poifér, tmaër ttie thirtéentli constitùtional ^ amend-
: "^tmdtrmr ^émA tànzemon the Unltea IStates In the enjoymébt of . those
rl^hfs i^Wc^ ;air« f,»n<Wpi9&t^l-.aniil;bélong tpevery citizen,; Jf ,ttie depriva-
„ .tlon of avcli'j^ghis is çoïely^Decause of racé or color; and section 1 of
the ciVn rightâ act (Rey, St'XJ. S. î 1978 ÏU. S. Comp. St 1901, p. 1262])
ia yMliii ^m T^bvfêf.; ' ■ '■ ' '■■' ■ ' / ■'■■' ';
& CoNSPiîiio*— I^is'E'^ïittiiïcf ÉXERCïaB OF Civil RiGHTB. ■
là. cpnspimey JpetlweBn.tVFo or more persous to prevent ; negro citizens
from éxerci^tng/it^e- rigli|,.toJea^e, ajid cultiyate land, because they are
negroeSfis ^ con^jjlraçy.'tp dépave tïiem of a right sCcuré'd to them by
. the CbnséitirtloH"and latv^ oiithe Ùnlted States, within thè meaning of
EeV; St tl/«S.'-| 5508' [Ûi Sj Goà^. St. 1901; p. 3712]. ' i -
Qn Demurijer.tp.Ii^fiiGtijfpt^t. , , ., m- ;■
W. G. Whipple,-U; S. Attys-. - ■■; • >.. ;.: - . \ ;,.; :.
O. Ni ■ Killough) Q-uarleB 'SîMobre,. andîL». G. Going,- for défendants.
TRIEBER; District JudgelK «ITte défendants arç indictài for a vio
latièfl: of the i^rovisiorisiof 'Biectiqn SS08, Rev. §>t. U. S. [U: S. Comp.
St'iigoil'p. 3712»] ; the'JSpedfiC'ChaTgeibdn^ that they cônspired to
injure, oppress/tetndiptimidaÈe- certain! citizens of the United States,
of Afiricanidescent)' iii tteeofree exercise' or' en joyrtient of certain
rights secured to them by the Constitution and laws of the Unit-
ed' States; on kcffount ôf theiti being negro'es; The'fight which it is
charged the défendants sôught ïo prevent the persoris named in the
ihdittment fromexerci'singj'On açcountof their race and color, is the
right to leaselakdë'aindicultivateitheiii— aright allegedtô'be guaran-
tied to them by the thîrtéëntK amendment t<3 the Constitution of
the' United Staites' and the ^provisions of section i of the act of Con-
gress entitled '"lAk act' to protéct al} persoiis in the United States in
their civil rights* and îafnis'h means of their vindication," enacted
April 9, i86â fchapter .51,; 14; Stat. 27, digested in the United States
Revi8ed':Statutes as Section 19(78; "U. S. Comp. St. 1901, p. 1262).
The demurrer challenges -thfe Gonstitutionality of both statutes. The
constittitionality of' section (5508' is no longer open to controversy,
its''Validity hàving- beencdetermined and' upheld by' the Suprême
Court in Ex parte Yarbrbugh, iio^U. &'65i, 4 Sup. Ct. 152, 28 L.
Ed. 274; .United States v. Waddellï,. rii2 U." S- 76, 5 Sup. Ct. 35, 28
1,. Ed. .673; Baldwin wiiï^Tanksi 120 U. S. 678/7 Sup. Ct. 656, 763,
32 JL,. Edi 766; I/dgaffV'.'United States; 144 U. S. 29x^:12 Sup. Ct.
617, 36 L. Ed. 429;';Mptes V. United States, 178 U. S. 458, 20 Sup.
Gt.'993,'44:il<.i^d;'i;r^0.nr -.':■: 1 ■ ■';;/ .-,
The only question, therefore, left fiôr dietermination, is the constitu-
tàonalityjiof section iJofdhercivil rights act of April 9, 1866: Nothing
in the Constitution of the United ^Staies as originally adopted, or in
any of the first twelve amendments to that instrument,- adopted
shortly after the ratification of the Constitution, would warrant the
enactment of this act by Congress. Section 2 of article 4, guaran-
UNITED STATES V. M0BHI3. 823
tying to citizens of each state ail privilèges and immunittes ôf citizen»
in the several states, merely secures and protects the right of a citizen
of one State of the United States to pass into any other state of the
Union for the purpose of engaging in lawful business, to acquire and
hold property, to maintain actions in the courts of that state, and to
be exempt from taxes and excises not imposed by the state on its
citizens, free from ail discriminations — such discriminations being
made by the state in its capacity of a sovereign — but does not apply
to acts of individuals. Paul v. Virginia, 8 Wall. i68, 19 L. Ed. 357;
Ward V. Maryland, 12 Wall. 418, 20 I^. Ed. 449; Slaughterhouse
Cases, 16 Wall. 36, 21 L. Ed. 394; Blake v. McClung, 172 U. S. 239,
19 Sup. Ct. 165, 43 L. Ed. 432.
If the power to enact the législation involved in this proceeding
exists at ail, it must hâve been granted by some provision of the
last three amendments to the Constitution — the thirteenth, fourteenth,
or fifteenth. As the acts contemplated by this statute are those of
individuals, as well as of ofïicers in the enforcement ofthe statutes
of a state ar in the discharge of officiai functions, neither the four-
teenth nor fifteenth amendment can be relied upon as an authority
for it, for it is now weU settled that thèse two amendments hâve
référence solely to actions of the state, and not to any action of pri-
vate individuals, although it is immaterial whether the state acts
by its législative, executive, or judicial authority. United States v.
Reese, 92 U. S. 214, 23 L. Ed. 563; United States v. Cruikshank,
92 U. S. 542, 23 L. Ed. 588; Virginia v. Rives, 100 U. S. 313, 25
L. Ed. 667; Ex parte Virginia, loo U. S. 339, 25 L. Ed. 676; Civil
Rights Cases, 109 U. S. 3, 3 Sup. Ct. 18, 27 L. Ed. 835 ; United
States V. Harris, 106 U. S. 629, i Sup. Ct. 601, 27 L,. Ed. 290; James
V. Bowman, 190 U. S. 127, 23 Sup. Ct. 678, 47 L. Ed. 979-
The power of Congress to enact such législation must, therefore,
be found in the thirteenth amendment, else it does not exist. That
Congress assumed that its power was derived from that amendment,
and not from either of the later amendments, is conclusively shown
by the fact that at the time this law was enacted, in 1866, neither
the fourteenth nor fifteenth amendment had been ratified, or even
submitted by Congress to the states. The fourteenth amendment was
submitted for ratification by resolution of June 16, 1866, and de-
clared a part of the Constitution on July 21, 1868, while the resolu-
tion to submit the fifteenth amendment to the states was only passed
by Congress on February 27, 1869, and the amendment promulgated
as a part of the Constitution on March 3(>, 1870. The language of the
thirteenth amendment difïers materially from that used in the two
later ones. While the fourteenth amendment provides that "no state
shall make or enforce any law which shall abridge," etc., and the fif-
teenth amendment déclares that "the right of citizens of the United
States to vote shall not be denied or abridged by the United States
or by any state on account," etc., the, thirteenth amendment déclares,
"Neither slavery nor involuntary servitude, exeept as a punishment
for crime whereof the party shall hâve been duly convicted, shall
exist within the United States or any place subject to their jurisdic-
tion." There is no limitation in that amendment confining the pro-
&Zi 125 Ff DBKAL BEPORTEB.
hibitionitothe States, but it inçlu des everybody within the jurisdic-
tipp of tfe[,e<natiopal governnient. This distinction in the language
of thèse amendments was fully reeognized by the Suprême Court in
the Civil Bights Cases, 109 U. S. 3, 3 Sup. Ct. 18, 27 L. Ed. 835.
Mr. Justice Bradley, in delivering the opinion of the court, said :
"We mtist not forget that- the province and scope of the thirteenth' and
fourteenth amendments are différent. The former simply aboUshed slavery.
The latter prohlbitèd the st^tes from abridging the privilèges or Immunities
of cltlzens of the United States by deprivlng them of llfe, liberty, or prop-
erty T^îthcrtit due process of la>v, and from denying to any the equal pro-
tection of the laws. The ameBdments are différent, and the powers of Con-
gress nnder: them are différent. What Congress has power to do under one,
it may not hâve power to do under the other. Under the thirteenth amend-
ment,,!); has on!y to do with plavery and Its Incidents. Under the fourteenth
amendïtient, It has power td bounteract and rendèr nugatory ail state laws
and proceedings whlch havé the effect of abridging any of the privilèges or
immunities of cltlzens of the United States, or to deprive them of lif e, lib-
erty, or property without due process of law, or to deny to any of them the
equal protection of the laws. .Under the- thirteenth amendment, the légis-
lation, 80 far as necessary or proper to éradlcate ail forms and Incidents of
slavery and involuntary servitude, may* be direct and priniary, operating
upon the acts of Indivlduals, whether sanctloned by state législation or not.
Under the fourteenth, as we hâve alreâdy shown, it must necessarily be
and can.only be corrective In Its charactçr, addressed to counteract and
afford rélièif against state régulations or prpceedings." 109 U. S. 23, 3 Sup.
Ot. 30, 27 p. Ed. 835.
Congress ,is, therefore, authorized by the provisions of the thir-
teenth ahiehdment to legisiate against acts of individuals, as well as
of the States, in ail matters necessary for the protection of the rights
grantedby that amendment.
Slavery and involuntary servitude being prohibited within any place
subject to the jurisdiction of the United States, and Congress being
authorized by the second section of the amendment "to enforce this
article by appropriate législation," does that vest it with the power to
protect those emancipated from slavery by this constitutional amend-
ment in the enjoyment of such rights as it is chafged in the indictment
the défendants' conspired to deprive them of, or is that power stjll
solely reserved to the states, notwithstanding the adoption of this
amendment ?
The powers of Congress are limited to such matters as are ex-
pressly or by implication g:r&nted to it by the national Constitution,
that being an enabling instrument, while the Constitutions of the states
are limitations upon the power of the Législatures of the respective
states. There can be no doubt that the same power may exist at the
same time in the nation as well as the states. Gibbons v. Ogden, 9
-Wheat. I, 235, 6 L. Ed. 23; Passenger Cases, 7 How. 540, 553, 561,
12 L. Ed.'702; Missouri, K. & T. Ry. Co. v. Haber, 169 U. S. 613,
627, 18 Sûp. Ct. 488;, 42 L. Ed. 878. The same act or séries of acts
may conétitiite an offense eiqùally against the United States and the
state, subféôtiég the guilty party to punishment under the laws of each
govemmenti Fox v. Ohio; ^ How. 410, 433, 12 L. Ed. 213; Moore
V. Illinois, 14 How. 13, 19, I4 L. Ecl. 306; United States v. Gruik-
shank, 92 U. S. 542, 550, 23 L. Ed. 588; Ex parte Siebold, 100 U. S.
371, 390, 23 L. Ed. 717; Cross v. North Carolina, 132 U. S. 131, 139,
UNITED STATES V. MOEBIS. 325
10 S'jp. Ct. 47, 33 L. Ed. 287. The citizens of the United States rési-
dent within any state are subject to two governments — one state, and
the other national. Every citizen owes allegiance to both of thèse
governments, and, within their respective sphères, miist be obedient to
the laws of each. In return he is entitled to demand protection from
each within its own jurisdiction. The thirteenth amendment is a
great extension of the powers of the national government. In the
language of Mr. Justice Swayne in United States v. Rhodes, i Abb.
28, 37, Fed. Cas. No. 16,151:
"It trenches directly upon the powers of the states and of the people of
the states. It is the tirst and only instance of a change of thls character
in the organie law. It destroyed the most important relation between capital
and labor In ail the states where slavery existed. It afCected deeply the
fortunes of a large portion of their people. It struck out of existence millions
of property. The measure was the conséquence of a strife of opinions and
a conflict of interests, real or imaginary, as old as the Constitution itself.
Thèse éléments of discord grew in intensity. Their violence was increased
by the throes and convulsions of a civil war. The impetuous vortex finally
swallowed up the evil, and with it forever the power to restore it. Those
who insisted upon the adoption of this amendment were animated by no
spirit of vengeance. They sought security against the récurrence of a sec-
tional conflict. They felt that much was due to the Afriean race for the
part it had borne during the war. They were also Impelled by a sensé of
right and by a strong sensé of justice to an unoffending and loug-suffering
people. Thèse considérations must not be lost sight of when we come to
examine the amendment in order to ascertain its proper construction."
The efïect of this amendment on the negro, as stated by the same
learned jurist in that case, is "that the émancipation of a native-born
slave by removing the disability of slavery made him a' citizen without
any further act of Congress."
Chancelier Kent defines "citizens" as foUows : " 'Citizens,' under
our Constitution and laws, means free inhabitants born within the
United States, or naturalized under the laws of Congress." i Kent,
Comm. 292. The possession of political rights is not essential to citi-
zenship. Minor v. Happersett, 88 U. S. 162, 22 L. Ed. 627; 6 Am.
& Eng. Enc. of Law, 15.
Every citizen and freeman is endowed with certain rights and priv-
ilèges, to enjoy which no written law or statute is required. Thèse
are fundamental or natural rights, recognized among ail free people.
In our Déclaration of Independence, the Magna Charta of our re-
publican institutions, it is declared:
"We hold thèse rights to be self -évident: That ail men are created equal;
that they are endowed by their Creator with certain unalienable rights;
that among thèse are life, liberty and the pursuit of happiness. That to se-
cure thèse rights governments are instituted among men, deriving their just
powers from the consent of the governed; that whenever any form of gov-
ernment becomes destructive of thèse ends, it is the right of the people to
alter or abolish it, and to institute a new government, laying its foundation
on such principles, and organizing its powers in such form, as to them shall
seem most likely to efCect their saf ety and happiness."
Nor were the framers of the Constitution of this state less emphatic
in the expression of their views on this subject, for in the bill of
rights of the state of Arkansas it is provided:
"Ail men are created equally free and Independent, and hâve certain
Inhérent and Inaliénable rights, amongst which are those of enjoying and
326 .125 FEDEBAIi BHPOETER.
. defendkiglife and liberty; of acquiring; posâessing and protectlng property
and repH^fJÔri, and of pursulng their qwn happiness. To secure tbese rights
goveiiStiéntB are instituted among meri, deriving tbeir just-powèrs from the
consent of i tlie governed."
Can there be any doufct that the right to purchase, lease, and culti-
vate larids^ or to perforip honest labor for wages withwhich to sup-
port hiniself and family, is among thèse rights thus declared to be
"inhérent and inaliénable" ? In Corfield v. Coryell, 4 Wash. (C. C.)
37i,Fed. Cas. No. 3,230, decided as early as 1823, Mr. Justice Wash-
ington said: "What thèse fundamental rights are would perhaps
be more tedious than difficult to enumerate. They may, however,
be ail comprehended under the following gênerai heads." And there-
upon he enumerated, among others, "To take, hold, ànd dispose of
property, either realof personal." While this opinion was deliv-
ered by the learned justicç in a cause heard by him on the circuit, it
has received the approval of. the Suprême Court of the United States
in numerous cases. Slâùghterhouse^ Cases, 16 Wall. 75, 97, 21 L.
Ed. 394; Butchers' Union Co. v. Crescent City Co., 1,1 1 U. S. 746,
762, 764, 4 Sup. Ct. 65^, 28 L. Ed. 585; Blake v. McClung, 172 U.
S. 239,. 24S, 19 Sup. Gt., 165, 43 X. Ed. 432.
In Butchers' Union Go. v. Crescent City Co., m U. S. 762, 4 Sup.
Ct. 657, 28 L. Ed. 585, ■Mf. Justice Bradley, in a concurring opinion,
says:' ' ' ', „ .;:, ,..: i .^ ,,,,'■■,■; •
"The rlght to follow any of the common occupations of Ufe Is an inalién-
able right. It was formùlàtéd as suCh under the phrase 'pui'sutt of hap-
piness' in the Déclaration of Independence, which commencéd with the
fundamental proposition that 'ail men are Created equal; that they are en-
dowed by their Creator with certain unalienable rights; that among thèse
are lif e, liberty and the pursuit of happiness.' This right Is a large in.
gredlent In the civil liberty Of the citizen."
Again, on page 764, iii U. S., page 658, 4 Sup. Ct„ 28 L,. Ed. 585,
he proceeds :
"I hold that the liberty of pursuit— the rlght to follow any of the ordinary
callings of Ufe — is one ôf tlie privilèges of a citizen of the United States."
And again, on page 765^ m U. S., page 658, 4 Sup. Ct., 28 L. Ed.
-S85': ; : ■
"But if It does not abridgé the privilèges and immunities of a citizen of
the United States to probibit :hlm from pursulng his ohosen calling, and
giving to others the exclusive right of pursulng It, it certainly does deprive
him, to a certain extent, of his liberty; for It takes from him the freedom
of adopting and following the pursult 'which he prefers, which, as already
intimated, Is à materlal part of the liberty of the citizen."
Thèse extracts were cited with approval and reafïîrmed by the
Suprême Court in Allgeyer V. Louisianà, 165 U, S. 578, 589, 17 Sup.
Ct. 427, 41 E. Ed. 832, 'Sèe, also, the.iabie opinion of Judge Jones
in The Peonage Cases (t). C.) 123 Fed. 671.
As is well known, in: many of the statès in which slavery had
existed prior tp the adoption of the tl^irteenth arnendment, législa-
tion was enacted in relation to the negroes which practically estab-
lished a System of peonage but little removed from that of slavery ;
and owing to the passions and préjudices aroused by the Civil War,
and whiçh at that time had not yet béen allayed, irresponsible per-
UNITED STATES V. MOEKIS. 327
sons would prevent negroes from working or cultivating lands, and
the courts of the states were powerless to protect them. It will
serve no useful purpose to recite in this opinion the state of affairs
then existing, but a review of them may be found in the opinion of
Mr. Justice Swayne in United States v. Rliodes, supra, and in the
Slaughterhouse Cases, i6 Wall. 36, 70, 80, 21 L,. Ed. 394. To pre-
vent thèse unjust discriminations against the negroes, Congress en-
acted this civil rights act, intending thereby to protect them in the
enjoyment of those rights which are generally conceded to be funda-
mental and inhérent in every freeman. The constitutionality of this
act, although it has never been directiy passed upon by the Suprême
Court of the United States, has been upheld by Mr. Justice Swayne
in United States v. Rhodes, supra, and by Chief Justice Chase in
United States v. Turner, i Abb. 84, Fed. Cas. No. 14,247, in both of
which cases its constitutionality was directiy involved. Mr. Justice
Swayne delivered a very elaborate opinion, reviewing most thor-
oughly the history of the amendment and the authorities bearing upon
the issues involved, epitomizing his conclusions as follows :
"It would be a remarkable anomaly if the national govemment, witliout
this amendment, could confer cltlzensliip on aliens of every race or color,
and eitizensliip, wlth civil and political rigtits, on tbe Inhabltants of Louisi-
ana and Florida, without référence to race or color, and cannot, with the
help of the amendment, confer on those of the African race, who hâve been
born and always lived within the United States, ail that this law seeks to
give them. It was passed by the Congress succeeding the one which pro-
posed the amendment. Many of the members of both bouses were the same.
This faet Is not without weight and significance. McCulloch v. Maryland,
4 Wheat. 401 [4 L. Ed. 579]. The amendment reversed and annulled the
original policy of the Constitution, which left it to each state to décide ex-
clusively for ftself whether slavery should or should not exist as a local in-
stitution, and what disabilities should attach to those of the servile race
within its limits. The whites needed no relief or protection, and they are
practically unafifected by the amendment. The émancipation which it wrought
was an act of great national grâce, and was doubtless Intended to reach
further in Its efCects as to every one within its scope than the conséquences
of a manumission by a private individual. We entertain no doubt of the
constitutionality of the act in ail its provisions. It gives only certain civil
rights. Whether it was compétent for Oongress to confer political rights,
also, involves a différent inquiry. We bave not found it necessary to con-
sider the subject."
In United States v. Cruikshank, i Woods, 308, 319, Fed. Cas. No.
14,897, the question before the court was the constitutionaHty of the
enforcement act (Act May 31, 1870, c. 114, 16 Stat. 140), which Mr.
Justice Bradley declared to be unconstitutional, as an unauthorized
assumption of power by Congress under the fourteenth amendment,
but in referring to the civil rights act, in this cause involved, ex-
pressed the following opinion:
"It was supposed that the eradication of slavery and Involuntary servitude
of every form and description required that the slave should be made a
citizen and placed on an entire equaïity before the law with the white citi-
zen, and therefore that congress had the power, under the amendment, to
déclare and effectuate thèse objects. The form of doing this, by extending
the right of citizenship and equaïity before the law to persons of every race
and color (except Indians not taxed, and, of course, excepting the white race,
whose privilèges were adopted as the standard), although it embraced many
persons, free colored people and others, who were aiready citizens in several
328 125 FEDEBAIi EBFOETBB.
of the Statéa, was necessary for tbe purpose of settling a point which had
bpeny ralsed by emlnent authority* that none but the whlte race were en-
titled to the rights of citizenshlp In this country. As disabillty tp be a
citizen and enjoy equàl rlglits was deemed one form or badge of servitude,
it ,was supposed that Congress had the power, under the amendment, to
settle thls point of doubt, and place the other races on the same plane of
privilège as that occupled by the yrhite race. Coneeding this to be true
(whleh I thlnk It Is), Congress then had the right to go further, and to enforce
its déclaration by passlng laws for the prosecution and punishment of those
who should deprive, or attempt to depirlve, any person of the rights thus eon-
ferred upon them. Wlthout havihg thls power, Congress could noi enforce
the amendment It cannot be doubted, therefore, that OougBess had the
povs-er to ùiake it a pénal ofifense tO; conspire to deprive a person of, or to
hinder him In, the exercise and enjoynient of the rights and privilèges eon-
ferred by the thlrteenth amendaient ànd thé laws thus passèd in pursuance
thereof. But this power àoes not authortzë Çoùgress to pass laws for the
punishment of ordinary crimes and offenses against persons of the eolored
race or any other race. That belongs to the state govemment alone. AU
ordinary murders, robberies, assa]i}ts, thefts, and offenses whatsoever are
eognizable only in the state courts, unless, indeed, the state should deny to
the class of persons referred to the equal protection of the laws. Then, of
course, Congress could provide remédies for Ihelr security and protection.
But in ordinary cases, where the laws of the state are not obnoxlous to the
provisions pf the amendment, the duty pf Congress in the création and pun-
ishment of offenses Is limited to those offenses which aim at the deprivation
of the eolored Çitizen's enjoyment and exercise of hls rights of citizenshlp
and of equal protection of the laws because of his race, color, or previous con-
dition of éervltude.
" To illustrate: If, in a oommunity or neighborhood composed principally of
whites, a citizen ofÀfrican descent, or of the Indian race, not withinthe excep-
tion of the amendrnent, should propose to lease and cultivate afarm, and a corn-
bination should be formed to expel him andprevent him from the aceomplish-
ment of his purpose on account of his race or color, it cannot be doubted that
this would be a case within the power of Congress to remedy and redress. It
would be a case of interférence with that person's exercise of his equal rights as
a citizen because of his race. But if that person should be injured in hisperson
or property by any wrongdoer for the mère felonious or wrùngful purpose of
malice, revenge, hatred or gain, without any design to interfère with his rights
of citizenship or equality ttefore the laws, as being a person of a différent race
and color from the white race, it would be an ordinary crime, punishable by the
state laws only.
"To constitute an offense, therefore, of which Congress and the courts of
the United States hâve a rlght to take cognizance under this amendment,
there must be a design to injure a person, or deprive him of his et[ual right
of enjoying the protection of the laws, by reason of his race, cojor, or previous
condition of servitude. Otherwise it is a case exclusively within the juris-
diction of the state and its courts."
Thèse views, as well as those expressed by Mr. Justice Swayne
in United States v. Rhodes, supra, were approved by the Suprême
Court in United States v. Harris, io6 U. S. 629, 640, i Sup. Ct. 601,
27 L. Ed. 290.
The allégations in this indictment expressly charge that thèse acts
of the défendants were on account of the parties against v^^hom they
were directed being negroes. Prior to the adoption of the thirteenth
amendment, it had beeri determined by the highest court of the land
that even a free negro, whose ancestors were imported into this coun-
try and sold as slaves, is not a citizen of the United States, and there-
fore could not sue in the courts of the United States ; and, even if
made a citizen by the laws of the state of his résidence, the rights
UNITED STATES V. MOEBIS. 329
thus conferred upon him were limited to that state, and did not en-
title him to the privilèges and immunities of a citizen in any other
State. Scott v. Sandford, 19 How. 393. 405. I5 L. Ed. 691. Chief
Justice Taney, in delivering the opinion of the majority of the court,
said :
"Each State may still confer them [the rights of citizensMp] upon an alien,
or any one it thinks proper, or upon any class or description of persons, yet
he would not be a citizen in the sensé in which the word is used in the Con-
stitution of the United States, or entitled to sue as such in one of its courts,
lier to the privilèges and immunities of a citizen In the other states."
On page 404 of that opinion (19 How., 15 L. Ed. 691) it is said:
"We think they [negroes] are not [citizens], and that they are not included
and were not intended to be included under the word 'citizen' in the Con-
stitution, and can therefore claim none of the rights and privilèges which
that instrument provides for and secures to citizens of the United States.
On the contrary, they were at the time considered as a subordinate and in-
ferior class of beings, who had been subjugated by the dominant race, and,
whether emancipated or not, yet remained subject to their authority, and
had no rights or privilèges but such as those who held the power and the
government might choose to grant them."
Under this décision, therefore, a negro, until after the enactment of
the thirteenth amendment and the civil rights act of 1866, was, in the
language of the court, "so far inferior that he had no rights which
the white man was bound to respect." 19 How. 407, 15 L. Ed. 691.
Although this opinion was severely criticised at the time, it was never
overruled, and was at the time of the enactment of this civil rights
act regarded as the law. Based upon this décision, several of the
slave-holding states, shortly after its rendition, enacted laws absolutely
prohibiting free persons of color from coming into, or, if living there,
remaining within, their respective boundaries, upon penalty of being
sold as slaves; and, being "descendants of ancestors who were im-
ported into this country and sold as slaves," they could not, in view of
the principle estabhshed by the Dred Scott décision, invoke the pro-
tection of article 4, § 2, of the national Constitution, although by the
laws of the state of their résidence they might hâve been endowed
with ail the privilèges possessed by its white citizens. Obviously to
remove ail doubt as to the status of thèse people after the adoption
of the thirteenth amendment, and to secure to them the rights belong-
ing of right to freemen, Congress enacted this law, declaring ail
persons born in the United States and not subject to any foreign
power to be citizens of the United States, without regard to race or
color, and at the same session passed a resolution submitting to the
states for ratification the fourteenth amendment, which provides that
ail persons born or naturalized in the United States shall be citizens
thereof. It is therefore beyond controversy that the negro's freedom
and citizenship are rights secured to him by the Constitution and laws
of the United States, and which, according to the décision in the Dred
Scott Case, he did not possess in the absence of such législation.
The fugitive slave acts (Act Feb. 12, 1793, c. 7, l Stat. 302; Act
Sept. 18, 1850, c. 60, 9 Stat. 462) were enacted in the exercise oî
the power of Congress similar to that sought to be eflfected by this
act. By the provisions of that act it was a pénal offense to knowingly
and willingly obstruct or hinder the owner of the fugitive slave from
330 ï;$2g B"ÈDïiBAL EtstotoËR. =
seizing br arfésting liim|'ai^-to harbor or coïiçeal such person after
notice^that he was afùgitiW slave. Thë consthutibnality of this act
was upÈeld în Jones v.Van: Zandt, 2 McLean, 611; Fed. Cas. No.
7,502, Prigg V. PennsylvàBia, 16 Pet. 539, 10 L. Ediioôd, and Able-
man v. Booth, 21 How. 506, 16 L. Ed. 169, as being authorized by
article 4, § 2, of the Constitution j which was not as broad as the pro-
visions of the thirteenth àhi^ndment. That provision merely provides
that:
"No person held to service or labor in one state under the laws thereof ,
escaping.into another, shall In conséquence of any law or régulation therein,
be dlseharged from Such service or labor, but shall be dellvered up, on clalm
of the party to whom suCh service or labor mày be due."
The leading case in whkh this act was sustained by the Suprême
Court is Prigg v. Pennsylyania, supra. It was there argued that the
act of Congress waS unconstitutional, "because it did not fall within
the scope of any of the enumerated powers of législation confided
to that body." Mr. Justice Story, who delivered the opinion of the
court, in disposing of that contention, said:
"Stripped bf Its àrtlflcial and technical structure, the argument cornes to
this: ïhat although rights arètexclusively secured by, or dutles are exclu-
slvely imposed upon, the national governmént, yet, unless the power to en-
force thèse .rights or to exécute thèse duties can be found among the express
powers of législation enuinerated In the Constitution, they rèmain without
any meàns of giving them effect by any act pf Congress, and they must oper-
ate solely prpprio vigore, however détective may be their. opération; nay,
eveu although, In a practical; sensé, they may become a nuUity from the want
of a proper rçwedy to enforce them or to provide against their violation. If
this be the trùë Interprétation of thé Constitution, it mùst, in a great measure,
fail to attaiii inany of its avôwed and positive objects, as a sècurity of rights
and a récognition of duties. Such a limited cofistructlon of the Constitution
has never yet been adopted as correct, either In theory or praçtice. No one
bas ever supposed that Congj;es^ çould, constitutlonally, by Its législation,
exercise powers or enact lawS béybiid the powers delegated to it by the Con-
stitution. But it has on various occasions exercised powers which were
necessary and proper as means to oarry Into efCect rights expressly given
and duties expressly enjoined theTeby, The tnd being required, it has been
deemed a Just and necessary Implication tha,t the means to accomplish It are
given also; or, Ih other Words, that the power flows as a necessary means
to accomplish the end." '
Ail the judges of the. Suprême Court concurred in that view; the
only point on wjiich there was a ;dissent being whe,ther, under the
constitutional provision, the powers of Congress were exchisive of
the States. Shall the court^ be less libéral in construing constitu-
tional provisions in favor^offreedom than those in favor of slavery?
In my opinion,, Congnsss bas the power, under the provisions of
•the thirteenth amendmentj , to protect citizens of the United States
iii the enjoyment ofthoge rights which are iundamental and belong to
«very citizen, if the deprivàtion of thèse privilèges is solely on accotint
of his race or color, as a déniai of such privilège? is an élément of
servitude within, the njeaning of that amendment. In the language of
jMr. Justice iPield, in his dissenting opinion in, the Slaughter House
Cases-:
"The abolition of slavery and Involuntary servitude ■ was Intended to make
every one born In this counti'yji free man, and as such to give him the right
BBAUN « KITTa V. COYNB. 331
tQ ptirsue the ordlnary avocatlons of Ufe wltbout otber restreint than sucb
as affeçts ail others, and to enjoy equally with them the fruits of hls labor.
A prohlbltton to hlm to pursue certain callings, open to others of the same
âge, condition, and sex, and to réside in places, where others are permitted
to live, would so far deprive him of the rights of a free man, and would
place him, as respects others, In a condition of servitude. A person allowed
to pursue only one trade or calling, and only In one locallty of the country,
would not be, In the strict sensé of the term, in a condition of slavery, but
probably none would deny that he woùld be in a condition of servitude. He
certalnly would not possess the libertles nor enjoy the privilèges of a free
man. The compulsion which would force hlm to labor, even for his own
benefit, only in one direction, or in one place, would be almost as oppressive,
and nearly as great an Invasion of hls liberty, as the compulsion which would
force hlm to labor for the benefit or pleasure of another, and would equally
constitute an élément of servitude." 83 U. S. 90, 21 L. Ed. 413.
That the rights to lease lands and to accept employment as a labor-
er for hire are fundamental rights, inhérent in every free citizen, is
indisputable ; and a conspiracy by two or more persons to prevent
negro citizens from exercising thèse rights because they are negroes
is a conspiracy to deprive them of a privilège secured to them by the
Constitution and laws of the United States, within the meaning of
section 5508, Rev. St. U. S. [U. S. Comp. St. 1901, p. 3712].
For thèse reasons, the demurrer to the indictment is overruled.
BEAUN & FITTS V. COYNB, '
(Circuit Court, N. D. Illinois, N. D. January 30, 1899.)
1 Internal Revenue— Olbomahgabine—Statutory Définition.
A food produet known as "Fruit of the Meadow," composed of leaf lard
and beef fat, bathed in sait ice water to take away the fat and lard
odor, but not having any ingrédient to give It a butter flavor, or coloring
matter to give It a butter èppearance, although put up and sold In pound
packages, la not taxable as oleomargarine, under Act Aug. 2, 1886 (chap-
ter 840, 24 Stat 209 [U. S. Comp. St. 1901, p. 2228]), which is Intended to
apply only to products made In consclous imitation of butter.
Action to Recover Internai Revenue Taxes Paid.
Harlan & Bâtes, for plaintifF.
John C Black, U. S. Atty., for défendant
GROSSCUP, Circuit Judge. Thîs case is to recover taxes paîd
upon a produet known as "Fruit of the Meadow," which the com-
plainants allège is not taxable under Act Cong. Aug. 2, 1886, c. 840,
24 Stat. 209 [U. S. Comp. St. 1901, p. 2228], known as the "Oleo-
margarine Act."
The act itself defines oleomargarine as foUows :
**A11 substances heretofore known as oleomargarine, oleo, oleomargarine-
oll, butterine, larding, suine, and neutral; ail mixtures and compounds of oleo-
margarine, oleo, oleomargarine-oil, butterine, larding, suine, and neutral; ail
lard extracts and tallow extracts; and ail mixtures and compounds of tallow,
beef-fat, suet, lard, lard-oll, vegetable-oll, annotto, and other coloring mat-
ter, Intestinal fat, and offal fat made in Imitation or sembMnce of butter,
or when so made, calculated or Intended to be sold as butter or for butter."
Oleomargarine is usually made of leaf lard, and beef fat churned
in milk and cream, or milk, cream, and butter, to give it flavor,
and colored with the vegetable dye annotto. This compound is
832 125 FEDERAL REPORTER.
harmle^â, and the law is hbt intended to prevent its' inanufacture,
but bfily là tdx its manufacture wb.en put up in such wayas to be a
substitute' for butter, o,r to lead the consumer into the belief that it
is butter. The tax ^practically is upon the product of sueh manu-
factures of 'leaf lard, beef fat, etc., as are made in the conscious
imitation of butter. The purpose of Congress was to protect butter
as it has commonly been known against outside competitors, under
the guise or appearance of butter. The test is this: Is the product
a conscious imitation of butter ?
"Fruit ôf thé Meadow"is leaf lard and beef fat bathed in sait ice
water. The fcath takes away the fat and lard odor. There is no
mixture of cream, milk or butter to give it a butter flavor, and no
coloring matter to give it a butter appearance. It, in no way, steals
any of its qualitîes or appearance from the product .of the cow.
It is, it is true, a new product, but not related, either in flavor,
color, or any of the other instrumentalities of imitation, to the genu-
ine butter.
In my opinion, it is not taxable under the Oleomargarine law.
The fact that it is put up in one ponnd packages does not make it a
conscious imitation of butter, The manufacturera of butter hâve no
mohopoly ùpon the commercial expédient of one pound packages.
A judgment may be entered for the complainants for the sum of
two dollars and costs, the amount of the taxes paid subséquent to
the running of the Statute of Limitations.
AMES MERCANTILE CO. v. KIMBALL S. S. 00.
(District Court, N.J3, Californla,^ «eptember 18, 1903.)
': ■": No. 12,437i,',' ,''„
ShIPPING— UOBTSTBUOTIOI* OP Bll;!/ OP LADlSà-J-DELITERT DP QOODS.
A bill of ladlng issued by a steamsliip company for goods to be trans-
ported from San Francisîsô 'to Nomë contalned the foUowing clause: "It
is expressly understood that the above-mentioned merchandlse shall, at
the option of said company,, be reeeived by the consignée thereof at the
vessel's tackle immediateiy àfter the arrivai of the steamer at the port
of destination, or the game may, be landed and stored • • * at the
expease and' risk of'tBtè-dw'ner, shippèr, or consignée. ♦ * * ai1
lighterage • '• . •/ betweeji:! steamer àhd shore * * • will be at
the risk , of owner, shipper^, or , consignée, and also at thelr expense."
Meldj that'îhè pùrpose of .Rucj? provision was to prevent' delay or incon-
venience to the steamer by reason Of the f allure of the consignée to fe-
ceive the goods at the steamer's tackle when ready for dellvery, and that
•when he was ready flàd'' prepared toso reeeive them on the steamer's
arrivai at her ancborage the company was not anthorized by such
clause tb lightér thèm at ,}ils expense, an,d risk, and an undertaking by
it to do tiïe llghtètage for a compensation agreed upon after the vessel's
arrivai constituted a, ^newaii'd separ^te contract. ,
SaMK— CONTKACT FOR Ll<ElîÇTB.Rii6B-^L08S OP .GOODS BT CaREIBB.
An agreêmènt by tbeiojs^àgr of a vessel to lighter goods which she had
. eontracted to deliver at herianchorageifor an agreed compensation, in
the absence of a stipulation otherwise therein, Imposed on him the obliga-
tions of à cotamon carrier; ând as such he beCame respohsible for al!
goods lost or damaged between the vessel i and shore, unless such loss
was occasîonedby actof God or the public enemy. ,■
AMES MERCANTILE OO. V. KIMBALL S. 8. CO. 333
>. Usage— Evidence to Establish.
Usage is a matter of fact, and not of opinion, and can only be estab-
lished by proof of a séries of acts of a similar character performed at
différent tlmes by différent persons.
In Admiralty. Libel in personam to recover for loss of and dam-
age to merchandise intrusted to respondent as a common carrier.
Page, McCutchen & Knight, for libelant.
Nathan H. Frank, for respondent.
DE HAVEN, District Judge. There are two causes of action set
forth in the libel. In the statement of the first it is alleged that the
merchandise was delivered to the défendant on board the steamer
J. S. Kimball for carnage from San Francisco to the steamer's anchor-
age at Nome, in Alaska ; that upon arrivai of the J. S. Kimball at
Nome the libelant and défendant entered into a further agreement
by which the défendant undertook, for the agreed compensation of
$5.50 per ton, to lighter such merchandise from the steamer to the
beach ; that by reason of the carelessness of the défendant "in and
about the discharge of the said merchandise from the said steamer,
and the attempted carriage thereof from the said ship to the beach,"
part of the merchandise was lost, and the remainder delivered to the
libelant in a wet and damaged condition. It appears from the évi-
dence that the merchandise referred to was shipped by libelant upon
the steamer J. S. Kimball for carriage from San Francisco to Nome,
Alaska, under a bill of lading which contained the following, among
other provisions :
"Shipped In apparent good order and condition by Ames Mercantile Co.,
on board tlie Kimball Steamship Company's steamer J. S. Kimball, * * *
lying in the port of San Francisco and bound for Nome, * * * [the goods
mentioned in ttie libel], to be carried at the option of said company upon the
said steamer or upon any other of said company's steamers * * * unto
the port of Nome; * * ♦ explosions at sea or in port, or from any cause
whatever, or any other accidents, literage, disasters, or dangers of the sea
* * * excepted; * * * and there, in lilce apparent good order and
condition, to be delivered at the vessel'ç tacliles, unto Ames Mercantile Co.
* * * It is expressly understood , that the above mentioned merchandise
shall, at the option of said Company, be received by the consignées thereof,
at tlie vessel's taclile, immediately after the arrivai of the steamer at the
port of destination, or the same may be landed and stored or stored in huilas,
or put in lighters, or launches, to be selected by the master of the steamer,
at the expense and risk of the owner, shipper or consignée. * * * a.11
lighterage from steamer to steamer ana/o^ between Steamer and Shore, of
goods named in this bill of lading, vpill be at the risk of owner, shipper, or
consignée, and also at their expense at port of delivery. * * * And the
said company is hereby expressly granted the right and option of delivering
the merchandise represented by this Bill of Lading to consignée from along-
side, or of landing and storing said merchandise either In lighters, hulks, on
wharf or in warehouse, immediately upon the arrivai of said steamer at the
port of discharge of said merchandise without notice to and at the expense
of consignée, and in the event of its so landing and storing said merchandise,
said company is thereupon hereby released from ail further liabillty for loss
or damage thereafter, whether arising from flre or from any other cause."
irs. Presumptions as to customs and usages, see note to Elevator Co. v.
White, 56 G. C, A. 394
834 ti. ,: . 135 PEPE11AL,,BBÇ0ETB,B. . ■ ; , . >
Upon the arrivai of the J. S. Kimball at the port of Nomé the libel-
ant! vvâfeVékdy to accept.the;dëîi^^ ôf the goods'and tnerchandise at
tiie vèssël's -tatlcre, and had àri'aftged witli the North, Coast Lighterage
Company for the lighterage of the same from the steamer to the
beachj'ol which fact the défendant was notified, whereupon the défend-
ant expraçsed a désire to Jigllter the raerchandise, and oiïered to do
so upon as favorable terms as the libelant Iiad secured from the North
Coast Lighterage Company. As a resùlt of tliis ofïer it was fînally
agreed that défendant should lighter the goods from the steamer, and
receive for, such service $5.50 per ton. Thereafter the goods were
placed by the défendant on îts Hghter, but before they could be landed
upon the beach à storm arosé!, and the J. S. Kimball, with the lighter in
tow, steamed for Sledge Islahd, a short distancé from, and more
sh'eltered than, the anchOràgè at Nome. During the stôrm some of
the goods were lost froni' the lighter, and thpse that retriained were
delivered to the libelant in a wet and damaged condition. It is
claimed by the libelant that when the goods were plated on the lighter
the weather was threatenihg, and the sea becoming rough ; and that
défendant was gililty ôf tie^igence not only in discharging the goods
upon the lighter ùnder sudh conditions of sea and weather, but also
in not properly securing the goods so discharged, and not protecting
the same from' the ràin and océan spray. Upon considération of ail
of the évidence; my conclusion is that défendant was npt négligent
in discharging the goods ûpûn the lighter when it diçi, nôr in failing
to properly secure and protect the same after they were placed on the
lighter. In viëw of this conclusion it becomes necessary to consider
what obligation was assumed by the défendant in lightering the
goods. The défendant insists that this service was undertaken under
the option givén to it by the bill of lading, and that by the tei-ms of
suçh bill of lading the libelant assumed the risk of any loss or damage
to the goods arising from a péril of the sea after they were placed upon
the lighter^ This contention is based upon the foUowing clauses found
in the bill of lading:
"It is expressly understoofl that the àbove !mentioned merchandise shall,
at the option of sald Company, be reeelved by the consignée thereof, at the
vessel's taclile, Immediately after the arrlyal of the steamer at the port of
destination, or the same may be landed and Btored, or stored In hullia, or put
In lighters, or launches, to be sèlected by the master of the steamer, at the
expense and risli of the ower, shlpper, ot consignée, * • ♦ AU lighter-
age from steamer to steamer' anfl/oj. betweèn steamer and shore, or goods
named in this i)iï[ of lading, wlll be at tbe ilsk of owner, shlpper or con-
signée, and also at their expenàe at port of delivery."
I do not think this language should be construed as authorizing the
Kimball Steamship Company to lighter the goods at the expense and
risk of the consignée upon the arrivai of its stean^er at ,her anchorage
at Nome, if tfie consignée was then able and willing to receive the
same at the steamer's tackle when ready for delivery. The obligation
assumed by the, Kimball Steamship Company under the bill of lading
was to carry the goods to the anchorage at the port of Nome, and the.
libelant agreed to accept them at the end of the steamer's tackle;
and, for the purpose of preventing delay or inconvenience to the
steamer, if the libelant should fail to accept the goodis at the steamer's
AMES MERCANTILE CO. V. KIMBALL S. S. CO. 335
tackle when ready for delivery, the clauses in question were inserted
giving to the master of the steamer the right in that event to lighter
them at the expense and risk of the consignée. But, as stated,
the hbelant was ready to receive the goods at the steamer's anchor-
age, and the défendant, not claiming any right to lighter the goods
under the terms of the bill of lading, undertook, for what it deemed
a reasonable compensation, to lighter the same from the steamer
to the beach, under a spécial agreement made at^ that time; and
its obligation under that agreement is not limited by any stipulation in
the bill of lading, under which the goods were carried from San Fran-
cisco to the anchorage at the port of Nome. The goods were light-
ered under the new contract made at Nome, and the parties so under-
stood it, and to that agreement alone must we look to ascertain the
obligations assumed by the défendant. By the terms of that contract
the défendant undertook to lighter the goods, and stipulated for no
exemption, and therefore, in légal eflfect, took upon itself the common-
law obligation of a common carrier, and as such became responsible
for ail goods lost or damaged between the steamer and the beach,
unless such loss or damage was occasioned by the act of God or the
public enemy. That a common carrier, in the absence of a spécial con-
tract limiting his liability, is responsible for ail losses except those oc-
casioned by the act of God or the public enemy, is the settled rule of
law. The reason upon which the rule is founded is thus stated by Best,
C. J., in Riley y. Horne, 5 Bing. R. 217, 15 E. C. L. 549:
"When goods are delivered to a carrier, they are usually no longer under
the eye of the owner. He seldom fôUows or sends any servant with them to
the place of their destination. If they should be lost or Injured by the grossest
négligence of the carrier or his servants, or stolen by them, or by thleves
in collusion vpith them, the owner would be unable to prove either of thèse
causes of loss. His wltilesses must be the carrier's servants; and they,
knowing that they -would not be contradicted, would excuse their masters
and themselves. To give due seeurity to property, the law has added to that
responsibillty of a carrier which immediately arises out of his contract to
earry for a reward, namely, that of taking ail reasonable care of it, the re-
sponsibillty of an insurer. From thls llàbllity as an insurer the carrier is
only to be relieved by two things, both so well known to ail the country,
when they happen, that no person would be so rash as to attempt to prove
that they had happened when they had not, namely, the act of God and the
king's enemies."
The défendant sought upon the trial to show a local usage at the
port of Nome exempting persons engaged in lightering merchandise
from liability for loss or damage to such merchandise occasioned solely
by périls of the sea, but the évidence offered was not sufificient to
establish such a usage. No witness testified to any instance in which
such a usage had been recognized and acted upon by the parties in-
terested, when goods had been lost or damaged by périls of the sea
while being lightered to the beach at Nome. Two witnesses stated
generally that there was such a usage ; but one seems to hâve based
his statement upon the fact that he had previously entered into an
agreement with the North Coast Lighterage Company to do lighter-
age for him, in which it was agreed that the lighterage company
was not to be liable for damage or loss of goods while in transit from
the ship to the shore; and the other, upon conversation he had had
336 .< 125 FEDERAL HHiPOETEB.
wîth pérsons engâged în the business pf lightering, in which he was
informed by tbem that they would not be responsible for loss or dam-
age occasionéd by périls of the sea. This évidence is certainly not
sufficient to establish a usage. "Usage is a matter of fact, not of opin-
ion. Usage of trade is >a course of dealing; a mode of conducting
transactions of a particularkind. It isproved by witnesses testify-
ing of itS! existence and uniformity fi*om their knowledge obtained
by observation of what isJpracticed by themselves and others in the
trade to which it relates."; Haskins v. Warren, 115 Mass. 535. And
in Duer on Ins., vol. I, p. 182, it is said :
"The existence of a usage, "Whateter majf"be the nature of the subject t»
which it relates, is In ail caaeBâ' fact; a complex fact, It is true. resultlng
from a variety and a succession of indivldual acts, but still a fact, to be
proved like ail oîher facts, by the t'estlmony of witnesses speaking from their
Personal knowledge, It is riot created by hypothetical opinions, but by actual
practlce, and can ohlybe eStabliShed by a sériés of acts of similar character
and impart, perfonned at différent tUnes, by différent persons. It is to thèse
acts that the testimony, prçperly restraineâ and directed, should be strictly
eonflnèd, and Itis upon their number, uniformity, and notorîety that the
weight ând "valtie of the evwfence dépend. Hence, where a withess swears
generaUy that à pàrticular Usage exists, yet is uhable to state from his own
knowle'dge any instance of itS açtuai; observance, his testimony should at once
be rejected; and it is only by a strict adhérence to this rule that the im-
portant distinction betweeh the évidence of opinions and belief and that of
fact is pçssibie to bè maintaliled."
See, also, Mills t. Hallock, 2 Edw. Ch. 652; The John H. Cannon
(D. C.) SI Fed. 46; Hall v. Benson, 7 C. & P. 711, 32 E. CL. 835;
Hamilton Vv Nickerson, 13 Allen, 3^1. ;
It is also alieged in the answer, as la défense to the first cause of
action set out in the libel, that an account vsras stated between the
libelant and respondent, "and that thë sàid claim of said libelant for
damage and shortage in said libel set :forth was then and there by
mutual consent between the parties fuUy settled, and the said re-
spondent ftilly discharged from any further claim by reason thereof."
This défense is not sustained by the évidence.
In relation to the second cause; of action set out in the libel, it seems
to hâve been conceded upon the hearing that the défendant is liable for
whatever damages the libelant may hâve sustained by reason of the
matters therein charged. It follows from what has been said that the
libelant is entitled to recover damages sustained by him by reason of
the matters alieged in the libel, and the case will be referred, with
directions to ascertain and report to the court the amount of such
damages.
XATLOK QAS PBODUCEK CO. V. WOOD. 337
TAYLOR GAS PRODUCER CO. T. WOOD.
(Circuit Court of Appeals, Third Circuit September 15, 1903.)
No. 24.
L CÎONTBACT BY CORPORATION— MODIFICATION BY PAROL— QUESTION FOR JURY.
Piaintiff, a corporation, sued for royalties under a written contract by
whlch it granted to défendant an exclusive llcense under a patent, and
défendant agreed to pay royalties after three years on not less tlian a
stated number of the patented machines annually. It was admltted that
the contract was subsequently modified by paroi, but whetber the pro-
vision requiring the payment of minimum royalties hàd been abrogated
was in dispute. It was shown, however, that piaintiff failed to protect
défendant against infringers of the patent, and finally abandoned any
attempt to do so, and that, in conséquence, défendant had ceased to
make the patented article; that he had uever paid the stipulated mini-
mum royalty, but had pald on the machines actually made by him, and
that such payments had been known to plaintiff's dlrectors and accepted
without objection, and no further claim made until eight years after the
first of such payments was due. Helâ, that the f allure of piaintiff to
maintain the validlty of its patent and protect défendant as ils licensee
was sufficient considération for the modification of the contract clalmed
by défendant, and that the évidence warranted the submission to the
jury of the question whether such modliication was in fact made.
In Error to the Circuit Court of the United States for the Eastern
District of Pennsylvania.
For opinion below, see 119 Fed. 966.
Alex Simpson, Jr., for plaintifï in error.
Joseph E. Fraley, for défendant in error.
Before ACHESON and GRAY, Circuit Judges, and BUFFING-
TON, District Judge.
GRAY, Circuit Judge. The plaintifï below, who is plaintifif in error
hère, brought suit for the alleged infringement of a written contract
between plaintifï and défendant, dated September 11, 1890. Under
the terms of this contract as written, the plaintifï corporation, being
the owner of certain letters patent of the United States and Canada,
for improvements in gas producers, granted to the défendant "the ex-
clusive license, right or privilège under the terms and conditions here-
inafter expressed * * * to make, and vend to others to be used,
gas producers or apparatus for making gas, containing or embodying
the inventions described or contained or claimed in the hereinbefore
recited several letters patent, or some of them, within and throughout
the United States and Canada." In considération of the grant of
this license, the défendant covenanted to pay, from the date of the
license and agreement, certain royalties during a period of three years,
ending October i, 1893, graded from $20 to $35, according to the size
and capacity of the producers or apparatus to be manufactured.
After the said ist day of October, 1893, thèse royalties or license
fées were to be from $25 to $50. In the third article of said agree-
ment, it is provided as follows :
"Third: That furthermore In considération of the license aforesald, the
said Walter Wood, party hereto of the second part, heréby agrées to make
and sell or cause or procure to be made and sold to others to be used after
125 F.— 22
338 .'■ic ■• 125 ©BDERAL EBPOÉTER, :
the thîrd and during each subséquent year of thls license and agreement, not
less than one hundiBd ga* producers or apparatus for inakltig gas contalning
or embodylng the inventions set forth or described and clalmçd in the said
hereinbe£ot<é" râclïëd severftl lëtters patent oi* account for and piày royalty
to the said corporation, the Taylor Gas Producer Company, party hereto of
the flrst part, in each and every yéar after the thlrd from the date of this
license and agreement, a royalty or license fées on not less than one hundred
gas producers or apparatus for making gas containlng or embodyinglthe in-
ventions set forth or described and claimed in the herelnbefore recited several
letters patent ,«r some of them, whether that number of gas producers or
apparatus for maklng gas or not bas or bave been made by the said Walter
Wood, party hereto of theiseeond part, or by his procurement or authority
during that year;"
The défendant acknowledged the vaiidity of each and every of the
letters patent, and agreed not to dispute or set up any défense against
the vaiidity thereof in àriy contro'versy arising out of the license.
It is admitted on botii sides that the terms of the original con-
tract, in the matters herein recited, were altered by subséquent oral
agreements betWeen the parties thereto and the controversy betweon
them relates tô the exteht and scope of said altération. ' The défend-
ant contènds that, shbrtly after the expiration of the first year in
which the mininium royalty clause was operative, the président of the
plaintif! cQrporation, being duly authorized in the prernises, agreed
with the défendant, vi^ho was one of the directors in said corporation,
that since the ist of October, 1893, and thefeafter, te was to be
charged at the uniform rate of $25 for every apparatus manufactured
by or for him, instead of the larger sums stipulated for in the written
contract, and that the agreement with référence to a tiiinimum royalty,
which was to go into effect op and after. October I,: 1853, should be
abrogated. That the considération for this altération and modifica-
tion of the original agreement, was the fact that the patents covered
by the contract were; being; constantly infringed, and that the plaintiff
corporation had failed,' 01; >s{a?;,ùnable, to protect tbem. The plaintiff
corporation, on the, other hand, contènds, and so states in its déclara-
tion, that while the terms, and conditions of the written contract were
acted upon by the défendant until about; the. iSthday of October,
.1894, the said contract, vvas then, by resolution of the board of di-
rectors of the plaintiff corporation, and with the consent of défendant,
altered and modified, so that the royalty and license, fee to be paid
by the défendant was:reduced to the uniform sum of $25 for each pro-
ducer made, sold or usei(|. by said défendant, but that the stipulation
in regard, |to a minimum royalty remained in force, under which stipu-
lation the défendant was il^ound to pay said royalty upon 100 producers
or furnaces during each calendar year, whether manufactured, sold or
used by him, or not. ■ : ^ r ::w'
Upon this view of thej.contraet, as itnodified, suit has been brought,
on which a çlairri of $io,ooQ is made for the minimum royalty during
,the years, of 1898, ;i899, 1900 and igoi. ■ During this period, the in-
ference is,,jastified, that no prodùcer had been made or sold by the
défendant. Both sides agrée that the contract aS; Written had, by oral
agreemç,nt and fjnderstanding, been altered and modified so as to sub-
stitute a, uniform . royalty of $35 on each producer manufactured or
sold in lieu of the highér graded royalties prescribed in the original
TATLOE GAS PEODUCEB CO. V. WOOD. 839
contract, but they disagree as to there being any altération or abroga-
tion of the minimum royalty clause pi the contract. This was the
principal question in controversy at the trial, upon which évidence
was adduced on both sides. The jury found a verdict for the défend-
ant, whereupon a motion was made for judgment for plaintifï, non
obstante veredicto, "in accordance with the stipulation entered into by
and between the counsel for the respective parties during the trial of
this cause." This stipulation is as follows :
"It is hereby agreed between counsel for plaintiff and défendant that if the
court shall upon a review of the entire évidence produced on the trial held
Novemher 13, 1902, be of opinion there is not suflacient évidence to submlt to
the jury the question as to whether or not the cause of the contract in suit
relative to the minimum amount of royalties to be pald has been abrogatéd
or walved by agreement of the parties, express or implled, that then the
verdict, If for the défendant, is to be changed to a verdict for the plaintlflC
for the amount clalmed as if upon an instructed verdict to the jury to that
effect, reserving to each party the rlght to appeal or writ of error as to the
correctness of the ruling of the court on this and ail other points in the case.
This stipulation is entered into in order to avold difflculty on the question
of practice whlch forbids a judgment for plaintiff non obstante veredicto
desplte a flnding by the jury for the défendant."
This motion for judgment was refused by the court below, and the
single question presented upon this writ of error is, was there suf-
ficient évidence to justify a submission to the jury of the question,
whether or not there was a binding agreement to abrogate the mini-
mum royalty clause of the contract in suit? The plaintifï in error
makes two main contentions as to this question. First, that there
was no sufficient évidence of such an agreement in regard to the
minimum royalty ; and second, that, if such an agreement were made,
no considération sufficient in law to support it has been shown. Ail
the évidence in the case is embraced in the testimony of two wit-
nesses, — ^William J. Taylor, président of the corporation plaintifï, and
Walter Wood, the défendant, and in the correspondence between
them, and in certain minutes of the plaintifï corporation.
The learned judge of the court below, in denying the motion of
plaintifï for judgment, non obstante veredicto, said :
"It is true that the minutes of the plaintiff corporation exhibit no resolu-
tion of its board of dlrectors, or of Its stockholders, directly and in express
terms making the agreement In question, but it does not necessarily foUow
that it was not In fact made, and in such manner as to bind the company.
The Court of Appeals for this Circuit, In Salem Iron Co. v. Lake Superior
Consol. Iron Mines, 112 Fed. 241, 50 C. C. A. 216, said: 'Undoubtedly the
board of dlrectors is generaliy the governing and controlling body of a cor-
poration. Its policy and conduct within the scope of the purpose of Its créa-
tion is In the absolute control of such dlrectors. It cannot incur obligations
withont the consent of such board, or generaliy wlthout its express authority;
but the board of dlrectors can exercise Its plenary power by delegating its
authority as to certain transactions or classes of transactions to its président
or other executive officers, as well as by direct authorlzation of a particular
transaction by express resolution to that effect A corporation is an intelli-
gent, though artlflcial person; and, while Its board of dlrectors Is its con-
trolling mind, It may be bound, llke a natural person, by a consent Implled
by law from a course of conduct permitted and recognlzed by Its governing
body.' Thèse observations ère pertinent to the présent case."
The fîrst year during which the minimum royalty clause would
hâve been operative, ended October 15, 1894. On April 25, 1895, at
S4(ï 125 FEDERAL EEPOB^BR.
a meeting of the directors ;of' tHè plàintiff corporation, the président of
the Company repofted lEts ioîlpws :
"The question of the valldity of the Tâylor producer patent la still un-
settled, and considérable Infringement is stlll golog on."
— And the,.board of directors thereupon passed the following resolu-
tion:
"Messrs. E. B. Coxe, W. J. Taylor, and Walter Wood were appointed a
committee for the prosecution flf the parties infrlnging the patents owned or
contulled by the company. This eommlttee was also instructed to consider
amendments to the contract wlth R. D. Wood & Co., the terms of which to
be held In abeyance owing to tlie doubt. surrounding the patents, and to be
modifled as may be agreed ijpon subsequently between the eommlttee and
the llcensees of the company under the sald patents."
Mr. Coxe, a member pf this committee, died soon after his appoint-
ment, and, the subséquent negotiations, pursuant to the authority of
the resolution, were carried on between Taylor, the président of the
company, and' Wood, the défendant. Mr. Wood testifies to the con-
versations' between Taylor, and himself, and says:^— "It was distinctly
understood, and also said,by Mr. Taylor, the président of the com-
pany, that the question of a minimum, royalty was wiped out and
ceased." Healso testifies that he pâid the royalties upon machines
actually made'by him during thé years 1895, 1896, and 1897. The
failure of the company to restrain infringement of the patent, seems to
hâve been the chief cause of the dissatisfaction on the part of the de-
fendant, and a donfessed inability to maintain the validity, and there-
fore the value of the patents sëems to hâve been the considération
operating upon those in control of tlie plaintifï company, to influence
them in modifyingthe terms of thé written contrâct. The defendant's
testimony is corroborated by the évidence relating to the' conduct of
thé parties. Therfe is no évidence of any attempt on the part of the
company to colléct; or even claim,' the minimum royalty stipulated for
in the original côntract untilthe bnnging of the suit in 1902. A
considérable dorrespondencétook placé in regard to the sums due for
royalties at différent tifties, -but ttd allusion is rnade therein to the
minimum royalty, although -rôfeipence is made în the -course of said
cOfrespondencè, by thé plaintiS ÇQtpôratiqn, to payments in full of
aU i-<3yàlties duÇj, ,which , would , hâve. been untrue and ^absurd if j there
was believed by plaintiff toiexist any just claim under the minimum
royalty clause.' A course otc-ondùct continûOùsly carried on thfough
a period of six yéars 'or mëi*àwliiçh supports, or is entirely consistent
with, the diréfct testijnony oï tiî'é'defendant, that "the minimum royalty
clause had been abrogated by mutual agreement between himself and
Mr. Taylor, président of the corporation, was an important fact fOr
the considération of the jury, ip connection with that testimony.; Oîi
Noveinber 26, 1 900, after this course of conduct had been continuously
carried on, for more than five years, the président reported to the
board that the instructions of the; board at the last meeting, held Oc-
tober 9, rô96,' ,hàd"àll been practicâlîy carried'out; that is ; to say,
the royalties for the producers sold in 1895 by the licensees, were lOw-
ered to $25 each and settlement madé accordingly; and that 'Mr.
Wood acçepted the board's proposition to continué to manufacture
TAYLOE GAS PEODUCEE CO. V. WOOD. 341
the producers, and paid the royalties for the calendar years 1896 and
1897 — namely, 19 producers, $25 each, $475."
If the plaintiflE's contention be correct, and the agreement for the
payment of a minimum royalty was still in force, the royalties paid
by Mr. Wood for the years 1896 and 1897 should hâve been $5,000
instead of $475, which is stated to hâve been the amount due accord-
ing to the modifîed agreement. It must be recollected, also, that for
the purposes of this case, the truth of defendant's testimony and ail
inferences favorable to the défendant which the jury might logically
dravv from the plaintifif's admissions, or from the minutes, correspond-
ence and conduct of the parties, must be assumed.
The question of considération must be viewed from the standpoint
of the parties at the time the modification of the contract was sug-
gested. In the statement made by the président of the company, as
shown by the minutes of October 9, 1895, he speaks of the "unsatis-
factory protection the patents afiford." Afterwards, in correspond-
ance between the parties, it appears that the président of the plaintifï
company had concluded not to further prosecute infringements or
défend the validity of the patent, on account of the great expense
to be incurred and the doubtful issue of suits to sustain the patents.
That the défendant had ground for objecting to be longer bound by
the more onerous features of his contract, seems to hâve been clearly
admitted by the action of the board of directors and the président of
the company in the premises. The most onerous feature of the con-
tract undoubtedly was the stipulation that, after three years, défendant
should pay the royalties on 100 machines, whether manufactured by
him or not, and if the jury believed the testimony of the défendant,
that this minimum royalty clause had been abrogated by agreement
with the président of the company, acting under the authorization of
the board of directors, as set forth in its resolution of April 25, 1895,
then they were also justified in believing that the défendant was led
to relinquîsh efforts to manufacture under thèse patents of doubtful
validity, by the understanding he testifies to having had with the plain-
tiff, and that in conséquence of that understanding, he put himself in
a position in which he would not hâve put himself, had that clause in
the contract been still binding. ;
We think, on the whole, there was a sufilicient considération to sup-
port the modification of the contract, testified to by the défendant,
and acted upon by him, and that, whether there was an agreement to
£o modify the contract, was a question of fact properly submitted to
the jury upon the évidence.
The judgment of the court below is therefore afHrmed.
342 ..;: 12ô FEDERAL .EBl'OIi:fI^K. r, :
Western union tel. co. et ai. v. amèrican BELt tel. co.
■ (Cttrcuit Court ofAppeals. First Circuit October 6, 1903.)
■ -' :;. • , ' No. 398.'
1. EquiTT JtJRrSMCTION— SOlT FOR ACCOUNTINO UNDEB CONTRACT CrEATING
Trust RKiiATioN.
By the contract between the Western Union Telegraph Company and
the American Bell Téléphone Company, dated Novepiber 10, 1879, tbe two
cojççorâtioris Consolidated their interests in the téléphone business; the
flnsî-named coi-poratloti transferrlhg Its interests to the second-named
corporation, which It was agreed should control the cbmbined whole,
paying the flrst-named corporation a certain percentage of ail rçntals or
roj^altles, received. Held, that the co^tract established between the
parties a relation In the nature of a trust, which required the American
Beir Téléphone Company to account and- pay according to the principles
o( equity, and gave a court in equlty jurisdiction wlth référence to the
subjeot-matter in behalf of the Western Union Telegraph Company.
8. COHÏRACT— tCONSTRCCTION-^RUIITALS OB ROYALTIES FHOM , TELEPHONES.
A,ç;o,i)iract was entered into by complalnant and défendant, both beiug
corporations ownlng patents rélatlng to téléphones over which litigatlon
was pending between them, and engagea in operating téléphone Unes
and In leasing téléphones for use by others, by which complainant con-
veyed to défendant ail its; business, and itfi patents and rightg thereunder,
In considération of whiçli défendant agreed to pay to complainant upon
ail téléphonés ùsed intte United States 'under any Ucense granted by
It, unless éxpressly eXcepted, "a royalty or bonus of twenty per cent
of ail rentals or royalties actually received or rated as paid in accordance
with the provisions of the contrjact from Ucenses or leases for speaking
téléphones." It further pfovided that certain stated rates were "recog-
niÈed as the présent .standaTdra:tes of'gross royalties or rentals," and
that sueh tates of charèe^ BJlfeht be InCreàséd by défendant at pleasure,
but should not be lowered withoùt complainant's consent, any increased
rate, while in force, to be taken as the grpss rentals or royalties In re-
spect of the téléphones itor which they,were obtained. ÏÏeU, that under
the circtimstànces the phrasé "rentalS or royalties actually received or
rated as paid" covered ^oss sûms received by the American Bell Tele-
iphone Company for perpétuai or other exclusive licenses under the pat-
ents embraced, in the oontract, for which sums It gave no considération,
except auch Ucenses.
8. Rbfebbncb— Mastkr ijî Chancery.
The rule of Kimberlèy v. Arms, 129 U. S. 512, 524, 9 Sup. Ct. 355, 32
h. Ed. 761, with regard to spécial références to masters in chancery,
considered.
4. CoNTHACTS— COSTBTRUCTIQN.
The rules with référence to the efCect to be given to prior negotiatlons
and other extrlnslc circumstances, In construlng complicated contracts
of many years' standingj considered aûd applled.
Appeal from the Gircuit Court of the United States for the Dis-
trict of Massachusetts.
For opinion below, see 105 Fed. 684.
Josiah H. Benton, Jr., and Rush Taggart (John F. Dillon, on the
brief), for appellants.
John C. Gray and Richard Olney (Gharles H. Swan, on the brief),
for appellee.
Before PUTNAM, Circuit Judge, and ALDRIGH and BROWN,
District Judges.
WESTERN UNION TEL. CO. V. AMEKICAN BELL TEL. CO. 343
PUTNAM, Circuit Judge. There are several parties to the rec-
ord, and several other parties hâve been predecessors in title; but,
as the sole bénéficiai issue is now between the Western Union Tele-
graph Company and the American Bell Téléphone Company, we will
find it necessary to name only them. The bill was brought for an
accountlng under a contract dated November lO, 1879, between the
Western Union Telegraph Company and corporations in the same in-
terest and the National Bell Téléphone Company, the predecessor in
interest of the respondent. It was filed on November 16, 1883.
Without waiting for a hearing, on May 24, 1886, the case was sent
to a so-called master under the following agreement :
"It Is agreed that the above-named cause may be referred to the Honorable
John Lowell, as master, to hear the parties, report the facts, with such part
of the testimony as either party shall request, and his rulings on any ques-
tion of law arising In the case."
The référence fell within the rule of Kimberly v. Arms, 129 U. S.
512, 524, 9 Sup. Ct. 355, 32 L,. Ed. 761, and of subséquent cases of
that class. Frequently such références involve troublesorae complica-
tions through the fact that they necessitate departures, more or less
definite, from the ordinary practice. In the présent case, however,
no difficulty arises. The complainants excepted to the master's re-
port solely as to questions of law. The respondent took no excep-
tions. We should explain that there are some findings of the master
• which take the form of findings of fact, but which are really findings of
law, as they arose on the face of the various papers in the case.
Therefore, we are not embarrassed on account of the agreement for
référence by Kimberly v. Arms or by other cases of that class.
The master found for the respondent, and the Circuit Court sus-
tained his findings, and entered a decree dismissing the bill. We
think that we should first make clear what the true issue is. The
contract obligated the téléphone company, among other things, to
account to the Western Union for a certain percentage of rentals
or royalties for the use of téléphones protected by certain letters
patent. At the time of the exécution of the contract there were three
ordinary methods of using téléphones : First, on private lines ; sec-
ond, on lines from one part of a building, or premises, to another
part thereof, ordinarily known as "speaking-tube" purposes ; and,
third, in exchange Systems or the like thereof. Then the téléphone
company not only owned and licensed téléphones, but also had cer-
tain interests in exchange Systems. The master, among other things,
reported :
"I am of opinion that by the contract the défendant clearly had the exclu-
sive right to cany on the exchange business, alone or jointly with others,
and to receive Its profits, paying to the plaintiffs twenty per cent, of the
stated rentals."
It is clear that the Western Union had, under the contract, no in-
terest in the exchange business which the téléphone company owned,
in whole or in part, or in the profits received therefrom, so far as
either can be distinguished from considérations for the mère Hcensing
of téléphones, or so far as the advantages which came from them
to the téléphone company came as the resuit of a contribution by it
344 125 FEDERAL REPORTER.
aside from that of such mère licensing. It is also clear that when,
even after the contract of November lo, 1879, the téléphone company
had properly acquited any part of an exchange, the complainants
had no interest in the subséquent profits which might come there-
from. The position gf the complainants before us renders it unnec-
essary to elaborate thèse propositions. They put the case on a single
issue in the foUowing language, which refers to certain shares of cor-
porate stock which the complainants maintain the téléphone com-
pany received as part considération for licenses to rent and use télé-
phones:
"It Is In respect to thèse shates thus received by the Bell solely for ex-
clusive licenses to use téléphone instruments under the patents which vpere
by the contract comblned In Its hands, and by virtue of which contract alone
the Bell was able to give such licenses, that this suit seeks an accounting."
Thîs claim is illustrated by the foUowing finding by the master :
"The. shares, of which the plalntlffis require one-flfth to be accounted for,
were, In nearly ail cases, obtained in the way to be presently mentioned, but
référence may be had for thetr terms to the contràcts reported herewith. The
défendant IssUed to a corporation a llcense to use téléphones for five years
in an exchange to be establlshéd by and at the expense of the Ucensee in
a certain place, paying the usual rentals, and reserved the right to take the
plant at aotual cost, less dépréciation at the end of the term, allowing noth-
ing for franchise or good will. Thèse short-term çontracts either expired or
were surrendered by the licensees, and thereupon the défendant gave them
perpétuai exclusive licenses for the àgreed locality, and received thèse shares,
usually thlrty-flve per cent, of the entire capital stock, for which it pald noth-
ing except the exclusive perpétuai llcense."
This renders immaterial a considérable portion of the master's find-
ings of the proofs in the record and of the propositions urged on us
by the respondent. It especially renders it unnecessary that we
should consider the proposition urged by the respondent that there
is a substantial distinction between a "rental of téléphone instru-
ments" and the "profits of an exchange business," or that we should
follow out any élaboration of the définitions and expressions in the
contract, showing that the word "téléphone" is used therein with the
utmost précision. In the same manner, we are relieved from con-
sidering the respondent's illustration of its proposition that the con-
tract had no intention that the Western Union "should share in the
whole profits due to the telephorlic patents," if that expression bas
any peculiar significance, or the further proposition that it was con-
templated that some exchanges would make larger charges, and,
consequently, hâve larger profits, than others. It also renders un-
necessary any considération, at least at this stage of the case, of the
peculiar relations of the contractîhg parties to èxchanges at the date
of the contract or prior thereto. It is plain that the only question
before us is whether the Western Union may share in valuable as-
sets received in lump by the téléphone company in exchange in the
whole or in part for téléphone licenses.
The parties hâve not urged on us any question of Jurisdiction in
equity, but it naturâlly arises in connection with that of the substan-
tial merits of the case. The record shows that the accounting, if
the complainants are entitled to it, would be so voluminous and com-
WESTERN UNION TEL. CO. V. AMERICAN BELL TEL. CO. 345
plicated that it would be impossible to take it at common law, unless
by the technical action of account, if it would lie. That this fact af-
fords sufficient ground for jurisdiction in equity, whether that action
would lie or not, is well settled. Some of the authorities bearing
thereon are cited and explained in Fenno v. Primrose (C. C.) Ii6
Fed. 49. In addition, the nature of the rights vested in the Western
Union by the contract in issue hère supports this jurisdiction. It
will appear that the contracting parties combined substantially al!
their interests in téléphonie patents, to be worked by the téléphone
Company for their joint benefit, certain net results to be shared on an
agreed percentage. While this did not create the technical relation
of trustée and cestui que trust, it established a quasi trust, such as
between copartners, and between the officers of a corporation and the
corporation, over which chancery takes jurisdiction.
It is not necessary to set out with great fullness the contract in
issue. It has been abstracted in the opinion of the learned judge
who heard the case in the Circuit Court, and a gênerai statement of
its purview with référence to the topics which bear on the question
at bar will be sufficient. The respondent has very well stated its
gênerai feature.s in substantially the following language: The West-
ern Union, a well-established corporation with a large capital, con-
trolling continental telegraphing, was also, previous to and at the
time the contract was made, carrying on a more or less extensive
téléphone business. The téléphone company, then a comparatively
new and small corporation, was wholly engaged in téléphones, and,
by virtue of its patents, claimed an exclusive right. Numerous suits
were pending for a détermination of the respective rights under the
several téléphonie patents owned or controlled by the parties. The
Western Union desired to protect its télégraphie business against
possible inroads by téléphones, and, under those circumstances, a
compromise was reached, and this contract was executed. Its prin-
cipal features are carefully framed provisions for the protection of
the Western Union télégraphie System, and a lease and transfer by
it to the téléphone company of its interests in the téléphonie patents,
its téléphones and téléphonie exchanges, with an agreement that the
Western Union should receive a certain proportion of the rentals
or royalties which should come to the téléphone company. It should
be added that, as incidental thereto, the téléphone company agreed
to keep accounts of the number of téléphones manufactured, licensed,
and put out for use, and of the rentals received therefrom, which
should be open to the inspection of the Western Union, for the pur-
pose of ascertaining the "royalties or bonus" coming due under the
contract.
The contract is long, and contains a great many provisions, and,
therefore, of course, many of its expressions are oftentimes repeated,
and not always exactly in the same form. As the contract was made
so long ago, it was, perhaps, constructed in the light of facts the
common recollection of which is now dimmed, leading to a strong
anxiety on the part of one or both parties to the controversy to
restore them, for the purpose of sustaining their respective views
pro and con. The resuit of this is a voluminous mass of proofs rela-
346 , 125. FEDERAL EBl'ORa'ER.
tive to prior Jiegotiatione, correspondence, and earlier contracts, to
which much weight was given by the master and the Circuit Court.
Against this the Western Union earnçgtiy objects.
To spme extent it ià the same with a contract as with a statute.
The court upon whicli rests the burden of construing it, especially
if it is ancient and coraplicated, searches carefully for any scrap
which maystiggest an interprétation not obvious after a lapse of time.
While nothing such can te availed of for the purpose of overruling
the intention of the parties as finally incorporated in the executed
instrument, yet, as said ty Judge Aldrich, in speaking for the Cir-
cuit Court pfAppeals for this circuit in Church v. Proctor, 66 Fed.
240, 242, 13 C. C. A. 426, an interprétation of writings is to be made
"with référence to the subject-matter and the understood situations
of the parties." The circumstances under which contracts are exe-
cuted, and the difficulties of understanding the actual relations with
which parties are dealing, vai:y so much that no absolute rule can
be framed as to the methods in which courts may inyestigate them;
but the practice is so hberal that Greenleaf on Evidence, vol. 1, § 282,
an authority which we need not go beypnd, says that "the rule ex-
cludes only paroi évidence of the language of the parties, contradict-
ing, varying, or adding to that which is contained in the written in-
strument." On the other hand, extrême care is required in making
investigations into a field beyond v^hat was clearly appropriated,
because qf , the fact that such investigations may not only mislead,
but they may draw courts into spéculations and doubts more involved
than those arising on the face; of the contracts conçerned.
In the présent instance, what is known as the "Ormes Contract,"
and also the "Outline" — that is, a preliminary draft — and other drafts,
hâve been much reliçd on by the respondent; but one will be shown
to hâve been based on radically dififerent principles, so far as the
problem before us is conçerned, while as to the various drafts the
chasm between them and the completed instrument is so broad that
nothing in the record enables us to bridge it. We will explain this
more atlength hereaf ter.
Among other éléments, the existence of which is much discussed,
is that of exçhanges; but their existence is so emphatically recog-
nized by the contract, and- so extensively provided for, that whether
at the time of its exécution there were few or many, whether in use
by one party or both, and whether subsequently ; greatly multiplied
or not, must be regarded as in ail respects understood and antici-
pated contingencies. The same is tru« with référence to nearly ail
the other incidents which hâve been brought to our attention with
great détail. The récognition of most of them by the contract itself
is so positive that it will be necessary for us to refer to them only
briefly, if at ail, except as they appear therein.
In contemplating the construction and effect of the contract, we
must first of ail consider that the relations of the parties to it were
of the fiduciary character to which we haye referred ; so that the
téléphone company, as the sole holder of the joint interests, left in
exclusive control thereof, was bound to the underlying rule that
neither directly nor indirectly, nor by any artifice whatever, should
WESTERN UNION TEL. CO. V. AMEEICAN BELL TEL. CO. 347
the Western Union be deprived of its share in the net profits of the
licenses or leases, whatever form they might assume, unless and ex-
cept as expressly so provided. In Batchelder & Lincoln Company
V. Whitmore (C. C. A.) 122 Fed. 355, 361, we illustrated how such
fiduciary obligations may arise between others than technical trus-
tées and cestuis que trustent, pointing out that tlie utmost good faith
is required between creditors coming into a composition of a failing
debtor. The existence of similar obligations under otlier circum-
stances, as between copartners, and also as between ofHcers of a
corporation and the corporation, is explained in Pomeroy's Equity
Jurisdiction, §§ 157, 1088, and séquence, although it is shown that
under such circumstances jurisdiction in equity does not lie to the
same extent as with technical trusts. It is also true that, other than
with a technical trustée, this contract left a large discrétion with the
téléphone company, and did not bind it to any particular rule of dili-
gence or skill. Nevertheless, this gênerai equity requires it to ac-
count with the utmost good faith for what concerns the common in-
terests. This equity is effectuai, universal, and unyielding, and we
must approach the contract in the light of it, and give the Western
Union the full benefit thereof.
The contract in suit took efïect as of November i, 1879, ^"^ ran
for 17 years. It covered .the whole United States, with sundry ex-
ceptions, which need not be named hère. The Western Union and
corporations it represented are described in it as the party of the
first part, and the téléphone company as the party of the second part.
The contract opens with a requirement that the téléphone company
pay to the Western Union "upon ail téléphones used in the United
States under any license" from the téléphone company, "unless ex-
pressly excepted, a royalty or bonus of twenty per cent, of ail rentals
or royalties actually received or rated as paid, in accordance with
the provisions of the contract, from licenses or leases for speaking
téléphones." Article l, par. i. It then provides for a déduction of
certain allowances, which does not trouble us. It then proceeds as
follows : ■
"Conceming the sum wMeh is to be taken as thé gross rental or royalty
for the purpose of the preceding article, it is declared and agreed" "that ten
dollars per annnm for each téléphone, where only one is used at a terminal
or station, and flfteen dollars per aniium for a pair of téléphones composed
of an instrument used for sending and another instrument used for receiving,
used at one terminal or station, are recognized as the présent standard rates
of gross rentals or royalties."
The contract provides that the téléphone company may raise the
rentals or royalties without conférence with the Western Union, but
it prohibits the lowering of them without its consent, except as the
resuit of an arbitration, the détails of which we hâve no occasion to
explain. It should be said in this connection that the contract makes
spécial provision for téléphones which might be exported and sold
abroad, but that, aside from this, the uniform practice of both parties
to the contract, if not their universal practice, was, and had been,
not to sell téléphones, but to lease for annual rentals. The master
reported that "the rentals had corne to be nearly uniform in the dif-
348 125 FEDERAL EBPORTEB.
ferent classes of business at about the rates mentioned in the con-
tract." It appears, however, by the answer that the rentals and
royalties naraed in the contract had ever since been the same, with
the exceptiqri that the priée for a pair of téléphones had been raised
to $20. We do not find that there is any dispute arising out of this
fact, but we speak of it because it illustrâtes a proposition as to which
there should, be nô question made before us. There is no pretense
whatever for ^ny claim to the efïect that the word "rated," or the
Word "standard," or any other word or expression in the contract
established a fixed license fee, so far as the relations between the par-
ties to this litigation are concerned. Numerous paragraphs, some
of which we will refer tô hèreafter, expressly provide for increasing-
the rates, and for the Western Union sharing in such increase. The
word "standard" could hardly be justly construed as leading in any
other direction, and, if it could be, the context would show that it
was merely an unfortunately chosen word, overruled by varions other
portions of the contract.
Every word contained in the following expression in the fîrst para-
graph of article i, namely, "ail rentals or royalties actually received
or rated as paid," etc., can hâve, and should hâve, its full efïect. The
words "actually received" relate to whatever may corne in hand, wheth-
er on the basis of the "présent standard rates," or from licenses for
which more than the "présent standard ratés" might be paid. There-
fore it is uséless to contend that the contract contemplated any fixed
sum as a maximum which the Western Union must be content with,
while, on the other hand, the expression which we hâve just cited from
the first paragraph of article I was entirely in its interests, giving it
the minimum named licensç rate, even if the téléphone company sold
licenses below that rate, ëxcept as provided in the contract, and also
giving it the benefit of ail rentals or royalties received in excess of
that rate, whatever the excess might be.
A large portion of the case as submitted to us concerna the meaning
of thèse words "rentals" and "royalties." , The respondent claims
that they are used interchangeably, and that neither adds anything to
the other. The word "rentals" would naturally fall into the contract,.
becausé, as we hâve said, the business had Uhiformly gone on the basis
of a fixed amount for each year for the use of each téléphone, and the
word "royalties" naturally occurs in any contract of the gênerai char-
acter of that at bar. The use of words of this character, which so
naturally, and almost inevitably, fall into any contract with référence
to patented matters, cornes short of requiring any inference of spécial
value. Thèse words appear frequently in the contract ; the respond-
ent says 33 times, and states that the coijtract is not uniform in using
both expressions. But departures of this character are frequently of
the scrivener only, and, in any view, such a fact is too easily aç-
counted for to meet the effect of the. positive language with which
the contract opens.
Royalties are commonly understood as meaning something pro-
portionate to the use of a patented device ; in other words, a kind of
excise. Bouvier's Law Dictionary, "Royalty." In its more ordinary
meaning, it would not literally include the shares of stock for which
WE8TEKN UNION TEL. CO. V. AMERICAN BELL TEL. CO. 349
an accounting is demanded. In some of its uses it is a broader word
than "rentals," and yet in other aspects "rentals" is a broader word
than "royalties." Rentals in their ordinary signification are not limit-
ed as royalties in their ordinary signification ; that is, to something
proportionate to the use of the patented device. The word "ordi-
narily" means spécifie sums paid annually, or at other stated periods,
for the right to use a patented device, whether it is used much or little
or not at ail. We will show before we close that in the présent case it
is capable of an adaptation to meet in any view the literal construction
which the respondent puts on the contract at bar.
On the whole, this expression in the first paragraph of article i,
"ail rentals or royalties actually received or rated as paid," is, on
any method of construction, whether literal or otherwise, flexible,
and favorable to the complainant ; but, after ail, the fundamental
ruies of construction which we hâve said apply to this contract eut
under this refined discussion as to the literal meaning of particular
words and phraseology. This will appear from a hypothetical case :
Admitting that thèse parties, or any other parties, had stipulated
literally and expressly for the payment and receipt of a share of annual
rentals, springing out of the use of a patented device covering the en-
tire United States or any limited district, and admitting that under
those circumstances the party in whom the title to the patent vested
had granted a perpétuai license for a gross sum of money, abandoning
the collection of annual rentals, or thus, for a like gross sum, had
disposed of the entire or partial interest in the patent for the whole or
a part of a district served, so that the collection of annual rentals was
no longer practicable, either wholly or in part, as the case might be,
it would be preposterous to maintain that thereby the party entitled
to share was eut off from his rights under the contract. It might
well be that the contract could be so framed that he might bring an
action in the nature of an action of tort for such disposition of the
patented interest, but in no event would his rights be thus limited.
Indeed, even at the common law, the précise kind of return described
would be regarded as merely illustrative, and an action would lie at
the option of the party entitled to share in whatever was in fact real-
ized; and this resuit would be more marked in a suit in chancery,
like this, where the proceeds of a bénéficiai interest can be followed by
the party entitled to that interest, whatever form they take. This
rule was fully explained by us in Hutchinson v. Le Roy, 113 Fed.
203, 206, 51 C. C. A. 159, and it is laid down broadly in the following
terms in Smith v. Vodges, 92 U. S. 183, 186, 23 L. Ed. 481 :
"Wbere money bas been mlsappropriated, tbe gênerai rule of equlty is that
those wronged may pursue It as far as It can be traced, and may elect to
take the property in which it bas been Invested or to recover the money."
While the court hère speaks of "money," yet this word is only
illustrative. Like the other équitable rule to which we hâve referred,
this oneis also efficient, far-reaching, and absolute; so that beyond ail
question, in view of the équitable obligations resting on the téléphone
company which we hâve described, and even under the rules of the
common law, contracts of this character must be so construed and ap-
plied that the portions of the présent contract which we hâve cited
350 .0 . 1 ; . 125 FBDEEAIi EEPORTBB.
compélthe téléphone compafty to accôunt for the shatës oî stock for
which the accounting is askèd, under the circumstances stated by the
mastef, prècisely as it would be required to accôunt for ahy gross
addition to Tentais which it might hâve recéived in the form of a sum
of money, ttnlass something can bfe found in the contract which shows
that the parties hâve stipulated otherwise. The underlying equities
which we hâve described are so strong that they are not lîghtly to be
set asidë, nor can they be ignôred on account of mère inferences
ingeniously drawn from circumstances, or from anything except what
appears clearly on the face of the contract or what is clearly incon-
sistent with the opération of itS' provisions.
At this point it is convenient to^sây what we need to say as to the
Ormes contract. Tlie réspondent cîaims that this was the "basis"
of the contract in suit. The master sD fonnd, and the Circuit Court
sustained this finding. This is a remarkâble illustration of the care
which we hâve sâîd should be used with référence to the investigation
and application of matters oUtsidé bf a contract itselL The founda-
tion for this proposition is the testimony of Mr. Forbes, then prési-
dent of the téléphone Company, as to a conversation with Mr. Gifford,
then one of the counsel of the Western Union. The Ormes contract
was completed in August, 1879. It constituted an arrangement be-
twéen the Western Union, the téléphone company, and Ormes, by
which Ormes was licensed for several Southèni' states by both the
other parties, and was àble, therefore, to cover those states without
Gontroversy. Mr. Forbes testifies that he met Mr. GifFord at New
York, and the suggestion was then made that the Ormes contract
would be a good basis for a settlement for the rest of the country, "to
which Mr. Gififord immediately expressed his opinion that it would,"
foUowing which there was a discussion as to the method of making
the suggestion practicable. What this conversation probably meant
appears from the testimony of Mr. Gififord. While at the White
Mountains, a short time before, he endeavored' tô arrange with the
counsel for the téléphone company for a combinatiOn of ail interests
into a joint property, in which each party should bave a half share,
looking to a corporation for that pUrpose. This was refused, and
those negotiations failed.' In othfer words, when Mr. Gififord assented
to the suggestion ôf the Ormes contract as a ba^is, it satisfies the
proofs to assume that-he'did it as an expédient in lieu of the proposi-
tion which he had made for the combination of the joint properties
into a corporation. So far as that particular wàs concerned, the prés-
ent contract did follow that with Ormes. While, also, in many dé-
tails, the instrument before us foUows the other, as it inevitably would,
yet, as to the'onîy question on this appeal, the principle underlying
one is in côntràst witb that underlying the other.' Ormes was the
paymaster. , Heistipulat'çd directly with the Western Union to pay it
â fixed annuàl Tentai of $I for each téléphone, wiih a réduction under
Some circumëtances; to 75: cents.. : Sd far as the Westerrl Union was
concerned, he agreed to pay it this fixed license.' That was the end of
it; and he was under no further obligation to it, legally or equitably.
The relations between the Western Union and the téléphone company
jn the Ormes contract were of the simplest character. They, of
WBSTEBN UNION TEL. CO. V. AMERICAN BELL TEL. CO. 351
course, protected the télégraphie business of the former, but beyond
that the téléphone company made no stipulations in favor of the
Western Union, except with référence to a certain incidental right
which the téléphone company reserved to increase its royalties as
against Ormes, in case of additional cost to itself arising out of im-
provements. It indeed stipulatçd that under certain contingencies it
would assume the royalties which Ormes agreed to pay the Western
Union, but it did this only as a substitute for Ormes. In its essence,
the Ormes contract is so far removed from the contract before us that
we are unable to find in it any assistance of value.
We will also in this connection dispose of what we hâve to say with
référence to the drafts preceding the contract as executed. First was
what is called the "Outline." Precisely in what stage of the negotia-
tions this came in we hâve not been advised. What purports to be
a copy of it was obtained for this record, but a note by the clerk says
that it was omitted when the case was printed for the master "because
of the difficulty of properly reproducing it." It was covered with
pencilings, and was altogether in the most confused and uncertain
form. It, however, is plain that it did not contain the parts of the
third paragraph of article 2 of the existing contract, which will be
found to be necessary to the ultimate détermination of the issue be-
fore us. The record also contains a paper dated on the 27th of Sep-
tember, 1879, signed by the parties as a mémorandum to be replaced
by a formai contract to be prepared by counsel. This also fails to
contain the most essential part of the third paragraph of article 2;
also the seventh paragraph of the same article, which we will explain
further on. It is true, for whatever it may be worth, that the sub-
stance of this paragraph is found in the gênerai phraseology of the
mémorandum of September 27th. No clear proposition is based on
any of thèse preceding drafts; and, indeed, none could be, except
that the mass of papers in the record relating to the prior negotia-
tions shows that they were in a state of flux till the contract was com-
pleted. Thèse extraneous drafts illustrate most vividly a proposition
most pertinent to this topic at the outset of any discussion of it, that
it sometimes happens that the minds of contracting parties meet on
essentials only at the last instant, and this in such way that the final
agreement finds no expression except in what was written last of ail.
On the whole, the contract before us exhibits on itS face sufificiently
for présent purposes the existing condition of things ; and, aside from
what is disclosed by it and things of common knowledge, the matters
which hâve been so elaborately pressed upon us cannot safely be per-
mitted to change the just construction of what we find in the instru-
ment itself. So far as it goes, it is reasonably clear ; and its applica-
tion to any conditions which its terms do not in fact anticipate must
be determined by the fundamental rules of law which we hâve aiready
explained.
The case as put is one of the receipt by the téléphone company of
certain shares of capital stock, in addition to the annual rentals for
which it has accounted to the Western Union ; but it must not be ob-
scured by the nature of the additional assets thus obtained. The case
in this respect stands exactly the same as though the téléphone com-
352 125 FEDERAL RÏÏPOBÏBK.
pany hadTeceived the équivalent of thèse share& in mbney, or had
imttiediatelyconverted them into money. For ail présent purposes,
the transaction is to be iscratinized in the light of the fact that ail
questions as to the nature of the assets received are irhraaterial. The
case stands, therefore, on the propositions of law and equity which
we hâve already stated; that is to say, that the téléphone company
has received ceftain assets in addition to rentals by name, which it
must account for under theïirst paragraph of article i, unless the con-
tract elsewhere clearly pef mits otherwiseï • ■
Not a word in the contract is brought to our attention which ex-
presses such a permission. The respondent's case isibuilt up on in-
ferences, and it therefore rests upori it to show that thèse inferences
so work into the body of the contract 'as to render it inconsistent with
the application of the positive equities "which we hâve said underlie
instruments of this character. One proposition urged upon us is that
in this- long contract, carefully framed, between parties who were
compétent to provide for contingencieS of the character we are con-
sidering, the constant use; ôf the words' "rentals" and "royalties," and
the références to annual rates, must be accepted as a positive ex-
clusion ofany other benefit to come to the Western Union. But
the mère fact of numerous répétitions; especially in long contracts,
does not prove that they are nôt vain. On this topic we said in Reece
Button-Hole Company v. Globe Company, 6i Fed. 958, 960, 961, 10
C. C. A. 194, as follows :
"The orôinary rule that If by a ilteral construction an instrument would be
rendered friVolous and Ineffectuai, and its apparent objeet frustra ted, a dif-
férent exposition will be applied if it can be supported by anythlng in it,
requires that words which relate to what ma y be held nonessentials, however
much multiplied, ehall not be permitted unnecessarily to control the sensé."
Even if aliterai interprétation, on the ■ fuies insisted on by the re-
spondent, be given effect, it would easily be met by a déduction from
what we hâve already said as to the meaning of the word "rentals" or
"annual rentals." That which can be made certain is certain; and,
whatever form rémunération takes, if it can be reduced mathematicâlly
to a rental, or annual rental, it is sufïicient for even the most literal
rules of construction. If, for example, in lieu of the "ten dollars per
annum," named in paragraph 2 of article i, the téléphone company
received, either in shares of stock or money, $100 for a 10 years'
license, which seems to hâve been cômmonly granted, or $170 for a
perpétuai license, which wbûld mean thé entire 17 years for which
the contract ran, either hypothésis readily computes an annual rental
of $10, and, if received in advarice, it must hkewise be accounted for
in advance.
But, from what we hâve already said, it follows that ail this is a
mère play on words. The course of business at the time the contract
was made leads to the just conclusion that the parties thereto were
not contemplating the tâking of lump sums as a considération for
licensing téléphones for the period of the contract or the larger por-
tion thereof; but if the respondent did this, and thus departed from
the spécifie mode of doing business then customary, it nevertheless
remained justly chargeable under a true construction of the broad
WESTERN UNION TEL. CO. V. AMERICAN BELL TEL. 00. 353
provisions of paragraph i of article l. The fundamental answer to
this proposition of the respondent, therèfore, is that it defeats itself,
in that it goes so far that it strikes against the foundation of those
rules of construction which, as we hâve already explained, are prop-
erly and necessarily applied to ail contracts of the character before
us, and according to which, as we hâve said, a description of particular
forms of pecuniary returns must be regarded as merely illustrative.
The leading proposition of the respondent is based on one of the
master's fîndings, which must be accepted as a finding of law, and
has weight only accordingly. After stating, as we hâve already said,
as a matter of fact, that nothing was paid for thèse shares of capital
stock except an "exclusive perpétuai license," he states at another
point as follows:
"The défendant considered it was selling its exclusive riglit to carry on tlie
business, and that In whatever way the value of this right was realized it Is
the exclusive owner of it; and I so flnd."
This proposition is made by the téléphone company the burden of
its case. This word "exclusive" is deduced from paragraph i of
article 12 of the contract, and paragraph i of article 13, in each of
which the word "exclusively" appears, as will be shown by the foUow-
ing transcripts thereof:
"The right to ail uses of the téléphone on wires of a district or exchange
System is to remain exclusively with the party of the second part, excepting
such temporary suspension of the application of this contract to certain lo-
calities as has been already herein provided for."
"The right to connect téléphonie district or exchange Systems for the pur-
pose of Personal conversation between persons at the instruments, and the
right to use téléphones on ail Unes not forming a part of a téléphonie district
or exchange System for such Personal conversation (except so far as llcenses
for private Unes are to be granted to the party of the flrst part under article
14), are to remain exclusively with the party of the second part, and those
licensed by It for the purpose."
The respondent says that for success the licensees of the exchanges
required not only téléphones, but a monopoly; "they" — the licensees
— "needed the exclusive right to do business in the district"; and it
adds : "This monopoly which the licensees wanted to buy the défend-
ant had for sale, and the défendant sold it to the licensees for a share
of their capital stock." The respondent réitérâtes that the téléphone
company's contracts of leases, by virtue of which it received sundry
shares of stock, conveyed much more than the right to use téléphones,
because each transaction was an outright sale of its monopoly of the
exchange business for the locality concerned.
Thus, the respondent rests its case mainly on the word "exclusive-
ly," found in the extracts we hâve made from articles 12 and 13. But
it is clear that for the purposes of this case this word has no légal
force.
We must remark incidentally that in this proposition the respond-i
ent has worked out a most anomalous resuit. The forms of licenses
in use by the téléphone company establish the statement made by
the master that it was usual to limit the use of certain téléphones
to exchange purposes. It is to be noted, however, that the téléphone
company also had forms of licenses limiting the use to private Unes or
125 F.— 23
334 .OD .JK',; .,i.,v..<-.<125'.FEDERAL-.BEPOB!raB. ■ ,-.■• ' J!! Il; ■._.,','
to othefî;pui|)05«Siéxpr€Ssly named therein.. It is, not iiacessary to
elaboratèitbe'térAis^oi thèse licehses. 'The anomaloustEesult is that
the teléphoWÊi-èoimpany claims, to take^ something irom ; the Western
Utiion aiS tSealleged ïogical séquence «f its issuing limited licensés,
tfaus maki*ig: a/^rt of greàter Value than the whole. Of course, it îs
not possible that "there coaldbe anysuchgreater value.
Althaugh ihe; téléphone cbmpany had certain exclusive rights under
the contraet,! as betweert'it and the Western Union any: exclusive
rights which jt graiited to 'its licensees.were not the sartie, but they
merely sproîig eut of thein, becauseit Was entirely at the option
of the telephotte cotiipany' to grant dicenses which Gontained no
feature of sexclltsiveness. The fundanietp.tal and controlling proposi
tion, however, is a simple one. The relations were so complicated
that alniost every provision of the contract in suit, if not: every one,
is subjectto certain iticidental exceptions ; but, àside from that,
the téléphone conipany held undér ît a right to issue iicertses exclu-
sively for exphange usesind^pendently of any terminology to that
egect, precisely as it; had a right to grant licensés exclusively for
private Hnçs,- orforspeaking tubes, or for any other spécial class
of uses. So.rthatj go far as this ç^se is concerned, it m^y well be
said, without any Hmitation, that the téléphone company, from the
mère force, of, the contract, a? construed by the l^vsf, might grant
exclusive riglîtg, with refç^epce tO; every use to whiçÉthe téléphone
could be put. ' It was in the power lof thë téléphone company to con-
tract vi^ith .a corporation in Boston to grant it an exclusive license
for that city, for a terrti |,0f years, qr perpetually, subject to a cer-
tain inévitable exceptions, for ail speaking-tube purposes, or a Hke
exclusive license for ail private lines. With référence to^ each of
the samej the téléphone company acquired exclûSively the same
monopoly that ît did as to téléphone exchanges; but the respondent
resta its case on this verbal distinction, and, inasrriucli as the dis-
tinction is entirely immateriâl in this connection, its case falls
through.
It is èasy to account for the use of the word "exclusively." Prob-
ably in no view of the case Wàs it strictly nécessafy, and it seems to
hâve been used ex majore 'cautela, balaticing the same word as used
in behalf of the Western Union. It was one great purpose of this
contract to divide, by boundaries as clearly mafked as practicable,
the téléphone field from thé télégraphie field, giving the former to
the téléphone company and thé latter to the Western Union. The
contract is largely occupiéd with very careful détails and précise
conditions intended tô aceomplish this purpose iri a practical way,
and so far as possible tô anticipate and prevent évasion. At many
points it was impracticable to state anything more than gênerai prop-
ositions, relying upon their being made practically effective by the
gênerai principles time afld time again exhibited. Paragraph i of
article 12, which we hâve quotèd, is the formai beginning of the
body of that part' of the contract which seeks to effectuate this pur-
pose. It isdifïEcult even for the rêspondent tO speak of articles
12 and 13, éxcept in language describing them as pertaining to the
portions of the contract which relate to the "dividing up of terri-
WESTEBN UNION TEL. OO. V. AMERICAN BELL TEL. OO. 355
tory." Such was the fact. In the following out of this topic, article
15 directs the téléphone company, in at least two places, to turn
over to the Western Union "exclusively" messages for transmis-
sion by telegraph, so far as it can legally contrôl the same; and
many expressions in this division of the contract, including this
word, are better adapted to impress the fact that each party was to
respect the rights of the other within its peculiar territory, and to
aid in securing each other with référence to the good will thereof,
than to support the proposition that by any of them the téléphone
company possessed certain légal rights which it had without them.
But whatever may hâve been the reason for inserting tne word
"exclusively," it is clear, as we hâve already said, that it adds noth-
ing to the case before us from the point of the law.
Other portions of the contract strengthen our gênerai conclusion,
and some of them lead to it quite positively. As we hâve already
said, paragraph 7 of article 2 was not contained in the mémoran-
dum of September 27, 1879, except so far as it may be found in the
gênerai language thereof. That reads as follows:
"The party of the second part may increase the established annual rate,
either generally or upon téléphones used for any particular purpose, or by any
particular class of licensees, from tlme to time, at its discrétion, and such
higher rates, while in force, shall be taken to be the gross rentals or royalties
in respect of the téléphones for which they are obtained."
This provides not only for increase of gênerai rates, but specially
for "increase upon téléphones used for any particular purpose or
for any particular class of licensees." This, of course, embraces
téléphones used for exchanges, and makes no exception arising out
of the fact that they may be used under licenses exclusive for cer-
tain territories. It makes no distinction for or against licenses of
an exclusive character, either for exchange, private lines, or speak-
ing-tube purposes, whether perpétuai or for a term of years. It
gives no method, and suggests no occasion, for apportioning what
may be received in the manner claimed by the respondent so as to
make a spécifie allowance for monopoly or exclusive right. And
it distinctly provides that "such higher rates while in force" shall
be taken to be the gross rentals or royalties in respect to the télé-
phones for which they are obtained. This language seems to be
sweeping, clear, and emphatic, and to leave no room for any such
apportionment as is now claimed before us.
The phraseology of paragraph 3 of article 2 is even more spécifie.
That reads as follows:
"Téléphones used on exchanges or lines owned In whole or part by tht
party of the second part, or by auxiliary corporations or organizatio'ns in
■which It is interested, or rented together with lines owned in whole or part
by it, or by auxiliary corporations or organizations in which it is interested,
shall be rated as paying to said second party the said reeognized standard
rates, or such other rates as may hereafter be established in accordance with
this contract for like uses by parties other than the second party or auxiliary
corporations or organizations In which it is interested, less the commissions
and allowances provided for by this contract; but whenever the party of the
second part is or shall be interested with others In the ownershlp of such
excUanges or lines, the annual rental or royalty actually charged to and re-
356 125 FEDERAL BBPOBTEB.
ceived from the owners thereoî for the use of the telepliones, If greater tban
the rates established as aforesaid, shajl be taken to be the gross rental for
the purpose of ascertalnihg the stlpulated bonus or royalty."
As we hâve already said, that portion of this paragraph which
begins with the words, "but whenever the party of the second part,"
was new in the contract as executed, and appeared neither in the
"Outline" nor in the mémorandum of September 27, 1879. We
hâve already shown that, on a true construction of contracts of this
character, the words "tentai or royalty," found herein, must stand
for and represent ahy grbss sum received for a perpétuai Hcense or
other interest; and such being the fact, this portion of this para-
graph specifically prohibits the téléphone company from receiving
for téléphone licenses any spécial advantage to itself, whether by
shares of stock or money, without apportioning it to the Western
Union. It must be admitted that apparently the first portion of the
paragraph makes a certain concession in behalf of exchanges or lines
actually owned in whole or part by the téléphone company. This
considération was undoubtedly yielded to the necessities of the case,
arising out of the fact that, where the téléphone pompany had an
interest, especially the whole title, the accounts might not, or could
not always be kept, so as to show specifically what was a just allow-
ance merely for licenses. This portion of the paragraph, however,
is Hmited to the opération of exchanges after the téléphone company
becomes interested in them, and it has nothing to do with the ac-
quirement of such interests, Moreover, it is especially guarded,
so far as practicable, in order to secure to the Western Union its
share of what would be reasonable and just rates proportionate
to those paid by other exchang'es in which the téléphonie company
had no interest.
The, answei allèges that the practice of the téléphone company
with référence to the matters covered by this bill was well known
to the Western Union, and that until shortly before the commence-
ment of this suit it made no complaint thereof, but, on the contrary,
"recognized such course of dealings." This is not in such definite
language as to make it clear whether the respondent intended to
raise a question of lâches or to make the proposition that the West-
ern Union had practically construed the contract as claimed by it.
The bill, as we hâve said, was fîled on November 16, 1883, four
years from the exécution of the contract. The demand by the West-
ern Union on the téléphone company for this accounting was con-
tained in a létter of February 26, 1883. Of course, on well-settled
principles, the acquiescence of both parties for over three years
in the construction of a contract, involving so many éléments as this,
would be of great importance when a court comes to détermine its
meaning. Lâches is,, of course, available when plainly raised by
the proofs, even if not set up in the answer. The master fînds no
facts of a definite character with référence to either of thèse topics.
The respondent, moreover, referred to this line or lines of défenses,
whichever it is, in only a brief, indeterminate, and incidental man-
ner. On being specifically inquired of by the court on this topic,
nothing more satisfactcry in référence thereto was obtained. The
WESTEKN UNION TEL. CO. V. AMERICAN BELL TEL. CO. 337
answer does not allège how long the Western Union had known
of the course of business which this case develops, and nothing in
the findings of the master, or in the proofs brought to our atten-
tion, contains anything in that respect. Therefore we are not re-
quired to give attention to this phase of the défense.
It is claimed by the respondent that on this bill no relief can be
granted according to the case made by the proofs and submitted to
the court by the complainants. This point seems to be that to reach
the case the bill should hâve prayed that the contract be reformed,
or should hâve alleged artifice on the part of the téléphone Com-
pany in fraud of complainants. But, in view of the construction
and effect which we give the contract, the prayer of the bill, so far
as it asks an accounting for the amount and value of assets received
for licenses to use téléphones, is appropriate to the facts. The
prayer, however, asks for an accounting for téléphonie appliances,
which, of course, is erroneous. It also asks specifically that the
shares of stock received by the téléphone company, and other inci-
dental matters described in the prayer, be transferred to the West-
ern Union, and that the dividends thereon be also accounted for,
with interest on each item. None of thèse détails are within the
scope of our présent adjudication. The disposition of them will
turn on a further investigation to be made by the Circuit Court.
We find nothing in the case which raises any practical issue ex-
cept the spécifie matter which we hâve discussed, and that we find
to be limited to certain shares of stock alleged to hâve been received
by the téléphone company. We therefore détermine that the only
issue is the ascertainment as to certain shares of stock received by
the téléphone company since November i, 1879, ii^ considération,
in whole or in part, for licenses to use téléphones, and as to the in-
cidentals appurtenant thereto.
We exclude from the accounting anything received by the télé-
phone company in any form which was properly the équivalent of
what it possessed the day as of which the contract went into effect;
that is, November i, 1879. ^^' ^^^ example, so far as at that time
the téléphone company had given any license, if there were any
such, involved in any contract entitling it at the end of a spécifie
period to receive a surrender of the whole or any part of the plant
or other incidents of a téléphonie exchange, and so far as subsé-
quent to November i, 1879, *^^ téléphone company surrendered
such option and gave a new Hcense, receiving an obHgation for the
usual rentals or royalties, and certain shares of corporate stock,
such portion of such corporate stock as represented the value of the
option surrendered pertains to the téléphone company, and is not
to be accounted for. It may, and probably will, be difficult to make
this apportionment ; nevertheless, if there are any conditions exist-
ing, as we hâve stated, the apportionment must be made as can be
best done. In this connection we repeat that we do not intend
hereby to conclude or preclude any questions with référence to divi-
dends or interest, and ail such questions are reserved, so far as we
are concerned, until the case comes to us again from the Circuit
Court, if it ever does.
358 425 FEDERAL BKPOBTEB.
Of course,, the accounting, according to settled practice in equity,
will be brought dowit to as late a: perjod as is practical; and, ail
parties having already had full çjpportunity of bringing: into the
record ail facts essenti^lto the final accounting, each must, on such
accounting, be confinedi to the présent record, except so far as
equity shall require ot}ier»ifise,
In view of the state of the record thus spoken of, it is probable
that we could proceed further, and dispose considerably of the issues
involved in the accounting; but the; proper prjictice is that pointed
eut in Chicago, Milwaukee & St Paul Railway v. Tompkins, 176
U. S. 167, 179, 20 Sup. Gt. 336, 44 ly. Ed. 417. In the form in which
this case :Comes to us-T-that is, on a gênerai finding against the com-
plainants*-T-it might be ' impracticable for us to go further into dé-
tails without doing injustice^ However, we are entitled to avail oui'-
selveSfOf the relief which cornes from the rule stated in the case just
cited.
We hâve thoroughly cpnsidered the yery careful reasoning of the
Circuit Court in this case, and differ from it only after much dé-
libération. We hâve reached our conclusion by holding firmly to
the true issue in the case, from which there has been a grave de-
parture, originating with those portions of the master's report which
we hâve cited, and fjirther;,induced by some of the Complainants'
exceptions thereto, and by propositions urged by the respondent
before us and in the Circuit Court.
The decree)Of the Circuit Court is reversed, the case is remanded
to that court to enter a decree for the complainants for an account-
ing, and for further proceedings in accordance with our opinion, and
theappellants .reçover their costs of appeal.
ORDER OF UNITED COMMERCIAL, TRAVELERS OF AMERICA V.
McADAM.
(Circuit Court of Appeals, Bighth Circuit October 3, 1903.)
No. 1.833.
1. Benefit Ins0kakce— FsATBKiiTÂt Okdbb— AssEssMENTs Advanced for Mkî'
BER BY LOCAIi BOBY.
The Order of United . Commercial Travelers of America Is a fraternal
organization, -^vlileh, as one of its features, insures its members against
death by accident. It bas a suprême council, subordlnate to whicti are
local councUs. Its Insurance or indemnlty fund Is obtalnéd by the su-
prême council by assessing tbe subordlnate councils $2 for each member
whenever the fund becomes insufficient to pay four death losses. Subor-
dlnate councils also malntalQ an Indemnity fund, from which such as-
sessments are pald, which is replenlshed by assessments on their mem-
bers. The constitution provides that, whenever a member fails to pay
hls Individual assessment when due, he shall forfelt his good standing in
the order and hls right to indemnity and beneflts; and also that at a reg-
ular meeting of his council such- member shall be suspended from the
order and from ail beneflts derived therefrom, but may be reinstated by
vote. Eelê that, construlng sàld provisions togefher, And in the absence
of any prohibition in the constitution, a local council had power in its
discrétion to keep up It» payments to the suprême council on account of
one of its delinquent members, and to thus maintain him in good stand-
OEDEK or UNITED COMMEEOIAL TEAVELEE8 V. M'ADAM. 359
Ing Jn the order, and tbat where a council, Instead of suspending a
member on hls failure to pay an assessment, by resolutloii expressly deter-
mined to advance the amounts assessed against It by the suprême coun-
cil on his account, which was done, and the council continued to treat
and report him in good standing untll his death, whIch occurred from an
accident shortly afterwards, when it was reimbursed for such advances,
the suprême council, which recelved and retained the assessments made
onhls behalf, could not deny his good standing as a member, nor avoid
payment of the insurance to his beneflciary, on account of hls Personal
delinquency.
2. Appeal — Review of Finùing of Fact.
The finding of a trial court In a suit in equlty on a life Insurance poli-
cy, made on conflicting évidence that the accident which caused the death
of thé insured did not happen while he was, or in conséquence of his hav-
ing been, under the influence of intoxicating drinks, eannot be reviewed
by an appellate court unless a serlous and important mistake appears to
hâve been made in the considération of the évidence, or an obvious error
has Intervened in the application of the law.
3. Release — Cancellation in Equity— Unfaik Settlement op Claim.
Complainant's husband was a member of a fraternal order which In-
sured its members against death by accident. At the time of hls death,
which resulted from an accident, complainant was too ill to attend his
funeral, and she remained in an enfeebled and nervous condition for sev-
eral weeks. A member of the same local body in the order, in whom she
had fuU confidence, was appolnted administrator of his estate, and he
assured complainant that the insurance due from the order would be
paid soon, and in fuU. Whlle so believing, she was called on at her home
by the administrator and three other members of the order, two of whom
were officers of the governlng body, who told complainant she had no
claim against the order, but offered to pay her $1,000 In settlement, and
pressed her for an immédiate décision. The administrator, when she
talked with hlm apart, said he knew little about the matter, but that the
other men probably understood the situation. Belng required to décide
at once, she accepted the offer, signed a release, and recelved a draft for
$1,000, which, however, she never cashed. It appeared that she knew
nothing of the constitution of the order, nor of the truth of the facts
stated by its représentatives as grounds for thelr statement that she
had no claim, nor was she ever advlsed before that its validlty was ques-
tioned. She in fact had a valid légal claim against the order for $6,300.
Helâ, that the settlement so obtained by taking complainant by surprise,
and by requlrlng her to aet at once wlthout an opportunity to take légal
advlce or to ascertain the facts, would not be sustained by a court of
equity, but the release would he set aslde.
Appeal from the Circuit Court of the United States for the District
of North Dakota.
George A. Bangs (J. E. Sater, on the brief), for appellant.
Guy C. H. Corhss (J. M. Cochrane, on the brief), for appellee.
Before CALDWELL, SANBORN, and THAYER, Circuit Judges.
THAYER, Circuit Judge. At the conclusion of the trial of this
case in the lower court counsel for the respective parties stipulated,
in substance, that it should be decided upon the pleadings and the
évidence ; that no point or objection should be urged by either party
to the cause as against the other based upon the insufficiency of the
pleadings to présent the case of the plaintifï or the défense of the de-
fendant ; that the case should be decided in the same manner as
though the matters of fact established by the évidence had a sufifîcient
foundation in the pleadings; and that the évidence should be con-
360 125 FEDERAL EEPOBTEK.
strued in the 'sa:ne mahner as though the facts which the évidence
proyèd or iended to prove were supportéd by proper allégations in
the ' plçàdings. In view of this stipulation it will be unnecessary to
State the issues whichwere raised by thé pleadings in détail. It will
suffice to say generally, concerning the nature of the controversy,
that Isabelle D. McAdàm, the appellee, exhibited a bill of complaint
against the appellant, thp Order of United Commercial Travelers of
America (hereafter termed the "Order"), for the purpose of setting
aside a written release of ail claims against sïiid order which she had
been induced to exécuté, ànd for the further purpose of compelling
it te? pay tçi her the sum of $6,300 and interest thereon, wliich she
claimed-tb be entitled totinder the constitution of the order by virtue
of her husband's having been a member of the same at the date of his
death on January 31, 1900. The release which she asked to hâve can-
celed was one executed by her on March 26, 1900, whereby she ac-
knowledged the receipt of $1,000 in full settlement of ail claims against
the aforesaid order by reason of the death of her husband, who, at
the time of his death, was the holder of a certificate of membership
in thé order. The lower court granted the plaintifï ail the relief prayed
for in hef bill; that is to say, it canceled and annulled the aforesaid
release, and further decreed that she hâve and recover frota the de-
fendant order the sum of $7,123.26. The présent appeal was taken
by the défendant order from that decree.
In the lower court it was conténded in behalf of the défendant, and
the contention is renewed'on appeal, that Thomas J. McAdam, plain-
tifFs husband, was not one of its members in good standing at the
time of his decease, and that his wife was not entitled to demând any
indemnity from the order for that reason.- This is the first question
which deserves attention, and the facts pertaining to its détermination
are as follows: The appellant above named is an Ohio corporation,
which transacts business in many states through the agency of what
are termed "subordinate" 6r "local" counçils. By its constitution it
promises to pay a certain indemnity to its members in good standing
who happen to sustain "bodily injury effected through external, vio-
lent, and accidentai means which alone shall occasion death immedi-
ately or within one year from the happening thereof ." The fund to
pay this indemnity is obtained by the suprême council of the order by
assessing subordinate counçils.. The constitution of the order pro-
vides, in substance, that whenever the indemnity fund belonging to
the suprême council becomes insufHcient to pay four death losses, the
suprême counselor of the order shall make an assessment upon each
subordinate council to replenish its indemnity fund for a sum not ex-
ceeding $2 for each member in good standing of such subordinate
counçils, which assessment shall be payable within 15 days from its
date ; and that whenever the indemnity fund of a subordinate coun-
cil is less than $2 for each of its members, the suprême counselor shall
order an assessment not exceeding $2 upon each member of the
subordinate council in good standing for the purpose of replenishing
its indemnity fund, which assessment shall be payable within 30 days
from its date. In case any subordinate council fails to pay an assess-
ment levied upon it by the suprême council, power is given to the
ORDER OP UNITED COMMERCIAL TRAVELBR8 V. m'aDAM. 361
latter council to suspend the subordinate council or revoke its charter.
Other provisions of the constitution require each subordinate council
to keep the suprême council advised, by proper reports, of the num-
ber of its members and the condition of its indemnity fund. The
subordinate council to which plaintifï's husband belonged was located
at Grand Forks, N. D., and was known as "Grand Forks Council
No. 64." He became a member of that council on February 17, 1896.
On August 2, 1899, the suprême counselor of the order directed an
assessment at the rate of $2 per each member in good standing to
be made against each subordinate council, payable in 15 days, and at
the same time directed an assessment of the members of each subordi-
nate council at the rate of $2 per person, the latter assessment to be
paid-to the subordinate council. Further assessments in ail respects
like that of August 2, 1899, were ordered by the suprême counselor on
September 30 and November 20, 1899. Thèse assessments, known
as assessments Nos. 46, 47, and 48, were not personally paid by the
plaintifif's husband to the Grand Forks Council, of which he was a
member, during his lifetime. At the time thèse assessments were re-
spectively levied against individual members, the indemnity fund in
the treasury of the local or subordinate council, to which McAdam
belonged, was not less than $2 for each member of that council in good
standing. Notwithstanding the fact that McAdam did not pay as-
sessment No. 46 within the time limited, he was treated as a member
in good standing and assessed as such when assessment No. 47 was
revied. He was treated in the same manner when assessment No.
48 was levied, although he had not paid either of the prior assess-
ments. In point of fact, the subordinate council dealt with McAdam
as one of its members continuously until his death, which occurred as
the resuit of an explosion of gas on January 31, 1900. In the mean-
tinie it reported him to the suprême council as one of its members,
and advanced and paid on his account, out of its indemnity fund, to
the suprême council, the several assessments aforesaid, which were
made by the suprême council against the subordinate council. The
payments so matîe on his account, as one of its members in good
standing, the suprême council has never refunded or ofïered to refund
to the subordinate council, but still retains. On February 3, 1900,
after McAdam's death, the three assessments aforesaid, which he had
failed to pay personally, amounting to $6.75, were paid to the subor-
dinate council by an agent of the plaintiflf, and out of moneys belong-
ing to her, and the sum so paid was accepted by the subordinate coun-
cil in satisfaction of its claim against the deceased for the money
theretofore advanced in his behalf. Prior to the death of the de-
ceased, and on January 13, 1900, at a regular monthly meeting of the
subordinate council, a resolution was passed to the efïect that the
council carry T. J. McAdam and others, who were then delinquent,
until the next meeting, and "that the secretary make an effort to
get them to pay up." The next regular meeting after the adoption
of this resolution was not held, as it seems, until after McAdam's
death.
The contention on the part of the appellant that McAdam was not
one of its members at the time of his death, or not a member in good
362 .ii'Ani'.r ,-,. :.,.il25':EB!DœBaii:BEPOSTBB. '. ;,:■.::..:,!
Standing; :andhence hot entitled tO'iridemhîtiy, îs based primarily on
a provision of its cottstitutïonto the followingeffèct :
"An^ -mèmber who fails to pa,y irl* dueâ"and assessments, or any of them
when, and as ithe same beconje ôuéiand payable, shall Immedlately on the
happening of such default, and by.virt^e thereof, forfelt hls good standing In
tbe ordeir; and he, or any person oir persons claiminç under him and by virtue
of Ws certiflcate bf menabérship, stiftH iikewise and at the time such default
occùrs, ànd by vlrtué theredfv forfèît ail Tlght to Indemnity and benefits of
whatsoever character." . . \;i:>
It is insisted, in substance, that thiâ provision of the constitution
operated propriô vigore to ex'tingùish McAdam's right to indemnity
when he failed to pay assessmeht"'îf6. 46 and the subséquent assess-
ments, Nos; 47, and 4e, to thé subofdinàte council of which he was a
member, notwithstanding the fact \hat the subordinate council ih due
time paid dut of its own indemnity fùiid to the, suprême council the
amount of the assessments which McAdam should hâve paid to the
local council; and reportecj hini as a member in good, standing, and
elected to giVè him crédit for thè mottey so advanced, and to treat him
in ail respects as a m.embèr ;in gdod standing up to the moment of his
death. , ;'^-y- '' ' ./ '■'[■'
We hâve been forced tb côhçlude that this contention on the part
of the défendant Company mùàtbè Ùrisbtind. It is apparent that the
suprême cèuiïcil has suitained n'à:loss in conséquence of the alleged
default-, bécauèfe it receivéd t!hé''three assessments "from the local
council in dtie season, and stiU retains the same. Its own in-
demnity furtd, ont of whitih'âll losse.s Hke the onie iii hand are paid,
is precisely what it would have bèèii; had' McAdam paid the assess-
ments punctually. Moreovej-, thè Jbcal council has sUstained no loss,
because the, iiibney which' it sawr fit Wadvance ti'àk beén refunded.
The provision of the constitutiàn abdve qudted,, which is invoked
to work a fol-feitureof the prorriîsëd indemnity, is immediately pre-
c^dedbyànbther, which l'éàds as ipllôws: '
"AU members trto fàll to pày iliélr dueà or assessments when due, shall
be suspendéd froÉi the order, àt â regUlaï meeting of the council, by order of
:the senior connselor, and from ail ibenefits derivèd therefrom, and if there be
no more than two adverse ballots agaiust hls reinstatement he may, at a
regular meeting of the council, çhtliepayment of a flnieof twenty-five cents
per montb, • • • be rèiittstalted • by & regular vote by the bail ballot.
• ;.*■.*"..■: "''i ■■'■:■:'. 'i ■" '
" The tWo provisions aforei^àid,; standing as they do in juxtaposition,
must bé iread'iand cbnStruëd ftôg;ether ; and théy imust be so read
the light of'the \\rell-establi4Hë^'fuii't'ha't insuratlce contracts and oth-
ier instruments of that nature; wjiëfjeby an indemnity is promisëd in
case of deàth oi- .accident, must pe çonstrued rnbst strongly àgainst
the insurér, ând sb as 'iç avoidj if p0Ssi|ble, a forféiture of the rights of
^he insur^d, where thé jàriguàge etri|jïoyed in formulatihg the con-
tract gives riSëto^dbtibt'br uncertàinty as to its propèr interprétation.
'As contratfts bf tfiat nature are formulatèdby the insurer, and gener-
ally with,àn eyè singly to thè'protectibh of its own interests, it is the
însurer's duty fo see to it that the various provisions which they con-
tain are harmonious, and tl;at the intentions of the contracting parties
are cléarly expfessed. First; National Banlç y. Hartford Fire In-
surance Co.',: 95 tJ; ê; 673, 678, 24 L,. Ed. 563; Thompson v. Phénix
OEPER OF tlNITED COMMEKCIAL TBAVELERS V. m'aDAM. 363
Insurance Co., 136 U. S. 287, 297, 10 Sup. Ct. 1019, 34 L. Ed. 408;
American Surety Co. v. Pauly, 170 U. S. 133, 18 Sup. Ct. 552, 42 L. Ed.
977; Phénix Insurance Co. v, Wilcox & Gibbs Guano Co., 65 Fed.
724, 13 C. C. A. 88, 92. The provision first above quoted cannot
be regarded reasonably as worl<ing a permanent forfeiture of a mem-
ber's right to indemnity if he fails to pay an assessment, and as de-
priving the subordinate council to which he belongs of the right to
advance his dues and perpetuate his membership if it is so minded,
because the preceding provision, also quoted, gives the local council
the power to suspend members "who fail to pay their dues * * *
at a regular meeting of the council. * * *" It is apparent, there-
fore, that the subject of suspending a member who is in default is
one to be considered and acted upon at a regular meeting of the local
council, and the exercise of this power involves the exercise of some
discrétion on the part of the local body. No provision of the con-
stitution to which our attention has been directed déclares that a
subordinate council shall not advance to the suprême council the
dues of one of its members who is in default, and by that means
préserve his good standing; and, in the absence of such a provision,
we know of no sufRcient reason why it may not so act, especially as
it is vested with authority, to be exercised at a regular meeting, to
détermine whether a member ought to be suspended. The exercise
of the power in question by the members of the local council, who are
usually acquainted with the causes which hâve led to a default, and
with the condition of the defaulting member, undoubtedly tends to
préserve and enlarge the membership of the order, which is an object
that such organizations generally aim to accomplish, and on which
their successful opération, in a great measure, dépends. The oppo-
site view, that a failure of a member to pay an assessment to the local
council the very day it is due terminâtes his good standing in the
order, and extinguishes his right to indemnity, and that the local
council has no power, even if it so desires, to retain him as a member
and maintain his standing, is not enforced by any apt provision con-
tained in the constitution to which our attention has been directed,
and that view, if adopted, would prove harmful to the best interests of
the order. Inasmuch as the constitution of the order establishes a
System of dual assessments — 'that is to say, since it directs an assess-
ment to be made at intervais against the respective subordinate coun-
cils, as such, to replenish the indemnity fund of the suprême council,
and an assessment to be made against individual members to replenish
the indemnity fund of each subordinate council, over which fund the
local body seems to hâve fuU control — it is possible, we think, to place
upon the two provisions of the constitution now under discussion a
construction which is not only reasonable in itself, but will give to
each due efifect, and not lead to any conflict. It is obvious that when
a member fails to pay a given assessment a certain period will ordi-
narily elapse between such default and the next regular meeting of
the council at which he may be suspended by that body. It may be
that during this interval he is not to be regarded as a member in good
standing, by virtue of the opération of that provision of the constitu-
tion above quoted, on which the appellant relies, and that if injured
864 'X 125 FEDERAL BEP0ETE3B.
during' ihatîpieriod he is not entitledto inderanity, pro\ided the pre—'-
ous course of dealing with the member has not been such as to operate
as a waiver of the defallMt. But when the next regular meeting of
the subordinate councii does occur, if the member is not suspended
by the local body, as it is empowered to do, but is reported to the
suprême councii as a member in good standing, and assessments are
paid upon that theory by the local councii, out of its own indemnity
fund, to the suprême councii, this opérâtes to restore the member's
good standing and right to indemnity. Such action on the part of
the local councii clearly indicates its intention to carry the member
who is in default, and tb hold itself responsible to the suprême councii
for the payment of his dues. Such intention on the part of Grand
Forks Councii to carry McAdam was not left to be deduced by in-
ference from the failure of the local councii to suspend him when it
was advised that he was in default, but was expressly declared by the
resolution of the local councii adopted January 13, 1900, to which
référence has already been made.
The foregoing view — ^that the provision of the constitution de-
nouncing a forfeiture of good standing, and conséquent loss of the
right to indemnity, for failure to pay dues, is temporary in its opéra-
tion, and does not occasion a permanent loss of the member's right
to indemnity, but that the conséquences of such default may be over-
come by the subséquent action of the subordinate councii to which the
member belongs — is confîrmed by the fact that if such default on the
part of a member, in and of itself, odcasions a permanent loss of good
standing and the right to indemnity, then therè woùld seem to hâve
been no necessity for inserting in the constitution of the order the
other provision conferring on local councils the power to suspend
members at regular meetings. It is further confirmed by the fact
that the constitution requires local councils to report to the suprême
councii the number of their memberâ, at stated intervais, as a basis for .
levying assessments against them, while it does not require a report
to be made of members who hâve lost their good standing for failure
to pay dues; but hâve not been suspended for that reason. It seems
dear, therefore, that the constitution of the order does not contem-
plate the existence of a class of members who hâve lost good standing
and the right to indemnity, but bave not been formally suspended, un-
less it be during the short period which may elapse between the occur-
rence of a default and the next regular meeting of the subordinate
councii. Those who "framed the constitution seem to hâve intended
that the respective. local councils should détermine for themselves, at
regular meetings thereof.whethernlefflbers then in default should be
definitely sUspended, or carried by thelbcal body as members in good
standing, and reported as such to thessupreme councii. In accordance
with thèse views, we are Gonstrained to hold that McAdam must be
regarded as having been a member in good standing and entitled to
indemnity at the date of his death.
Counsel for the appellee strongly contends that none of the assess-
ments, to Wit, Nos. 46, 47, 48, were légal assessments when levied,
because the indemnity fund of the subordinate councii had not been so
far depleted at the time they were levied as to authorize the suprême
OBDEB OF UNITED COMMEECLS.L TRAVELER8 V. m'aDAM. 365
counselor to levy them, and that McAdam lost none of his rights by
failing to pay them promptly. This view seems to hâve been adopted
by the lower court. On the other hand, the appellant contends that
the assessments made by the suprême counselor against the subordi-
nate council operated to deplete the local indemnity fund as soon as
the assessments were announced, and hence that the several assess-
ments aforesaid against individual members of the local body were
properly levied. It is undoubtedly true, as the appellee contends, that
no forfeiture can be predicated upon a failure to pay an unlawful as-
sessment; and, if the assessments in question were made at a time
when no power existed to make them, McAdam's failure to pay them
at the appointed time did not affect his rights. Miles v. Mutual Re-
serve Fund Life Ass'n, io8 Wis. 421, 84 N. W. 159; Niblack on
Benefit Societies, §§ 250, 252. We find it unnecessary, however, in
the présent case, to express a definite opinion concerning the legality
of the several assessments ; being satisfied, for reasons already stated,
that McAdam must be regarded as a member in good standing when
he accidentally lost his hfe. Thèse assessments appear to hâve been
made in the same manner that the order had been in the habit of
levying assessments, and it may be that the previous conduct of the
order, which had been assented to by its members, operated as a con-
temporaneous construction of the provisions of the constitution, which
should be held binding. We would not be understood, however, as
expressing' a definite opinion on this point, because it is unnecessary
to do so.
We turn at this point to consider questions of a différent character.
The appellant contends that it incurred no liability to the appellee
by the accidentai death of appellee's husband, because he was intoxi-
cated at the time, and that this condition of intoxication exempts it
from liability, irrespective of the question whether it did or did not
contribute to cause his death. This contention is founded upon a
provision of the constitution of the order which relieves it from the
payment of any indemnity when the death of a member happens while
he "was, or in conséquence of his having been, under the influence of
intoxicating drinks." The learned judge of the trial court, after hear-
ing numerous witnesses who testified respecting McAdam's condition
at the time of his death and previously, made a spécifie finding, which
is contained in the record, "that the injuries sustained by said Thomas
J. McAdam, resulting in his death, and the said death caused thereby,
did not happen while the said McAdam was, or in conséquence of his
having been, under the influence of intoxicating drinks." This court
has been asked to review that finding, and to find, to the contrary
thereof, that the deceased was intoxicated when the explosion oc-
curred which occasioned his death. This we must décline to do.
This court and other courts hâve repeatedly decided that, even in an
equity case, where the trial court has determined an issue of fact upon
confîicting évidence, the finding will be presumed to be correct, and
will not be disturbed unless a serious and important mistake appears
to hâve been made in the considération of the évidence, or an obvions
error has intervened in the application of the law. This rule has be-
come so firmly established by judicial décisions of this and other
366 ' 125 WBSDBBÀI. BEPOBTBB.
courts, ahd the presumptibu irifaVor ôf the accuraidy of a finding made
by tlie trîal jâdge is necessatily so fetrong, in view of the peculiar
fâciîîties ^vhich he enjoys to ascertain the fâcts, that we are net at
liberty to disregard it. Wàrren v. Burt, 7 C. C. A. 105, 58 Fed. loi ;
Snîder v. Dobsttn, 21 C. C. A. 76, 74 Fed. 757, and cases there cited;
Latta V. Grangerj 15 C. C. A. 2^, 230; 68 Fed. 69. Nothing is dis-
dosed by thé présent record torelieve the case in hand from the
opération of the rulfi: la'st statedi ' It seems to havë been tried by the
îower court with.great fairnesS) délibération, and care, and with the
aid of able counsél. • The teStirïiony relative to McAdam's condition
on the occasion of the accident is quite voluminous and very conflict-
ing. Charges arèfreely made thàt-the testimony of some of the wit-
nesses for the appellant on the point in controvefsy is utterly unre-
liabie, and ought to be disregarded. Moreovèr, it does not seem to
be daimed that the death of the deceased was caused by the condition
as to sobriety that he may hâve been in when he met his death. Un-
der thèse circumstances, and conceding that the testimony was such
that the issue as to intoxication might hâve been decided either way,
we are of opinion, followîng our usùal practice in such casés, that the
finding of thé trial judge ought not to be disturbed. The strong pre-
sumption which must always bè indulged in favor of the finding of the
Iower court in a case like the one at bar has not been overcome to
owr satisfaction.
It is finally urged by the appçllant that even if it was liable for the
full amount of the indemnity now sued for, at the time of McAdam's
death, yet that the liability was discharged by the release which the
appellee saw fît to exécute on March 26, igoo. This contention pré-
sents the question whether that release, whereby a valid claim for
$6,300 was released in considération of the receipt of a draft for $1,000,
was obtained in such a manner as will justify a court of equity in up-
holding it. It also nécessitâtes a brief statement of the circumstances
under which the release was obtained. After McAdam's death his
wife was repeatedly assured by one B. F. Brockhoff, who was a mem-
ber of the Grand Forks Council, aiid a personal friend of her husband,
as well as his administrator after his decease, that the indemnity due
to her from the défendant order would surely be paid, and that $5,000
thereof would be paid in a few days, and the balance in installments.
She was utterly ignorant of her rights, except as she wais informed by
Brockhofi. She had never seen nor read the constitution of the or-
der, and had no knowledge that thé insurance contract was embodied
in the provisions of that instrument. She \vas quite sick when her
husband's death occurred — so sick that she was ûnable to attend his
funeral — and she remained in an enfeebled condition until long subsé-
quent to March 26, 1900. Up to the latter date she relied confidently
upon the statements made by Brockhoflf, expecting that the promised
indemnity would be speedily paid, ■ and she seems to hâve had no
knowledge that her right to thé indemnity had ever been challenged.
On the latter date, however, between 3 and 4 p. m., she was waited up-
on at her home in Grand Forks, N. D., by four men, to wit, B. F.
Brockhoff; W. ^W. Fegan, secretary of the Grand Forks Council;
B. F. Holbrook, grand counselor for the jurisdiction embracing said
307
Grand Forks Council ; and C. B. Flagg, secretary of the order. Thèse
men, through Holbrook, acting as spokesman, informed her, for the
first time, that her claim had been disallowed because of her husband's
intoxication at the time of his death, and irregularities in paying his
assessments. This statement greatly surprised her, as she had previ-
ously been informed that her claim was valid ; and, as she remained
silent for a few moments, one of the parties suggested that she go into
an adjoining room and confer with Brockhoff, in whora, as they knew,
she had great confidence. On retiring to an adjoining room, Brock-
hoff told her, in substance, that he did not know much about the mat-
ter concerning which she had been advised, but that the other gentle-
men probably understood the situation, and if she had no claim against
the order, as they stated, it would be best to accept the ofïer which
they had corne prepared to make; that is, to pay her $i,ooo. He
further told her, however, to hold out for half of the promised indem-
nity, and on returning to the adjoining room the statement was made
by Brockhofï that Mrs. McAdam thought she ought to hâve half of
the indemnity. Thereupon Holbrook said, in substance, that, if she
was entitled to be paid half of the indemnity, she was entitled to the
whole; that she had no claim against the order, and that they pro-
posed to give her $i,ooo because it would cost them that much to con-
test the claim if she should sue; and that they would prefer to make
her a gift of that sum, rather than pay it to a lawyer. The interview
was hurried to a conclusion within 20 minutes or half an hour. The
statement appears to hâve been repeated that she had "no claim."
One of the parties took out his watch and said "they were in a hurry
to get away. Let us hurry up with this business." Being thus in-
formed that she had no claim against the order, and pressed to a
speedy décision, the appellee finally signed the release in controversy,
which was drawn up by Fegan, and received a draft payable to the
order of C. B. Flagg, and by him indorsed. She never câshed or
negotiated this draft, or attempted to do so, but shortly after the
transaction in question, having in the meantime consulted an. attorney
and been advised as to her rights, she brought the présent suit to an-
nul the release and recover what was justly due her. Brockhofif testi-
fied that, as the parties left Mrs. McAdam's résidence, Flagg remarked
"that settlement was dead easy," and "that he expected to pay $1,500
or more."
The trial court found the facts attending the exécution of the release
to be substantially as last stated, and, after an examination of the
testimony, we fuUy concur in that view. It is apparent, therefore, that
the transaction in question was not one where a person having a
demand against another, and full knowledge of the facts on which it
dépends, make?: a claim against that other for its payment,: which the
latter disputes, whereupon mutual concessions are made by way of
compromise to avoid litigation. Mrs. McAdam had no acquaintance
with the provisions of the appellant's constitution, and no knowledge
of the conditions that would serve to destroy her right to indeimnity,
or whether such conditions in fact existed. She had heard it said
casually that her husband was not intoxicated at the time of his death,
but she does not appear to hâve been aware that intoxication at that
368 .".îi-'l 125 FEDERAL BBPOETER,
timë wotild forfeît hîs riiflht to indemnity, while she had been repeat-
edly ^stared that the indeifinity woûld surely be paid. While in this
frame of mind she was suddenly assured, in the most positive manner,
by at least two high officers of the ordei', that she had no daim against
the order, and that the sumof $i,ooo which they proposed to pay was
not paid by way of compromise of a doubtful daim, but was a mère
gratuity. Besides, she was constrained to an instant acceptance or
rejection of the offer when she was in a low, depressed, and nervous
condition incident to sicknéss and the shock occasioned by her hus-
band's death. It is furthermôre noteworthy that Brockhoff, the only
person with whom Mrs. McAdam had an opportunity to confer pri-
vately, told her, in substance, that, while he "didn't understand much
about it," yet the two officers of the order who asserted that she had
no daim "probably understood the situation, * * * and, if there
was no daim, it would be better to accept" what they ofïered. This
statement, coming, as it did, from a member of the order and a friend
of her husband's, in whom she had great confidence, undoubtedly in-
duced her to believe that the représentation that she had no daim was
reliablè, and that she ought tô act on it, We are of opinion that a
release obtained in the manner aforesaid cannot be upheld by a court
of equity. It is évident that Mrs. McAdam signed the release in the
behef that she was not entitled to any indemnity from the défendant
order, or, in other words, under a misconception of her légal rights,
wbich was occasioned by the confident assertion of two officers of the
order that she had no daim agairist it, and that what they proposed
to pay was in the nature of a gratuity. This statement implied that
McAdam was intoxicated when he met his death, and that no action
had been taken by the order or the subordinate council to which the
deceased belonged that could operate to cure the alleged irregular-
ities in the payment of assessmerits. Mrs. McAdam appears to hâve
had no knowledge concerning the acts of the local council after her
husband was in default, and, even if she had such knowledge, she was
not qUalifîed to judge of the efïéct'of such acts upon her right to in-
demnity. On the other hand, the assertion that she had "no daim,"
or was not entitled to any indemnity, was made by persons who pre-
sumptively were well acquainted with ail the fàcts on which her
right to indemnity depended,' and -who werè thoroughly conversant
with the constitution of the order, and whose statements, for thèse
reasons, could and ought to be reliéd upon. In any aspect of the
case, when the rdease was ôbtairied the parties did not negotiate on
equal terms. The agents of the order who induced the appdlee to
sigri the release took advantage of her ignorance of material facts
on which her rights depended, as well as of her ignorance of matters
of.law, and hurried her to a décision with indécent haste when she
was in a; nervous and enfeebled condition. As a natural resuit of
such conduct, she was misled and induced to act under a misconcep-
tipn of her légal rights, for which the appellant should be held re-
sponsible. In such cases courts of equity will afïord relief. In his^
work' on Equity Jurisprudence, § 849, Mr. Pomeroy, after considering
at length the charaCtei" oÉ mistakes which will serve to entitle one to-
relief in the forum of equity, says:
ORDER OP UNITED COMMERCIAL TRAVELERS V. m'aDAM. 369
"A person may be ignorant or mlstaken as to his own antécédent existing
légal rights, interests, dutles, liabllitles, or other relations, whlle he accurately
understands the légal scope of a transaction Into wliich he enters, and its légal
effeet upon his rights and liabilities. * » • Courts hâve felt the impera-
tive demands of justice, and bave aided the mistalsen parties, although they
hâve often assigned as the reason for doing so some inéquitable conduct of the
other party, vi'hich they bave inferred or assumed. The real reason for this
judicial tendency is obvious, although it bas not always been assigned. A
private légal right, title, estate, interest, duty, or liability is always a very
eomplex conception. It necessarily dépends so much upon conditions of fact
that it is difllcult, if not impossible, to form a distinct notion of a private
légal right, Interest, or liability separated from the facts in whlch it is in-
volved and upon which it dépends. Mistakes, therefore, of a person, with
respect to his own private légal rights and liabilities, may be properly re-
garded — as in a great measure they really are— and may be dealt with as
mistakes of fact."
Further on in the same section he formulâtes the following gênerai
rule as being eminently just and based on principle, namely :
"Wherever a person is ignorant or mistaken with respect to his own anté-
cédent and existing private légal rights, interests, estâtes, duties, liabilities,
or other relation, either of property or contract or personal status, and enters
into some transaction, the légal scope and opération of which he correctly
apprehends and understands, for the purpose of affecting sueh assumed rights,
interests, or relations, or of carrying out such assumed duties or liabilities,
equity will grant its relief, défensive or affirmative; treating the mistake as
analogous to, if not identical with, a mistake of fact."
Other text-writers hâve, in substance, expressed their approval of
this doctrine. Kerr on Fraud & Mistake (American Notes by Bump)
pp. 398, 400, 401 ; Eaton on Equity, p. 263. In addition to the au-
thorities which are cited by Mr. Pomeroy as recognizing the doctrine
stated in the text, the following cases may also be consulted as cases
where the doctrine in question has been stated, or, if not stated in
terms, has been practically applied: Gerdine v. Ménage, 41 Minn.
417, 421, 43 N. W. 91 ; Renard v. CHnk, 91 Mich. 1,3, 51 N. W. 692,
30 Am. St. Rep. 458; Whelen's Appeal, 70 Pa. 410, 427; Berry v.
American Central Ins. Co., 132 N. Y. 49, 53, 54, 30 N. E. 254, 28 Am.
St. Rep. 548; Freeman v. Curtis, 51 Me. 140; Skillman v. Teeple, i
N. J. Eq. 232, 245 ; Bonney v. Stoughton (111.) 13 N. E. 833, 837.
See, also, Billings v. Aspen Mining & Smelting Co., 51 Fed. 338, 347,
348, 2 C. C. A. 252, 261, 262.
It would not alter the conclusion at which we hâve arrived, namely,
that the release in question ought not to be upheld, even if it were
conceded that, when the appellant's agents represented to the ap-
pellee that she had no claim against the order, they supposed the
statement to be true. In point of fact, it was not true. She did hâve
a valid claim against the order in the sum of $6,300, and it cannot
be permitted to profit by a false représentation made by its agents,
on which the appellee confidently relied, although it was unwittingly
made. The manner in which the release was obtained, and the con-
duct of the appellant's agents on that occasion, preclude such a resuit.
They did not lay before Mrs. McAdam ail the facts on which her
right to indemnity depended, with which facts they must be pre-
sumed to hâve been acquainted, and, after stating their own view of
her rights in the premises, request her to seek compétent légal ad-
125 F.— 24
370 125 FBDJSEAIi EBPOUTEB. i
vice, wfefch they nwst hai^e known that she nèeded badly, before
actfflg 9!f>i!1f^^ ^pï^ùposi^^^ $i,pd(!},in dischafgë'bf ail claims.
Ori'thejpon'trary, they rèfeirred her fôr;advice to one b{ their own
number, amember o'f tbe order, in whom, as they well knew, she
had gfeat 'confidence, and whoseadvite would doubtless control her
action, Whp",ni'erely confirmed tbe statëmënt of bis associâtes. By
their conduct they also cbmpelled an immed,iate décision, without al-
lowing her ladequate time for proper délibération. That Mrs. Mc-
Adam was' taken by surprise, having previously been informed that
the indemnity would sut^ejy be paid, and that she did not deal on equal
terms with-the agents of the order, and for thèse tessons was led
to act hastily and improvidently, admits, we think, of no controversy.
And where such a state of facts is disclosed, it seems that courts of
equity will afford relief against a. mistake, although it was purely
one of law. Cofïman v. Lockout Bank, S Lea, ^32, 40 Am. Rep.
31, 34; Evans v. Llewellyn, 2 Brown, Ch. 150; 2 Poméroy's Eq. Jur.
§ 847; I Story's Eq. Jtir; '§§ 1^4, 251.
Anot}ier., considération, whiçh cannot be, overlooked, and should
bave some weight in a case of this character, is the fact that the
défendant order professes =tp be a fraternal association consisting ex-
clusively, b'fj'Cornniercial: traVelêrs— -an association organized; as its
constitutioii' déclares, "togive ail mofal and material âid in its power
to its members and those depending on them. Also to assist the
Widows and orphans of deceased rnenibers." If thèse professions do
not in theniselves establish a relation of peculiar confidence and trust
between the order and its members, including the faniilies of de-
ceased meifibers, which; imposfe on it the duty, in ail of its dealings
with them.iiof exercisirig the^ highest degree of fairness and good
faith, they at least justify a court of eqUity, in condemning the un-
fair method by which the rèlease now in question was obtained.
We are of opinion that the Circuit Côuït acted properly in cancel-
ing and antlulling it, and that the decree belpw should be afSrmed.
It is so ordèred. r
■WBBES V. INTEBKATIONAIi TRUST CO.
(Carcuit Ctourt of App^lp, First Circuit. Oçtober 6, 1903.)
;...,.''. . ,■' ■ ;.Nd.473.
1. JUKISDICTION OF FEDERAL CpDRTS— FedEBAL QUESTION— ACTION A.GAINST
Agent bf iNsoivENiP 'National Bank.
An action against a. Btodkliolder's agent for wlndlng up the afifairs
of a natlonaj batik is.oneriof which a fédéral court has Jurlsdlctlon, irre-
speetlse of çitizensliip, jirider section 4, JudlclaiTr Act Aug. 13, 1888, c.
. 866, 26 Stat. 436 [U. S. Çoiïip: St 196?t, p. 514].
ai National Banks— Powaitef—LEASB OFÏ^opEnTT.
■ ■' A nationalfiank haS'pbwér'to' leaSè propetty for its ôccupancy In con-
. ductlrig Its business for aterm' ejçtending beyond the expiration of its
., çh^rter, even thpugh the lease is assignable only by consent of the lessor.
. ' t'I. Jurlsdictlon çf fédéral Coui'ts.iii ca.ge^ ihvolvïng fédéral question, see
^note tb Baltéy V. Mosher, 11 G. C. Ai '308; Mbntaiik Ote-Purchasing Co, T.
Boston:& M; C 0. & S. Min. Co., 35 O. a A. 7.
WEEK8 V. INTEKNATIONAIi TETJST CO. 371
3. Bame— Construction of Lhasb— Option to Rklet Aftkr Re-entrt ai
Tknant'b Risk.
A lease provided that on a breach of any of Its covenants by the lessue
the lessors might re-enter and résume possession, "and thereupon the
lessors may, at thelr discrétion, relet the premises at the rlsk of the
lessee, who shall remain for the residue of said tenn responsible for the
rent herein reserved, and shall be credited wlth such amounts only as
Bhall be by the lessors actually realized." Held that, to entltle the lessors
to recover rent under such provision after a re-entry and resumption of
possession by them, they must show an élection to relet the premises,
and that where the évidence dld not show any offer to relet, except at
an Increased rental, the question of such élection was one for the jury.
4. Landlobd and Tenant— Action on Lbask— Plkadikg.
That the déclaration in an action by a lessor agamst the lessee, after
default by the latter in the payment of rent and re-entry by the lessor,
States the cause of action as one for the recovery of rent, Instead of for
damages for breach of covenant, Is Immaterial where the lease provides
that In such case the lessee shall remain responsible for the rent during
the tenu.
5. Samb— Transfer of Propkrtt by Lessor.
A provision of a lease giving the lessor, in case of re-entry for condi-
tion broken, a discrétion to relet the premises at the lessee's risk, must
be construed as giving such élection to the landlord in Interest at the
time, in case of a conveyance of the premises by the original lessor.
In Error to the Circuit Court of the United States for the District
of Massachusetts.
For opinion below, see Ii6 Fed. 898.
Edward E. Blodgett and G. Philip Wardner (Eugène P. Carver, on
the brief), for plaintifï in error.
Robert M. Morse (William M. Richardson, on the brief), for défend-
ant in error.
Before COLT, Circuit Judge, and BROWN and LOWELL, Dis-
trict Judges.
LOWEEL, District Judge. This is an action brought against the
plaintifï in error, receiver of the Broadway National Bank, upon a
covenant in a lease of the fîrst fîoor and basement of a building on
Milk Street, in Boston, given by the predecessors in title of the défend-
ant in error to the bank. In this opinion the plaintifï in error will be
called the défendant, and the défendant in error the plaintifï. The
bank had occupied since 1884 a part of the premises described in the
lease. On March 30, 1893, the owners of the building had let the lirst
fioor to the bank. The lease ran for six years from April 30, 1893,
and was signed, on the part of the lessee, "Broadway National Bank,
by James B. Kellogg, Cashier." On August 11, 1898, Parkman and
others, then owners of the premises, executed to the bank the lease
hère in question for a term of 10 years from April i, 1899, at a rent of
$6,000 a year. This lease was signed, "Broadway National Bank,
by Roswell C. Downer, Président." There was no vote authorizing
Downer to negotiate or to exécute the lease, but the directors knew
that he was negotiating for a lease in behalf of the bank, and on July
27, 1898, they voted that he be authorized to exécute a lease from
the bank to one Pray, upon such terms and with such covenants as
to Downer might seem fit. By this vote they intended to authorize
Downer to let to Pray one-half of the basement which the bank was
372 125 FBDERAE, EEPOUTER,
then occupyîng under a verbal agrëement for a new lease made wîth
Parkman and the other owners of the property. A lease for two
yeàrs was thereafter executed by Downer in accôrdance with the vote.
On March 28, 189g, the lessors sold the whole building to the défend-
ant in error. On December 16, 1899, the bânk became insolvent, and
the cômptroUer of the currency appointed Wing as its recèiver. On
February 15, 1900, the comptroller released the estate of the bank to
the défendant, as the stockholders' agent. Between December 16,
1899, and January 5, 1900, the plaintifif eritered upon the premises and
repossèssed itself of the same as of its former estate. The plaintifif
agreed with the recèiver and the défendant that the occupation of the
premises by the two latter after January 5, 1900, should be taken as
a tenancy at will, and should not operate as a waiver by the plaintifif
of its termination of the lease or the bank's tenancy thereundér, nor
operate as an afïirmance or acknowledgment by the bank or the re-
cèiver or the stockholders' agent of any liability on their part under
the lease. The défendant occupied the premises until May 19, 1900.
Except as above stated, the plaintifif had possession of the premises
since its re-entry. The bank's .charter was issued September 29, 1884,
and was limited to expire October 3, 1904.
The lease, in addition to the terms above stated, contained the fol-
lowing clause:
"Provlded, always, and thèse présents are upon this condition, that if the
saifl lessee or its successors àr assigna dd or shall neglôct or fail to perform
and oberve any or either of the covenants contained in thls Instrument, which
on its or their part are to be performed, or jf the said lessee shall be de-
clared bankrupt or insolvent accbrdihg to law, or if any assignment shall
be made of its property for the beueflt of creditors, then and in either of
the said cases the lessors, or those liaving their estate in the said premises,
lawfully may, Immédiately or at any time thereafter, and whilst sueh neg-
lect or default continues, and without further notice or demand, enter inlo
and upon the said premises or any part thereof, in the napie of the whole,
and repossess the same as of their former estate, and expèl the said lessee
and those claiming under it, &nà retnove its effects (forcibly, If necessary),
withoUt being talien or deeraed guilty of any manner of trespass, and with-
out préjudice to any remédies which might otherwlse be used for arrears of
rent or preceding breach of covenànt; ànd thereupon the lessors may, at
their discrétion, relet the preniises, at the rlsk of the lessee, who shall remain
for the residue of said termiresponslble for the rent hereln reserved, and
shall be credited with suçh ampunts only as shall be by the lessors aetually
realized."
On June 21, 1901, the plaîntifï brought suit. After setting out a
part of the facts heretofore stated, the déclaration proceeded as fol-
lows: ■■■■■'',-::
"That by the terms ofi Sàld lease said bapk, notwithstandlng such entry
and taking possession by thei plaintiff, remalned and remàins responsible for
the rent reserved by said lease; that the rent due on the last days of May,
1900, June, 1900, ♦ • * and May, 1901, was unpaid; that demand for
said .rent was duly made of sàid bank when said amounts were severaUy
due, and that the total amouiït df rent due and unpaid May SI, 1901, was
$0,500, for which said bank Is; responsible; that on January 22, 1900, John
W. Weeks wa.s duly eleçted agent; * • * and that on February 15, 1900,
the Oom'ptroller of the Currency and Daniel G. Wing, recèiver as aforesald,
duly transferred and delivered to said Weeks, as agent of the Broadway
National Bank, ail the assets and property of said bank; and that by virtUo
of the appointinent of said : Weeks as agent aad of the other acts aforesald
WEEK8 V. INTERNATIONAL TRUST CO. 373
he became and is Ilable to be sued in hls own name for the rent herein-
before set forth."
' The défendant pleaded a gênerai déniai and a payment, and also
that upon the termination of the lease it became the plaintiff's duty
to use ail reasonable effort to relet the premises, so as to minimize
the damages; that, if the plaintiff had used such effort, suitable and
responsible parties were willing at varions times to hire the premises
in question at a rent as great as, or greater than, the rent reserved
in the lease to the bank ; that the plaintiff willfully and arbitrarily re-
fused to accept thèse parties as tenants ; that the défendant offered to
the plaintiff several specified suitable and responsible tenants, whom
the plaintiff arbitrarily and unreasonably refused to accept. At the
trial the Circuit Court directed a verdict for the plaintiff for an amount
equal to the rent reserved in the lease for the time in question, less
certain payments actually made to the plaintiff by the occupant of the
basement, formerly the bank's subtenant. The case is hère upon the
defendant's exceptions. In discussing some of thèse exceptions fur-
ther évidence bearing upon them will be set forth in addition to the
gênerai statement of the case above made.
1. The défendant excepted to the Jurisdiction of the Circuit Court.
The jurisdiction is based upon Act Aug. 13, 1888, c. 866, § 4,
25 Stat. 436 [U. S. Comp. St. 1901, p. 514] :
"That ail national banking associations established under the laws of the
United States shall, for the purposes of ail actions, by or against them, real,
Personal, or mixed, and ail suits in equity, be deemed eitizens of the states
in which they are respectively located; and in such cases the circuit and
district courts shall not hâve jurisdiction other than such as they would hâve
in cases between individual eitizens of the same state. The provisions of
this section shall not be held to afifect the jurisdiction of the courts of the
TJnited States in cases commenced by the IJnited States or by direction of
any officer thereof, or cases for winding up the afCairs of any such banlc."
That the receiver of a national bank may be sued in the Circuit
Court, irrespective of citizenship, was decided in Auten v. U. S.
Bank, 174 U. S. 125, 19 Sup. Ct. 628, 43 L. Ed. 920. That a stock-
holders' agent in this respect stands like a receiver was decided by the
Circuit Court of Appeals for the Ninth Circuit in Guarantee Co.
V. Hanway, 104 Fed. 369, 44 C. C. A. 312. With that décision we
find no reason to disagree. See, also, In re Chetwood, 165 U. S.
443, 459, 17 Sup. Ct. 385, 41 L. Ed. 782. The exception is overruled.
2. The défendant contended that the lease in question, whose term
extended beyond the expiration of the bank's charter, was ultra vires
and void, and he excepted to the ruling that the bank could take such
a lease. In Brown v. Schleier, 118 Fed. 981, 55 C. C. A. 475, the
Circuit Court of Appeals for the Eighth Circuit held that a national
bank can take a lease for 99 years. That court said that the lease
there in question "was an interest which was salable during the life
of the corporation or on its dissolution." 118 Fed. 984Î 55 C. C. A.
478. In the case at bar the bank's interest could be alienated only
with the consent of the lessor. But we are not prepared to hold that
the différence (if there be one) between the lease in Brown v. Schleier
and the lease in this case is material to the validity of the latter.
Strictly speaking, the lease hère in question is aliénable, though aUen-
374 125 FEDERAL EEPOBTBB.
ablë only ùpôh à condition. The coïiditîon is usual, at any rate in
Massachusetts. And the assignment of a lease, even where'permit-
ted tinconditionally, dœs inot free thelessee from his obUgations
thereundér; : he remains Uable on his covenants, unless the lessor ex-
pressly or by implication releases the liabiHty. To require unrestrict-
ed assignability in thbse leases taken by a national bank which extend
beyond its charter would hamper the bank in obtaining a lease, with-
out relieving the bank from embarrassment at the charter's expiration.
Considering that the charter of a national bank may be extended as a
matter of course (Act July 12, 1882, c. 290, § i, 22 Stat. 162 [U. S.
Gomp. St. 1901, p. 3457]), we hold that Côngress did not intend to for-
bid sUch a corporation from hiring banking rooms for a term extend-
ing beyond the period of its existing charter. When, for example,
but threè years of its chartered existence are left, it will be unduly
hattipered ,if it is not permitted to take a lease for more than three
yeârs. In McCormick v. Market Bank, 165 U. S. 538, 17 Sup. Ct.
433, 41 L. Ed. 817, at the time the lease was executed the bank had
no authority to exécute a lease of any sort, and the case does not as-
sist us in determining what sorts of leases a national bank may validly
enter into. What would be the efïect of a lease which, in respect of
length of term or otherwise, was entered into for some purpose other
than that of meeting the reasonable needs of the bank, we need not
discuss at this time. This exception of the défendant is therefore
overruled.
3. The défendant coriténded that Dôwner, the président of the
bank, was never authorized to exécute the lease, and that the bank
and the défendant were never bound by its terms, and he excepted to
the ruling of the judge that the lease was validly executed. The
évidence above stated was clearly sufficient to submitto the jury upon
the question of ratification, and, upon the whole, we deem it so con-
vincing as to justify the direction given by the court. •
4. The défendant contended that, even if the plaintifif had a good
cause of action on the facts set forth and proved, it could not recover
under an allégation of liability for rent, because the défendant was not
liable for rent, but only for breach of covenant. We think the déc-
laration sufficiently sets out a claim for a breach of the bank's cove-
nant, and is not limited to a daim for rent eo nomine. In its use of
the Word "rent" the déclaration foUows the lease, and in this respect
the meaning of both is plain. Perhaps it would hâve been more accu-
rate, in both lease and déclaration, to substitute for the word "rent"
the phrase "a sum of money equal in amount to the rent" ; but such a
substitution in the déclaration, aftèr the original inaccuracy of the
lease, would hâve been needlessly verbose. This exception is there-
fore overruled.
5. The défendant contended, and laid particular stress upon the
contention, fiiat the plaintifï could not recover under the clause in
the lease hereinbefore set forth without some efifort on its part to
relet the premises. Upon this point the learned judge instructed the
jury as follows :
"I thlnk the construction which the défendant asks me to put on it (the
covenant in the lease) is a Darrow one, and ratber a strained one, which I
WEBK8 V. INTBENATIONAIj TEUST 00. 375
■would not be Justtfled In gIvtQg It Take the danse as It stands, and re-
ferring to the words, 'Thereupon the lessors may at thelr discrétion relet
the premises,' the défendant says that that imposes upon the plaintifE a cer-
tain duty to use reasônable efforts to rent the property. I do not so read
it, at least as far as this court Is concerned. I cannot justly hold that the
International Trust Company Intended to assume any risls. I think the fair
construction of it is that they did not intend to incur any risk, but that they
intended to use their own discrétion in the matter absolutely. Of course,
under such circumstances, where a man agrées to act only at his own dis-
crétion, the law ordlnarlly says hé must act with some degree of reasonable-
ness and with some degree of justice, and hâve some regard to the rights
of the position of the other parties concerned. If that is the construction
to be given to this clause, still it remains on the défendant to show that the
plalntâf had abused that discrétion; that it had proceeded with a certain
degree of willfulness. Now, I find no évidence of that. I find. on sifting
out the testimony, only three tenants actually brought to the International
Trust Company in such a form as would présent to it a fair question for
solution. The flrst was the Beacon Trust Company, which it was dearly
justifled, and correct, in disregarding; the second was the Title Insurance
Company, as to whlch, under the circumstances, it was justifled in uslng its
discrétion. Whether or not its conclusion was correct, it was a case where
it had a right to solve accordlng to its own discrétion. The same with référ-
ence to the talloring establishment."
To thèse instructions the défendant duly excepted.
The plaintiiï contended in argument, first, that it was entitled to
recover, even though it had willfully and even maliciously refused
to let the premises; and, second, that, if reasônable effort to relet
was required of it, the évidence showed that reasônable efïort had
been made. Therefore this court has to détermine, first, what is
the proper construction of the covenant in question ? and, if the de-
fendant's construction be found the correct one, then, second, what
does the évidence in this case show concerning the plaintifï's efïorts
to relet?
We cannot adopt the plaintifï's construction of the covenant. At
common law, if a lessee broke a covenant of the lease, either the
covenant to pay rent or some other, and if the lessor had the right to
re-enter for breach of covenant, the lessor might take either of two
courses : Either he might abstain f rom re-entry, in which case the
lessee remained liable on his covenant to pay rent until the end of the
term, or, on the other hand, he might re-enter and résume possession,
in which case the lessee's liability to pay rent was at an end. If the
lessor did not re-enter, he retained his rjght against the lessee, but
risked losing rent for his property by reason of the lessee's insolvency.
If he re-entered, he gained the right to seek a solvent tenant, but ran
the risk of losing rent by reason of his inability to find one. A
covenant like that hère in question, not uncommon in Massachusetts,
has fOr its object to give the lessor some of theadvantages which re-
suit from both the courses before described. The lessor is permitted
to seek a solvent tenant without letting go his hold upon the old one.
The covenant does not compel the lessor to relet or to attempt to relet
if he does not wish to do so. He need not avail himself of the
covenant. He may still abstain from re-entry, and so hold the lessee
liable for rent eo nomine. Hé may still re-enter, and thereafter may
use the- premises as he sees ût, or may leave them whoUy unused.
The léssee cannot complain of either action. By the first he is left
376 ^;-., r..l2j5;.FfpE^KAi;,^^î!p{^Ep..^::.i:i..;v.
in possession! of tbe premises; bythB sefioad -htf is relieved from his
liability, unâerthe covenant, to pa^' rent. On the other hand, the
lessof mày'^viâjl himself of the covena!nt. He màf re-enter, and may
exercîse his diâcretion to relet the prçmises at the risk of the lassée.
The exercise of this discrétion is manifested by a reletting or by an
attempt to relet. If there is an actukl reletting, the covenant be-
Cômes operative, and the original lessee is liable for the deficiency of
rent, ât éifiy rate if the reletting is hohestly and reasonably made. If
an horiest and reasonable attempt to relet is made withont success,
then also the lessee is liable ; the lessor need not go through the form
of a reletting. But if the lessor doeS not relet, and makes no attempt
to relet, he has not exercised the discrétion nor has he made the élec-
tion given him by the covenant, and, as we hold, it is only upon the
exercise of the lessor's discrétion to relet that the covenant imposes
a liability upon the lessee. The re-entry has terminated the lessor's
right to fèço'ver rent eo nomine, and the right given by the covenant
to recover the différence between the old rent and the new does not
arise until the élection to relet has been made by the lessor. The
lease does not, indeed, impose upon the lessor any duty to relet or to
attempt to relet. The lease merely gives the lessor certain rights
upon his élection to do certain acts.
The injustice which would resuit from the plaintiiï's construction
of the lease makes it improbable that the parties intended such a con-
struction. In argument; the plaintifï's counsel admitted that the
lessee's liability under the coyenant would cease if the premises were
destroyed by fire or were actually used by the lessor. But to con-
cède this is to abandon the plaintifï's whole contention. ' There is
no material distinction between the actual use of premises by the
lessor, and his possession of premises with an intent to prevent actual
use by anybody else, and there is none between a gênerai refusai to
relet and an unreasonable refusai to relet to a suitable tenant. We
go further, and hold that, in order to make the lessee liable under this
covenant, the lessor must within a reasonable time make his élection
to relet, and must manifest that élection by a reasonable attempt to
do so. What sort of an attempt he must make we need not discuss
hère. In gênerai, the effort must be that which a reasonable land-
owner would make under the cîrcumstances. Not every proposed
tenant need be accepted, but an unreasonable refusai to accept a suit-
able tenant will be deemed an abandonment of the élection to relet
at the risk of the lessee.
It was urged by the plaintifï's counsel that, if the construction thus
put upon the covenant be the true one, much litigation will necessarily
resuit, becavtse in almost every case the lessee will urge by way of
défense or of mitigation of damages that the lessor did not make any
reasonable attempt to relet, and, if the premises were relet, that they
were let at îtn unreasonably low price. We are not insensible to the
force of this argument, but it assumes that the court and jury will be
unable to pass ffiirly upon the questions thus raised. If the argument
be urged by way of stating a nard case, we think that the case sug-
gested by the plaintifï's counsel is barder, viz., that in which a tenant
under a long lease, who is early ejected for breaking one of its smallest
WEEKS V. INTERNATIONAL TRUST CX>. 377
covenants, is compelled to pay full rent during the whole term, while
the lessor déclines to receive a new tenant. A construction which
gives an arbitrary right of forfeiture of the tenant's bénéficiai interest,
while holding him to the payment of full rent, is to be avoidec}.
In several cases the courts of Massachusetts hâve dealt with the
covenant hère in question, and in nohe of their décisions do we find
anything opposed to the conclusion we hâve reached. See Way v.
Reed, 6 Allen, 364; Bowditch v. Raymond, 146 Mass. 109, 15 N. E.
285. In the latter case the court said: "At the first publication of
notice there was a contingency, not merely as to the amount of lia-
bility, but as to whether it would ever attach or arise out of the
covenant. The lessors in their discrétion might not relet the prem-
ises, but résume possession of them." This language impHes that
resumption of possession without reletting prevents the obligation
of the covenant from attaching to the lessee.
Having thus determined that the plaintifï, in order to recover, must
show an élection to relet the premises, we next consider if an élection
to relet was so clearly shown as to justify the instructions quotec
above.
We cannot take this view of the évidence. To go no farther, wc
fiixl that the plaintifï's président testified that he told several persons
\v!io inquired the price of the premises that he asked $6,000 for the
banking rooms, and that he never quoted a lower price. The banking
Tooms in question were on the first floor of the building. The base-
ment was in the actual occupation of the bank's old subtenant, who
was paying therefor to the plaintiff more than $2,000 a year. The
testimony of the plaintifï's président amounts to this : That, instead
of seeking by a reasonable reletting to reduce the sum which the
défendant was bound to pay, the plaintifif was holding out to possible
tenants a demand for a rent more than $2,000 larger than that stipu-
lated for in the old lease. The évidence was sufïicient to warrant a
jury in finding that the plaintifï did not elect his remedy of reletting the
premises. It was argued that the évidence showed that the plaintifï
had elected not to relet, and so that the court should hâve ordered a
verdict for the défendant; upon the whole, however, we think the
issue should hâve been decided by the jury under proper instructions.
6. The défendant further objected that the discrétion stipulated
for in the covenant was that of the original lessors, and not that of
the plaintifï or actual owner of the premises. Thus to construe the
covenant would deprive it of ail its value. The discrétion intended by
the lease was that of the landlord in interest, not that of some one
who had been the landlord at an earlier time. In this respect the
ruling of the court below was correct.
The judgment of the Circuit Court is reversed, the verdict is set
aside, the case is remanded to that court for further proceedings in
accordance with the opinion passed down this day, and the costs of
appeal are awarded to the plaintifï in error.
378 125 FBDERAt PÏJJPOETEB.
nNITBD STATES PEG-WOOD, SHANK & LBATHER BOARD CO.
T. B, F. STURTBVANT GO,
(Circuit Court of Appeals, #lrat Circuit October 6, 1903,)
No. 480.
1. Patents— Anticipation— Construction of Claims.
The rule applied that the fact that the machine of a patent Is capable
of a method of use not referred tonor Indicated lu the patent cannol
be availed of to affect the constructioà of the claims.
2. Same — Machine fok CnT^iNo Bhoe-ShAn^ Sttffbners.
The Lewis patent. No. 607,602, fol* a machine for cuttlng shoe-shank
stlffenera, is void for anticipation;
8. Same— Invention.
The [Substitution in a machine of a common drive shaft for other meth-
ods of driving Is too familiar in the mechanlcal arts to constitute inven-
tion, under ordinary clrcumstances.
4. Samb.
"Means for holding in and out of operatlve position" a part of a ma-
chine are so common in the arts that there can be no invention in such
means, except in the détails thereof, unless under exceptional clrcum-
stances.
5. Samb— Machine for Cuj'tino Shank Pièces,
The Lewis patent, No. 675,661, for a machine for eutting shank pièces
for shoes, claims 1, 2, 3, 4, 12, and 19, are vold for laCk of Invention.
daim 15 construed, and held not infrlnged.
Appeal from the Circuit Court of the United States for the District
of Massachusetts.
For opinion below, see 122 Fed. 470.
Janjes E. Maynadier and George A. Rockwell, for appellant.
Elmer P. Howe and Benjamin Phillips, for appellee.
Before COLT and PUTNAM, Circuit Judges, and ALDRICH
District Judge.
PUTNAM, Circuit Judge, This bill is based on the alleged in-
fringements of two patents for alleged inventions — ^one to George E.
M. Lewis, No. 607,602, issued on July 19, 1898, on an application filed
on October 30, 1897; and the other. No. 675,661, issued on June 4,
19Ô1, on an application filed on .April 4, igoo, to John Lewis, a
brother oî Geo|-ge E. M. Lewis, who;assigned one-half of his interest
to the latter. Patent No. 675,661 covers oply improvements on the
earlier one. Both relate to macl^ines for çutting "shoe-shank stifïen-
ers" or "shank pièces" from ^yood veneers.
The litigation with référence to patent No. 607,602 is limited to the
third claim as follows:
"(3) In a machine for cuttlng shoe-shank stlffieners, the combinatlon with
the cuttlng-block, the knives, and thecam, h, of the reclprocatlng holder, 1,
Intermedlate of the knlves, the lever, e', plvoted to the frame, the rods, h',
Connecting the holder, 1, with the lever, e', the roUer, o', on the extremlty
of e', and the spring, g', for pressing the roUer, o', agalnst the cana, h', sub-
stantlally as set forth."
T 1. Bee Patents, vol. 38, Cent. Dlg. § 241.
UNITED STATES PEG-WOOD, S. & L. B. CO, V. B. F. STUKTEVANT OO. 379
The spécification fails to express the state of the art or the nature
and purpose of thé invention in any compréhensible manner. It
deals with numerous small détails of machinery, and points ont the
purpose in such gênerai terms as not to be practically useful. The
record also fails to explain in a clear manner what is thus omitted
from the spécification. We gather that the stifïeners are eut trans-
versely of the ribbon of veneer ; that is, at a right angle to the length
of the ribbon, or substantially so. It is desired, also, that the eut
shall leave the edges or sides of the stiffeners beveled. The in-
vention, among other things, relates to tvi^o knives operating in
converging lines on the surface of the veneer, so one of them cuts
through the veneer with a bevel to or from the center of the stifïener,
while the other cuts v^fith a bevel to or from that center, but with a
reversed direction. Both knives reciprocate towards and from the
veneer, and it is plain from the mechanism that it would be within
the competency of any machinist of ordinary skill to arrange them
so that they would reciprocate simultaneously. Of course, kny
machinist would thus arrange them, because a simultaneous recipro-
cation would resuit in better work and increased speed. That such
a simultaneous reciprocation is to be accepted as a part of the claim,
introduced therein by the words "substantially as set forth," is plain,
because the spécification uses the words "upward movement of the
knives," and also the expression, "knives moved on the downward
stroke," each of which, by using the singular number for the words
"movement" and "stroke," contemplâtes only a single, and therefore
a simultaneous, action in either direction.
Ail the détails of thisclam are of that class of which the common
arts hâve many équivalents. Nothing in the record tends to prove
to us, with référence to any of thèse détails, that there is any pecu-
liarity indicating an inventive spirit which distinguishes them from
équivalent methods well known in the prior art of obtaining like
movements of dfïerent parts of machines. Indeed, the complain-
ant's expert testifies that "the only new and fundamental and useful
parts of this machine" (meaning the patented machine) "are the two
obliquely placed cutting knives; their adjuncts, such as the chop-
ping blocic and holder." He adds, "I do not consider the means
for operating the knives or the feeding mechanism to be new."
The learned judge who sat in the Circuit Court dismissed the bill,
so far as it relates to patent 607,602, on the ground that the sup-
posed invention was anticipated by a machine constructed in 1892
by J. Roak Pulsifer. His opinion (122 Fed. 470) puts this with suf-
ficient détail and clearness to save us the necessity of adding much
thereto. There is hère no such question as arose in Brooks v. Sacks,
81 Fed. 403, 26 C. C. A. 456, decided by this court on June 10, 1897,
with référence to the existence, construction, function, and actual use
of the alleged anticipation. Bearing in mind what we hâve cited from
the testimony of the complainant's expert, to the efifect that the means
for operating the knives or the feeding mechanism in its machine
were not new, with which we agrée, the Pulsifer machine was me-
chanically the same as that now in controversy. It was capable of
doing exactly the same work, although used by Pulsifer on leather-
380 125 FEDERAL BEPOBTBB.
board, and not on wood veneers. It required no readjustment whîch
presumably involved the inventive faculty for the purpose of doing
the woTk to which Lewis applied his deyice. There is nothing in the
record showing that the trade had been looking in vain for suitable
means of cutting out shanks or stiffeners from wood veneers, to
bring the case within Watson v. Stevens, 51 Fed. 757, 2 C. C. A. 500,
decided by this court on September 6, 1892. On the other hand, in
McKay-Gopeland Lasting Mach. Co. v. Copeland Rapid-Laster Mfg.
Co., 77 Fed. 306, and 80 Fed. 518, 25 C. C. A. 611, decided by the
Circuit Court for the District of Maine on August 18, 1896, and by
this court on April 24, 1897, a device for'clamping counters of leather
was held to be anticipated by a prior wood-bending machine, con-
taining the same parts, and operating on the same method. The
analogy between the two anticipations is so striking as to require on
our part no further discussion in support of the conclusion reached by
the Circuit Court with référence tothis patent.
We must not ovetlook the proposition brought to our attention,
and discussed in the opinion of the Circuit Court, that machines con-
structed under patent No. 607,602 îiave been used to eut out the
"waste" between the shanks or stifïeners; thus, in cutting, bringing
the thin edge of each bevel against the chopping block, and there sup-
porting it during the process, with a claimed résultant of giving better
work. It is enough to say, however, that the patent on its face
does not show the slightest indication of this method of opération.
Thus, âccording to the axiomatic rule applied by us in Long v. Pope
Mfg. Co., 75 Fed. 835, 839, 21 C. C. A. 533, and in Heap v. Tremont
& Suflfolk Mills, 82 Fed. 449, 457, 27 C. C. A. 316, this subséquent
method of use cannot be availed of to afïect the construction of claim
3 for the purpose of saving this case. Moreover, underlying this dis-
tinction between cutting out the waste and cutting out the shanks or
stifïeners, is the fact that it is a mère question of feed, which can be
regulated in any machine so soon as it is perceived that it is désirable
so to do. The Circuit Court was right in holding that this proposi-
tion of the complainant is inefïective.
This brings us to patent No. 675,661, in which there are several
claims in issue. This patent is for improvements in détails on No.
607,602. With référence to ail the claims except 15, the complainant
submits to us that their characteristics are in "a common drive shaft,.
straight-edge cutting knives, which approach the material simul-
taneously, moving obliquely towards each other on their cutting
stroke, and cutting out waste pièces between them, and means Con-
necting the knives and drive shaft." As we hâve construed patent No.
607,602, the word "simultaneously" introduces nothing novel, and
the only new élément is the common drive shaft.
John Lewis testifies that the main diiïîculty in his brother's machine
of patent No. 607,602, which led to the witness' common drive shaft,
was the disadvantage of too many connections. While it is perhaps
true that somfetimes the mère simplification of mechanism by omit-
ting parts may amount to patentable invention, yet this is only under
exceptional circumstances, none of which appear in the case before
us. The substitution in the arts of a common drive shaft for other
UNITED STATES PEG-WOOD, S. & L. B. CO. V. B. P. STURTEVANT CO. 381
methods of driving is altogether too familiar to be heid to be any-
thing more than a mechanical improvement of an ordinary class, unless
circumstances appear which this record does not disclose. Therefore,
as the Circuit Court held, there is nothing in thèse claims, in the
light of what the record shows, which amounts to patentable inven-
tion. '
Claim 15 is as follows:
"(15) In a machine for cutting shank-pieces from a strip or ribbon, a main
frame, a feed-roller mounted therein, an auxiliary frame liinged to said main
frame havlng a roller mounted in its outer end, said rollers adapted to co-
operate wlth eacli other to feed the strip or ribbon to the cutting-linives, and
means for holding said rollers in or ont of operative position, substantially as
described."
It is impossible to discover in this claim any novel élément, unless
it be in the means for holding the rollers in and out of operative po-
sition. The mounting of one roller on a frame auxiliary to that whicli
carries the main roller is certainly so common in the arts that we
must take cognizance that it affords nothing new. The means for
holding the rollers in and out of operative position referred to in the
claim are described at great length and with much détail in the spéci-
fication. They are simply locking contrivances, which also are so
commonly used in the arts for holding in and out of operative position
that nothing of that nature can be patentable, unless it contains some-
thing peculiar in the devices used therefor. In this respect the patent
falls within the underlying principle applied in Bâtes v. Keith (C. C.)
82 Fed. 100, 103, affirmed by this court in 84 Fed. 1014, 28 C. C -A.
638, in the following language :
"Guides used In connection with sewing machines, and for Innumerabli^
other purposes, bave been so common in the arts, and hâve been used froni
time Immémorial for so many purposes, that it would be an unreasonable
State of the law which would deny as a common right to every artisan and
manufacturer freedom to procure or frame guides suited for bis art, or for
his particular subdivision of any art. In this respect it is impossible to draw
any essential distinction between the common right and privilège of every
person to adapt guides to his own peculiar necessities and the like right to
shape gouges or plane irons, or combine them of différent shapes, according
to the changing necessities or desires of carpentry, or to devise, subdivide,
or change the form of boxes, or other paeking cases, aecording to the neces-
sities of each particular trade."
In Hke manner, in Nutter v. Brown, 98 Fed. 892, 893, 39 C. C. A.
332, quoting from Consolidated Electric Company v. Holtzer, 67 Fed.
907, ï5 ce. A. 63, we said :
"In Consolidated Electric Company v. Holtzer, 67 Fed. 907, 15 C. C. A. 03,
decided by us on Aprll 6, 1895, It was said, at page 908, 67 Fed., and page
64, 15 C. C. A., that 'the right to Improve on prior devices by making solid
castings In lieu of constructions of attached parts is so universal in the arts
as to hâve become a common one, so that the burden rests on any one who
sets up this improvement in any particular instance as patentable to show
spécial reasons to support his claim.' So, by parity of reasoning, it is so com-
mon in the arts to shlft the movable point, when there is a movable point,
that the mère statement that it Is shifted will not enable the court to pro-
nounce that there bas been a substantial advance."
Following thèse practical applications of rules for aiding in the dé-
termination of what does or does not involve patentable invention, we
382 V 125 FEDERAL BBPOBTEB.
repeat what'we hâve âlready said, that the subject-matter of "means
for holding" "in and out of operative position" is so universal in the
arts that there can be no invention except in the détails thereof, uniess
under exceptional circumstances, which do not : exist ; at bar. The
Circuit Court was of the opmibn.'that the respondent's machine bas
no "means for holding" the feed roller "in and out of operative posi-
tion." Possibly this might need some qualification; but, however
that may be, it is entirely plain that the respondent does not use the
particular means pointed ouf with so much détail by the complainant.
It follows, therefore, that the 'respondent does not infringe claim 15,
and that the conclusions of the Circuit Court with référence to patent
No. 675,661 are also correct.
The decree of the Circuit Court is afHrmed, and the appellee will
recover its costs of appeâl.
UNITED STATES PEG-WOOD, SHANK & LEATHBR BOARD 00. v.
B. F. STUETEVANT 00.
(Circuit Court of Appeals, Mrst Circuit October 16, 1903.)
No. 481. ■ ' ■ .
1. Patents— iNFRiNGKMKNT—VENBBR-CnTTiNG Machines.
Ttie Lewis patent, No. 609,513, for a veneer-cutting mactiine, construed,
and held limited to the particular combination described, and, as so
limited, not infringèd.
Appeal from the Circuit Court of the United States for the District
of Massachusetts.
For opinion below, see 122, Fed. 476.
James E. Maynadier and George A. Rockwell, for appellant.
Elmer P. Howe.and Benjamin Phillips, for appellee.
Before COLTand PUTNAM, Circuit Judges, and ALDRICH,
District Judgè. ,
PUTNAM, Circuit Judge. This case relates to an àlleged infringe-
ment of lëtters patent No. 609,513, for improvèments in veneer-cut-
ting machines, issued to George E. M. Lewis under date of August
23, 1898, On an application filed on August 9, 1897. There is only
one claim, as follows: ^
"In a veneer-cutting machine, the knife-block, and a eurved knife-blade
secured therêto, conïbined with the knlfe-block proylded' with grooves, e,
the plYoted clàmp, the screiw; Q, the presser-bar, g, held In position by the
clamp, the two chamferlng : knives placed In grooves in the block, A, and
held in position by the présser-bar, aind thé screws, f, for adjustlng them, sub-
stantlally as shown and described."
The question is, that of infringement, which dépends on the nature
of Mr. Lewis's invention, and the construction, in the Ught thereof,
to be givèiH to the claim in issue, ; The, spécification states the objects
of the invention to hâve faeéh two, of w*hich we heed refer to only one,
as follows: "To provide imeans by which a eurved or straight veneer
can be eut and chamfered on either one or both edges to a desired
rmiTE© STATES PEG-WOOD, S. A L. B. CO. V. B. P. STUETEVANT OO. 383
bevel by the simultaneous use of différent knives." This is put at bar
by the complainant in différent ways, but, among the rest, it is said
that the opération of cutting veneer and chamfering the edges by the
combined and simultaneous action of the various knives of the ma-
chine and the presser-bar, constitutes the functional novelty. The
effect of this proposition, if sustained, would be that any machine
which has the éléments thus specified would infringe, whatever might
be the means for holding the various parts in the relative operative
positions required.
On the other hand, the claim expressly enumerates as éléments
"grooves, e," a "pivoted clamp," a "screw, Q," and a presser-bar "held
in position by the clamp." The spécification also contains the foUow-
ing:
"This clamp is pivoted at P, and Its pressure upon the presser-bar, g, is
controlled by the set-serew, Q, Tchleh passes through the outer end of the
knife-block, A."
The learned judge who decided the case in the Circuit Court (122
Fed. 476) found that the respondent's machine did not embody a piv-
oted clamp, the screw, Q, or the grooves referred to in the spécifica-
tion, and that it used a direct acting clamp. He also found that the
use of the patentee's pivoted clamp, with the screw, Q, and the grooves,
was to facilitate removing the chamfering knives from the front of the
machine without removing the clamp, and that the respondent had
no équivalent means which would give it the same advantages. The
record sustains thèse findings. The only question is whether the
claim can be construed, in the light of the nature of the invention and
of the spécification, to cover ail means for holding the parts in their
relative operative positions, as maintained by the complainant at bar.
If it cannot, the decree of the Circuit Court dismissing the bill must
be affirmed.
Bearing on this question there are two propositions. One is that
on the face of the patent the claim is so positively iimited that it can-
not be construed to sustain the case; and the other is that, in the
light of what occurred in the Patent Office with référence to this pat-
ent, the inventor consented that his claim should hâve a literal, narrow
construction. Bearing on questions of this character are lines of
cases which illustrate the extrême rules of construction one way and
the other. In Reece Buttonhole Machine Company v. Globe Button-
hole Machine Company, 61 Fed. 958, 10 C. C. A. 194, the spécifica-
tion, and also the claims, detailed certain directions relating to the
mère order of the arrangement of the machine, which were clearly not
essential to its functions, and which also liad no relation to the
invention which it embodied. The respondent made use of ail the
éléments of the complainant's invention, but reversed the described
arrangement of mechanical parts, and thus evaded only the mère
letter of the spécification and claims. The invention marked a very
decided advance in the art, and was of great merit. We held that to
construe the claims as urged by the respondent was, in the light of
the context, unreasonable ; and again, that, although the described
order of the mechanical parts was reversed, the rule of équivalents
protected the inventor.
384 125 FEPBBAIi BEPOBTBK. :/. il
On the other hand, amofig casèS Which run to tHe otfaer exlreme,
where the range of équivalents' isheld to be verynarrow, are Masten
V. Hunt (C. C.) SI Fèd. 216, 55 Eed, 78, 5 C. C. A. 42 ; Bail; & Socket
Fastenér Co. v; Bail Glove Fàstening Ce, 58'Fed. 818/7 C. C.
A. 498; Bail & Socket Fastenér Co. v. C. A. Edgi^rtoil Mfg. Co.,
96 Fed. 489, 493, 37 C. C. A. 523;;and Millard v. Ghasé, 108 Fed.
399, 47 C. C. A- 42^- . Inl somè ôf this class the nâturéiof the in-
vention prohibited anything except the narrowèst range of équiva-
lents, it being a practical rule that the range is proportionate to the
extent of the invention p but some are ■<vithin the expressions in the
Reece Case, at pages 961 ând 962, to the efifect that wprds and phrases
which might hâve been omitted may be so iiitrodùced as to leave the
courts no option except to regard them as limitations.
When the application for the patetut in suit was£rst.filed it con-
tained three daims. Thefirst was for a combination in. a veneer-
cutting machine, in gênerai terms, of a curved-cutting knife-blade,
a curved presserTbar,:and two chamfering knives. Tihis is.precisely
what the complainant now maintains it is entitled to cover. The sec-
ond was for a combination, in a veneer-cutting machiile, in gênerai
terms, of a curved knife-blade: and a çurv^d presser-bar. The third
was for a combination, in a yeneer-cutting machine, in gênerai terms,
of a curved knife-blade with a chamfering knife or knives. The
learned judge who sat in the Gif cuit Court carefuUy explained the
proceedings in the Patent Office,' showing hôw the patent came into
its présent form ; and he held that the patentée was estopped thereby
from maintaining that any machine infringed which did not hâve the
détails which we hâve said are not found in the respondent's machine.
The rule on this topic laid down in the Reece Case^ at pages 968 and
969, is to the effeçt that, in order that the proceedings in the Patent
Office should positively operate as a waiver or estoppel, they must
relate to the pith and marrow of the alleged improvement, and be
undçrstandingly and deliberately i assented to. This rule has been
many times approved by the federaLcourts. Perhaps as good a com-
mentary on it as can be found is in Magic Light Co. v. Economy Gas-
Lamp Co., 97 Fed. 87, 91» 38 C. C. A. 56, decided by the Circuit Court
of Appeals for the Seventh Circuit, and in Paxton v. Brinton, 107 Fed.
137, 138, decided by Judge Dallas in the Circuit Court for the Eastern
District of Pennsylvania.
Applying thèse obseryations, we find that what occurred in the Pat-
ent Office did not relate to the pith of the complàinant's invention as
now maintained. The application was rejected in gênerai terms on
various références. The letter of rejection closed as follows: "It
being held that there is no invention, in view of the well-known art
in veneer cutting, to employ a presser-bar of the same shape as the
knife." No other ground of objection was specifically stated. In
this way the Patent Office put itsfinger on only the second claim as
originally drawn, which had no relation to the alleged invention in
issue hère. It in no way touched the daims which covered combina-
tions of a cutting knife with chamfering knives, with or without a
presser-bar. Yet for some reason which the record does not explain,
the patentée not only abandoned the second claim as originally drawn,
' TraiTED STATES PEG-WOOD, 8. & L. B, CO. V, B. F. 8TUETETANT CO. 385
but introduced, both into the spécification and into the daim now in
issue, the détails which we hâve pointed out. Therefore we corne to
the question within which of the two rules of construction stated in
the following extracts from the Reece Case (already cited) 6i Fed.
958, found at pages 960 and 961, the patent at bar must be held to fall,
namely :
"The ordinary raie that if, by a literal construction, an Instrument would
be rendered frivolous and ineffectuai, and its apparent object frustrated, a
différent exposition will be applled if it can be supported by anything In It,
requires that words which relate to what may be held nonessentials, however
much multiplied, shall not be permitted unnecessarily to control the sensé.
For the most part, such words are merely lUustrative, or are used through
Inadvertence. On the other hand, it is true that words and phrases which
might hâve been omitted on the presumptlon that they relate to nonessentials
may be introduced in such direct and positive manner as to leave the courts
no option except to regard them as affecttng the objects and limitations of
the instrument in question."
The most that the inventer in the présent case can claim is that he
pointed out a way in which the two processes of cutting veneers and
chamfering can be combined. It might almost be said that any
skilled machinist, accustomed to manufacturing machines for cutting
veneers, to whom it might occur that it was désirable to simultane-
ously eut and chamfer, would easily hâve found a method of accom-
plishing that purpose. This, of course, does not absolutely contra-
vene the fact that what the inventor in this case did was invention ;
but it leaves it a very narrow one in a narrow art. In view of this
fact, and looking at the spécifie and précise language of the spécifica-
tion and claim, we would not be justified in holding that a "hteral con-
struction" can be avoided; nor could we be relieved from holding
that the phraseology was "introduced in such a direct and positive
manner" as to leave us no option except to give fuU eflfect to it. The
patentée bas expressly made the pivoted clamp an élément of the claim
in issue. We are of the opinion that the conclusions of the Circuit
Court were correct.
The decree of the Circuit Court is affirmed, and the appellee will
recover its costs of appeal.
125 F.— 25
386- .'■'■■.■■"/■. '.ÎT- ■.126.«'3DBKAL BBIPOETER. ■'■,:'';^ ,,
■ 1 PARSONS V. NEW HOME SEWING MAOH. 00. et al.
(Clrûtat Court, ki D. ■ Illinois, N. D. October 21, 1903.)
. ;'.-[\ , ' , '.No. 25,647. ■' ,
1. Patents— Construction of Claims— Limitation bt Prior Art.
A prior patent, al^hougli pot pleaded as an anticipation, may be shown
and çonsidered oi.tiïS <ïùestlon of infrlngement as a part of the prior
art to llmlt, the elàiins of the patent In suit.
2. Same— iNPHiNOBMBiNT-^SawiNG; Machinb Rufflers.
ïhe Parsons patent, No. 354,5t7, for a sewing machine ruffler, construed
as to claims 2, .7, and 8, ançl held valld, but, as limited by the prior art,
not Inf ringed;. i :
In Equity. Suit for infr|ji^ement of letters patent No. 354,577, for
a rufïling attachment for. sewing machines, granted to Winslow R.
Parsons December 21, 1886. On final hearing.
Elliott & Hopkins, for conjplainants,
John W. Munday and Henry LoveiQark, for défendant.
KOHIvSAAT, District Judge. Cpmplainant files his bill to restrain
défendants from iiffringing claims 2, 7, and 8 of patent No. 354,577,
which read as follows, viz. :
"(2) The qorqblnation, in a sewing machine ruffler having a reciprocating
ruffling-blade, of the customary frame-piece having an uprlght portion, a
main lever to engage with the needle-screw, embraclng dne side of said
uprlght, à swinging arm to carry said blade, embraclng the other side of said
upright, and a pivotai rivet, the respective ends of which pivot said lever and
said arm at the upper end of êaid uprlght, as herein specifled, for the purpose
setforth."
"(7) In a sewing machine ruffler, a separating blade holder having an up-
rlght portion provided with à pair of horizontal slots, each having an open
end, in combinatlon v?ith a frame^pleee having a stud and a stud-screw fitted
to said slots, and'a thumb-nut permanently appllefl to said screw, as herein
specifled, for the purposes set forth.
"(8) In a sewing machine ruïfler having a reciprocating ruffling-blade and
an under blade or separator, a séries of cloth-guides, Includlng a guide slot
or passage closed at both ends* and crossing the path to the needle, for auto-
matically guiding a piplng eut and folded to fit the same, said guides being
formed in stationary parts, and located wholly in front of the presser-foot,
so as to be supplemented by the blades, substantially as herein specifled, for
the purposes set forth."
The only infringement insisted on as to claim 2 consists in placing
the needle-screw lever and the swinging arm, which carries the recip-
rocating ruffling-blade, on opposite sides of the upright part of the
frame-piece, and pivoting the same at the upper end of said upright
part. There is some justification in the record for the allégation that
in this manner séveral advantages are attained, among them the
minimizing of friction and of irregularity of action between the two
moving arms. An exactly similar arrangement of those two arms is
shown in the Sieven & Hildebrand patent, No. 152,254, granted June
23, 1874. This patent was not set up in défendants' answer, but is in
évidence, and may be considered as bearing upon the state of the prior
art for the purpose of construing complainant's claims, though not to
î 1. See Patents, vol. 38, Cent. Dig. § 542.
PAESONS V. NEW HOME SEWING MACH. CO. 387
invalidate them on the ground of want of novelty. Eauchus v. Broom-
all, IIS U. S. 429-434, 6 Sup. Ct. 229, 29 L. Ed. 419, and other cases
cited on page 10 of défendants' brief. The mechanism of the device
manufactured under the last-named patent is essentially différent from
that of complainant, but it establishes the fact that the arrangement of
the lever and arm, in the patent sued on, with référence to each other
and the upright portion of the frame-piéce, is old in the art. It fur-
ther appears that in the patent issued to A. h. Smith, numbered
266,554, the swinging arm is made to carry the ruffling or shirring
blade just as in complainant's device ; i. e., the blade is rigidly attached
to the arm, which thereby not only carries it, but firmly directs its
course, so that it requires no additional guide. The lever and the
arm of this patent, however, are pivoted on the same side of the up-
right portion of the frame-piece. This patent and several others,
showing the device to be well-known in the prior art, are set up in the
défendants' answer. Thus it is évident that claim 2 of complainant's
patent dépends for its patentability upon the combination set out, and,
in view of the évidence, I am of the opinion that said claim, properly
construed in the light of the prior art, is valid. Applying the same
test to défendants' device, we fînd that it is in ail respects identical
with that of complainant's, provided it carries the ruffling-blade.
While, as above stated, complainant's blade is rigidly affixed to the
swinging arm, and consequently rigidly moved and directed, défend-
ants' ruffling-blade, as exhibited in complainant's exhibits défendants'
rufflers Nos. i, 2, 3, and 5, is an intégral part of the guide; that is,
the blade and the guide constitute one rigid device, which is pivotally
attached to the swinging arm. Défendants' ruffler No. 4 might be
said to be pivoted to the swinging arm and to carry the stud of a guide,
one end of which is rigidly attached to the frame-piece, though défend-
ants insist it, too, is supported by an extension or arm of the guide.
However that may be, can it be said of défendants' rufflers that any of
the ruffling-blades thereof in évidence are carried by the swinging
arm? The term "carried" of complainant's patent signifies both the
actuating and guiding of the blade. In défendants' rufflers, aside from
the fact that the blade may be said to be attached to the guide, and not
to the swinging arm, the blade is only advanced and withdrawn re-
ciprocally by the arm. It is not directed in any sensé thereby. It
lacks entirely a vital élément necessarily implied in the word "carried"
as employed in complainant's claim 2. In view, therefore, of this
fact, and of the construction to be given complainant's patent in view
of the prior art, I am of the opinion that défendants' combination does
not infringe said claim 2.
Claim 7 of the patent in suit covers a device for attaching, detaching,
and adjusting a separating blade. It consista of a blade holder having
an upright portion provided with a pair of horizontal slots, each hav-
ing an open end, in combination with a frame-piece having a stud and
a stud-screw fitted to said slots, and a thumb-nut permanently applied
to said screws. Défendants' device has only one open slot. It has
no thumb-nut. It has no horizontal slots, whereby it can be longi-
tudinally adjusted. It is clear as daylight that it was not intended to
be so adjusted. It requires a screw driver to put it in and out of posi-
388 125 FEDERAL RErORTER,
tion. To my mind it lacks every feature of complainant's device, so
far as daimed tp be patentable, and therefore does not infringe said
daim 7.
Claim 8 pertains to a séries of doth-guides, induding one dosed at
both ends. It calls for a redprocating ruffîer-blade and an under blade
or separator. By its terms the resuit attained is the product of the
ruffler éléments and the separator. It appears from the drawings of
the patent in suit, figure 4, that the dosed cloth-guide is located in
the separator or shirring plate or blade, and not in the ruffler proper.
In défendants' device the dosed slot is above the ruffling-blade, and
located near the upper part of the ruffler frame, and not at ail related
to the separator holder, thus lacking one of the essential co-operating
éléments of complainant's patent. In arriving at this conclusion I
hâve followed the drawings of the patent in suit, rather than complain-
ant's exempHfications of his patent in évidence. In view, therefore,
of the foregoing, I am of the opinion that défendants' device does not
infringe said claim 8.
The record and briefs go at length into certain alleged inventions
and dates, which hâve made the case tedious, and which involve the
relative veracity of the witnesses. In view of the fact that I find no
infringement as aforesaid, it becomes unnecessary to détermine who
has told the truth (an undertaking which must be, in the absence of
the observation of the witnesses, their manner of testifying, and the
other tests of a personal examination, calculated to aid a court in
deciding where the truth lies, a most unsatisfactory task).
The bill is dismissed for want of equity.
NATIONAL PHONOGRAPH CO. T, LAMBERT CO.
(Circuit Court, N. D. Illinois. July 29, 1903.)
No. 26,598.
1. Patents— Infkinoement—Pkocess Patent.
A patent for a process is not infringed by a sale of the product.
2, Bamb— Suit pok Inpbingement— Evidence.
Proof that défendant sold an article a month or so after the issuance
to complalnant of a patent covering a process for making such article
Is not sufficlent to establlsh that the article was made by défendant
after date of the patent, In infringement of such process.
8. Same— Process — PhonoqbAph Records.
Claim 17 of the Edison patent. No. 713,209, for a method of producing
record cyllnders for phonographs, Is for a process, and not for a product.
In Equity. Suit for infringement of letters patent No. 713,209, for
a process of duplicating phonograms, granted to Thomas A. Edison
November 11, 1902. On motion for preliminary injunction.
Richard N. Dyer (William G. Beale, on the brief), for complainant.
Thomas F. Sheridan, for défendant.
KOHLSAAT, District Judge. This cause comes up on defendant's
motion for a rehearing, and upon complainant's motion for a prelim-
TONOPAH & SALT LAKE MIN. CO. V. TONOPAH MIN. CO. 389
inary injunction. Heretofore, on the like motion of complainant, the
court rendered its opinion sustaining the validity of the patent, and the
title thereof in complainant ; granting the motion on the ground,
mainly, that défendant failed in its answer to sufRciently and specifically
négative the allégation of infringement. The answer contained a gên-
erai allégation traversing the charge, but it seemed to me to equivocate
somewhat in denying the clause thereof making spécifie allégations of
infringement. Leave was given défendant to amend its answer in this
respect, which was donc. The proof, therefore, of infringement, rests
entirely upon the affidavits of Taylor and Nesbeth, and the record
filed as an exhibit in the case. From thèse it appears that Nesbeth
purchased from défendant, about six weeks after the patent in suit
was granted, a record marked "Pat'd Mch. 20, igoo." From Taylor's
afïidavit it appears that patent No. 645,920 was granted on that date.
Complainant insists that this évidence is sufficient to estabhsh the
fact, for the purposes of this motion, that défendant was on December
23, 1902, manufacturing and selling records made under the process
of the patent in suit. The court cannot proceed upon the presumption
on this hearing that this record was made since the granting of the
patent in suit. From ail that appears in the record, it may hâve been
made prior to that date. There remains to be considered, therefore,
only the question as to whether défendant had the right to sell the
record, even though it were made prior to the grant to complainant.
The patent in suit is for a process, not for the article produced. A pat-
ent for a process is not infringed by selling the product. Welsbach
Light Co. V. Union I. Light Co., ici Fed. 131, 41 C. C. A. 255. This
being so, I am of the opinion that the proof fails to make such a case
of infringement as would justify the granting of a preliminary injunc-
tion herein.
The motion for a preliminary injunction is denied.
TONOPAH & SALT LAKE MIN. CO. v. TONOPAH MIN. CO. OP NEVADA.
(Circuit Court, D. Nevada. August 3, 1903.)
No. 734.
l. MlNINQ Cl/AIMS— BOUKDARIBS — AmENDED LOCATIONS.
The statute of Nevada (Cutting's Comp. St. 1897, §§ 210, 213) giving
locators of mlnlng daims 90 days after posting of location notice in
■which to file certificate of location, and also permitting them at any time
thereafter to file an additlonal or amended certificate, in which they may
change the boundarles of the claim, "provlded that such relocation does
not Interfère with the existing rights of others," is not In conflict wlth
any law of the United States, but is consistent with and supplementary
to the fédéral statutes; and an amended location perfected thereunder
becomes the completed location of the discoverer, and is as valid and
effective to deflne the boundarles of the claim as an original location,
as agalnst others whose rights were subsequently inltiated.
9. Samk — Additionai. Nambs in Ambnded Certipicatb.
The fact that a second or amended notice or certificate of location of
a mlnlng claim contains names other than those set forth In the original
cannot be taken advantage of by other parties, but, as to the persons
390 125 FEDKRAL KKPOKTEB.
whose names flrst appear therein, it may be treatèd as an original notice
or certiflcate, and as a supplemental or amended notice or certiflcate as
, to tliose whose riames appear on both.
3. Same— Rbquisitbs of Amended Ckbtificatb.
The law does not require that the object or purpose of making an
amended certiflcate of location of a mining claim shall be specifled
therein; such certiflcate being effectuai for ail the purposes enumerated
in the statute, whether mentioned in the certiflcate or not.
4. Samb— Extension or Change of Boundahibs.
ïhe locator of a mining claim, who by an amended location extends or
changes its boundaries, is-not required to make any discovery of ore on
the ground so added, or to take physical possession of or do assessment
work thereon, but It becomes a part of the original claim, possession of
which and work done on which extend to the entire location as amended.
Suit in Support of Adverse Claim to Mining Ground.
Dickson, Ellis & Ellis and Key Pittman, for complainant.
W. E. F. Deal, Kenneth M. Jackson, and Campbell, Metson &
CampbeU, for défendant.
HAWLËY, District Judge. This is a suit or proceeding brought
under the provisions of section 2326, Rev. St. [U. S. Comp. St. 1901,
p. 1430], upon an adverse claim and protest filed in the United States
land office at Carson, Nev., against the application of the défendant
for a patent to consoHdated claim No. 2,012, embracing eight mining
claims, for the purpose ofdetermining which of the parties has the
better right to the mining ground in controversy. The right and in-
terest of the complainant to the la,nd is based upon a location of a
mining. claim situate in Tonopah mining district, Nye county, Nev.,
known and designated as the "Pyramid" ; and the right and interest
of the défendant to thé area in confîict is based upon the location of
the mining claim known and designated as the "Valley View." A
composite diagranl is hère inserted, which was prepared by complain-
ant's surveyor for the purpose of showing the conflict existing, not
only between the Pyramid and the Valley View in this suit (No. 734),
but also between the Wandering Boy and Valley View in suit No. 735,
125 Fed' 400, and between the Stone Cabin and the Valley View and
Silver Top in suit No. 736, Id. 408.
This diagram contains many red lines and marked points, inserted
at the trial to illustrate and explain the testimony of the respective
witnesses. Référence will be made thereto as occasion may require.
(The Pyramid location overlaps the Valley View for some distance,
covering groUnd to which complainant makes no claim.) The portion
of the ground in confîict between the, Pyramid and the Valley View
is colored yellow, and is deiscribed in the bill of complaint as follows:
"Beginnlng at corner No. 8 of the Pyramid location, which Is Identical with
corner No. 7 of survey No. 2,012, Valley View Iode, and runnlng thence along
the southerly slde line of the said Valley View Iode as surveyed south, 82° 02'
east, 1,478.3 feet, to corner No. 1 of said Valley View as surveyed; thence
north, 1° 82' east, 83.1 feet, to a point on the Une running from post No. 1
to post No. 2 of said alleged Valley View claim, as surveyed; thence' north,
85° 15' west, 1,471.3 feet, to corner No. 3 of said Pyramid Iode, the place
of beglnning. Area in conflict, 1.401 acres."
If S. See Mines and Minerais, vol. 34, Cent. Dlg. § 49,
TONOPAH & SALT LAKE MIN. CO. V. TONOPAH MIN. CO. 391
The south line of the original location of the Valley View, as
claimed by the défendant, is marked on the diagram by the broken
black line drawn through the ground colored yellow from the original
S. E. corner of the Valley View to the S. S. Center monument, which
is 250 feet in a southerly direction from the Valley View discovery
shaft, marked on the diagram, "V. V. Dis. Shaft." The red line
drawn on the diagram from the point marked "N. W. Cor. V. V. Loc."
to the point on the easterly end Hne of the Valley View, marked in red
ink "N. E. Cor. V. V. Gayhart," represents the northerly side line of
the Valley View in the additional and amended location of the Valley
View, which will be hereafter referred to. It is proper to add, in
explanation of the diagram, that the line in red east (about 30 feet)
of the dark easterly end line of the Valley View represents the easterly
end line of Gayhart's survey. The ground between thèse respective
end lines was surrendered by Butler to the Stone Cabin claim (referred
to in No. 736).
The contention on behalf of complainant is that the original loca-
tion of the Valley View claim could legally embrace only the ground
marked with dark lines on the diagram, with the corners and side
center stakes and monumuents thereon, as designated, because the
notice of location of the Valley View was placed in a discovery monu-
ment (marked on the diagram "V. V. Disc. M.") at the east end center
of the Valley View ; that, as matter of law, the locators thereof are
only entitled to 300 feet in a northerly direction and 300 feet in a
southerly direction therefrom, which would bring the southerly side
line of the Valley View north of that portion of the Pyramid marked
in yellow. In other words, that the Valley View was located in the
form of a parallelogram, and is so stated in the location notice ; that
the location notice on the ground calls for 1,500 feet west to the west
end center, and 300 feet on each side ; that this must be a straight
line between the discovery and the west end center, and that the side
lines must conform to the line drawn through the center, that being
the initial line establishing the location of the Valley View claim ; that
they hâve located a straight line as the north side line of the Valley
View ; that 300 feet south of that, Connecting the discovery point and
the west end center, is a straight Hne running parallel to the north
side line (marked by a red line on the diagram) ; that the south side
Hne of the Valley View must necessarily be a straight line, and that
they would not be allowed to place a side center monument outside
of the boundaries of their claim, and outside of 300 feet from the
center of their claim ; that at the date of the Pyramid location the
ground marked in yellow was vacant, unappropriated public land, and
was subject to location by the grantors of complainant. The défend-
ant claims that the dark straight line on the southerly side of the por-
tion marked in yellow is the southerly side Hne of the VaHey View
location. Defendant's contention in this regard will be best shown by
a review of the évidence.
There are three independent suits between the same parties. They
were tried separately, with the understanding and agreement between
counsel that any testimony taken in either which was applicable to
either or both of the other suits might be considered with like force
392 125 FEDERAL REPORTER.
and effect as if givert therein. The arguments of counsel were made
after ail the testimony was taken, and the three caSes were argued to-
gether. The cases are not identical in ail respects, either in the facts
or the principles of law applicable thereto, but there is much in com-
mon between them. It would, perhaps, hâve been better if the cases
had been Consolidated for trial, but the agreemeiits and stipulations
of counsel hâve accomplished the same end. Separate opinions will,
however, be prepared in each suit, itt order to présent the légal views
which bear upon the conflict as made in each case ; but as to matters
common to ail they will not be repeated, the référence made thereto in
either to be applied to ail.
In ail of the three cases the facts admitted and proven clearly show
that the respective locators of the mining claims in controversy (ex-
cept as noted in the opinions) had fully complied with the mining laws
in every respect, and the only point involved in each case is in estab-
lishing the boundaries of the respective claims, and the extent of the
surface ground to which the owners of each claim are entitled. To
do this it was necessary to prove each and every step taken by the
original locators, every monument built by them, and where placed,
every peg driven in the ground, and every stake placed in the monu-
ments, with the marks fhereon. A mass of testimony was taken upon
thèse points, the détails of which need not be specially referred to.
In consid'ering the methods adopted of building monuments, posting
notices, defining corners and directions of lines, etc., we must keep in
mind the rules universally recognized as to the necessity and duty of
applying to such acts of the pioneer locators the same libéral construc-
tion that was given by this court in Bock v. Justice M. Co., 58 Fed.
106, 114, 115, and by the Court of Appeals in this circuit in Walton v.
Wild Goose M. Ce, 123 Fed. 209, and remember that we are deaHng
with locations made in a new, unkhown, and previously undiscovered
mining district, without any surveying instruments, or other means at
hand to secure absolute accuracy as to courses and distances in mark-
ing the lines and defining the boundaries, etc. Another rule to be ap-
plied in each of the three cases is that, when a valid location of a
mining claim is once made, it vests in the locator and his successors
in interest the right of possession thereto, which right cannot be di-
vested by the oblitération or removal, without the fault of the locator
or his successor in interest, of the stakes and monuments marking its
boundaries, or the oblitération or removal from the claim of the loca-
tion notice posted thereon, The nature and character of thèse suits,
and the objects and purposes to be accomplished by such proceedings,
were explained and discussed at length by this court in Tonopah Frac-
tion M. Co. V. Douglass, 123 Fed. 936, and the principles therein an-
nounced are applicable to each of the three cases.
The eight claims in the application for a patent embrace the original
Butler group of mining claims, discovered and located by J. L. Butler,
and were the first locations made in what is now known as the "Tono-
pah Mining District." Butler went to Tonopah May 19, 1900, accom-
panied by his wife, on a prospecting trip. After considérable search,
he discovered mineral-bearing rock, the value and richness of which
were to him unknown. He left Tonopah May 27th, and returned to
TONOPAH il SALT LAKB MIN. OO. V. TONOPAH MIN. CO. 393
his home at Belraont, distant from Tonopah about 6o miles. At the
time he left he took samples of ore from the Iode he had discovered,
leaving a portion of said samples with assayers at Klondike, in Esme-
ralda county, and others with W. C. Gayhart at Austin, Nev. The
returns made of the assays taken showed the ore to be of great value.
He returned to Tonopah about August 25, 1900, and on this tnp
posted notices of location on the eight daims, the Valley View bemg
the seventh claim located. The original notice, with the certificate
of location hereafter referred to, was found by the surveyor, Charles
]P. Brooks, in a tin can in the monument marked on the diagram "V.
V. Orig. Dis. Mt.," on or about the iith day of May, 1902. This
notice of location was written with a pencil, and when introduced was
weatherworn and difficult to make out. As near as it could be de-
ciphered, it reads as follows :
"Valley View Mine Location Notice.
"Notice that J. L. Butler, the undersigned, on this 30 August, 1900, locates
and elaims for mining purposes 1,500 by 600 feet on this Iode or vein con-
taining gold, sllver and precious minerais commencing at this notice and
monument and running westerly along the side of the south hill to another
monument maklng 1,500 feet from location notice, also 300 feet on each side
of center of location for surface ground, and ail dips, stratas, or other min-
erais therein; this mine shows good strong iode • * * Désert Queen iode
on 27 day of August by J. L. Butler wlU on the southeast corner overlap or
touch part of the surface of the Valley View ground; the Burro mine will
nearly if not quite touch the northwest corner of the Valley View also. No
ground claimed south of tbis mine. It Is situated most southerly of ail the
mines in open country on south hill in view of the valley * * • and
passed through the mountain about flve miles south of the Tonopah Springs
just at the foothills of Butler Butte, flfteen miles east from Loue Mountain
"foothills of Montezuma Valley * * * and is supposed to be in Nye Ooun-
ty, State of Nevada. J. L. Butler, 1,500 feet."
On the 8th day of October, igoo, James L. Butler, accompanied by
Mr. Oddie and Mr. W. Brougher, returned to Tonopah with two loads
of timber to be used as stakes in constructing the monuments, and
marking and defining the boundaries of the mining elaims which he
had previously located. Between the ist and 24th of November, 1900,
monuments were erected on the lines and corners of the original loca-
tion of the Valley View, and the discovery work done upon the claim.
On the 24th of November, Butler filed in the clerk's office of Nye
county his certificate of location of the Valley View, which was placed
in a tin can, and found by Brooks, as before stated.
Mr. Gayhart on or about the 20th of March, 1901, made a survey
of the eight elaims. With respect to the Valley View location, as sur-
veyed by him, he states that after the survey he prepared the amended
certificate of location, using a printed form, and to this added a tissue
page on thin paper, with the field notes typewritten thereon, and the
names of the amending locators; that he made this in triplicate,
"one to be posted on the claim, or put in the mound in the location
monument, * * * and one that I retained, and still hâve in my
possession, and one that was placed on record" ; that this amended
certificate of location was posted or put in the monument at the east
end center of the claim as designated by his survey (marked "Loc.
2012" on the diagram). The record shows that monuments were built
394 ' 125 FBDiBEAij' feBPOETEÈ.
at the time deàîgnating the corners ahd side and end Une centers at
the points designated in the anxeiided certificate o£ location. This
certificate reads as follows :
"Additional and Amehded Certificate of Location.
"Know ail men by thèse présents: That the undersigned, J. L. Butler,
W. Brougher, T. L. Oddle, Alice H. Gayhart and B. F. Higgs, citizens of the
United States, hâve thls 20th day of Mareh, 1901, amended, loeated and
elaimed, and by thèse présents do amend,' locate and claim, by right of the
original discovery, and the location herçtofore made, such deeds, transfers
or conveyances as may hâve been made, and this amended location certificate
made, filed and recorded as provided by fédéral law and by the laws of the
State of Nevada now In force, and local customs and raies, flfteen hundred
linear feet, on this Iode, vein, ledge or depcslt, bearing gold, silver, lead,
copper and other valuable minerais, with ail its dips, angles and variations,
as allowed by lavç-, together veith 300 feet on each side of the middle of said
vein at the surface, and ail veins. Iodes, ledges, or deposits and surface ground
vi^ithin the Unes of said claim.
"This said Iode was originally loeated by J. L. Butler on the 30th day of
August, 1900, and named the "Valley View Lode, by vehich name it is found
of record in Book D of Mining Notices, pages 324 and 325, Nye County,
Nevada, Kecords. The nàme of this Ipdè is Valley View. The date of this
amended location Is Mardi 20, 1901. The name or names of the amending
locators are, J. L. Butler, W. Brougher, T. L. Oddie, Alice H. Gayhart and
B. F. Higgs. From the digcovery point, 690 feet easterly from the discovery
shaft, there is elaimed by us, 1,500 feet in a westerly direction along the
course of said Iode or vein. The gênerai course of this vein is east and west.
The discovery shaft or Its équivalent is situa ted upon the claim 690 feet west
from the east end center, and exposes the ledge at a depth of fully ten feet;
its dimensions are 12 feet long by 3 feet wide by 10 feet deep.
"This further additional and amended certificate of location Is made and
flled without waiyer of any prevlously acquired and existing rights in and
to said mining claim; but for the purpose of correcting any errors or omis-
sions in the original location, or location certificate, description or record; and
for the purpose of securing the beneflts of the Act of the Législature of the
§tate of Nevada, approved March 16, 1897^ and the amendments thereto, and
of conf orming to the requirements of law. The amending locators hereto are
the original loCators or la'rt'ful grantees deriving tltle and right of possession
ffom them, through deed& of conveyance.
"This said location Is deseribed by metea and bonnds as follows, to wit:
Feet Commencing at Cor. No. 1. On the southeast slope of Mt. Oddie.
Sec. Cor. common to Secs. 25, 26, 35 and 36, T. 3 N., R. 42 E.
M. D. B. & M. bears N. 17° 10' E., at the distance of 4,345 feet.
A monument of earth and rock over three feet high with stake,
marked 'N. B. Corj Valley View.'
Thence S. 1? 30' W.
600 To Cor. No. 2, intersecting south side line 2 to 3 Silver Top lode.
A monument of earth and rock over three feet high with stake,
marked 'S. B. Cor. Valley View."
Thence N. 82° 10' W.
1,500 To Cor. No. 3.
A monument of earth and rock over three feet high with stake,
marked 'S. W. Cot. Valley View.'
Thence N. 1° 30' B.
600 To Cor. No. 4, Intersecting south side line West End lode, and
. south side Une Burro lode. Near south side of Main Street be-
tween Brougher and Oddie Avenues.
A monument of earth and rock over three feet high with stake,
marked 'N. W. Cor. Valley Vtèw lode.'
Thence S. 82° 10' E.
1,600 To Cor. No. 1, the place of beginnlng, Intersecting west end Une
of Silver Top lode and south side line of Burro Ipde.
Ali courses from the true merldian, Variation 16° 20' East"
TONOFAH <fe SALT LAKE MIN, CO. T. TONOPAH MIN. OO. 895
Thè owners of the said Valley View Iode, and the interests owned by
them in said Iode, are also set forth in this certificate. It was —
"Filed for record Apr. 16, 1901 at 9:45 A. M. T. F. Egan, Dist. Kecorder.
Eecorded at request of J. L. Butler May 1, 1901 at 20 min. past 5 P. M. in
Boolî B. of Ming. Eec. pages 29/0/1, Nye County, Nevada, Records, W.
Brougher, Recorder."
It is admitted that the ground described in this additional and
amended certificate of location does not include any more ground than
the law allows. The location thus made was in the form of a parallelo-
gram 1,500 feet in length and 600 feet in width, and a straight line
drawn from the end centers does not exceed 300 feet from either the
north or south side Hnes thereof. The northerly side line of the
Valley View in the application for a patent does not follow the lines of
either the original location or the amended certificate, being further
drawn down in order to avoid any conflict with other locations. This
was done by agreement of the parties interested in that portion of the
ground.
The whole case, se far as the légal questions hâve any bearing, dé-
pends upon the validity or invalidity, and the interprétation and efïect,
of this amended certificate of location. The Pyramid notice of loca-
tion bears date May 24, 1902, and the certificate of location is dated
August 19, 1902, and recorded August 21, 1902. Both the notice and
the certificate of location were signed, "Tonopah and Sait Lake Min-
ing Company, by J. M. Healy, Supt."
It will be noticed that the original location of the Valley View, the
certificate of location, and the additional and amended certificate of
location were long prior in point of time to the location of the Pyra-
mid. The right of the original locators to change their original loca-
tion, so long as such change does not interfère with the existing rights
of others acquired previous to such change, is unquestioned. Erhardt
V. Boaro, 113 U. S. ^27, 533-536, 5 Sup. Ct. 560, 28 L. Ed. 1113;
McEvoy V. Hyman (C. C.) 25 Fed. 596, 600; Shoshone M. Co. v.
Rutter, 87 Fed. 801, 806, 31 C. C. A. 223; Thompson v. Spray, 7a
Cal. 528, 529, 14 Pac. 182 ; Strepey v. Stark, 7 Colo. 614, 620, 5 Pac.
III ; Craig v. Thompson, 10 Colo. 517, 16 Pac. 24; Frisholm v. Fitz-
gerald, 25 Colo. 290, 53 Pac. 1109; Duncan v. Fulton, 15 Colo. App.
140, 148, 61 Pac. 244; Sanders v. Noble, 22 Mont, iio, 55 Pac. 1037,
and numerous authorities there cited ; Morrison v. Regan (Idaho) 67
Pac. 956; I Lind. on Mines (2d Ed.) § 396 et seq.
In several of the Pacific Coast states, statutes hâve been enacted,
supplemental to and consistent with the laws of the United States,
clearly defining the rights and duties of the miners in making and
perfecting their locations, and recording the same. The statute of
this State approved March 16, 1897 (Laws Nev. 1897, p. 103, c. 89;
Comp. Laws 1900, § 210), gives 90 days after the date of postinj; the
location notice in which to file a certificate of location, which must be
recorded, and provides what it shall contain. In another section it
provides for the filing of an additional or amended certificate of loca-
tion. This section reads as follows :
"If at any time the locator of any minlng clalm heretofore or hereafter lo-
cated, or hls assijfns, shall apprehend that hls original certificate was de-
S98 125 rBDEiBAI. BEPOBTŒB.
fectlTs, erroneous, or that tbe requlremênts of the law had not been complial
with befpre flUng; or shall be desirous of cbanging his surface boundarles or
of taklng Sn any part ot an overlapplng claim which bas been abandoned;
or In case the original certlflcate was made prlor to the passage of thls law,
and he sball be desirous of securlng tbe benefits of thls act, such locator or
bis assigna may file an addltlonal certiflcate, subject to the provisions of tbls
act: provlded, that such relocatlon does not interfère wlth the exlsting rlghts
of others at the time of such relocatlon, and no such relocation or the record
thereof sball preclude the clalmant or clalmants from provlng any such titles
as be or tbey may hâve held under previous location." Outtlng's Comp. Laws
1900, § 213.
The courts, previous tô the enactment of statutes of this character,
held that the locator, after posting his notice of location, should be
allowed "a reasonable time" within which to perfect his location, i
Snyder on Mines, § 205, and authorities there cited ; Doe v. Waterloo
(C. C.) 55 Fed. II, 15; Id., 70 Fed. 455, 457, 458, 17 C. C. A. 190;
Gleeson v. Martin White M. Co., 13 Nev. 442, 460. One of the ob-
jects of the state statute was evidently to make this time certain and
definite. The Législature of this state, in enacting this statute, rec-
ognized that difficulties are always liable to présent themselves to the
enterprising prospector, especially in districts where no actual develop-
ment has been made, to détermine with accuracy ànd précision the
course of the ledge which he has discovered, its apex and width. The
statute gives to the locator of the Iode 90 days to take such bearings
as he can to guide him. in marking and defining his boundaries, and
further provides that if he discovers that he has made mistakes, has
taken up more or less grbund than he is entitled to, or from any cause
that his location is defective or erroneous, he may relocate or change
his boundaries, provlded the same "does not interfère with the existing
rights of others." It gives the original locator the full measure of
the rights which the miriing laws permit him to acquire as the reward
of his energy in discove;ring the minerai Iode or vein. It has always
been the policy of the goVernment to encourage its citizens in search-
ing for, discovering, and developing the minerai resources of the coun-
try; and this policy can always be best subserved by permitting the
discoverer to fèctify arid readjust his lines, whenever from any cause
he desires to do so, provided he does not interfère with or impair "the
intervening rights of others." There is rio statute, law, rule, or régu-
lation, state or national, whiçh dénies this right. The amended cer-
tificate of location, when liiade, becomès the completed location of the
discoverer, and is just as valid as if it had been made in the flrst in-
stance. It iiecessarily fûllows that parties coming upon the mining
claim and grourid describèd in the amended certificate of location, sub-
séquent to the perfection of such amended location in compliance with
the mining laws, can acquire no rights, because they hâve not been
injured, and hâve rio right to complain.
The amended certificate of location in the présent case contains the
names of several persons, as locators,. who were shown by the évi-
dence to hâve legally acquîred interests therein after the original loca-
tion had been made, aild befôre the amended certificate was prepared
or fîled. The rule is that, where the second or amended notice or cer-
tificate of location contains names other than those set forth in the
original, it cannot be takeii advantage of by other parties. It may be
TONOPAH <fe SALT LAKE MIN. CO. V. TONOPAH MIN. 00. 397
treated as an original notice as to the persons whose names do not
appear on the first, and as a supplemental or amended notice as to
those whose names appear on both. Lind. on Mines (2d Ed.) § 398 ;
Thompson v. Spray, 72 Cal. 528, 529, 14 Pac. 182. The law does not
require that the object or purpose of making the amended certificate
shall be specified therein. A gênerai statement that it is made to cure
errors or defects will be sufficient, the gênerai rule upon this subject
being that the filing of such certificate is effectuai for ail the purposes
enumerated in the statute, whether such purposes are mentioned in
the certificate or not. Lind. on Mines (2d Ed.) § 398; Johnson v.
Young, 18 Colo. 625, 629, 34 Pac. 173.
One of the reasons testified to at the trial was that the original
north side line of the Valley View took in the Silver Top discovery
shaft, and also interfered with other previous locations. Another was
to straighten up the south line. In making the change from the orig-
inal marking of the northerly side line, the northeast corner of the
Valley View was dropped down in a southerly direction along the
eastern end line about 83 feet, at which point a new monument and
stake were placed to mark the northeast corner of the amended lo-
cation of the Valley View. A monument and stake were placed 300
feet southerly from the northeast corner to designate the east end
center of the Valley View, marked on the diagram "Loc. 2012," and
are about 83 feet south of the "V. V. Orig. Disc. Mt." From the
point marked "Loc. 2012" to the southeast corner of the Valley View,
as shown on the diagram, is 300 feet. The location of the Valley
View under the amended certificate of location was and is valid, as
against the Pyramid location, the owner of which had not at that time
acquired any right whatever to the ground in controversy. At the
time the Pyramid location was made, the complainant knew where the
monument marking the south side center of the Valley View was. It
knew that a monument was erected at the southwest corner (No. 7),
V. V. location, and that a similar monument was erected at the south-
east corner of the amended location (under the Gayhart survey), and
must hâve known — at least must be held to hâve had knowledge — of
the monument and stake on the east side center where the amended
location was put.
When Mr. Brooks, who had been employed by the complainant to
find certain facts which it believed would tend to support its theory,
went to the "V. V. Orig. Disc. Mt.," he was not looking for any
amended certificate of location, or any new monument. He was doing
just what he had been employed to do — trying to find where the origi-
nal notice and the first certificate of location were posted. He found
them at the "V. V. Orig. Disc. Mt." On cross-examination Mr.
Brooks was asked whether he did not find an amended notice of loca-
tion. He answered :
"I am trying to recall exaetly the point where I found that. It was a
very windy day, and in going down over the hill to that notice of location
I did find what purported to be an amended notice of location on the ground
near that monument. It appeared as though the wind had blown it out. Q.
Did you examine that? A. Tes. Q. How did that compare or correspond
with the original, from your examina tion? A. It appeared to correspond,
clalmed soine ground from the same point, • • • as it appeared to me.
398 125 fbdeeaij ebpoktkb.
Q. Dldn't that original location speak of a dlscovery shaft 650 feet from
the west end of the "Valley Ylew? A. îiy remembrance of It ts that It dld.
I hâve not rea.d it for a long time. Q. And dld it not then claim a direct Une
directly east to the center stake— dlrectly east on a direct Une to the middle
center stake of the Valley View ground?"
Hère objections were made, it appearing that the witness could not
remember what was in that notice.
It is deemed safe to say that this notice was the amended certificate
of location. It was evidently not deemed to be a necessary Hnk in
the chain of évidence tending to support complainant's theory of the
case, or it would hâve been more carefully scrutinized by Mr. Brooks,
for his entire testimony showed to the court that he was not only a
compétent surveyor and engineer, but was at ail times faithful in look-
ing after the interest of his employer ; making the most of everything
he could find or see in its favor, and ignoring everything that militated
against it. He marked on his map such points only as he had been
requested tp do by his employer. Other références to his testimony
will explain this matter. After his testimony about the notices of lo-
cation and amended notice, the following questions and answers ap-
pear (in his cross-examination) :
"Q. Was there not a monument on the ground south of that which you
hâve indicated on this map— the location monument— some '80 feet? A. There
was a post there; yes, sir. Q. Then, sir, will you kindly state to the court
why, in making this map, when you made a survey of the Valley View
ground, you dldn't indicate that? A. Simply, I made that map to Illustrate
the conflict between the Pyramid and Valley View Iodes. I put on nothlng
except what related te that ground colored yeUow; that is, prlmarily to that
ground. There are a lot of workings and monuments on the white portion
of the Valley View not shown— I didn't attempt to show. * * * Q. Will
you kindly take your pencil and place on this map where you found that
post and what was on it? * * • A. Loc. 2,012. • * • Q. Now, Mr.
Brooks, did you not find a monument— a center south monument of the
VaUey View- the side center? A. Yes; it was side center. Q. Is that shown
on your map? A. No, sir; It Is not. Q. Will you kindly put that on your
map? A. I thought I had a record of It hère, but I don't see it. Q. To the
best of your recoUection, mark it where you think it is. A. I think it is 756
feet from the corner where the numbers are. (Marking on map.) I wUl mark
that side center. Q. Mr. Brooks, what were the marks upon that monument
which you hâve marked hère 'S. S. Center'? A. I don't know as I can glve
you those marks. I don't remember them. I don't remember without look-
ing at my notes and refreshing my recollection of having seen that side monu-
ment when I was out there, so I am unable to describe it. I put it on there
from the patent— from the record. Q. Didn't you see any monument there at
aU? A. I don't remember it at this time. If I did, I made no mémorandum
of It I was taking in the corners, knowing that the Une was straight be-
tween the corners. Q. You ran out the south Une, didn't you? A. I did— a
portion of it—hot directly on the Une. My Unes were run by traverses Con-
necting varions points on the, claim. Q. Then that is the reason why you
don't remember now having séen It while you were there, but you knew that
there was a south side center monument described in the application for
patent? A. Yes. Q. And you didn't look for it? A. I didn't take spécial
pains looklng for it, because In thé patent application the Une was straight
from 7 to 1, and practically one course and one distance, and I was Connect-
ing the exterlor boupdaries of the property rather than the interior posts.
Q. But you were satisfled that 756 feét from the southwest corner of that Une
was where that monument v^as? A. I was satisfled from the observation
that I had made of those sùry^eys; yes, sir. Q. And you answered my ques-
tion before that the reaçoh yôu didn't mark thèse other matters was that
TONOPAH & SALT LAKE MIN. CO. V. TONOPAH MIN. OO. 399
you were simply surveying for this yellow strip of ground which waa the
territory in conflict. That is the fact, is It? A. Yes, sir. Q. Well, didn't
the fact that there was a monument— a south sida center monument — enter
into your calculatlons in relation to the conflict? A. Net particularly. Hav-
ing the extrême ends of that line, knowing it to be the straight Une, I didn't
take any spécial pains to hunt up the intermediate monuments."
Mr. Brooks, at the time he found the original notice of location and
the original certificate of location of the Valley View, was accompanied
by Mr. Wilson, a surveyor and mining engineer, also in the employ of
the complainant ; and from the testimony it appeared that he had ab-
stracted the notices from the tin can, and appropriated the same for
his own uses and purposes, and, being in court, he was called as a wit-
ness by the défendant, and admitted, under oath, that he took posses-
sion of thèse notices "by his own authority," and carried theni away
to Sait Lake, and delivered the same to the attorneys for complain-
ant for the purposes of presenting them to the court as the best évi-
dence in regard to where they were posted on the ground, "regardless
of any surveys or contests or protests," and because he thought "they
were safer" in his possession than they were or would be if left where
they were found. "I was acting for the Sait Lake & Tonopah Com-
pany."
The broad contention of complainant, as made in ail the three cases,
is that the locators of the Valley View must be held to the lines of its
original location ; that they acquired no new rights in their amended
location, because it included ground not within its original boundaries,
and they did not make any relocation of such new territory, and did
no annual assessment work thereon, and did not make any discovery
of minerai therein, and were never in the actual possession thereof.
The law does not require that such things should be done in order to
make the claim, as described in the amended certificate of location,
valid to the full extent of the bouridaries thereia described, as against
any subséquent locator of any portion of said ground. If such is not
the true intent and meaning of the state statute, it has no meaning,
and ought never to hâve been passed. The object of the state statute
has already been fully discussed. It was to protect, not to deceive,
the locator. It was to enable the miner to make good the develop-
ments he had made — the assessment work he had done under his
original location — and at the same time include other ground not
embraced in his original notice or first certificate of location, so as to
make his lines conform to the directions which his labor, time, and ex-
pense had indicated to him as the true course of the Iode. In making
the additional amended notice, it was not necessary for him to take
physical possession of the additional ground, sink new shafts, or make
any new discoveries of minerai. The fact is that, before the amended
location was made, the owners of the Valley View had sunk shafts
and run cuts at an expense of thousands of dollars at différent points
from the point marked "V. V. Orig. Disc. Mt." in the direction of,
and within a few feet of, the point marked "S. S. Center," and had dis-
covered minerai in nearly ail of them ; and the complainant, in building
the monument on the yellow ground at the point marked "P. Dis.,"
used minerai rock taken from one of thèse near-by shafts or cuts on
the Valley View claim.
*00 125 FEDERAL REPORTER.
In Duncan v. Fultoh, supra, the court, in discussing the question as
to the ri^hts of miners/under différent certificates of location made
uiider the provisions bf the state statute, among other things, said :
"The question of good faith Is an Important considération, because that Is
the real basls of the rule whlch ail the courts, as we observe them, bave
adopted in çonstrulng thèse mlning statutes— llberality of construction.
• * • tfhder the spécifie terms of our statute, the boundaries need net be
the same. The miner is glven the absolute rlght to change his boundaries
to take In, overlapping and abandonedclaims, or other territory which bas
not been located or occupied. It is to the end that the prospecter may cure
any defects In his location, and conservé and protect the results of his In-
dustry, that the authority Is glven. For this reason, ♦ * • the original
[certlflcate] and the addltional one ought to be admltted; and, we believe,
if therefrom and thereby, and not necessarily from one alone, but from either
one or both together, the necessary statutory steps can be shown to hâve
been taken, the miner thereby establishes an unimpeachable title as against
the subséquent clalmant. In other words, we believe the law to be that
though nelther one, as a whole, may be absolutely correct and In perf ect con-
formity to the statute, yét If in both and from both there may be found and
deduced ail that the law requlres, the statute being otherwise complied with,.
the miner's record is complété» and his title is perf ect."
See, aiso, Frisholm v. Fitzgerald, 25 Colo. 290, 53 Pac. 1109.
From ail the facts disclosed by the record in this case, and the prin-
ciples of law applicable thereto, I am of opinion that complainant, at
the time it made its location of the Pyramid claim and entered upon
the ground marked in yellow on the diagram, was a mère trespasser
upon the ground then legally possessed by the défendant by virtue of
the rights acquired by it to the Valley View mining claim.
Let a decree be entered in accordance with the views herein ex-
pressed in favor of the défendant, and for its costs.
TONOPAH & SALT LAKE MIN. CO. v. TONOPAH MIN. CO. OF NEVADA.
(Circuit Court, D. Nevada. August S, 1903.)
No. 735.
1. Mining Claims — Conflictins Boundaries — Kbcognition op Linb as-
boundahy.
The locatpr of a mining claim ran his end Une across the side Une of
a prier claim in order to make his end Unes parallel, but with the in-
tention, as declared in his certlflcate of location, not to claim anything
withln the Unes of the other claim. On a subséquent survey of the
latter Its sjde Une was moved f urther outward, over the newer claim,
and so marked by monuments, and an amended certlflcate of location
was flled to conform thereto. Later the new claim was also surveyed
by the same surveyor, oné purpose being to establish the boundary be-
tween the two claims; and the loeator, as shown by a prépondérance of
the évidence, recognized the slde Une of the older claim, as established
by the survey, as the true boundary, and claimed nothing beyond it.
Eeld, that It was compétent for the parties to adopt such Une as the
boundary between them, whether the correct one or not, and that such
action was bindlng upon them and thelr subséquent grantees.
Suit in Support of Adverse Claim to Mining Ground.
Dickson, EUis & Ellis and Key Pittman, for complainant.
W. E.. F. Deal, Kenneth M. Jackson, and Campbell, Metson &
Campbell, for défendant.
TONOPAH 4 SALT LAKE MIN. CO. V. TONOPAH MIN. 00. 401
HAWLEY, District Judge. This suit is brought in support of an
adverse daim made by complainant, as the owner of the Wandering
Boy mining daim, against the application for a patent made by the de-
fendant to the Butler group of mines, situate in Tonopah mining dis-
trict, Nye county, Nev., and is one of the three cases referred to in the
opinion in No. 734 (125 Fed. 38g). It will be noticed from an ex-
amination of the diagram inserted in that case that the Wandering
Boy, as located, overlaps the Valley View in the form of a triangle.
The complainant makes no daim whatever to any part of the ground
within this triangle that is situated north of the ground marked in
yellow on the diagram. The dispute between the parties is confined
to that portion in yellow situate between the northeasterly and south-
westerly side line and the northeasterly end line of the Wandering
Boy. It is described in the bill of complaint as follows :
"Beginnlng at a point which is' north, 55° 23' west, 286.5 feet distant from
corner No. 8 of said Wandering Boy claim, and running thence on a true
course north, 55° 23' west, 13.9 feet, to corner No. 7 of said Wandering Boy
daim; thence north, 46° 31' west, 301 feet. to corner No. 6 of said Wandering
Boy clalm; thence south, 50° 27' west, 235.5 feet, to corner No. 5 of said
Wandering Boy claim; thence south, 39° 38' west, 8.7 feet, to a point on the
southerly side line of said alleged Valley View claim, as surveyed for patent;
thence south, 82° 02' east, 421.1 feet, to the place of beginning; containing
0.872 acres."
The side lines of the Wandering Boy, marked in black on the dia-
gram, measure in length 1,553 ^^et. Deducting the excess over 1,500
feet therefrom brings the northeasterly end line down to the line in
red from F to G on the diagram.
The contention of complainant is substantially the same as made in
the Pyramid Case with référence to the dropping of the east end line
southerly 83 feet ; the différence in the cases being that the Wander-
ing Boy was located, and certificate of location recorded, prior to the
recording of the amended location certificate of the Valley View, in-
stead of subséquent, as in the case of the Pyramid in No. 734.
The Wandering Boy was located September 9, 1900, by Edward
Clifford, Jr. A notice was posted on the ground by the Cliffords.
Mr. Butler thereafter called their attention to the fact that the notice
was defective, and, among other things, suggested they had not given
any name to the claim. They requested him to name it. He said
Ed had often expressed great pleasure in listening to a famous song :
"I will name it the Wandering Boy to remind him of it." This origi-
nal notice of location was not introduced, but the certificate of loca-
tion was. It bears date December 5, 1900, and was recorded on that
date. It refers to the original location, and states, in giving the de-
scription, "This claim joins the south side line of the Valley View
claim." It contains the further statement that "the north corner of
said claim overlaps the Valley View claim ; said ground lying within
the south side line of the Valley View claim, which is included within
this Wandering Boy claim, to belong to the Valley View." In an
additional and amended certificate of location, dated May 29, 1901,
and recorded July 7, 1901, defining the Wandering Boy by metes and
125 F.— 26
402 125 FEDBBtAt EEPORTEK.
bounds, is the statement "intersects south Une of Valley View Iode
at; itià'iniddle point."
Thè cbntroversy in this case is principally one of fact. It dépends
upOri the proper solution of the question as to where the south side
line of the Valley View was at the time the Wandering Boy was lo-
cated, and where it was at the time the owner of the Wandering Boy
filed the additional and amended 'certificate of location. The Hnes in
relation to thèse points are sharply drawn. There is upon sonie of
the points a direct conflict in the évidence, which is somewhat difHcult
to unravel or make dear, and there are other points in connection
therewith which are undisputed. There is in this case, as well as in
case No. 736 (125 Fed. 408), a long history as to the manner in which
the early locations were made in the Tonopah mining district. Con-
spicuously in the foreground stands the original discoverer, J. L.
Butler, who was the active and moving spirit that directed ail the loca-
tions involved in thèse two suits^ as well as other locations made in
the immédiate vicinity. After Butler had made the discoveries men-
tioned in case No. 734, he notified the Cliffords thereof, and suggested
that they ought to go to the new district and locate some mining
claims. They had no knowledge of mining, but had faith in Butler
as a friend, appreciated his friendship, and acted upon his suggestion.
The complainant's case rests entirely upon the testimony of Edward
Clifïord, St., and Edward Clifford, Jr., from whom, çomplainant dérives
title. PriOr to any statement or review of their testimony, it is
deemed proper to sây th^t the Clififords, father and son, had lived upon
a ranch ïor'several yeàrs; that they had no expérience in mining;
that their memory and recollections of the events that transpired at
Tonopah were not clear upon many points ; that they often became
confused in giving theif testimony (they were not, however, the only
witnesses that became confused) ; that they evidently had but little
expérience as witnesses, and were unàble àt ail times to comprehend
the questions asked by the respective counsel, and were easily led into
making ahswers contradictory of their first statements. They were
called and recalled, éxamined and re-examined and cross-questioned,
to explaîn their testimony, and at times lost their bearings. It is
dififîcult to review such testimony.
Mr. Edward Clifford, Sr., testifîed : That after his arrivai with his
son at Tonopah in Septembér, 1900, he fpund where Mr. Butler had
made some locations, and Vvent prospëcting around to see if he could
not fitid something — some ground that he could take up. That he
went lipon what is called the "Valley View Ground," and thought he
would take the course ' of the Valley View ledge, and would locate
across the caîïon. He told his son whet-e that ledge crossed through
a canonj and went oflf with a hammer in his hand, breaking rock
around, and went acro'ès what is called "Gold Hill" now, and came
right down and found some rock cropping out, and that his son lûcated
the claim known as the Wandering Boy. That they first intended to
locate the claim east and west, pàrallel with the Valley View. That
he knew at the time of the l'oèatiçin of the Wandering Boy where the
Southwest and' southéàsf corners bf the Valley View were, and saw
the monument marking the south side center of the Valley View,
TONOPAH & SALT LAKE MIN. CO. V. TONOPAH MIN. CO. 403
that after making the location he had it surveyed by W. C. Gayhart.
H-€ and his son Edward and a man named Roddick assisted, and Gay-
hart had Mr. Egan and Mr. Miles assisting him. Upon his cross-
examination he was asked :
"Q. For wtiat purpose was the survey made? A. My monuments on the
claim was knoeked down right along. Every time I would go over the ground
I would find monuments knocked down, and I spoke to the boys that we
ought to hâve It surveyed. So my son went and seen Mr. Gayhart, and got
him for to survey the ground. Q. Wasn't it surveyed for the purpose of
establishing the line between the Wandering Boy and the Valley ViewV A.
I suppose it was. Q. When Mr. Gayhart surveyed it, had your monuments
then been knocked down— the ones which you erected prior to that time?
A. Yes, sir; I put them up many times. Q. At the time of the survey, had
they been knocked down? * * • A. Well, now, I could not say whether
they were down then or not. * * • Q. I corne back now to where we
were talking about yourself and Mr. Butler at the time of tho Gayhart
sur\'ey. You didn't intend to claim any of the Valley View claim as it was
located at that time, but you wanted ail that was south of the Valley View.
That is a fact? A. Yes, sir. Q. And that is because Mr. Butler and you were
friendly, and you wanted to adjust the Unes between your mining claims? A.
Yes. Q. And that was the only reason of the survey? A. No, sir; that was
not the reason of the survey, altogether. If my monuments had not been
knocked down, we would not hâve had it surveyed at ail. Q. Having it sur-
veyed, that was what you wanted Mr. Gayhart to do— to estabtish the line as
it existed between you and the Valley View, as it existed then? A. To es-
tablish the whole line, clean around the claim. Q. And you ail the time didn't
want any of the claim that was at that time within the lines of the Valley
View, did you? A. I wanted nothing belonging to the Valley View. I didn't
want any ground belonging to the Valley View."
It will thus be seen that the object of this survey was to establish
the line between the Wandering Boy and the Valley View, that at the
time of making this survey it was his intention to establish the south
line of the Valley View as the northerly boundary of the Wandering
Boy, that they understood at the time of fixing the boundaries that
Mr. Gayhart had surveyed the Valley View ground, and they did not
intend to infringe upon any portion of the Valley View claim.
The contention of counsel présents the question whether the Clifif-
ords meant the line first established by Butler before, or the line estab-
lished after, the easterly end line of the Valley View was dropped
down, as stated m the former opinion, No. 734. On the redirect ex-
amination of Edward Clififord, St., the counsel for complainant
brought out the évidence upon which it relies to establish its conten-
tion.
"Q. When you say you didn't want any ground belonging to the Valley
View, you mean the ground originally located by Mr. Butler, or the ground
surveyed by Mr. Gayhart? A. The ground that was originally located by
Mr. Butler. Q. When Mr. Gayhart got through surveying the Valley View,
was there any différence between it and the way it was when Mr. Butler
located it? A. Yes, sir. Q. What was the différence? A. The uortheast
corner of the Valley View was originally downhill, and the southeast corner
of the Valley View was run down a hlU. ♦ » * south. I could not exactly
State how much, but quite a ways. Q. Did you intend to give any of that
ground that he had run down the hill up to the Valley View? A. No, sir.
* ♦ ■* Q. Now, Mr. Clifford, at the time that Mr. Gayhart was surveying
the Wandering Boy claim did you then know that he had dropped the south
line of the Valley View to the south? A. I did not."
404 125 FEDERAL EBPORTBR.
He then testified as to the détails, stepping off the ground from
point to point. Upon his cross-examination, touching thèse détails,
he was asked :
"Q. But before you put your monuments up, the Valley View had their
monuments up, didn't they? A. ïes. Q. But at the tlme you did the step-
ping the Valley View didn't hâve their monuments up? A. No, sir. * * *
Q. Is it not a fact that, at the time the Gayhart survey was made^you knew
that prior to that time Mr. Gayhart had surveyed the Valley View daim?
A. Well, I heard it. Q. You had heard that it had been surveyed before
this? A. Yes. Q. And you had heard that the corners had been dropped,
hadn't you? A. No, sir; I don't think I had. , Q. Didn't you bnow that? A.
No, sir; I didn't know that thé corners had been dropped. Q. At any rate,
you did erect monuments in March, 1901, on the Une of the Gayhart survey,
which was made for you and under your pay, did you not? * * * A. Yes.
Q. Mr. Gayhart put down pins or pegs in the earth where the monuments
should be erected, and you, or people in your employ, erected those monu-
ments where Mr. Gayhart put the pins, didn't they? A. Yes."
On redirect examination he testified that the first knowledge he had
that the east end line of the Valley View had been moved down was
"when I got thèse maps from Mr. Gayhart." Upon his recross-
examination, referring to his testimony on behalf of complainant, he
was asked: y"Q. Did you see any indication that the south center
point of the Valley View side line. had been shifted also? A. No, sir."
As stated in the opinion in No. 734, from the start to the finish of
thèse cases the testimony virtually unités upon the point that the south
side center monument of the Valley View remained substantially at
the point where first erected.
Edward Clifford, Jr., testified that he went with his father to Tono-
pah.
"We got Into Tonopah, I think, between the 4th and 9th day of September.
We found where Mr. Butler had located some mines there, and we prospected
around to see if we couldn't flnd some. So we made one location, now called
the 'Wandering Boy.' " That he located and built the original monuments on
the Wandering Boy. That afterwards his father had other monuments built
around the lines of this location. "I don't know what his object was in
placing them . there. * * ■* Q. Do you know whether or not your father
tried to find the south Une of the Valley View elaim, or where it would be?
A. Yes, sir; t believe he did. Q. Did you see him attemptlng to do that?
A. Yes, sir. Q. Well, what did he do? ■* • * A. I think he stepped off
from the west end line of the Valley View. Q. Do you know wlien the
original monuments were put up on the Wandering Boy Iode? A. Yes, sir;
they were put up on thè 9th of September. Q. Do you know when the claim
was monuménted by marking the boundaries? A. Within the ninety days.
* * » yi^Q had ninety days to do our work and erect our monuments. Q.
At that time were the monuments up on the Valley View? A. Yes, sir; I
believe they were. I think théy were. Q. Do you remember when the Gay-
hart survey took place? A. Yes, sir. Q. Do you know whether or not, ac-'
cording to Mr. Gayhart's suryey, the Valjey View claim differed from what
it was orlginally located? A. No, sir; I do not."
He testified lipon his cross-examinâtion that he did not pay much
attention to the monuments of either the Valley View or the Wander-
ing Boy ; that he secured Mr. Oddie to make out the certificate of lo-
cation — ^the first paper filed outside of the location notice — but could
not say whether he signed it or not.
"Q. Mr. Olitford, did you know the monuments of the Valley View ground
prior to March, 1901— before March, 1901? A. Yes, sir; some of them. Q.
TONOPAH & SALT LAKE MIN. CO. V. TONOPAH MIN. CO. 405
You had helped Mr. Knapp, had you not, run some Unes there? A. Yes, sir; T
did. Q. Now, you were there with Mr. Knapp in January, 1901, was it not?
A. Yes, sir; I believe it was. * * * Q. In the Knapp survey, did you
not start at what was termed the southwest corner of the Valley View claim,
and run east? A. Well, to tell you the truth, I could not say where we did
start from. Q. Can you tell me whether or not in that survey which you
know or was pointed out to you to be the south slde center Une of the Valley
View? A. No, sir. Q. You don't know much about the boundaries? A. No;
I do not. Q. And you don't know much about the mine, the Wandering Boy
or the Valley View, either? A. No. Q. You didn't pay any particular at-
tention to it? A. No, sir; I did not."
On behalf of défendant a number of witnesses were introduced. Mr.
Knapp, among other things, testified that he first took the position
of the south center side Une of the Valley View on January 26, 1901,
accompanied by Edward Clififord, Jr., who at that time pointed out
to him "the north end Une of the Wandering Boy, and the south center
side Une of the Valley View" ; that he had occasion to examine the
south side center of the Valley View recently, and found the monu-
ment in the same place it was in January, 1901. Mr. Oddie testified
that the Gayhart survey of the Valley View was made prior to March
20, 1901 ; that the survey of the Wandering Boy was made about one
month afterwards ; that he erected the monument on the south line
of the Valley View claim, which is called the "South Side Center Monu-
ment," prior to November 24, 1900, and that at no time since has that
monument been moved to the north or to the south ; that it was there
at the time of the survey of the Wandering Boy; that Mr. Edward
Clifïord asked him to draw the certificate of location of the Wandering
Boy, and gave him the initial points.
"I knew that it joined the Valley View on the south and overlapped it.
Well, he told me, or I suggested to him putting a monument inside of the
Valley View to square his end lines— parallel his end Unes— and he said that
would be a good idea, and he would not claim any of the ground inside; and
I wrote the description of the monuments, and numbered each one carefuUy.
and wrote in the certificate exactly what each monument was, and told him
to be careful and build his monuments where I had indicated, and mark
them exactly that way. I had helped him before, and I did the same thing
with his other claims. Q. Now, as I understand it, at the time you made the
certificate of location for Mr. ClifCord, the monuments had not been perma-
nently erected on the ground? A. I never had seen them, and he told me they
were not, and I advised him to put them up within ninety days. He told
me he was going to do it, and I impressed upon him the necessity."
W. C. Gayhart testified : That he made a survey of the Wandering
Boy claim, for the Clifïords, who were with him during the survey,
about one month after he had surveyed the Valley View. That at the
time of the survey of the Wandering Boy he pointed out and explained
to the Clifïords, father and son, the south side line of the Valley View
as established by his survey thereof. That they were at the time of
this explanation near the south side center Valley View monuments.
Mr. Clifïord, Sr., said that—
"He claimed no ground inside of the Valley View. He claimed the Wander-
ing Boy, but no ground that belonged to the Valley View, or that was in-
cluded in the lines of the Valley View, and that was in response to my
running the end line of the Valley View in order to make both end Unes par-
allel, and he understood that the block of ground in there did not belong to
the Wandering Boy, * • * I explained to him that * * • a part of
406 125 FEDEftAL EEPORTER.
the daim was In conflict with the Valley View, and that was ground that
belonged to the Valley View claim, and he said that he so understood it,
and, of coui:8e, did not claim it, but he wïinted the ground southerly from the
Valley View, as included in the Wandering Boy ground."
Edward Clifford, Sr., was called in rebuttal by complainant, and
testified that Mr. Gayhart did not show or tell him that "he had sur-
veyed the south line of the Valley View claim." On his cross-exam-
ination in rebuttal he said that Mr. Gayhart, when making the survey
of the Wandering Boy, did not "say anything at ail — not a word."
Edward Clifford, Jr., was called in rebuttal, and upon his cross-
examination testified as follows :
"Q. Did you know what you signed when you signed the amended cer-
tlflcate of location? A. I suppose I did, or I would not hâve signed it. Q.
You signed two, didn't you— two certificates of location— the flrst for Mr.
Oddie, and another one sent you by Mr. Gayhart? A. Yes, sir; I think I
did. Q. New, then, did you read it? A. Yes, sir; I certainly did, or I would
not hâve signed it? Q. Did you read in that that your north Une was where
the south Une or the south side eenter of the Valley View was— the south
side eenter monument Intersected? A. I don't remember whether I did or
not. I don't remember about that. Q. Now, vfhat did Mr. Gayhart say to
you? Tell the court a single tliing that he said to you during that survey of
the Wandering Boy claim. A. Mr. Gayhart and I had but very few words.
Q. Well, what did he say? A. That I could not tell you. » • • Q. Did
you know where the southwest corner of the Valley View was? A. Yes, sir.
Q. Did yoù know where the south side eenter was? A. I could not tell you.
I could not say that I did. « » • i geen a monument there. I could not
say whether it was the Valley View monument or another monument. I
don't know. Q. Did you know where the southeast corner of the Valley
View wasî A. Yes, sir. Q. You knew, did you not, that there was a certain
amount of that claim which was within the Valley View ground that you
didn't claim? A. I certainly did. Q. And you never did claim it? A. No, sir.
Q. And you didn't claim it up to the time you sold to thèse people? A. A
certain pièce we don't claim, and didn't claim at the time we sold it. Q. Did
you explaln to the gentlemen to whom you sold it that that portion of the
ground was within the Valley View ground? A. Yes. * * * Q. Mr. Oddie
wanted the claim surveyed for the purpose of establishing the Unes between
the two claims, didn't he? A. He advised me to hâve the claims surveyed.
Q. You knew they had had their claim surveyed, didn't you? A. Yes.
* ■• ■* Q. You say you knew where the southeast corner of the VaUey
View claim was. That was the monument that has been testified to, of
earth, and a nall keg in It? (At the S. E. corner of the Valley View, as sur-
veyed by Gayhart.) •■ * * >. Yes, sir. * ■" * Q. Didn't you and Mr.
Gayhart hâve a conversation about that particular monument, with the nail
keg in it? A. I did not. Q. And didn't he tell you that that was a monu-
ment which was established as the southeast corner of the Valley View? A.
No, sir; he did not. * * * Q. Oan you tell the court a single thlng that
he did speak to you about? A. No, sir; I cannot. i" * • Q. The only
thing you can tell the court Is that he didn't say anything to you about the
monuments? A. He did not"
Mr. Thomas F. Egan, the mining recorder, called on behalf of the
défendant, testified thàt he advised the CHfïords to hâve the Wander-
ing Boy surveyed ; that during the time of the survey made by Gay-
hart he heard conversations between Gayhart and Edward Clififord,
Sr., "in relation to the lines or monuments of that survey" ; that there
was something said about the boundary of the Valley View claim, "but
I could nôt exâctiy staté whàt it was. I know they had a talk
about it."
TONOPAH & SALT LAKE MIK. CO. V. TONOPAH MIN. CO. 407
In arriving at the proper interprétation and efïect of the testitnony
of the respective witnesses, it will, for the purpose of this opinion, be
conceded, as a légal proposition, that the Clifïords, at the time of the
location of the Wandering Boy, might hâve taken up and located ail
the ground in dispute, situate south of the straight dark line drawn by
Mr. Brooks as the légal south line of the Valley View, but the court
must décide the case upon the facts. It matters not what might hâve
been donc. The question is, what was done ? And from the acts per-
formed by the parties the court must détermine the légal efïect thereof.
The weight of the testimony establishes the fact that the location of
the Valley View was prior to that of the Wandering Boy; that, at
the time of the location of the Wandering Boy, the locators thereof
recognized the prior right of the Valley View, and did not intend to
interfère therewith; that they intended that their northern or north-
western boundary should be on the southerly side line of the Valley
View. They knew where the stakes and monuments of the Valley
View at the southwest and southeast corners were, and they also
knew where the south side center monument was placed. They ran
their northerly or northwesterly end line over a portion of the Valley
View location for the purpose of making their location conform to
the laws of the United States, which they had the right to do (Del
Monte M. & M. Co. v. Last Chance, 171 U. S. 55, 83, 18 Sup. Ct. 895,
43 L. Ed. 72), and with the declared intention not to claim any portion
of the ground embraced in their location, which was north of the
south side line of the Valley View ground. When the owners of the
Butler group of mines concluded that they had better hâve their
claims surveyed, and boundaries made more certain and definite, the
locators of the Wandering Boy soon followed their example, employed
the same surveyor, and pointed ont to him their original temporary
monuments, and Unes of their location, and at the time of such survey
recognized the south side line of the Valley View mining claim as
then marked on the ground by the monuments and stakes at the
northeast corner, at the south side center and at the southeast corner
of the Valley View, as shown by the Gayhart survey.
On August I, 1901, the Cliffords conveyed by deed their right, title,
and interest in the Wandering Boy, as well as in the Lucky Jim and
Stone Cabin, to W. H. Dickson and A. C. Ellis, and on May 5, 1902,
Dickson and Ellis conveyed the same to the complainant herein. The
complainant, after it acquired this title, having discovered that the
original location of the Valley View covered more than 300 feet in a
southerly direction from the original point of the location on the east-
erly end line of the Valley View, marked on the diagram "V. V. Orig.
Disc. Mt.," conceived the idea that the Valley View could not claim
any more than 300 feet south of the discovery point, and for that rea-
son the locators of the Wandering Boy, having marked its lines over
the Valley View ground, could hold ail that portion marked in yellow
on the diagram, within its side and end lines south of the dark line on
the diagram, which marks a point on the southeast corner of the
Valley View 300 feet south of the discovery point on the easterly end
line of the Valley View, and claimed that the Clifïords, when they
recognized the south line of the Valley View, were not aware that the
408 125 FBDBBAft AEFORTEB.
east end lîne of the Valley View had beén dropped down, and tKere-
fore cotdd not be bound by the line thereof, as surveyed by Gayhart.
It is sought in this case, as in No. 734, lo hold thç Valley View to its
original notice, and to ignore its rights to change its boundaries with-
out interfering with the rights of others. The Clififords, prior to the
time of their disposing of their interest, fixed the northerly line of the
Wandering Boy on the southerly line of the Valley View after the
Valley View end line had been dropped ddwn by the Gayhart survey
on the Valley View, and must, in equity, be bound by it. It is always
compétent for the owners of adjoining mining claims to adopt the
line established by a prior survey as their boundary or division line,
and when such line is adopted and agreed to by unequivocal acts from
which an agreement may be clearly implied, whether it is the correct
one or not, they will be conclusively bound by it. Such agreement is
not within the statute of frauds. Cutler v. Callison, 72 111. 113, 115;
Bloomington v. Cemetery Ass'n, 126 111. 221, 226, 18 N. E. 298 ; Boyd
V. Graves, 4 Wheat. 513, 517, 4 L. Ed. 628; Hagey v. Detweiler, 35
Pa. 409, 412; Dudley v. Élkins, 39 N. H. 78, 84; Coleman v. Smith,
55 Tex. 254, 259; Levy v. Maddox, 81 Tex. 210, 16 S. W. 877;
Bailey v. Baker, 4 Tex. Civ. App. 395, 23 S. W. 454; Barnes v. Alli-
son, 166 Ho. 96, 104, 65 S. W. 781 ; 4 Am. & Eng. Ency. Law (2d
Ed.) p. 862, and authorities there cited. The grantees of the Clififords
could not, by any theory known to the law, acquire any further rights
than the Clifïords possessed at the time they conveyed their title.
My conclusion is that the évidence in this case, when carefully ex-
amined, considered, and weighed, establishes the fact that défendant
has the better right to the ground in controversy. i,et a decree be
entered in its favor, including costs.
TONOPAH & SALT LAKB MIN. CO. v. TONOPAH MIN. CO. OF NEVADA.
(Circuit Court, D. Nevada. August 3, 1903.)
No. 736.
1. Mining Claimb—Validi'tt of Locatwn— Ovbrlapping Claims.
The Sllver Top and Valley View mlDlng claims, owned by the défendant
hereln, cocstltute a portion of the Butler group of mines, for which de-
fendant has applled for a patent Thèse locations were made hy the
same person, and the Unes as made by the original locator overlapped
each other. The dlscovery shaft on the Sllver Top was within the Unes
of that location as made, and was also within the Unes of the Valley
View. The claims were located on the same day, the Valley View belng
flrst. The Overlapping Unes of the conflict between thèse claims were
afterwards agreed upon and adjusted by the respective locators and own-
ers thereof. The Valley View changed its northem Une, so as not to in-
dude the discovery shaft of the Sllver Top. The adjustment as made
did not change any of the boundaries of the Sllver Top in so far as the
portion of the ground In dispute In this action Is côncerned. Thèse
claims were among the- ploneer locations in Tonopah, and were located
prior to the Stone Cabin, owned by complalnant Helâ, that the Sllver
Top is a vaUd location, that the change in the overlapped Unes of the
Valley View affected only the rights of the owners of those claims, and
that the subséquent locator of other adjoining claims was not Injured
thereby, and Is not In a position to complaln or take advantage of ftujr
overlapping of the Unes between tlie Sllver Top and Valley View.
TONOPAH & SALT LAKE MIN. CO. V. TONOPAH MIN. CO. 409
9, SaME— DiSCOVERT OF MlNERAL OOTSIDE OP DiSCOVKRT ShAPT.
It also appears that other discoveries of a minerai Iode were made by
the locator of the Silver Top at difiEerent places within the Unes of that
claim, and outside of the ground covered by the Valley View location,
within the 90 days allowed hlm to perfect and complète his location,
before the Stone Cabln was located. The Stone Cabin cannot for thls
reason claim any priority over the Silver Top.
& BAMK — BODNDARIBS — MOVING OP CORNERS.
Where, as shown by a prépondérance of the évidence, the corner of a
mining claim was established and marked by a monument and stake when
the claim was located, and had never been moved by the owner, he or
his grantees are entitled to a patent to the boundary so marked, where
It can be ascertained, as against a subséquent locator of a conflicting
claim, who, with knowledge of the prior claim, made no attempt to
ascertain its Unes, although such corner may hâve been moved by others.
i. iJAME.
Under the facts and principles of law applicable to this case, held, that
défendant has established a better right to the ground in controversy.
Suit in Support of Adverse Claim to Mining Ground.
Dickson, Ellis & Ellis and Key Pittman, for complainant.
W. E. F. Deal, Kenneth M. Jackson, and Campbell, Metson &
Campbell, for défendant.
HAWLEY, District Judge. This is a suit brought in support of an
adverse claim made by complainant, as the owner of the Stone Cabin
claim, against the application for a patent made by the défendant to
Consolidated claim No. 2,012, embracing eight mining claims, for the
purpose of determining which of the parties has the better right to
the mining ground in controversy, and is one of the three suifs men-
tioned in case No. 734 (125 Fed. 389), to which the diagram embodied
therein applies, and to which référence is hère made. The portion of
the ground in controversy in this suit is marked in yellow upon the
northerly portion of the Stone Cabin mining claim, as delineated upon
the diagram.
It is alleged in the complaint —
"That the défendant above named, claiming to be the owner of an alleged
adjacent mining claim called the 'Silver Top,' on or about the lOth day of
January, 1902, wrongfully and unlawfuUy caused said alleged Silver Top
mining claim to be so surveyed as to cross upon and overlap the said Stone
Cabin mining claim and Iode, and include a portion thereof described as fol-
lows: 'Beginning at corner No. 1 of the said alleged Silver Top mining claim
as surveyed for patent, being minerai survey No. 2,012, from which the
section corner at the southeast corner of section 35, township 3 north, range
42 east, Mount Diablo Base and Meridian, bears south, 25° 17' east, 1,369
feet distant, and running thence on a true course north, 89° 55' west, 540.6
feet, along the southerly side Une of the said alleged Silver Top Iode, as sur-
veyed, to its intersection with the westerly end Une of the Stone Cabin Iode:
thence on a true course north, 3° 26' east, 208.1 feet, to corner No. 7 of the
said Stone Cabin Iode; thence on a true course south, 86° 32' east, 507.8 feet,
along the northerly side Une of the said Stone Cabin Iode to Its Intersection
With the easterly end Une of the said alleged Silver Top Iode as surveyed
(survey No. 2,012); thence south, 6° 49' east, on a true course, 179.1 feet, to
«orner No. 1 of the said alleged Silver Top Iode as surveyed, the place of
beginning; containing 2.317 acres.' "
The Stone Cabin claim was located by Edward Clifïord, Sr., on the
8th day of October, 1900, as the east extension of the Valley View
410 125 FEIDBRAL,,p.pPOETEE.
claim in the Butler group of mines. His certificate of location was
signecl and recdrded DeCember 22, 1900, and, among other things,
contains the fbllowing statement :
"The locator hereby furtlier certifies that he located and npw claims 1,500
linear feet along the course of the Telrior Iode extending from the point of
discovery and location, a monument upon the ground 1,500 feet in an easterly
direction, together with 300 feet on èach slde of the center of the ledge, Iode,
or vein, in a northeriy and southerly direction. That the gênerai course of
the veln Is east and west. The discovery eut is situated 10 feet east of the
discovery monument, and its dimensions are 15 feet in lèngth along the ledge,
cutting It 10 feet deep from the surface. 'The location and description of each
corner of the claim, with the marfcings thereon, are as follows, to wit."
And then a description is given by mates and bounds from monu-
ment to monument, which includes the yellow portion embraced
therein.
The Silver Top claim was located by J. L. Butler, for J. H. McCor-
mack, August 30, 1900. He had previously located the Burro and
the Désert Queen and the Valley View in the Butler group of mines,
and he believed there was some vacant ground lying between the
Burro and the Désert Queen, on the north, and the Valley View, on
the south ; and his object in locating the Silver Top was to include
such vac-ant ground, in order to prevent others from coming in and
locating the ground between the claims he had already located, and
also to include some vacant ground to the east. This accounts for
the overlapping of the lines of the Silver Top over a portion of the
Burro, Désert Queen, and Valley View, Mr. Butler, in his testimony,
stated (hat the Silver Top was the last claim located in the Butler
group of mines ; that there were several ledges on^ the claim ; that he
discovered mineral-bearing rock in several places ; that the croppings
that he located cropped out a few hundred feet — "a pretty solid ledge —
rather a low-gfade quartz"; that he found several stringers atjove
there "that we afterwards leased, and some ore was taken out."
He described the discovery work done upon the claim "in the shape
of a trench along one of the ledges," ten feet long, three or four feet
wide ; that he followed the. ledge several feet, and struck "some pretty
solid quartz" in place; that the location work was done within the
boundaries of the Silver Tqp location— "about the center of it, I
think." He testified to a conversation which he had with Edward
Clifïord, Jr., about Gctober 8, 1900, which was after he had located
the Silver Top. "I told him about the end of the Valley View I had
located, * * * on the brink of a wall, there was nothing showing
to the east, and to put his location just on there so it would stand side
of mine, and to claim east up: towards the low country there towards
the Middle Buttes, the valley, and he would probably get a whole
claim, not to swing in toward the big mountain as that ground was
claimed." That the big mountain he referred to was Mt. Oddie, to
the east and northwest. Upon cross-examination he Baid that the
Valley View was located a few hours before the Silver Top, but that
the Silver Top was monumented fîrst; that "the richest ore in ail
Tonopah" was taken out of the Silver Top claim ; that there was
a space of vacant land between the Valley View and Burro at the time
TONOPAH & SALT LAKE MIN. CO. V. TONOPAH MIN. 00. 411
he located the Silver Top of about "four to six hundred feet" ; that
at the time of this location, August 30, 1900, no boundaries had been
erected around any of the Butler group of mines.
On the 24th of November, McCormack signed and iiled for record
his location certificate of the Silver Top, which, among other things,
contains the following statement :
"This claim lies between the Valley View claim, on the south, and the
Burro and Désert Queen elaims, on the north. The locator hereby certifies
that he located as above and now daims 1,500 linear feet along the course
of the veln or Iode, extendlng from the point of discovery and location, a
monument upon the ground 1,250 (feet) in an easterly and 250 feet in a
westerly direction, together with 300 feet on each side of the center of the
ledge, Iode, or vein, in a northerly and southerly direction. That the gênerai
course of tbe vein is about east and west. The discovery eut is situated about
650 feet easterly from the location monument, on the ledge, and its dimensions
are 10 feet long, and about 3 feet deep, showing ore and quartz in place.
The location and description of each corner of the claim, with the markings
thereon, are as follows, to wit."
And then follows a spécifie statement, by metes and bounds between
monuments, of certain ground, which includes the yellow strip marked
on the Stone Cabin claim.
The dotted dark line on the diagram commencing at point i on
the southeast corner of the ground in yellow (claimed by the défend-
ant as the southeast corner of the Silver Top), and running westerly
to point 2 on the east end line of the Valley View, and continuing
westerly to point 3 (as the southwest corner of the Silver Top), marks
the southerly side line of the Silver Top as originally located.
The record in this case is voluminous. It contains 520 typewritten
pages. The witnesses in this case were called upon not only to testify
to the lines, boundaries, monuments, and pegs, when and where made,
built, posted, and driven upon the ground claimed by the Stone Cabin
and Silver Top, but once more to invade the territory traveled over in
the Valley View, Pyramid, and Wandering Boy locations in cases No.
734 (125 Fed. 389) and No. 735 (Id. 400). In the light of what was
said in the opinion in case No. 734 touching the admissions and proofs
as to locations, discovery, posting of notices, building of monuments,
performance of annual labor, etc., it would be an endless and useless
task to attempt to review ail the testimony of the witnesses. It would
only tend to bewilder, instead of explain, the real issues involved in the
présent contest.
The Gayhart survey, as stated in No. 734, included about 30 feet of
ground east of the original east end line of the Valley View. The ap-
plication for the patent adhères to the original line. It appears from
the testimony that at one time, when the Clififords had bonded the
Stone Cabin, there were conversations had with Butler in regard to
thesç lines, and the whole thing was settled by Butler (with the
consent of others interested with him) voluntarily withdrawing any
claim on the part of the Valley View to the ground east of the
original end line.
The conflict in this case arises upon somewhat différent grounds
from those presented in No. 734 and No. 735 ; but in this, as well as
the other cases, the Valley View original location, certificate of loca-
412 125 fbdbkal reporter.
tion, and the additional amended certificate of location, and Gayhart's
survey, with the lines and monuments marked under each upon the
ground, furnish the groundwork for the théories advanced by com-
plainant, and throughout the record, in ail of the three cases, will be
seen the footprints of an effort on the part of the complainant to con-
fine the Valley View to the limits of the lines and monuments em-
braced witliin the original location.
It will be noticed by looking at the diagram in No. 734 that the Sil-
ver Top discovery shaft was sunk at the point "S. T. Dis. Shaft,"
which is south of the original north Une of the Valley View, and north
of the red line designating the north Une of the Valley View, as drawn
down by the Gayhart survey.
I. The contention of the complainant herein is that it is the owner
of the entire area of the Stone Cabin claim embraced within its ex-
terior boundaries as marked on the diagram ; that the location of the
Stone Cabin is prior in time, as a matter of law, as against the Silver
Top location. Counsel for complainant, in his argument, said :
"The first contention and postulate we make Is that the Silver Top so-called
location never for an instant of tlmé was valld, that it always was invalid,
that It was vold ab initlo, and that no rlght immedlately thereafter or since,
by anythlng that bas transpired, could flow from It."
This broad statement is sought to be sustained upon the ground
that the proofs show that the Silver Top location notice and discovery
shaft were within the original boundaries of the Valley View, which
was located prior to the Silver Top ; and, even if it be conceded that
the monuments of the Silver Top were, as testified to by some of the
witnesses, erected prior to the monuments of the Valley View, the
Silver Top would not be entitled to any priority as against the Valley
View. Under thèse conditions, it is claimed that the owners of the
Silver Top could not initiaté any légal right to the ground by virtue
of their discovery, which was made, as shown by the testimony, with
in the boundary lines of the original location of the VaUey View ; that,
the owners not having acquired any légal rights by reason of the acts
done by them under the Silver Top location, the ground in conflict
was not and could not be appropriated by them, and was open, public,
minerai land, subject to location, at the time that Clifïord, Sr., made
the Stone Cabin location; and that, for the reasons stated, priority
attaches, in law, to the Stone Cabin as against the Silver Top. If
the premises as stated by complainant are correct, then the conclusions
drawn by counsel would certainly follow. But are the premises cor-
rect ? Was the Silver Top location void ?
The défendant is the owner of the Butler group of mines, consist-
ing of eight contiguous mining claims. Whatever rights the loca-
tors possessed at the time of the conveyance, the défendant is entitled
to. No more, no less. It stands in their shoes. It so happens, as is
often the case, that the lines of the claims at some places overlapped
each other. This was particularly so with the Silver Top and the
Valley View. The application for a patent, in so far as it relates
to the Silver Top, does not embrace any more ground than was in its
original location. The government is not concerned as to where the
TONOPAH & SALT LAKE MIN. CO. V. TONOPAH MIN. CO. 413
location monument, the discovery shaft, or boundaries were, unless
the application for a patent embraces more ground than the law al-
lows. The défendant, being the owner of both the Valley View and
the Silver Top, had the right to adjust the Hnes in its application for
a patent. It makes no différence to the government whether the Unes
of thèse two claims overlapped each other or not, provided the land
for which the application for a patent is made is ail within the
boundary lines of the two claims as located.
In deterniining the conflict between counsel as to the effect to be
given to the established facts, and of the application of the law in re-
gard theretc, we must keep in mind that the Valley View and Silver
Top were located prior to the location of the Stone Cabin. The lo-
cators of the Valley View and the Silver Top were the pioneers in
Tonopah. They were unhampered by any outsiders in running their
lines, and selecting the ground they deemed advisable to locate. One
man controlled the whole thing. He was the original discoverer.
He had the pick and choice of ail the locations constituting the Butler
group of mines. He was not called upon to look for notices, stàkes,
or monuments. He was, in thèse respects, unfettered. The ground
was ail vacant. Ail that he had to do was to sélect the ground
which he desired to locate, and those who came after him were called
on to respect his locations, not to disregard them. He was not mon-
arch of ail he surveyed. He was limited by the mining laws, national
and State. He could not include within a claim more ground than he
was entitled to, and he was compelled to complète and perfect his lo-
cations within the time designated by statute. His location, when
completed, was at his own péril. If he mistook the true course of the
Iode or vein, he and those purchasing from him would be bound by it.
But the fact of priority of location is one of great importance. It can-
not be ignored. If the acts he had performed or caused to be per-
formed were valid, subséquent locators were bound thereby, and could
not intrude upon the ground he had lawfully taken up. They were
called upon to notice what had been done by him, and others acting
with him, and the law required them to ascertain where the lines of
his location were, and they were held to a knowledge of his rights,
in so far as the time of marking his boundaries was concerned. If
his initial steps were valida the right to complète his location within
the time allowed by law could not be interfered with. If he had made
mistakes in running the lines, or committed any errors in the sinking
of his discovery shaft, or running cuts upon his ground to fînd the
minerai therein contained, he had 90 days after his location, by virtue
of the law of this state, to correct such mistakes or errors, and those
who came after him would be bound thereby. It does not lie in the
mouth of complainant to déclare that the Valley View was prior in
point of location to the Silver Top, and that the owner of the Valley
View had a perfect title to the ground where the discovery shaft was
sunk. The fact that the locator of the Silver Top sunk his discovery
shaft upon ground overlapped by the Valley View was a matter which
might hâve been taken advantage of by the locator of the Valley View
in any conflict that might hâve arisen as to the overlapping ground
between the two claims, and the respective claimants of each theretc.
414 125 FEDERAL REPORTER,
But this discovery shaft was, as a matter of fact, sunk upon the ground
as located by the Silver Top. The lines of the conflict between those
twO Glaîms were agreed upon and adjusted by the locators of those two
claims. The change in the overlapped Unes of the Valley View and
Silver Top affected only the rights of the owners of those claims. No
adjoining locator of other ground was affected thereby, or could com-
plain or take advantage thereof, because he was not injured thereby.
The adjustment as made between those claims did not change any of
the boundaries of the Silver Top in so far as the portion of the ground
marked in yellow is concerned.
In Little Pittsburgh C. M. Co. v. Amie M. Co. (C. C.) 17 Fed. 57,
the court, after stating the contention of counsel, said :
"Thls position appeàrs to be to the effect that one who owns a mining claim
must at ail events hold onto his discovery shaft untll he has obtained a patent
for his clalm. If he ylolds it to another In any way, by conveyance or other-
wise, he thereby abandons the rest of his claim. I do not see upon what
principle sUch a conclusion ean rest. After a claim has been properly lo-
cated, the owner of It may sell any part without préjudice to his right to
hold the remainder. He may dispose of it by glft or grant in any way that
seems proper to him. What was done in this Instance by the Winnemucca
parties and the Little Pittsburgh parties is not stated. Whether the Win-
neaxucca parties yielded voluntarily to the Little Pittsburgh people, or made
sale to them, or in what way they dlsposed of thelr interest, if they had any,
in this claim, Is not stated. But I do not think that oan be material. Any
concession that they may hâve made to the Little Pittsburgh pçople is to
them only, and is not available to apy other person. It has been decided,
it is true, in the Suprême Court of this state, and in this court also, that a
location may not be made by a discovery shaft upon another clàim which
has been previously located, and which is a valid locatioii, but that doctrine
has nothing to do with the point in controversy hère. For ail that appears,
the Winnemucca may hâve been the better location, and it may hâve been
sold by the Little Pittsburgh parties, or disposed of in some way. The mère
fact that a part of it was transferred to the Little Pittsburgh parties is not
enough to defeat the right of the locators to other portions which were not
sold, disposed of, or surrend ered."
2. There is an additiorial answer to the contention of complainant.
The testimony of Mr. Butler shows that rock in place, containing
minerai, was disçovered in diffèrent places within the limitS of the Sil-
ver Top location ; that there were several ledges on the claim, ail of
which were disçovered by him prior to the location of the Stone Cabin
daim. Conceding, as we hâve throughout this case, that the location
of a mining Claim based exclusively on a discovery of minerai within
the limits of another exiéting and valid location is void; that the loca-
tion as made by the locator, as was said by the court in Gwillim v.
Donnellan, liS'U. S. 45, 50, S Sup. Ct. iiio, 1112, 29 L,. Ed. 348 —
"Must be one which entitles him to possession against the United States, as
well as against another claimant. If it is not valid as against the one, it is
not as against the other. The location Is the plalntifC's tltle. If good, he
can recover. If bad, he must be defeated. A location on accOunt of the dis-
covery of ai yelji or Iode can only be made by a discoverer, or one who
claims under him. The disçovered Iode must lie within the limits of the
location which is made by reason of It. If the tltle to the discovery fails,
so must the location which rests upon it."
But this rule does not apply to a case like the présent. If the Valley
View had obtained a patent in accordance with the lines of its original
TONOPAH & SALT LAKE MIN. CO. V. TONOPAH MIN, 00. 415
location, including the discovery shaft on the Silver Top, the loss of
the discovery shaft would not vitiate the entire . Silver Top location,
because minerai was found and a discovery thereof made within the
undisputed limits of the location within the 90 days allowed the
locator thereof to perfect his location, and before the Stone Cabin
was located. Such a state of facts would not bring this case within
the rule announced in Gwillim v. Donnellan, supra, or of any of the
cases cited by complainant.
In Silver City G. & S. M. Co. v. Lowry, 19 Utah, 334, 57 Pac. n,
the court discussed this question at length, citing ail the cases, and
drawing the distinctions existing between them as to the facts. It was
there held that where the original discoverer of a vein upon which a
mining location is based is included within the surface boundaries
of a junior location, which goes to patent without protest from the
owners of the prior location, but before such patent a new discovery
has been made on the prior location, without the boundaries of the
junior location as patented, and within the surface boundaries of the
prior location as originally located, and development work is being
there prosecuted in good faith by the owners of the prior location,
their claim is valid and holds as to ail ground not included in the
patent of the junior location, notwithstanding the loss of the original
discovery. That case was appealed to the Suprême Court of the
United States, and there affîrmed upon another point, without passing
upon the question hère discussed. Lowry v. Silver City G. & S. M.
Co., 179 U. S. 196, 21 Sup. Ct. 104, 45 L. Ed. 151. The views ex-
pressed by the Suprême Court of Utah are in accord with the décisions
of the Land Department. Secretary Teller, in a letter to Commis-
sioner McFarland, April 11, 1882, said:
"Three questions présent themselves in connection with the facts recited:
(1) Did the waiver of the discovery shaft and the portion of the iode within
the Kangaroo survey, by failure to file an adverse claim, hâve the efCect to
vitiate the entire Metropolitan location, and bar an application for any part
of the same? * * * On the first point, I am of the opinion that the devel-
opment and possession of the Iode, so far as It runs upon public land. was
not interfered with in any manner by the waiver of a portion, even though
the original discovery shaft was included in the portion disposed of. The
continued possession and working of such outside portion under the original
ownership and location ought not to be held as forfeited while the good faith
of the owner toward the Dnited States is not impaired, and opportunity
should not be given to a stranger to appropriate under TJnited States laws the
property and improvements which he has acquired and made upon a good
and sufïicient location properly asserted at the time of his original discovery."
The yellow portion of the ground in the Stone Cabin was within the
lines of the Silver Top as originally located, and marked by stakes
and monuments, and the locator of the Stone Cabin must be confined
to and bound by those lines, unless there are other grounds which can
be found in the évidence which would entitle him to include the same
in his location.
3. The other contention on the part of the complainant is that the
boundary lines of the Silver Top hâve been so moved, or are so uncer-
tain, that it is impossible to establish the original corners of the Silver
Top. This contention is principally confined to the post and monu-
416 125 FEDERAL EBrOEIElt.
ment at the southeast corner of the Silver Top, viz., at the southeast
corner of the ground marked in yellow on the Stûne Cabin claim.
This contention involves the question whether the Silver Top claim
was so mbnumented and marked that the boundaries could be readily
traced.
At the trial there appeared to be much confusion in the testimony
in regard to the S. E. corner monument and stake. Mr. Edward
Clifford, upon his cross-examination, testified : That at the time he
monumented the Stone Cabin he knew that the Silver Top — one of
the Butler group of mines — ;had been located. That, in monumenting
the north line of the Stone Cabin, at the north side center he noticed
a stake of the Silver Top inside his Unes, and went to it and looked
at the marks thereon. "I think it stated the southeast corner of the
Silver Top." He understood "it was a stake or monument marking
the southeast corner of the Silver Top." That this stake was about
250 feet in a westerly direction — "a- littie bit south of west"; — from his
north side center, and about 30 feet south of the north line of the Stone
Cabin. In another portion of his testimony he stated that the south-
east corner of the Silver Top had been moved south from the point
where he first saw it, but he did not state that he saw it moved, or that
he knew by whom or when it was moved. The efïect of the testimony
of Edward Clifford, Sr., and of Edward Clifford, Jr., is, that they never
saw any stake or monument of the Silver Top at the southeast corner
of the ground marked in yellow.
Mr. Oddie, on behalf of défendant, testified that he saw the original
notice of the Silver Top on the ground ; that he saw the monuments
on the ground before the filing of the certifîcate of location ; that he
saw the southeast corner ; "that it was marked with a stake, two by
four. I rerîiember that monument marked 'Southeast Corner Silver
Top.' " Further, he said, "I built up that southeast corner monument
and marked the stake myself," some time prior to November 24, 1900.
His attention was called to Booker's survey, and he said:
"If this Is the correct southeast Corner of Mr. Booker's survey, 'S. E. C.,'
I should say that the old monument is in • • * about the same place It
is marked hère. • * * The monument • • * that I rebuUt is westerly
and a trifle southerly of the présent Booker monument," about 30 or 40 feet.
Butler testified that between the 8th and loth of October, 1900,
there was a slab about 5 feet high put in place to mark the southeast
corner of the Silver Top, and that a dirt monument was also built
there at that time by Mr. Oddie.
W. C. Gayhart testified that he made a survey of the Silver Top in
March, 1901 ; that he found a stake at the southeast corner marked
"S. E. Corner» Silver Top"; that at this point he had a monument
built four feet in diameter, three feet high, of earth and sage brush ;
that Mr. Butler showed him the corner where the stake was found.
Egan, the mining recorder, who carried the pegs, and Miles, who as-
sisted in building the monuments, corroborate the testimony of Mr.
Gayhart.
Several witnesses were called by complainant in rebuttal of the de-
fendant's witnesses, and testified with référence to the southeast cor-
lONOPAH <fc SALT LAKE MIN. CO. V. TONOPAH MIN. CO. 417
ner. Blood, who was on the ground in conflict in the month of
August, 1901, testified that he did not think there was any monument
at the point marked "Southeast Corner Silver Top." Replying to the
question whether he at that time saw any monument on the Stone
Cabin claim marked "Southeast Corner Silver Top," he said :
"I saw a monument about 150 feet to the north and east of where we
wanted to slnk a shaft on the Stone Cabln. Q. Were there any marks in that
monument? A. There was a peg, marked 'S. E. Corner Silver Top,' 150 feet
casterly and northerly of the point marked 'Dickson Shaft' " (on the diagram
in case No. 734).
Upon his cross-examination, upon being asked whether he was
positive there was not a monument at the southeast corner at the point
designated on the diagram, he answered: "I never saw one. I
didn't see one there."
Mr. Dewey testified that he was on the Stone Cabin ground in July,
1901, and saw a monument about 100 or 150 feet north of the Dickson
shaft, and that he did not think there was any monument at the point
marked on the diagram "S. E. Corner Silver Top." On cross-exam-
ination: "Q. You simply mean to say if there was a monument
there you didn't see it? A. That is what I mean to say."
Mr. Sullivan testified that he saw a monument at one time which
he judged was "from twenty-five to thirty feet inside of the Unes of the
Stone Cabin ground," marked "Southeast Corner Silver Top."
J. O'Toole was also called by complainant, and testified as follows :
"Q. Mr. O'Toole, I will ask you to state whether or not at the time you
Bunk what is designated upon this plat as the Dickson shaft there was a mon-
ument to the south and east of the Dickson shaft, now known as the southeast
corner of the Silver Top mining claim? A. There was a monument of some
kind over there. I don't know who it belonged to, or what it was. I under-
stood it was the center of the Stone Cabin. I don't know. Q. The point X
am referring to is the monument to the south and east of what is known
as the Dickson shaft. Was there a monument there or not? A. There cer-
tainly was."
He further testified that Mr. Booker was surveying the ground
there in October, 1901, and had three men with him; that there was
a monumçnt at that time about 200 feet northeast of the Dickson
shaft; and that "Booker's employés moved the monument in about
sixty or eighty feet south." He did not know "what monument it
was."
Mr. Bcoker was recalled by défendant:
"Q. I will ask you to state to the court whether or not, at any time when
you were surveying that ground for any purpose, you, or any person under
you, moved the southeast corner of the Silver Top to the south? A. No, sir.
Q. Did you ever move the southeast corner in any of your surveys anyway?
A. No."
Mr. Healy, the superintendent of complainant, on behalf of com-
plainant, testified that he had a conversation on or about the ist day
of June, 1902, at his office in Tonopah, with Mr. Miles.
"Q. I will ask you to state whether or not at that conversation Mr. Miles
stated to you that, at the time he assisted Mr. Gayhart in making the survey
of the Silver Top claim, that In assisting in that survey he moved the south-
125 F.— 27
ils 125 FEDEBAL REPOETPR.
east coraer ot the Silver Top mlning clalm southerly a distance of fif ty or
slxty feetî A, He did."
Mr. Miles, on behalf of défendant, în rebuttal, testified:
"Q. Dld ypii eyer at any tlme tell Mr. Healy, In hls ofiSce In the town of
Tonopah, that you had asslsted in moving the southeast corner ot the Silver
Top claim flfty pr sixty feet to the south? A, I did not."
Mr. Cliflfprd testified that Oddie admitted to him in Carson that he
had removed the stake at the southeast corner to the south. Mr.
Oddie was called on behalf of défendant, and testified that he heard
this testimony pf Mr. Clifïord.
"Q, Did you at any tlme since you haVe been in Carson, or ever, tell Mr.
Clifford, Sr., thafthe monuriient whlch we claim to be the southeast corner
of the Silver Top had been moved to thé south 7 A. I never told him any-
thing of the kind. Q. Did you ever tell him anything more than that whlch
you testified to on day befqre yesterdayî A. No, sir."
Comment upon this testimony is unnecessary. It explains itself.
The testimony ofïered by défendant is clear and positive as to the
monument at the southeast corner of the Silver Top. The testimony
of the complainant is négative. Its witnesses never saw it. There
is no satisfactory explanatîon about the "peg" seen by Clifïord and
others in a northeasterly direction from the Dickson shaft, marked
"S. E. Corner Silver Top." How it got there is apparently a
mystery. It is the only peg in ail of the cases that is not accounted
for or explained. There is nothing in the testimony showing that
the owners of the Silver Top ever put it there or removed it therefrom.
The burden of proving the moying of the corner stake of the Silver
Top is cast upon the coinplairiant, and it has failed to establish it
by any prépondérance of the testimony.
One thing in this case is made certain, and that is that the original
southerly liné of the Silver Top location included the ground in con-
flict in this case. There was never any change made in that line any-
where along the ground in dispute. The southeast corner of that
line was monumented ât the timè the Silver Top was located. The
patent asked for by défendant by reason of the Silver Top location
does not call for any ground that was not included within its original
lines. The southeast corner of the ground in yellow is 600 feet
southerly from the northeast dorner of the Silver Top location as
originally located. Under thèse undisputed facts, it is apparent that
the locators of the Silver Top could not be legally deprived of their
rights by any "juggling" of the post and monument, which was at the
southeast corner of that claim, by strangers. This question is referred
to in case No. 734, and is' disposed ofby the décision of this court in
Book V. Justice Min. Co:, 58 Fed. 106, 114. Moreovèr, Mr. Clifford,
when he located and monumented the Stone Cabin claim, paid no
attention to the stray peg marked "S. E. Corner Silver Top." He
included ground to the north of it, without making any inquiry of the
locators of the Silver Top claim in regard to it. He could readily
hâve ascertained where the claimed line was. He made no effort
to do so, although he kriéw, as before stated, that the Silver Top claim
had been located.
WELCH V. PHILADELPHIA & E, ET. CO. 419
In Eilers v. Boatman, 3 Utah, 159, 164, 2 Pac. 66, 69, a contention
was made upon similar grounds to the one under considération. In
discussing it, the court said :
"The proofs show that the plaintiffi, at the time he made his location of
the Virginia, was not, to say the least, a very anxious inquirer as to the
boundaries of the Nabob, for at that time he found the owners of the latter
daim at work in a shaft at or near their discovery point, and, without mak-
ing any inqulry as to the direction or estent of their claim, he complètes his
location, taking in and including the very ground upon which the défendants
were at the time actually working, and which is included in the conflict area.
It is sufflcient to give a right to the occupants of mining ground on the
government domain, which the courts will protect, to establi^h by évidence
its appropriation by means which are a substantial compliance with the law
upon that subject, and which, in view of the surrounding circumstances, will
give notice to those who hâve a right to know that the particular mining
ground is subject to the dominion and control of some private claimant.
* * * The same prépondérance of testimony shows that the boundaries
of the Nabob clalm, as surveyed for a patent, are substantially the same as
those described in the location, and marked on the ground at the time the
location was made. There was testimony showing a somewhat promiscuous
marking of trees with the word 'Nabob,' in varions directions, and entirely
off from the ground claimed and located by the défendants. The clear In-
ference to be drawn from ail the testimony is that this marking was done
by some party unknown to the défendants, • * * and would indicate an
attempt to confuse the boundaries of the Nabob daim. The flnding of the
court 'that the survey of the Nabob mining claim, as set forth in the answer,
is substantially in conformlty to the boundaries thereof as located,' la abund-
antly sustained in the évidence."
The proceedings in tliis case are in aid of the Land Department of
the government, to détermine whicli of the parties to this suit, as
against the United States, has the better right to the mining ground
in controversy. Tonopah Fraction M. Co. v. Douglass, 123 Fed. 936.
Under the facts in this case, as established by the weight of the évi-
dence, and the principles of law applicable thereto, this court is of
opinion that the défendant has established the better right to the area
in dispute. Let a decree be entered in its favor, with costs.
WELCH V. PHILADELPHIA & E. ET. CO.
SCHAUFFELE et al. y. SAME.
(District Court, E. D. Pennsylvanla. October 22, 1903.)
Nos. 37, 49.
L CoLMSiON — Tus WITH Tow AND Yacht — Yacht Dripting in River Channel.
The sloop yacht Venture, a pleasure craft 42 feet long, was making lier
way up the Delaware river at night with the flood tide, ha vin g a number
of persons on board. The wind was very llght, and finally failed when
the yacht was on the western slde of the river, and she then drifted
with the tide toward the center of the channel. She kept no proper
lookout, but the master and mate saw the tug International coming down
the river some half mile distant, with three heavily laden coal barges
In tow abreast. Nothing was done to control the yacht, which continued
to drift, until It was too late to avoid collision, and she was struck by
the barges and sunk. The tug saw the yacht when half a mile away
slightly to the starboard, whlle between them and to port was anoth<}r
tug coming up with a tow. The International kept her speed and ber
course in the center of the channel, which was at that point about 750
420 125 FBDEBAIi BBFOBTEB.
feet wlde. After passing the tug and tow she went to port, but did not
at once signal her tows to foUow, and when she did later they were
unable to clear the yacht, -whlch contlnued to drift toward them. Held,
that both vessels were in fault — the yacht for not anchoring when the
wlud failed, but permlttlng herself to drift, when not under control, into
the channel and the track of passing vessels, and for f allure to keep a
proper lookout; and the tug for not stopplng instead of trylng to pasa
between the two approachlng vessels wlth her tow 100 feet wide, the
danger being apparent, and also for not sooner changing the course of
her tow.
In Admiralty. Suit for collision and proceeding for limitation of
liability.
Chester N. Farr, Jr., Martin H. Stutzbach, and Frank J. Lloyd, for
Yacht Venture.
John G. Lamb, for steam tug International.
J. B. McPHERSON, District Judge. By one of thèse libels the
sloop yacht Venture seeks to recover damages for a colHsion by which
she was sunk and became a total loss. The other proceeding was
taken by the railway company, in order to limit its liability under tlie
act of Congress. I find the facts to be as follows:
In the afternoon of July 14, 1900, the sloop yacht Venture, a sma"
pleasure craft, 42 feet long and 13 feet beam, started from Camden with
a party of 18 persons on board, both men and women, for a sail upon
the Delaware river. They proceeded down the river, aided by the
ebb tide, to a point not far below Lincoln Park, landing at the park
about 7 o'clock, because of the failure of the wind, with the purpose
of waiting until a breeze should spring up, and also until the tide
should turn. They remained at the park until about half past 11
o'clock, and then, as the tide was at the fiood and a light breeze from
the Southwest was blowing, they started to return. The yacht was
of light draft, drawing no more than two or three feet of water, and
accordingly her master kept along the eastern shore of the river,
in order to be out of the way of larger vessels proceeding up or down
the river in the channel. Shortly after i o'clock the yacht reached
League Island, where the river bends to the eastward, and then ré-
sumes its northerly course, forming the Horseshoe Bend. Hère they
crossed the river to the western shore, and proceeded slowly along
that shore as far as the upper end of the Ironside bar or shoal. At
this point the set of the tide, by reason of the bend, is toward the
eastern, or New Jersey, shore; and hère* the very light breeze that
had been helping them in some degree left them entirely, and the
yacht merely drifted with the tide. Indeed, it had donc little else
than drift during their progress up the river, for the breeze had been
barely sufficient to give the boat steerage way. The crew consisted
of two men, the captain, and a mate. Both were in the stern of the
boat, aft of the sail, which was swung over the starboard quarter.
The captain was at the wheel, in such a position that he could not see
up the river except by stooping and looking under the boom, and
the mate was seated on the rail near the captain, in a little better situ-
ation, perhaps, to see approaching objects, but certainly not in the
right place for a lookout, under the circumstances. The night was
WELOH V. PHILADELPHIA & K. ET. CO. 421
clear and moonlight, and there was no difficulty in seeing the Hghts
of approaching vessels a long distance away. As the yacht drifted
toward the center of the channel, the captain and the mate saw the
Hghts of the tug International, coming down the river with a tow.
The tug is a powerful ocean-going vessel, 130 feet long, 26 feet beam,
drawing 16 feet, and of 400 tons registered tonnage. The tow con-
sisted of three large and heavy barges, loaded with coal, lashed to-
gether abreast, and attached by a bridle to a wire hawser about 60
fathoms long. The barges, from starboard to port, were the Her-
cules, 200 feet long and 27 feet beam, drawing 133^ feet of water,
and of 756 tons registered tonnage; the Girard, 186 feet long, 35 feet
beam, drawing 16 feet, and of 841 tons registered tonnage ; and the
Glendower, 193 feet long, 34 feet beam, 16 feet draught, 855 tons
registered tonnage. When the tug was seen by the yacht she was
probably half a mile away, and each was showing her green light to
the other. The yacht was headed somewhat toward the Pennsyl-
vania shore, with her boom out to starboard, and her sail set in order
to catch an occasional pufï from the south or west, but she was not
under control, for the wind was not strong enough, or constant
enough, to give her steerageway, and she was drifting with the tide
toward the center of the channel and the track of other vessels. No
effort was made on the part of the yacht to change this condition
of affairs until the two boats had come very near to each other.
There is some dispute concerning the distance that separated the tug
and the yacht when they passed each other, but it makes little différ-
ence whether the distance was 30 feet, as one witness says, or 100
feet, as it seemed to another witness. In either event, the situation
was plainly perilous, and the captain of the yacht, seeing that a colli-
sion was likely to occur with the tow, sent the mate forward with an
oar to attempt to move the yacht to port, and an ineffectuai effort
in that direction was made. It was of no avail, however, and in a
few moments the yacht came into collision with the barges and was
Eunk.
From the point of view of the tug the facts are thèse : The tug,
with its tow, was coming down the river in the center of the channel,
and as she approached the coal piers at Greenwich Point she saw
down the river the red light of a tug having a schooner in tow and
the green light of the yacht. At this time the International and the
yacht were at least a half mile distant from each other, the other tug
being probably not much more than a quarter of a mile away. The
situation was evidently dangerous. On the eastern side of the river
was the Greenwich Point anchorage, which was occupied that night
by a number of vessels at anchor, and the available surface of the
channel was thus reduced to a width of no more than 750 feet. More-
over, the yacht was then nearly in line with the tug, for the master
of the tug testifîed that when he first saw the yacht, after he had
straightened down on a new course, she was "just a little mite on
the starboard bow." The tug with the schooner in tow blew one
whistle, indicating that she would pass to starboard, and this signal
was returned by the International. At this time three possible
courses were open to the International. She could attempt to pass
422 125 FEDERAL BSPORTER.
ta the westward of the Venture, where perhaps there may hâve been
somewhat more room; but as this course required the tug to cross
the bows of the yacht, and would hâve also involved the risk oî colli-
sion, I think it was properly declined. Another course was to con-
tinue in the center of the channel, and attempt to pass between the
tug and tow and the yacht. The third course was to come to a stop
or proceed with the utnnost caution until the dangerous passage
should be safely accomplished. The master of the International
chose the second course, and, without changing his direction or slack-
ening speed, determined to pass between the two vessels. There is
some conflict in the testimony concerning his maneuvers immediately
before the collision took place, but I do not think the conflict is ma-
terial. The évidence seems to me to establish clearly; the fact that
after the schooner had passed the barges the course of the Interna-
tional was changed two or three points to port, in order to get as far
as possible out of the way of the yacht; but by this time the current
had carried the Venture so. far out into the channel that, while the
change was sufficient to carry the tug clear, it was not possible then
to pull the tow out of the way. This might, perhaps, hâve been done
if the course of the tow had also been altered at the time when the
change was made by the tug, but no signal to this effect was given
to the barges until an appréciable time after her own course was
altered, and there was therefore a distinct, and what may hâve been a
material, delay in this attempt at co-opération. The resuit was that
the unwieldy tow kept, its course without sensible change, the mast of
the yacht was caught by the bridle of the tow, and the yacht slipped
along the bridle until she struck the stem of the Hercules, and then
swung arpund into the space between the Hercules and the Girard,
where she was overturned and sank. Ail on board were rescued
except one woman, who was drowned, for whose death damages are
claimed by her parents, but the survivors ail suffered some loss of
property, for which also compensation is claimed in the présent pro-
ceeding.
Upon thèse facts it is clear to my mind that both vessels were at
fault. The Venture had no business to be in the channel, in the way
of large ships proceeding up or down the river, while she was drift-
ing helplessly with the tide and could not be directed. The wind
failed while she was still close to the Pennsylvania shore, and the
anchor should then hâve been dropped, unless the captain found it
possible so to direct the boat that she would not move further out.
He knew that the tide was carrying him out to the middle of the
stream, and if he could not steer the boat near the shore it was plain
négligence, as it seems to me, to allow' her to drift out to the middle
of the river, where a collision at any time might be inévitable. The
John S. Smith (D. C.) 27 Fed. 398 ; The Media (D. C.) 45 Fed. 79.
It was négligence also not to keep a proper lookout. Possibly an
earlier discovery of the approaching tug might not hâve availed, but
this is not certain, and unless it be clear that the absence of a proper
lookout did not contribute to the collision such absence is a fault.
The International also was négligent, in my opinion, in not stopping
at a safe distance: from the approaching vessels, or in not slowing
THE GENE3TA. 423
down and proceeding with the utmost caution. The Jesse W. Knight
V. The Wm. R. McCabe (D. C.) 45 Fed. 590; The Havana (D. C.)
54 Fed. 411 ; The Médusa (D. C.) 46 Fed. 303. The situation clearly
was one of great danger. Only a narrow lane was offered her for
passage, and she had behind her a tow more than a hundred feet
broad — enough to occupy nearly one-seventh of the whole breadth
of the available channel. Certainly, under such circumstances, to go
on without slackening speed was to take an unjustifiable risk, and I
hâve' no doubt at ail that this failure to act with the proper caution
contributed materially to the accident. She did slow down and stop
briefly after she came abreast of the yacht, but it was then too late.
It was a fault, aiso, not to signal the barges more promptly to change
their course to port. The master of the tug admitted delay in the
signal, excusing it on the ground that, "I did not think it was neces-
sary, and it is not customary unless there is imminent danger." To
my mind, the danger was imminent enough to require the promptest
action, and to omit to call for such help as the barges might be able
to aflford, little as it might be, was négligence.
I find, therefore, that both parties were at fault, with the resuit
that the damages must be divided. There is not enough testimony
in the record to enable me to détermine in every case how much dam-
age has been sufïered, and the inquiry upon this point must, there-
fore, go to a commissioner, who is directed to hear such further testi-
mony as may be offered, and to report a suitable decree.
THE GENESTA.
THE ADELINA OORVAJA:,
COLLIN V. KIERNAN et al.
In re KIERNAN et al.
(District Court, S. D. New York. October 13, 1903.)
1 Collision— Scow in Tow and Anchorbd Steamer— Failure of Tno fO
Maintain a Good Lookout.
A collision at night between a scow in tow on a hawser and a steam-
ship anchored within the anchorage grounds offi the quarantine station
in New York Harbor, lield to hâve been due solely to the fault of the
towing tug for her failure to keep a good lookout and to see and avoid
the steamer.
In Admiralty. Suits for collision, and pétition for limitation of
liability.
James J. Macklin, for the Goodwins.
Benjamin Patterson, for Augusta Collin.
Ullo & Ruebsamen, for the Corvajas.
Carpenter & Park, for the owners of the Genesta.
ADAMS, District Judge. The lîrst of the above actions was a
libel fîled to recover the damages caused to the owners of Scow W.
17, in tow of the tug Genesta, by a collision with the steamship Adelina
Corvaja, anchored ofï the Quarantine station, Staten Island. The
second of the actions was brought by the administratrix of Gustav
434 125 FEDERAL REPOETER,
CpUin, who was in charge of the scow, and lost bis life by the scow
béing overtarned in the collision. The third of the actions was
brought by the owners of the Genesta, to contest and limit their lia-
bility. ' - .
The scow, in tow of the Genesta, on a hawser of about 50 or 60
fathoms, left the foot of igth Street, North River, on the I4th of
March, 1902, about 12 :45 A. M., bound for the dumping grounds at
sea. The tide was ebb and the wind northerly. The tug's speed was
about 1 1 miles with the' tide. When ofif Quarantine the scow Came
in collision with the steiamship, then at anchor, resulting in the cap-
sizing of the scow and the drowning of Collin, who was on board as
master.
The libel of Goodwin allèges fault against the Genesta in that she
did.not keep a proper lookout and avoid the steamship; and against
the Corvaja for not maintaining a proper anchor watch, for being
at anchor outside of the anchorage limits and for not giving any
warning of her présence.
The libel of Collin allèges similar faults.
The pétition of the owners of the Genesta allèges fault against
the steamship: (i) in coniing to anchor in the channel, (2) in not
anchoring within anchorage grounds, (3) in not keeping a proper
anchor watch, (4) in not paying out chain to avoid the collision ; and
against the scow, (i) in fàîling to maintain an efficient lookout, (2) in
not cutting the hawser when the collision became imminent, (3) in
that she was not in charge of a compétent person, because the master
did not take efifective measures to prevent the collision.
A great many witnesses were examined in support of the alléga-
tions. Without now going into the testimony in détail, I hâve con-
cluded from an examihation of it, that the facts, in addition to those
expressed above, were briefly as follows:
When the tug and tow reached the vicinity of the steamship, and be-
fore she was discovered by those on the Genesta, a snow squall came
on, in which the tug proceeded at the same speed. While thus pro-
ceeding, the steamship was discovered ahead in close proximity.
The tug endeavored to avoid cpllision by starboarding her helm, the
efïect of which was to carry the tug to the eastward of the steamship
and leave the scow on the westward. They were both carried down
by the tide, the tug on the starboard side of the steamship and the
scow on the port side, having fîrst come in contact with the anchor
chain, with the efïect of overturning her. It is évident that the prin-
cipal causes of the accident were the failure of those on the tug to see
the steamship sooner than they did and avoid her.
It is not a case for an apportionment of the damages between the
tug and the steamship. I attach more importance to the testimony
of those who anchored the latter in the vicinity of other anchored
vessels and subsequently removed her to her wharf, than the judgment
of witnesses formed for the purposes of the case ; and I find, upon the
conflicting évidence, that the steamship was within the anchorage
limits. The facts that she did not maintain a vigilant anchor watch
and pay out chain are immaterial. The rudder could not be used
to any advantage, as the tug was on one side and the scow on the
THE PATEIA. 425
other. What space she could hâve gained by touching her com-
pressor and drifting astern would not probably hâve affected the re-
suit. The tide and wind were strong towards the steamship, and it can
not be assumed for the benefit of the delinquent tug that such action
would hâve been of any benefit. Moreover there was another an-
chbred vessel not far astern with which a collision would hâve occurred
if the anchor had started and the steamer had drifted about two
liundred feet.
Collin, the master of the scow, loSt his life in the accident. He wa^
a healthy unmarried man about 21 vears of âge. The damages, how-
ever, to his next of kin were not serious. They were not in any way
dépendent upon him though occasionally he aided them. His earn-
ing capacity was $9 per week, and I consider that the sum of $1,000
will be ample to cover their losses. The deceased was not in fault.
There is no dispute about the owners of the Genesta being entitled
to a limitation of liability and she has been appraised at $3,375, which,
with interest, is the extent of their liability.
L,et there be a decree entered limiting the liability of the owners of
the Genesta and providing for the recovery of $1,000 by Augusta
Collin, as administratrix ; also providing for an order of référence
to détermine the damages of the libellants Goodwin The libels
against the S. S. Corvaja and the Corvajas will be dismissed.
THE PATRIA.
(District Court, S. D. New York. October 15, 1903.)
1. Shipping— Damagb to Cargo— Burdbn of Pboop
Where the évidence shows that a carrier received goods on board te
good condition, and delivered them damaged, it has the burden of proof
to show that the damage was due to a risk excepted in the bill of lading
and. In the absence of satisfactory proof that such was the cause, h
must be held liable for the loss, although the cause of the damage does
not plainly appear.
In Admiralty. Action for damage to cargo.
R. Forsyth Little, Jr. (Frank H. Curry, of counsel), for libelant.
Benedict & Benedict, for claimants.
HOLT, District Judge. This action is brought to recover for dam-
ages to a lot of beans shipped by the libelant on the steamship Patria
from Marseilles to New York. The évidence satisfies me that the
beans were in good condition when shipped at Marseilles. When
they were landed at New York a large number of the bags were
stained, damp, and dirty, and the beans in a large part of the bags
were soft and covered with black specks, a condition which seriousiy
impaired their value. The libelant claims that the black specks were
coal dust ; that dampness had caused the soft condition of the beans ;
and that the ship was liable for exposing the beans to such coal dust
and dampness. The respondent claims that the beans were orig-
inally improperly cured; that they became heated, fermented, and
mouldy during the voyage ; that this heating and fermentation were
426 125 FB&EBÀi; ftaPORTEB.
the causes of the condition of the beàris which wére damaged; and
that the black specks seèn on theni-were particles of mould. I hâve
exàmined the évidence carefuUy, àiid I am unable to reach any satis-
factory conclusion as to what causèdithe damage to thè beans. There
is àlhiOsI n"o direct évidence on the question. There is no proof that
the beans were not prûperly cured. There is no proof that any coal
dust actually came in contact with them anywhere, ahhough it might
hâve blown over the cargo to some extent when the steamer was
coahng at Marseilles. There is no proof that anything occurred on
the voyage, or when the beans were being landed, or after they were
landed at the wharf in 'Brooklyn, which would cause the bags to be
stained, dampened, or soiled. They were properly stowed in the
hold, and an examination showed that the dampness was not caused
by sait water. The pier was covered, and apparently there was no
opportunity for the bags to become wet when being landed or at any
time. If the damage was due to heatîng, caused by improper cur-
ing, that does not seem to me to sufficiently explain the stained and
discolored external appearance of ; the bags. If the black speckfj
were coal dust which had been blown over the cargo, I do not see
how the coal dust could hâve become so widely dififused through the
interior of the bags. If the damage was caused by dampness, I do
not see how the bags could hâve beodilne wet during the voyage, and
if they became wet while discharging I do not see how the resulting
dampness could hâve so quickly caused so much injury to the beans.
The claims of both parties to the suit a.re based solely on inferences
which they argue should bé drawn frorrt the appearance of the beans
after they were dischârged from the 'steamer. AU that seems to me
clear on the proof is that the goods were shipped in good condition,
and were damaged when they reàched New York. Under thèse cir-
cumstances, I think that. the rule applies that when a common carrier
receives goods in good condition, and delivers them damaged, it has
the burdëri pf proof to show that the damage was caused by a risk
excepted in the bill of lading, and, in the absence of satisfactory
proof that the damage was so caused, the court is justified in finding
for the libelant, even if -the cause of the damage does not plainly
appear. Hudson River Lighterage Co.v. Wheeler, etc., Co. (D. C.)
93 Fed. 374 ; Pacific Coast S. S. Co. v. Bancroft-Whitney Co., 94 Fed.
180, 36 C. C. A. 13s ; Doherr v. Houston (D. C.) 123 Fed. 334.
My conclusion, therefore, is that therè should be a decree for the
libelant, with the usual référence to fîx the damage.
THE WALLAÇB B. FLINT.
TBH TBANSFBR NO. 9.
IDlstrict Court, S. D. New îork. October 9, 1903.)
1. O01.M8ION— Steameb and Cab Float in Tow— Crossing — Failurb to Stop.
A collision occurred at niglit in Hell Gâte between a steamer bound
from Èoston to New ïork and a car float on the side of a tug being
towed up the Bast river. The signais made by the steamer were not
heard by the tug, and the vessels were not seen by each other until they
THE WALLACE B. FLINT. 427
were only about 1,000 feet apart, although thelr lights were burning.
Seld, tb&t both were in fault for failing to keep a good lookout, that the
steamer was further in fault for failure to stop when danger of collision
was imminent, and the tug also for failing to stop in time when her sig-
nais to the steamer were unanswered.
In Admiralty. Suit for collision.
Wing, Putnam & Burlingham, for libellant.
Carpenter & Park, for The Wallace B. Flint.
Henry W. Taft, for The Transfer No. 9.
ADAMS, District Judge. This action was brought to recover the
damages caused by a collision which happened in Hell Gâte about 9:30
o'clock P. M. of the 2nd of January, 1902, between the Joy Line
Steamship Seaboard, bound from Boston to New York, and a car-
float in tow, on the port side, of the tug Wallace B. Flint, and bound
from Pier 50 East River to the Harlem River. The night was clear
and the tide ebb. Ail the proper lights of the vessels were set and
burning. The collision happened by the float striking the Seaboard
on the port side, abaft amidships, doing considérable damage to the
Seaboard.
The claim against the Transfer No. 9 was abandoned by the libel-
lant. It appeared that prior to the collision she was helping the Flint,
but just before it happened had cast ofï her lines. She had not par-
ticipated in any way in the collision navigation of the float, which at
the time was solely in charge of the Fhnt
The Seaboard blew a long whistle as she was rounding Hallets
Point, which was not heard on the Flint. A ferryboat, the Steinway,
crossing from Astoria to New York, came between the vessels and
they were not seen by each other until she drew away. The Steinway
crossed the bow of the Seaboard from port to starboard, after an ex-
change of a signal of two whistles. As she passed out of the way,
those on the Fhnt saw the Seaboard and blew a signal of two whistles
to her, to which the Seaboard did not reply. Then they blew another
signal of two, to which no attention was paid and the Flint then
stopped and reversed. Shortly afterwards the colHsion happened
while the Flint was still going ahead through the water.
The Seaboard claims that the Flint had her on her own starboard
hand and that the navigation was governed by the starboard hand rule,
but I can not agrée with this contention. The starboard hand situa-
tion was only temporary and the rule did not apply. The Seaboard
did not navigate in accordance with the rule but changed her course
to avoid the Steinway just before the Flint was seen, but not before
she should hâve been seen, and she was changing her course back
again when the Flint appeared. The navigation was governed by oth-
er considérations. There was obvions danger of collision and it was
the duty of the Seaboard to stop and reverse, which she did not do at
ail, claiming that it was not safe for her to do so in the tide. This con-
tention does not recommend itself to my judgment. A steam vessel
under command can nearly always stop temporarily without danger,
and there was nothing in the Seaboard's situation to make it peculiar.
She claims that she blew three signais of one blast each, to which the
428 125 FEDBEAL EBPOETEK.
Flint did not reply at ail. The Plint dénies thèse signais. ' Her testî-
mony is rather stronger than the Seaboard's upon the point and it has
thë support of thp pilot of the Steinway, who was a disinterested wit-
ness. It is probable that the pilot of the Seaboard thought he could
get across the Flint's bow but the attempt was a failure. I regard the
Seaboard's faults as condemnatory of her navigation.
The Flint was also in fault. The Seaboard was not seen by her as
soon as she should hâve been, probably not till they were within i,ooo
feet of each other, and continuing her two whistle course and speed
after she got no response to her first signal, when the vessels were in
such close proximity, with the Seaboard continuing her attempt to
pass ahead, was grossly imprudent and almost sure to bring about a
collision. The combined speed of the vessels was at least i8 knots and
there was no time for experiments when they were within about a half
a minute of each other.
Libel dismissed as tq the Transfer No. 9. Decree for half damages
against the Flint, with an order of référence.
MBYBR et al. v. PENNSYL VANIA R. CO.
(District Court, S. D. New York. October 20, 1903.)
I. WhARVES— iNJtJRT OP BOAT FROM StOKM— INEVITABLE ACCIDENT.
The injury of a barge whlle moored to a pier durlng a gale of unusual
severity, whichi caused Injury to many other vessels at the same place,
held to hâve been due to inévitable accident, for whlch the owner of the
wharf was not responslble.
In Admiralty.
Martin A. Ryan, for libellants,
Robinson, Biddle & Ward, for respondent.
ADAMS, District Judge. This action was brought to recover the
damages, amounting to $112.64, sufifered by the libellants, through
their barge, the John H. Meyer, Jr., being mjured at South Amboy,
on the 23rdi*and 24th of November, 1901. The boat first lay at the
respondent's wharf, knôwn as the Old SteambOat Pier, and the libel-
lants allège neghgence on the respondent's part in causing her to be
moved by the tug Winnie, to the New Steamboat Pier, which it is
alleged was an unsafe and dangerous berth, and placed on the outside
of a number of boats there.
The respondent dénies the moving by it and it appears that the
Winnie was not at South Amboy at the time. The respondent allèges
that the mooring wharf was ordinarily safe and that the injured boat,
with a number of others, while lying there, was damaged by stress of
weather and by reason of an extraordinary storm.
It is shown by the évidence that the storm was a north east gale,
of quite unusual severity, which was attended by rain and a very high
tide. The effect upon the boats at South Amboy was disastrous gen-
erally and many suffered much more seriously than the libellants' boat.
The defençe of inévitable accident is clearly established and affords a
complète exonération of the respondent, especially as the évidence
THE MOONLIGHT. 429
shows that this was the only case of such an accident happening in a
period of about ten years, during which the wharf in question had been
constantly used as a mooring place.
Libel dismissed.
THE MOONLIGHT.
(District Court, S. D. New York. October 16, 1903.)
1. BEAMBN— FORFEITIJRK OP WaGES BY DESERTION— ReV. St. § 4516.
Where a seaman employed by a master during a voyage to take the
place of one dlscharged by reason of illness, altliougli not of the same
grade as the one whose place he took, as required by Eev. St. § 4516, as
amended by Act Dec. 21, 1898, c. 28, 30 Stat. 755 [U. S. Comp. St. 1901,
p. 3071], was able to perform the work to the satisfaction of the master,
and no complalnt was made by the other seamen, the latter were not
justified, by reason of such employment, in leaving the ship at an Inter-
mediate port, and by thelr désertion forfeited their right to recover
wages.
In Admiralty. Suit by seamen to recover wages.
George C. Bodine, for libellants.
Alexander & Ash, for claimant.
ADAMS, District Judge. This action was brought to recover the
wages alleged to be due two seamen, amounting to $43.09. The de-
fence is désertion.
It appears that thèse men shipped at New York on the 4th of De-
cember, 1902, for a voyage to Norfolk and return to an eastern port
of discharge, at the rate of $25 per month, in company with another
seaman. The latter became ill when the vessel reached Norfolk
and was discharged there for that reason. Another man was shipped
in Norfolk, who turned out to be a non-union man. The vessel
sailed from Norfolk for Boston, after the libellants knew about the
new man, but put into New York to make some repairs and the libel-
lants left her there, alleging that the substituted man was not an able
seaman. The testimony indicates, however, that the real reason of
their objection to the new man was that he did not belong to the
Seamen's Union. The advocate for the libellants does not attempt
to support the libel upon such ground but claims that they are en-
titled to recover because of section 4516, Rev. St. U. S., as amended
by Act Dec. 21, 1898, c. 28, 30 Stat. 755 [U. S. Comp. St. 1901, p.
3071], which provides:
"Sec. 4516. In case of désertion or casualty resulting in the loss of one or
more seamen, the master must ship, if obtainable, a number equal to the
number of those whose services he bas been deprlved of by désertion or
casualty, who must be of the same grade or rating and equally expert with
those whose place or position they reflll, and report the same to tlie United
States consul at the first port at which he shall arrive, without incurring
the penalty prescribed by the two preceding sections."
A good deal of the difïiculty which would arise from the words
of the statute, is overcome by the fact that the new man, though not
of the same grade as the others, as he was an ordinary seaman and
430 125 FBDBBAIi BEPORTBB.
received but $20 per month, was able to work acceptably to the mas-
ter and without complaints from the libellants, until they were put
forward to meet the defence in this action.
I must hold, under the circumstances, that the libellants were not
justified in leaving the vessel and that the defence of désertion should
be sustained.
Libel dismissed.
THB HAERY B. HOLLINS. THE TIP TOP. THE ANNIE L.
(District Court, E. D. Nçw York. October 2, 1903.)
1, Whabvks— Mannbr of Use— Extbnsion Bbtond Limits Fixbd bt Law.
Where the bulkhead Une of a dock Is where it has been maintained for
years, and since a tliïie before there was any statute on the subject, per-
sons using the bulkhead for moOrlng vessels in the customary manner,
wlth the consent of the dty, cannot be deemed in fault theref or, although
it extends farther into the river than the line as established by law.
2, Same— Use of Slip by Feheyboat.
A ferryboat leasing a slip has no right to appropriate the waters abut-
ting the bulkhead below suoh slip to the estent of shutting out the use
of such bulkheads in the customary manner for the naooring of vessels.
8. Collision— VassEL at Wharf— Ferryboat Entering Slip.
A ferryboat held in fault for collision with a scow which was moored
outside of another vessel at a bulkhead adjoining the ferryboat's slip,
on the ground that she falled to exercise due care in entering the slip.
In Admiralty. Suits for collision.
Louis B. Adams, for Hastorf.
Wilcox & Green and Herbert Gfeen, for Brooklyn Ferry Co. and
ferryboat Hollins.
John F. Folèy, for scow Tip Top, tug Annie L., and Murray &
Reid.
THOMAS, District Judge. At about 9 a. m. the tug Annie L.
placed the sand scow Tip Top outside of dumper No. iR, at the
bulkhead between Forty and Forty-First streets, Manhattan. The
scow California lay ahead of No. iR. Ail of the scows were there
by permission of the lessee of the dock, and No. iR was suitably
close to the bulkhead, carefully moored. Ericsen, who, for Brown
& Fleming, had charge of the dumper and bulkhead, states that he
helped to moor No. iR, and showed the very careful and thorough
manner of doing it. His évidence, supported by that of other wit-
nesses connected with the moored vessels, is preferred to the évi-
dence of the witnesses for the ferryboat, that No. iR was hanging
ofï from 10 to 15 feet from the bulkhead; Such witnesses were
wrong with référence to the location of the vessels, as they placed
the California in an incorrect position. This mistake of the ferry
company's witnesses may not be of great conséquence, but is some
évidence of lack of careful obsÈrvation of the conditions. More-
over, the tide, which was abOut half flood, set on to the dock, and
would tend to keep the boats up, rather than to allow them to hang
ofï The Tip Top and No. iR occupied about 60 feet in width,
THE HAEET B. HOLLINS. 431
while the California, ahead of them, was about 120 feet in length,
and occupied the remaining dock space above the vessels men-
tioned. Counsel for the ferryboat gives a very good description of
the ferry slip, as foUows:
"The structure does not extend directly out into the river, wlth its sldes
nearly or quite at right angles wlth the bulkhead, but the Inner slde of the
slip is almost parallel wlth the actual bulkhead, the rack of that side belng
39.06 feet out from the bulkhead. The exterior Une of the outer rack is 150
feet from the bulkhead and pierhead Une as established by law. The further
side of the Inner rack is 39.08 feet. The mouth of the slip is about 85 feet
wide, and the slip narrows towards the bridge. Because of this plan of con-
struction, the ferryboats, when approaching the slip from their Brooklyn
terminus at Broadway, are obligea to proceed Inshore on a course about par-
allel with the bulkhead. This character of slip was necessitated by the fact
that the ferry company was permltted to build out into the river not more
than 150 feet from the established bulkhead and pierhead Une, and that
would hâve been insufflcient for the usual type of slip. 'The boat was 200
feet long, and the bridge is about 70, and the backing for the bridge or plat-
form, adding 10 feet, made 280 feet.' "
In making her slip on the flood tide, the Hollins struck the Tip
Top, carrying her away from her mooring to No. iR, and against
the California, and the injuries to the Tip Top, California, and Hol-
lins are involved in the above actions. The évidence of the cap-
tain of the Hollins is that, on the tide then running half flood, he
could not enter his slip without striking the Tip Top, although the
Tip Top had been in the same position for several hours, and the
ferryboats of the same line had been passing her every 15 minutes,
one of them but 15 minutes before the accident, which occurred
about 12:15.
It is urged on the part of the Hollins that the actual bulkhead
line extends somewhat farther into the river than the lawful bulk-
head line, and that therefore the vessels had no right to lie at such
point. The actual bulkhead line is the line shown on the maps of
the city, and has been in existence for many years, and was there
prior to the passage of the statute invoked by the ferry company
to condemn it. It was the de facto Une, and without it the bulkhead
could not be used at ail. Persons innocently using the bulkhead
with the assent of the city should not be deemed in the wrong. But
in any case the use of the line was not a cause contributing to the
accident. The présence of the bulkhead line there was one of the
conditions that attended the accident, but did not cause it. The
cause was the lack of proper calculation, whereby the captain al-
lowed his boat to go too far to port, with the resuit mentioned.
The accident happened in the daytime, with a very light wind, and
with no condition that was unusually dangerous al; that place, al-
though it did require considérable skill to take the vessel into the
-slip, on account of the proximity of the slip to the docks, and its
peculiar relation thereto. But other vessels did it that morning,
and continued to do it, and no good reason appears for the Hol-
lins failing to do it at the time of the accident. It is considered that
a ferryboat leasing a slip has no right to appropriate the waters
abutting the bulkheads below such slip, to the extent of shutting
out the use of such bulkhead in the customary manner, and it had
432 125 FEDBEAL EBPOBTEB.
quite ôften happened that one boat laid outside of another against
such bulkhead. In fact, that is a common method of employing
similar mooring places in the harbor.
It results from the foregoing views that the libelants Murray
& Reid will hâve a decree against the ferryboat HoUins; that the
libel filed by the Brooklyn Ferry Company against the scow Tip Top
and steam tug Annie L. is dismissed; that the libelant Hastorf will
hâve a decree against the Hollins:, but that the libel is dismissed
as to the sçojv Tip Top and the steam tug Annie L. No costs will
be allowed thé Tip Top or the Annie L. in the Hastorf action.
BUENS V. BURNS.
(District Court, S. D. New York. October 15, 1903.)
1. Shipping—Demdrragk— Evidence of Contract.
An agreement shown to hâve been made between a shipper and ves-
sel owner as to the rate of demurrage héld not to hâve been changed
by the delivery of a blll of ladlng on a form stipulatlng for a différent
rate, wMch was used by mistake, and wlthout intention to change the
prlor agreement.
In Admiralty. Suit for freight and demurrage.
Martin A. Ryan, for libellant.
Frederick W. Park, for respondent.
ADAMS, District Judge. This is an action which was brought to
recover certain unpaid freight and 21 days' demurrage on a cargo of
307 tons of coal delivered by the libellant on his boat Annie Burns at
the foot of 38th Street, North River, in December, 1902. It is not
disputed that the freight, amounting to $99.54, is due. The libellant
also claims 40c. per ton on the coal, in conformity with a bill of
lading, which is produced. The respondent admits that there is
freight and demurrage due to the extent of $223.32 and that amount
has been paid into court.
The controversy arises between the libellant's claim of demurrage
at the rate of 6c. per ton, which is mentioned in the bill of lading,
and the rate of $6 per day for the boat, which the respondent says
was agreed upon as the rate which was to be paid.
I do not regard the bill of lading as évidence of the contract with
respect to demurrage, under the circumstances developed by the
testimony. It appears that this form of bill of lading is the one used
for eastern shipments and that it was delivered to the libellant by
mistake and without intention of changing the agreement of $6 per
day, which I find wâs made when the rate of freight was agreed upon.
The libelant is entitled to recover the money in court with costs.
up to the time of the tender, including a docket fee, less the re-
spondent's costs, since the tender. Decree accordingly.
îl. Demurrage, see notes to Kandall v. Sprague, 21 C. C. A. 337; Hager-
man v. Norton, 46 C. C. A. 4.
STKE8 V. KOBBIN8. 433
SYKES V. E0BBIN8.
(Circuit Court of Appeals, Eighth Circuit September 7, 1903.)
No. 1,912.
1. Vendob and Porchabeb — Construction of Contract— Refusal of Vendob
TO Perform.
Complainant contracted to sell to défendant a large quantity of land, the
contract containlng the following provision: "If any title to any part of
said real estate shall prove defectlve, and cannot be perfected within one
year, and render the same unmarketable, so that the vendee cannot accept
the same, then said parcel shall be withdrawn from this sale. * • •"
JSelâ', th&t such provision bound complainant to use, in good faith, such
efforts as were reasonable to perfect his title to ail the lands within the
year; and that concedlng that, in case such efforts failed as to any of the
lands, he had the rlght to withdraw them from the contract, he could jiot
avail hlmself of his inability to make title at the end of the year to avold
the contract, where such inability resulted solely from his own action in
Instltutlng a suit to set aside prlor tax sales of the lands, instead of re-
deeming from the same, when, in the nature of things, such suit could not
be finally determined within the year; and especially where, subséquent
to the making of the contract, he obtained advances from défendant
thereon for the purpose of clearing the land of Incumbrances, and de-
fendant had agreed, if necessary, to extend the time for perfectlng the
title, apparently upon an agreement or understanding between the parties
that the incumbrance of taxes should be removed by suit.
Appeal from the Circuit Court of the United States for the District
of North Dakota.
Seth Newman (Burleigh F. Spalding and Winfield S. Stambaugh,
on the brief), for appellant.
John S. Watson (W. F. Bail and D. G. Maclay, on the brief), for
appellee.
Before SANBORN and VAN DEVANTER, Circuit Judges, and
SHIRAS, District Judge.
SHIRAS, District Judge. Under date of April i, 1901, the appel-
lant, Richard Sykes, entered into a contract with the appellee, Daniel
M. Robbins, whereby he agreed to sell and convey to the latter certain
lands in the county of Stutsman, N. D., containing 20,720 acres, at
the price of $2.75 per acre, of which the sum of $2,000 was to be paid
in cash upon the exécution of the contract, and the further sum re-
quired to make a cash payment of $1 per acre to be paid as soon as a
good marketable title in fee simple, free of incumbrances, was shown
in the vendor, when deed was to be delivered to the purchaser, by
whom a mortgage was to be given to secure the payment in fîve years
of the balance of the purchase price, with interest at 5 per cent, per
annum ; it being further provided that "if any title to any part of said
real estate shall prove defective, and cannot be perfected within one
year, and render the same unmarketable, so that the vendee cannot ac-
cept the same, then said parcel shall be withdrawn from this sale, and
the only damages to vendees under this contract shall be the return
to them of ail moneys paid on such parcel, together with interest tkere-
on of 5 per cent, per annum. * * *"
125 F.— 28
484 125 FEDBEAL liEPOETElt.
When this contract was entered into the title to none of the lands
described therein was cleaf and îpètfect on the record in the appellant,
the First National Bank of Eargo; holding the title to 4,224 acres as
security, 1,600 acres being heldby third parties by title absolute, and
of the remainder the record titlë was in the appellant, F. L. Pirie, and
the estate of Findlay Dunn, deceased, and ail the lands, except the
4,224 acres. held as security by the First National, Bank, had been sold
for taxes.
Without going into the détails, ît may be said that such steps were
taken that the title to the land'held by the bank was conveyed to the
purchaser, the interest held by Pirie and the estate of Findlay Dunn
was procured by the appellant, aijd with the exception of 1,600 acres,
the title to which could not be procured, the land was cleared of ail
adverse claims except that created by the levy of taxes thereon and
the sale foUowing the failure to pay the same. With respect to thèse
taxes the appellant refused to clear the land by the payment thereof,
but, claiming that the same were not valid liens on the realty, he
brought suits ât the December term, .1901, of the district court of
Stutsman county, N. D., against W. H. Beck and — ^^ Allen, the
owners of the tax sale certificàtes^ and Stutsman county, asking that
the levy of the taxes and the sales based thereon be declared null and
void, and on the 5th of March, 1902, that court handed down an opin-
ion to the efifect that the levy of taxes and the sales based thereon were
void. From the judgments and decrees following this opinion an ap-
peal was taken in due season to the Suprême Court of North Dakota,
which had not been dîsposed of when the présent suit was begun, nor
at the date of the trial in the court below.
Under the date of March 31, 1902, the appellant àddressed a letter
to the appellee, in which he states :
"Judge GlaspeU's Judgment In 'the suits brought by me In the district court,
Stutsman Co., N. D., against Mess. Allen & Beck, is in my favor, and cancels
& annuls ail taxes for 1897 to 1900. * ♦ * I am unàble, however, to offer
you a marketable title to thèse lands, because the défendants hâve the right
to appeal within 12 months from 13th March, 1902, belrig the date of record
pf the judgmepts. It appears to mç, however, that the title Is now such that
you might accept it, and I should be pleased to hear frqm you whether or
not you can do sb at the présent timè"
At a Personal interview between the parties, on the 5th of April,
the appellant urged the appellee to àccept the title as it then stood,
claiming that' the tax question was virtually closed by the judgment
of the district court of Stutsman county; but thé appellee declined
to close the deal, by paying for thé land, until the tax matter was put
at rest eithèr by the failure to appeal the case or by a disposition of
the case on appeal.
On the 5th day of April, 1902, the appellant wrote as îollows to the
appellee:
"Dear Sir: Referrlng to our Interview today, at which you again refused
to accept the title to the following laiids, I hereby withdraw thèm from the
sale of Ist April, 1901: [Hère, follows description of lands.] As the agrée-
raient above rçferred to bas been recorded, I enclose quitclaim deed, which
I hope yoTlwlh exécute and for-çyard to me at Waldorf Hôtel, Fargo, N. D.
I enclose one dollar to cover the expense of the deed."
STKES V. EOBBINS. 435
To this letter the appellee, under date of April 7, 1902, sent the fol-
lowing reply:
"Dear Sir: I am In receipt of your letter of the 5th enclosing $1 and asking
me to sign a quitclaim deed on certain lands. I return tlie dollar, as I am
unwilling to sign the deed, as I expect to talce the lands when you can perfect
the title to them. When you advised me that you could not perfect the title
as soon as expected, I agreed to extend the time so that you should hâve
ample time and opportunity to perfect the same. In regard to the tax title,
you had abundant time in which to redeem the lands, and were furnished
money, which it was understood was to be used in perfecting the title to the
same. You certainly can hâve no moral or légal right to take advantage of
your own lâches in failing to redeem from the tax sale when you had
abundant time and opportunity to do so. I trust you will get the matter
straightened eut as soon as possible, as I am désirons of closing the matter
up in accordance with the contract."
Upon the receipt of this letter the appellant at once brought suit in
equity in the district court of Cass county to quiet the title to the land
included in the tax sales, and to remove the cloud upon the title there-
to created by the contract of sale of April i, 1901, which had been
duly recorded in Stutsman county, and in the bill filed, after setting
forth the contract of sale, it is averred by the appellant :
"That, during the year provided in said contract for perfecting the title
to any of said tracts of land, the plaintiff perfected the title to the following
tracts, and caused the same to be conveyed to the défendant under and pur-
suant to the tenus of said contract, to wit, ail * * * [hère follows the
description of the 4224 acres formerly held by the Fargo Bank]. That the
title to the remainder of said land not so as aforesaid conveyed to the défend-
ant was imperfect, in this, to wit, that it was clouded by certain tax sales and
tax eertificates issued by the auditor of said Stutsman county thereunder,
which said sales and tax eertificates were void, and this plaintiff, as soon
as practlcable after he had ascertained that there existed clouds upon the
title to said land, caused actions to be commenced in the district court of
the State of North Dakota, in and for the county of Stutsman, to vacate and
set aside ail such tax sales and tax eertificates, and prosecuted said actions
to judgment with diligence, and such proceedings were therein had that on
the lOth day of March, 19<K, judgments were given and rendered In said ac-
tions, vacating and setting aside the said taxes, tax sales, and tax eertificates
upon said lands which were so as aforesaid clouds upon the title of this
plaintifiC, and on or about said date notice of entry of said judgment were
served upon the défendants in said actions, and the time for appeal from
such judgments will expire on or about the lOth day of March, 1903."
— ^The prayer being that the contract of sale, so far as it afifected the
lands not conveyed to the défendant, be declared to be of no effect,
and that the cloud created by the contract be removed, and the title
be quieted in complainant.
Upon the application of the défendant, who was a citizen of the
State of Minnesota, the suit was removed into the United States Cir-
cuit Court for the district of North Dakota, and the défendant filed
an a«swer and also a cross-bill, wherein he prayed a decree for the
spécifie performance of the contract of sale on part of the vendor.
In the answer and cross-bill the défendant set forth at lengtb the-
contract of sale, averring that under its terms it was the duty of the
complainant to pay up the taxes assessed upon the land, or to other-
wise protect the title thereto against the said taxes, and the sales
based thereon, and further showing that after the rendition of the
judgments in the district court of Stutsman county holding the tax
436 125 FEDERAL REPOETEB.
sales and certificates to be void, and in view of the doubt and uncer-
tainty that existed touching the final outcome of the question involved,
he caused a purchase to be made, in the name of John Wyman, of the
tax certificates, such purchase being made to protect his interest in
said lands, and not with any purpose to interfère with or burden the
title of the complainant, he being willing that the benefit of such pur-
chase should be availed of by complainant, in case it should be finally
determined that the land was subject to the taxes in question; it being
further ayerred that on or about June 14, 1901, by agreement with the
complainant, the défendant, in addition to the $2,000 paid upon the
exécution of the contract of sale, advanced to the complainant the
further sum of $8,500 to be used by the complainant in clearing off
the incumbrance on the lands contracted to be sold. It is also averred
in the cross-bill that on the pth of July, 1902, the défendant tendered
to the complainant the sum of $10,397.42 in cash, and his promissory
notes for the further sum of $36,260, with a mortgage securing the
sum upon the lands included in the contract of sale, and demanded
from the said complainant the exécution and delivery to the défendant
of a proper deed of conveyance of the lands in dispute, which tender
and demand was refused by complainant, and this tender is repeated
in the cross-bill, the cash, notes, and mortgage being brought into
court to secure the fulfillment thereof.
The évidence being taken, the circuit court decided the case on
the merits, qrdering a decree dismissing complainant's bill, and grant-
ing a decree upon the cross-bill, holding that the défendant was
entitled to Spécifie performances of the contract of sale, except as to
1,600 acres, the title to which was not in complainant; and the decree
further provides for the rétention of $5,500 from the cash payment
to be made by the défendant awàiting the action of the Suprême
Court of North Dakota, upon the suits involving the validity of the
taxes, and also directs the steps to be taken by défendant in cairrying
outthe obligation resting on him as purchaser under the contract of
sale.
The errors assigned by the appellant, who was the complainant
below, are, in brief, that the court erred in dismissing the bill, thereby
refusing to quiet the title of the realty in complainant, and in grant-
ing a decree for spécifie performance upon the cross-bill.
It is admitted in the brief of counsèl that the case is to be de-
termined by the construction to be given to the clause of the contract
of sale which provides that "if any title to any part of said real estate
shall prove defective, and càfinot be perfected within one year, and
render the same unmarketable, so that the vendee cannot accept the
same, then said parcel shall be withdrawn from this sale. * * *"
The contention of counsel for appellant is that this clause in the con-
tract is not tô be treated as a provision for a forfeiture to be strictiy
construed, but that it is a provision for the benefit of both parties, to
be fairly interpreted, and to be given a reasonable construction ; or, to
use the lariguage of counsel : "The agreement is mutual, it is lawful,
reasonable, and just, and there is no reason why it should not be
given effect by the courts according to the intention, of the parties,
as expressed in the language they hâve used, provided the contin-
8YKES V. KOBBINS. 437
gency lias arisen upon which the contract is to be determincd. It lias
arisen, if cotnplainant lias doue ail that under the law lie was bouiid
to do to perfect liis title."
In support of this contention counsel quote the language used in
D., L. & W. R. R. Co. V. Bowns, 58 N. Y. 578, wherem it was said :
"The more reasonable interprétation o£ the contract, and that most
in harmony vvith the intent o£ the parties, and best calculated to pro-
mote j.ustice between them, would only hold the plaintifï to the use
of ail reasonable and practicable means to procure and deliver coal
according to the well-known usage and practice of those engaged in
similar business, such as a jury would say would be reasonable and
proper under the circumstances ; such as the défendants niight be
presumed to hâve expected from the plaintifï at the time and under
the circumstances in which the contract was niade ;" and, in reliance
upon this case and other authorities cited, the conclusion of coun-
sel is : "The words 'cannot be perfected' must therefore be con-
strued as though they read 'cannot, after such efforts in good faith as
are reasonable and proper for the purpose, be perfected.' "
We do not question the correctness of the contention that parties
may include in contracts entered into by them provisions limiting the
time of performance, or naniing the contingencies or circumstances
which may absolve either party from further performance, of the
contract obligations, and we are content to accept the conclusion of
counsel for appellant that the latter was only bound to use "such
efforts in good faith as were reasonable and proper for the pur-
pose" in clearing the title of the lands contracted to be sold from the
incumbrance created thereon by the levy of the taxes and the sales
made thereunder, and the point at issue is narrowed down to the in-
quiry whether the appellant, with respect to thèse taxes, made such
efforts in good faith as were reasonable and proper to secure the
removal of the incumbrance created thereby.
The obligation resting upon the appellant was in good faith to
use ail reasonable and proper efforts to perfect the title of the lands
lie had contracted to sell to the appellee. When this contract was
entered into both parties knew that to perfect the title it was neces-
sary, among other things, that the incumbrance created by the taxes
and tax sales should be removed ; and it is admitted by his counsel
that appellant was bound to use in good faith ail reasonable and
proper efforts to that end, so that the contract of sale should be
completed within a year from its date. It is clear beyond question
that the tax incumbrance could hâve been promptly removed by the
payment of the amount thereof, and this mode of action was open to
the appellant. Instead of so doing, appellant, claiming that the as-
sessment was void, brought suits to the December term, 1901, of the
State district court, to secure the cancellation of the tax sales and cer-
tificates. When thèse suits were thus brought the appellant knew
that, in the ordinary course of events, it would be impossible to bring
thèse suits to a final termination within the year within which the
contract of sale was to be completed. He knew that suits of this char-
acter, brought to the December term, 1901, could not be prepared for
trial and determined in the trial court without the expiration of sonie
438 125 FEDERAL KBPORTER.
reasonable time, and he knew that after the district court had given
its décision a right of appçal could be exercised within one year to
the Suprême Court, and he knew that even if the trial court acted
with unusual promptness in decidingthe cases, and that if appeals
should be promptly taken to the Suprême Court, there was no reason-
able: :hope that the cases could be submitted to that court and a final
décision be had by the ist of April, igo2.
It cannot be otherwise, therefore, that when appellant, instead of
clearing the title of the lands from the incumbrances created by the
tax levy and the sales based thereon by paying the amount thereof,
undertook to clear the title by the institution of the suits in question
in the state district court, he well knew that by adopting this course
he was initiating proceedings which could not be brought to a close
within the year.
With respect to thèse taxes two methods were open to the appel-
lant for removing the cloud created thereby on the lands he had con-
tracted to sell — one being by payment of the amount due, and the
other by securing the cancellation of the same through judicial action.
By m^king payment of the taxes the title could be cleared within
the year limited in, the contract. By, initiating suits for cancellation,
it would be ,impossible to perfect the cancellation of the taxes within
the year. Was it open to the appellent to say that he was acting
in good faith and using ail reasonable and proper efforts to free the
lands from the incumbrance of the taxes within the year stipulated,
if he refused to pay the taxes, and iristead of so doing brought suits
for the cancellation thereof, which he knew could not be brought to
a final conclusjon until after the expiration of the year, and then rely
on his inability to get a final décision within the year of the suits thus
brought as a reason why he should be released from his contract to
sell and convey the lands to the appellee?
In our Judgment, the appellant would certainly be chargeable with
lack of good faith, and a failure in his contract obligations to the
appellee, if he availed himself of the delay in clearing the land from
the tax incumbrance created by his own action in bringing suits to
test the validity thereof under the cjrcumstances developed in the évi-
dence in this case. It was clearly >vithin his right to discharge the
taxes and cancel the sales by paying the amount due, and he obtained
from the appellee, in addition to the sum of $2,000 paid down at the
exécution of the contract, an advance of $8,500, to be used in clearing
off the incumbrances on the land. He thus had both the légal right
to pay the taxes, and was furnished by the appellee with funds more
than suificient to pay, the same.
He might fairly claim that, as he denied the validity of the taxes
in question, it would be a heavy burden to compel him to pay the
same instead of permitting him to test the validity thereof by suits
in court ; but it would nevertheless not be just to the appellee to hold
that the appellant, had the ri,ght to undertake the performance of
his contract by a method, to wit,/that of bringing suit to cancel the
taxes, which would give him the absolute right to cancel his contract
of sale with appellee. The appellant knew when he entered into the
contract of saie that the lands were incumbered with the taxes, and he
STEBg 7. B0BBIN8. 439
agreed to use in good faith ail reasotiable efforts to release the land
from the tax incurabrance, and he does not meet the obHgation of
his contract by refusing to pay the taxes, and undertaking to set them
aside by judicial proceedings, which, of necessity, could not be brought
to a final détermination until after the lapse of the year named in the
contract as the time witliin which the title should be cleared.
The inequity of the claim now asserted by appellant is not in the
mère fact that he sought to get rid of the tax incumbrance by suit
in court, but in the fact that he endeavors to évade his contract of sale
by asserting that when the ist of April, 1902, came around, the tax
incumbrance had not been finally removed, because the right of ap-
peal to the Suprême Court still existed against the decree in the dis-
trict court of Stutsman county, and that he was therefore absolved
from furthèr obligation to convey the lands to the purchaser.
In efïect, the contention of appellant is that, although he had bound
himself to use, in good faith, ail reasonable efïort to clear the land
from the incumbrance of the taxes, and although it was within his
ability to remove the same by payment of the taxes, he could refuse so
to do, and then release himself from the obligation to complète the
sale by the claim that he had not succeeded in getting a final decree of
the court within the year, when he well knew when he adopted that
course that it would be impossible to carry the suits to a finality by the
ist day of April, 1902.
The évidence shows that the appellee not only paid promptly the
$2,000 required to be paid at the exécution of the contract, but sub-
sequently advanced to appellant the further sum of $8,500, tO be usecl
in paying ofif the incumbrances on the land, and in September, 1901,
the latter endeavored to procure a further advance of $20,000. Under
the terms of the contract no obligation rested on the appellee to ad-
vance thèse sums, and, unless we assume that when he applied for the
same the appellant expected to perfect the titles and convey the land
in dispute to the appellee, he would be open to the charge of fraud, in
that he was seeking to obtain money from the appellee upon the
theory that he would in good faith perfect the title to the lands and
convey the same to the appellee, when he had no présent intention
so to do, but purposed to rely on his inability to settle the tax in-
cumbrance by judicial proceedings by the ist of April, 1902, as a rea-
son why he could withdraw the 15,000 acres from the contract and re-
fuse to convey the same to the appellee.
If it be true that when the appellant sought thèse advances from
the appellee upon the représentation that the money was to be
used in perfecting the title to the lands in the contract described
his purpose was, not to pay the taxes and thus clear the land from
the lien thereof, but to bring suits to hâve the same declared void,
and then to rely on the pendency of the suits as a sufiicient reason
why he was not able to perfect the title by the ist of April, 1902, thus
giving him the right to withdraw thèse lands from the contract
of sale, then the court would be justified in holding that the appellant
had not in good faith used ail reasonable and proper efïorts to perfect
the title to the lands, but, in refusing to clear the land by payment of
the taxes and bringing the suits, he had done so with the purpose of
1 44:0 125 JFiEJJBÇAL pJJgpjiy^E.
evading the proppr perforçn^iiqe of the çontract of cale, and under such
circumstaiwfes fie could not fivail himseli of the year limitation con-
tained in the çontract, even under the construction of the limitation
clause conténded for by his counsel.
Furthermore, is there any sufficient ground for holding that the
appellant was not absolutely bound to clear the land from the tax
incumbrance by paying ofiE the same, if that was the only meaiis
open to him for clearing the title by April i, 1902? When the çon-
tract of sale was entered into appellant knew that the lands were sub-
ject to the incumbrance in question. He agreed, in efifect, to use in
good faith ail reasonable means to clear the land within a year. Pro-
vision might hâve been made in the çontract for testing the validity of
the tax Içvies by judicial proceedings, thus giving the appellant the
right to resort to that method of settling the title. No such provision
was inserted in the çontract. The appellant bound himself to use ail
reasonable effort to perfect the title within the year, and as the évi-
dence shows there was but one method by which this could be accom-
plished, and that was by payment of the amount due, is it not the
necessary inference that the çontract of sale obligated the appellant
to pay the taxes, that being the only course which would enable the
çontract of sale to be carried out? If the tax assessments and levy
were valid, then the appellant owed the duty to the state and county
to pay the taxes, and it would only be by payment that the appellant
could perform his çontract obligation to the appellee to perfect the
title to the lands covered by the çontract of sale.
As thèse taxes amounted to about $5,000, it doubtiess seemed a
hardship to the appellant to be required to pay them, if in fact they
had not been legally assessed and levied, and, for thé purpose of
endeavoring to escape this necessity, the appellant sought to make
some terms with appellee, as is evidenced by this letter of October 23,
1901, addressed to the appellee, wherein he wrote:
"I shall be In Fargo, Waldorf Hôtel, Thursday evening of this week, 24th
Inst., & ail Frlday 25th Inst. I should be much obliged If you would give me
a deflnlte reply there or see me regardlng my récent letter on the subject
of thé çontract of Ist Aprll, 1901. I am able now to glve you as good a title
as I Bhall be able to give on Ist Aprll, 1902, and, If not acceptable to you,
let us adjust the matter at once, or, If acceptable, let us adjust the matter
now."
Under date of October 24, 190I, the appellee replied to this letter
saying :
"I expect to take the land as I agreed. If you are not able to complète
title wltMn the year, as speclfled in the çontract, I shall expect to take it as
soon as you can complète title. • * • If you are not able to flx it up the
flrst of April I should not take any advantage on account of that * • •"
Following this correspondence the appellant brought the suits ta
caricel the taxes at the December term, 1901, of the court in Stutsman
county, and is it not the faif inference that the parties understood
that the matter of the taxes was to be settled by the results of the
litigation thus begun? It would certainly not hâve been open to
the appellee to hâve declared the çontract at an end on the ist day
of April, 1902, for the reason that the suits were not then finally de-
8TKES V. ROBBINS. 441
termined, in view of the statements in his letter of October 24, 1901,
and it would be even more inéquitable to hold that the appellant could
terminate the contract of sale because the suits he had brought were
yet undecided.
As already stated, the appellee, in order to prevent the tax sales
from ripening into a title to the lands, in case it should be finally
held that the taxes had been validly levied, bought the certificates
from the owners thereof, and thus demonstrated that it was entirely
within the povver of the appellant to clear the land from the incum-
brance of the taxes. It is made clear beyond ail question that the
only reason why the appellant did not perfect the title to the land, by
payment of the taxes and redeeming from the sales, was that he
laoped to avoid the outlay that course would hâve called for ; and as
the appellant brought the suits for cancellation knowing that the
same could not be finally determined by April i, 1902, after the
appellee had stated in his letter of October 24, 1901, that he would
take the land whenever the title was perfected, even though that
should not be donc within the year, it may be fairly held that the par-
ties by their own conduct had waived strict performance of the condi-
tions of the contract within the time named in the original contract.
Subsequently the appellee, to protect the title to the land in case
it should be held that the levy of the taxes was valid, bought the tax
sales certificates, and thus made it certain that the lands could be
cleared from the taxes, no matter what the final décision was upon the
question of the vaHdity of the tax levy ; and, in view of thèse circum-
stances, the contention of the appellant that he was entitled to with-
draw the 15,000 acres of land from the contract, because he had in
good faith used ail reasonable effort to perfect the title by the ist
of April, 1902, but had been unable to do so, cannot be sustained, and
our conclusion is that the facts of the case, as proven in the court be-
low, justified the action of the circuit court in dismissing the bill of
appellant, and in granting a decree of spécifie performance upon the
cross-bill of the appellee.
Furthermore, since the submission of the case in this court, we hâve
been informed that the Suprême Court of North Dakota has handed
down an opinion in the cases appealed from the district court of Stuts-
m'an county reversing the decree of that court, and holding that the
taxes assessed on the lands in dispute herein were lawfuUy assessed
and levied.
If this is the final resuit upon the question of the validity of the
taxes and tax sales, it demonstrates tha't the appellant did not take
the course and the only one which would release the lands from the
incumbrance of the taxes, to wit, by paying off the same, and cer-
tainly the appellant should not be permitted to avail himself of his
own error to obtain a release from his contract obligation, thus bene-
fiting himself and injuring the appellee, especially in view of the
fact that, if the appellee had not protected the title to the lands by
buying up the tax sales certificates, it is possible that the lands might
hâve been lost to both appellant and appellee.
Under thèse circumstances, the order to be entered will be that the
decree of the circuit court dismissing the original bill filed by the
442 125 FEDERAL I^EPQRTER.
appellant is affirmed; that tbe decree of the circuit court upon the
cross-Wll fikd iby the appellee, Daniel M. Robbins, granting him spé-
cifie performance of the contract of sale, is affirmed; that the case be
remanded to the circuit court, with instructions to ascertain whether
the cases pending on appeal in the Suprême Court of North Dakota
hâve been finally decided, and, if so, to make such changes in the par-
ticular provisions of the decree heretofore entered in this case as may
be called for by such change in the situation of the parties, and as may
be advisable to fully protect the rights of the parties hereto. And it
is so ordered.
On Pétition for Rehearing.
(Norember 14, 1903.)
PER CURIAM. A pétition for rehearing bas been submitted in
this case on behalf of the appellant, in which, after quoting liberally
from the opinion heretofore filed, counsel state that:
"In thèse remarks the mind of the court was focused on four erroneous as-
sumptions of fact: (1) That the contract was valid and enforeeable wtien
made on April 1, 1901. (2) That the suits to set aside the taxes were not
brought until after Octcber 24, 1901. (3) That that method was resorted to
by Sykes without the consent and acquiescence of Robbins. (4) That Robbins
had furnished Sykes with money to be used for the express purpose of paying
thèse taxes."
In support of the first proposition, that the court erred in view-
ing the case upon the assumption that the contract for the sale of
the lands was valid and enforeeable when made on April i, 1901,
it is said that when the contract was signed the appellant, Sykes,
was in England; that the contract is signed by "D. M. Stewart,
attprney in fact for Richard Sykes"; that the statutes of North
Dakota provide that ail agreements for the sale of realty, if made
by an agent, are invalid unless the authority of the agent is in writ-
ing, subscribed by the party sought to be charged ; that no authority
in writing authorizing Stewart to make the contract is shown, and
theref ore the contract is void. Turning to the original pétition filed
in this case by the appellant, we find it therein stated that on the ist
day of April, 1901, he was the owner of the following described pr ém-
ises, giving the description thereof at length; "that on the ist day
of April, 1901, plaintifif made and entered into a contract with défend-
ant, by the terms whereof the plaintifï agreed to sell and convey unto
the défendant, upon certain terms and conditions and upon the full
performance of said contract by the défendant on his part, ail said
premises" ; and, further, "that said contract, so as aforesaid made by
and between this plaintii? and défendant, was in writing, and was
duly acknowledged, so as to entitle the same to record." In view
of thèse positive statements contained in the pétition which was the
foundation of this case, what need was there for the défendant to
introduce évidence showing that the agent, Stewart, had authority
to sign the contract. No évidence upon this matter could be as
weighty and conclusive as the averment made by the plaintifï in his
pétition that on the ist day of April, 1901, he had entered into the con-
tract in question with the défendant, and that the same was in writing
8TKE8 V. ROBBINS. 443
and duly acknowledged. The trial court vvas therefore clearly Justi-
fied in disposing of the case upon the assumption that on the ist day
of April, 1901, the parties had entered into a valid written contract
for the sale of the lands; the issue in dispute being the question
whether, under the terms of the conJ;ract and the acts of the parties,
the appellant was entitled to withdraw the larger part of the lands
from the contract of sale, upon the expiration of a year froin the date
thereof. When the case was submitted to this court upon appeal, it
was stated in the brief of appellant that "on April i, 1901, the parties
entered into a contract for the sale by Sykes to Robbins of 20,720
acres of land." In this condition of the record, we fail to see wherein
it was error to détermine the rights of the parties upon the assump-
tion that on the ist day of April, 1901, the parties had entered into a
valid and enforceable contract for the sale of the lands in the contract
described.
The second point urged is that the court was in error in stating that
the suits for the cancellation of the tax sales were not brought until
after the 24th of October, 1901. This criticism of the opinion filed
is correct, as it is made plain in the pétition for rehearing that the
record shows that thèse suits were in fact brought about June 12,
1901 ; this mistake in the date being caused, as suggested by counsel,
by the fact that there were suits brought in October, or later, by the
appellant, for the cancellation of the tax sales on lands forming part
of the 1,600 acres excluded from the opération of the decree entered,
although named in the contract. This mistake as to the time when
the suits for the cancellation of the taxes were instituted does not
call for any change in the views expressed in the opinion upon the
vital points of the case. The rights of the parties, as affected by the
action of the appellant in bringing suits for the cancellation of the tax
sales, do not dépend upon the question whether thèse suits were
brought in June or in October, 1901, but upon the fact that, when
brought, the circumstances were such that it was impossible to carry
them through to a ikial détermination by April i, 1902.
The third matter of fact touching which counsel claim the court was
in error is with respect to the bringing of suits for the cancellation
of the tax sales ; it being said that the court was mistaken in holding
"that that method was resorted to by Sykes without the consent and
acquiescence of Robbins." In considering the terms of the contract,
some considération was given to the question whether the contract
itself gave the right to the appellant to adopt a method of clearing
the land from the tax incumbrance by selecting the plan of bringing
suits for the cancellation thereof, and then to rely upon his inability
to secure a final détermination of the suits within a year as a reason
why, under the terms of the contract, he had secured the right to dé-
clare the contract at an end. In dealing with this question, it was
considered in the first instance from the point of view that Sykes had
of his own motion chosen this course, and this is the only foundation
for the daim that the court has erroneously held that thèse suits were
in fact brought without the consent and acquiescence of Robbins;
and that this was not the conclusion reached by the court upon a
considération of the évidence is shown by the fact that, after reciting
444 125 FEDERAL REPOETEU.
portions of the correspondence between the parties, it îs stated in the
opinion that:
"Followlng this correspondence, the appellant brought the suits tô cancel
the taxes at the December tèrm, 1901, of the court In Stutsman county; and
Is it not the fair Inf erence that the parties understood that the matter of the
taxes was to be settled by the results of the litlgation thus begun?"
There îs strong ground to support the statement of counsel in
the pétition for rehearing "that the record fairly shows that there was
an understanding or agreement between the parties that the cloud or
incumbrance of the taxes should be removed by suit." This' position
was not taken or advanced by counsel in their briefs submitted on
the hearing of the case, and naturally the opinion filed dealt with the
points relied on in the submitted briefs ; but, as already said, it was
stated in the opinion that it was a fair inference derivable from the
évidence that tlie parties had an understanding to the effect that the
matter of the taxes was to be settled by the resuit of the suits brought
by Sykes against the tax purchasers. If, on the submissiôn of the
case, counsel had taken the ground relied on in the pétition for rehear-
ing, to wit, that after the signing of the written contract for sale of
the lands it had been mutually agreed between the parties "that the
cloud or incumbrance of the taxes shôuld be removed by suit," it
would hâve obviated the necessity for considering at length what,
under the terms of the written contract, was required of Sykes in the
performance oî his admitted obligation to use ail reasonable efforts
to clear the land from the tax incumbrance resting thereon, because in
that view of the case, the rights of the parties would be dépendent
upon the meaning of this supplemental agreement. Assuming that
such an agreement was had, what is the construction to be placed
thereon?
When this agreement was entered into the situation was as follows :
By a valid written contract Sykes was bound to use ail reasonable
efforts to clear the land he had agreed to sell from ail incumbrances,
being given a year within which to perfect the titles. Among other
incumbrances was that created by sales of the land for nonpa3'ment
of certain taxes levied thereon. Sykes claimed that thèse tax sales
and the levy of the taxes were illégal and void, and-, while it was open
to bim to clear oiï the incumbrance by payment of the sums due, he
was anxious to avoid incurring that expense. Under thèse circum-
stances he reached an understanding or agreement with Robbins to
the effect "that the cloud or incumbrance of the taxes should be re-
moved by suit." When this understanding was had, there was no
reasonable possibility that the suits to be brought by Sykes could be
carried through to a finality within the year named in the written con-
tract, and therefore it must be held that the parties, in having this
understanding, intended that the lirait of a year should not apply to
the matter of clearing the land from the taxes. The claim made in
the pétition for rehearing is that Robbins agreed that Sykes should
hâve the right to remove the tax incumbrance by suit. This agree-
ment secured the right to Sykes to test the validity of the taxes and
tax sales by an appeal to the courts, and Robbins was in good faith
HARP V. CHOCTAW, O. & G. K. CO, 445
bound to allow him the time necessary for that purpose ; and, on the
other hand, Sykes was bound to carry the suits through to a final dé-
termination. Having agreed to undertake the removal of the tax
liens by suits for that purpose, he did not fulfill the agreement by
merely bringing the suits, and therefore, when the ist of April, 1902,
arrived, it was not open to him to daim that he had the right to with-
draw the lands which were yet incumbered with the tax liens from the
contract of sale. Having persuaded Robbins to accept this method
of dealing with the tax liens, he was in duty bound to carry through
the suits to a final détermination, and that he had not done when he
brought the présent proceeding, in which he claims a decree in his
favor on the theory that he had fully performed ail the obligations
restmg on him with respect to clearing the lands from ail Hens or other
incumbrances.
The fourth and last alleged assumption of fact which it is averred
in the pétition for rehearing was erroneous, and which aided in
misleading the court, is "that Robbins had furnished Sykes with
money to be used for the express purpose of paying thèse taxes." It
is not stated in the opinion filed that any sum was furnished by Rob-
bins for this express purpose ; the statement being that the advance
of $8,500 was raade to be used in clearing ofï the incumbrances on
the land. In the letter written by Robbins under date of June 6,
1901, to his attorneys, he states the terms under which he was willing
to advance the $8,500, further stating that, if thèse terms were com-
plied with, "I will pay him the $8,500 to be used in clearing up the
title, as I understand that is what he wants the money for." Under
date of June 8th, Sykes wrote to Robbins, saying :
"I bave carried out the arrangement proposed in your letter of the 6th
inst. * * * I hâve drawn upon you at slght to the order of the First Na-
tional Bank of Fargo for $8,500 as arrangea."
In his testimony as a witness Sykes states that he had represented
to Robbins that the purpose for which he wished to obtain the $8,500
was to enable him to remove liens upon the land and to perfect the
title thereto, and this évidence fully justifies ail that is said in the
opinion with respect to the $8,500 advanced by Robbins to appellant.
We hâve given a careful considération to the pétition for rehearing ;
but, finding nothing therein which satisfies us that the conclusion
heretofore announced is erroneous, the same is overruled.
HAEP T. CHOCTAW, O. & G. R. CO.
(Circuit Court of Appeals, Eighth Circuit. October 16. 1903.)
No. 1,847.
Carriers— Régulations Governing Manker of Receiving Goods — Right
TO Change,
At common law a common carrier has power to make reasonable régu-
lations governing the manner and form in which it will receive such
articles or commodlties as it professes to carry, and also to change or
modify such régulations from time to time upon reasonable notice to
the public.
446 125 FffiDKKAL BHPORTBB.
8. Same— Manîïbe of Loading Coal.
A rallroad çompany havlng a newly constructed Ilne through a locallty
underlald wlth coa], by permitting owners of mines to load cars wlth coal
from -wagons on its slde track at t*o small stations for a numlDer of
months, did not givé tbem a vested rlght to continue such manner of
loading, nor lose its common-law riglit to change its régulations, and
refuse longer to reçoive coal for shipment in such manner when the
volume of its business became such that tp permit the use of its station
tracks for loading cars in that manner would not oniy interfère with
the opération of its trains, and cause it loss and inoonvenience, but
would algo, by reason of the slowness of the method, resuit In serious loss
and inconvenience to other shippers and the public by greatly reducing
the quantity of coal which the road could handle and transport below
what it might if loaded by the use of modem appliances, as was the case
at ail other shipping points on its line.
8. Same— Prkfkbenob in Furnishing Caes.
A carrier which transports large quantifies of coal is entitled to make
régulations with respect to the manner of receiving and transporting it,
so that it may be handled expeditiously, safely, and economically, without
unnecessary interférence with the carrier's other business; and régula-
tions which are well deslgned to promote such object cannpt be com-
plained of on the ground that they operate to give a préférence to one
who compiles with them, or as a discrimination against one who does not.
4. Samb— Abeansas Statutb.
Défendant rallroad company, which had previously permitted the
loading of cars with coal on its side track at a station, made a régula-
tion by which it withdrew such permission, and it thereafter refused to
furnish cars to be so loaded to plaintiffl or to any other shipper. During
such time, however, certain mine ow;ners, who through agreements witli
the company had constructed private spur tracks to their mines, were
furnished cars, some of which they loaded from wagons while standing
on such spur tracks before the development of the mines and the con-
struction of tipples for loading. SM, that the furnishing of cars for
such purpose, while refusing to furnish cars for loading on the station
track to plaintiff, who had constructed no spur track, did not constitute
the giving of an undue préférence, either under the common law or the
statute of Arkansas (Laws 1899, p. 89), prohlbiting the giving of any
préférence in the furnishing of cars.
In Error to the Circuit Court o£ the United States for the Western
District of Arkansas.
For opinion below, see 1 18 Fed. 169.
Joseph' M. Hill (James Brizzolara, on the brief), for plaintiflf in
error.
Edward B. Pierce (John W. McLoud, on the briçf), for défendant
in error.
Before SANBORN, THAYER, and VAN DEVANTER, Circuit
Judges.
THAYER, Circuit Judge. This case was tried to a jury in the
Circuit Court of the United States for the Western District of Ar-
kansas, and at the conclusion of ail the testimony the trial court di-
rected a verdict in favor of the défendant, which action on its part
is said to hâve been erroneous, and is assigned for error. The com-
plaint on which the case was tried contâined two counts. In the fîrst
of thèse counts Jésse A. Harp, the plaintiff in error, alleged, in sub-
ï 4. See Carriers, vol. 9, Cent. Dig. § 22.
HARP V. CHOCTAW, 0. & G. K. CO. 44T
stance, the following facts: That he was the lessee of a coal mine
situated very near Hartford, Ark., a station on a railroad belonging
to and operated by the Choctaw, Okiahoma & Gulf Railroad Com-
pany, the défendant in error ; that from September, 1900, until about
February i, 1901, he operated this mine by taking ont the coal and
hauling it in wagons to the Hartford station, where it was loaded
from the wagons into coal cars that had been set out for that purpose
on a side track by the défendant company; that during ail of the
period last aforesaid the défendant company held itself out to the
public as a common carrier of freight, being especially engaged in
the carriage of coal, and that there were four other shippers of coal
at Hartford besides the plaintifif from whom it received coal for
transportation in the manner last described — that is to say, by set-
ting out cars as they were called for on a side track to be loaded
from wagons ; that ail the coal so placed on board cars by the plain-
tiiï at Hartford during the period aforesaid was shipped by him
westward to points outside of the state of Arkansas, in Qklahoma and
Texas ; that he succeeded, during said period, in building up a good
demand for his coal in those localities, and that in expectation of a
larger demand for his product during the coal season beginning
August I, 1901, he bought 40 acres of coal land near the station at
Hartford. He further averred that from and after August i, 1901,
and from that time forward, until about February 15, 1902, the défend-
ant company refused to set out coal cars on the side track at Hartford
to be loaded from wagons, as it had previously donc, save that on
or about October y, 1901, it did ofïer to furnish cars at that station
to be loaded from wagons for the shipment of coal to points in
Arkansas, and that, by reason of such conduct on the part of the
défendant, his trade in coal was practically destroyed during the fall
of the year 1901, and that he had sustained damages in a sum ex-
ceeding $6,000, for which he demanded judgment. The second
count of the complaint was substantially like the first in ail of its
material allégations, except that in one paragraph thereof it was
charged that other parties, who were engaged in mining and ship-
ping coal, to wit, the Kansas & Texas Coal Company, the Prairie
Creek Coal Company, and the Arkansas & McAlester Coal Com-
pany, shipped coal from the station at Hartford, and that during the
period when the défendant company had refused to set out cars
at Hartford for the use of the plaintifï it had supplied cars at said
station for the use of such other parties, thereby giving them an
unreasonable préférence and advantage, to the plaintifï's damage in
a sum exceeding $6,000.
The facts developed at the trial below, concerning which there
was practically no controversy, are thèse: From September, 1900,
to February 15, 1902, and thereafter, the Choctaw, Okiahoma &
Gulf Railroad Company, the défendant in error, operated a line of
railroad extending from El Reno, in the territory of Okiahoma,
thence eastwardly through the territory of Okiahoma, the Indian
Territory, and the state of Arkansas, to Memphis, Tenn. Coal
fields existed along this line of road from South McAlester, in
the Indian Territory, eastward to a point between Hartford and
4i48 125 FBDSRAL BBPORTEB.
MansfieHj both" of the latter places being in the state of Arkansas,
or for a distance altOgëther of about loo miles. The défendant Com-
pany made a practice of hauling coal taken from the mines contig-
uous to its road, whicb belonged either to itself or to other persons
and corporations, and aboyt 60 or 70 per cent, of its traffic was of that
character. When a mine owner, other than the défendant company,
desired to employ the défendant to haul his coal, he made applica-
tion to that effect to the company, and if, on an examination of the
applicant's mine by the executive officers of the railroad, the quan-
tity of coal therein seemed to be adéquate to justify the expense, the
gênerai practice was to enter into an agreement with the mine owner
whereby the latter undertook to procure the right of way and grade
a track leading from the railroad to his mine, and to supply the nec-
essary ties, the railroad, on its part, agreeing to furnish the necessary
iron and to lay the track,- and thereafter keep the track and roadbed
in good repair. It was also the usual practice in such agreements
to require the mine owner to develop his mine so that it would sup-
ply a certain number of cars of coal per day, and to equip it with tip-
ples and screens so that coal could be conveniently and speedily load-
ed into cars at the mine. In the month of September, 1900, the de-
fendant's road in the vicinity of Hartford, Ark., had been recently con-
structed, and the volume of trafïic at that station was small. The
railroad company, bef ore building its road eastwardly into the state
of Arkansas, had bought about 1,600 acres of coal land near Hart-
ford, and had located its station at that point on a part of the tract.
The coal fields in that vicinity had been only slightly developed in
the month of September, 1900, but there was one coal mine called
Glenn's Bank that had been opened near the station to supply the
local demand for coal, and after the railroad was opened for busi-
ness, and during the fall of the year 1900 and the winter of 1901,
the parties controlling this mine were allowed to haul coal to the
station by wagons and load it on cars that were set out upon a side
track. The plaintifï at that time was also in possession of a mine
near the station, and at his request, and as the trafïic at the station
was not large, he was accorded the same privilège of loading coal
from wagons into cars standing on the house track, which privilège
he continued to exercise until the spring of the year 1901, up to which
time, during a period of seven or eight months.he had loaded altogeth-
er something over 300 cars. During the period in question the railroad
company did not permit coal to be loaded from wagons into cars
standing upon its sidetracks at any of its stations, except at the
Hartford station, and at one other station called Red Oak, in the
Indian Territory, at which latter place, as it seems, the practice was
pursued temporarily until a spur track could be completed to the
mine, which was some distance from the railroad. The défendant
gave permission to load coal from wagons at Hartford mainly, if
not entirely, for the purpose of aiding in the development of the coal
measures at that point, but with no intention on its part of receiving
coal permanently in that way, or of permitting its station side tracks
to be used continuously for the purpose of standing coal cars thereon
to be loaded from wagons. Some time in the spring of the year
HAEP V. CHOCTAW, O. <fe G. E. 00. ^49
190T, or the early summer of that year, the plaintifï was advîsed, by
officers of the railroad company, that the practice of setting out cars
on the station side tracks to be loaded from wagons would hâve to
be discontinued. Thereafter there were several interviews between
the plaintifï and persons representing the railroad company relative
to the construction of a spur track to the plaintifï's mine for his benefit
and accommodation. The railroad company appears to hâve been
willing at ail times to lay such a track and to furnish the iron there-
for, provided the plaintifï would secure a right of way and do the
grading. The plaintifï on his part appears to hâve been willing at
first to accept this proposition. They difïered, however, as to the
place where the spur track should connect with the main line of the
road; the plaintiflF insisting that the connection should be made at
the station house at Hartford, and the défendant objecting to a con-
nection at that point. The negotiations looking to the construction
of a spur track accordingly fell through, and on August 15, 1902, the
défendant company peremptorily declined to permit cars to be further
loaded from wagons at its station or house track, the reason assigned
for such action being, in substance, that it was the universal prac-
tice of ail railroads engaged in hauling coal to require mine owners
and coal shippers to hâve tipples and tracks whereby coal could be
speedily loaded direct from the mines, and because of the annoyance,
inconvenience, and delay necessarily attendant upon the loading of
coal cars from wagons at stations. The plaintifï thereafter made
complaint concerning the defendant's action to the board of railroad
comraissioners of the state of Arkansas, and in view of threatened ac-
tion by that body the défendant company on October 7, 1902, again
permitted cars to be loaded at the Hartford station from wagons,
provided the coal so loaded was consigned to points within the state
of Arkansas. At a later date, in January, 1902, for the same reason
— that is to say, because of action taken or threatened to be taken
by the board of railroad commissioners for the state of Arkansas,
and to avoid the possible assessment of heavy penalties — the order
against loading from wagons at the Hartford station, as respects coal
consigned to any point on the defendant's railroad, either within or
without the state of Arkansas, was revoked.
The fundamental question which this state of facts présents would
seem to be whether the défendant company, by setting out coal cars
on its house track at Hartford, and permitting them to be loaded from
wagons for a period of several months, under the circumstances
above detailed, thereby obligated itself to continue that practice, and
was guilty of a légal wrong when it discontinued it in August, 1901.
Undoubtedly a common carrier must accept and transport ail com-
modities that are tendered to it for carriage which it holds itself out
to the world as engaged in carrying, provided a reasonable compen-
sation for the service is also tendered. Unlike a private carrier, it is
not entitled to choose its patrons or customers, but, being a quasi
public servant, must serve everybody who chooses to employ it, and
must treat them impartially, charging each the same rate for sub-
stantially the same service, and afïording to each the same facilities
for shipment. A common carrier, however, is not bound by the
125 F.— 29
é5Q 125,FEDBEAL EBPOETBK.
ruies of the CQinmon lawto receive and carry commodities of any
and evçry kind which may be ofFered to it, but only such as it makes
a praetice of transporting. It is entitled in the first instance to dé-
termine whatclass of commodities it will engage in carrying. More-
over, it is entitled, in the fitst instance, by the common law, to es-
tablish reasonable rules and régulations governing the manner and
form in which it will receive such articles as it professes to carry,
and providing how they shall be packed for shipment so that they
may be h^ndlçd and transported conveniently, safely, and expedi-
tiously. Hutchinson on Carriers, §§ 111-113, and cases there cited.
This power to make reasonable régulations with respect to the man-
ner in which it will receive çonimodities for transportation implies
the existence of a power on the part of a common carrier to change
or modify such régulations from time to time upon reasonable no-
tice to thepuMic, as otherwise it might be compelled to pursue a
particular praetice of receiving goods which it had once adopted,
and was at the time attended with no inconvenience, after that prae-
tice had become exceedingly inconvénient and burdensome both to
itself and the public. Itis manifest, we think (indeed, so manifest
that we might almost take judicial notice of the fact), that no rail-
road constructed through extensive coal ftelds and engaged in trans-
porting coal to market could for any considérable period follow
the praetice of setting out cars on its station side tracks, some dis-
tance from the place where coal is mined, and permittin^ coal to be
hauled thence by wagons and loaded into the cars by the slow process
of shoveling. The useless consumption of time, and the additional
expense incident to the handling of the commodity in question, in
large quantities, in that primitive manner, would occasion great pub-
lic loss and inconvenience, to say nothing of the loss sustained by
the carrier, and the serions manner in; which that method of handling
coal would interfère with the movement of its trains and the trans-
action of its other business. In the case at bar one of the witnesses
testified, in substance, that, if ail the coal tributary to the defendant's
railroad was loaded by wagon, the mines would not produce 20
per cent, of their présent output because of the impossibility of hand-
ling the output in that way. This is in itself an entirely reasonable
statement, and no attempt was made by the plaintifï to disprove it ;
his contention being apparently that, because the défendant had per-
mitted him to lo^d coal from wagons for a few months, it had de-
liberately chosen that method of receiving coal and serving the pub-
lic, and was bound perforée to continue the praetice indefinitely. We
are of opinion that this contention on the part of plaintifï is unten-
able, and should be overruled. The évidence shows without con-
tradiction, as heretofore stated, that the praetice of permitting a
shipper of coal to load cars from wagons at stations obtained at no
other station along the defendant's road save at Hartford and Red
Oak, where the praetice was tolerated temporarily, and for spécial
reasons, with no thought of pursuing it permanently. The great
bulk of coal that the défendant received and transported over its
road was loaded by means of tipples into cars standing on spur
tracks which had been laid to the mines, and in so far as the défende
HARP V. CHOCTAW, O. & G. E. CO. 1451
ant had held îtself out to the world as a common carrier of coal it
can only be said to hâve so held itself out provided the commodity
was so delivered and loaded. We entertain no doubt that the de-
fendant had the right to abandon the method of receiving coal which
it had adopted at Hartford when the conditions that led to the prac-
tice at that station had so far chanjçed as to render its further con-
tinuance inconvénient and burdensome. Especially should this right
be conceded to the défendant when we reflect that if it permitted coal
to be hauled to that station in wagons, and thence loaded into cars,
other mine owners along its hne might and probably would assert the
same privilège, thereby subjecting it to great loss and expense, be-
sides putting the public to much inconvenience. That conditions had
materially changed at the Hartford station between September, 1900,
and August, 1901, admits of no controversy. It was proven at the
trial, and not denied, that in the meantime the défendant had disposed
of its coal land at that point ; that several large mines had been opened
in the immédiate vicinity of that place ; that the station had become
a large shipping point for coal ; that the volume of traffic at that
place, as well as along the road generally, had largely increased dur-
ing the year; that the demand for cars in August, 1901, to handle
coal and other products which required shipment, was far greater
than during the previous year; and that the public interest, as well
as the interest of the carrier, demanded that there should be as little
delay as possible in loading cars. Under thèse circumstances, we
think that the défendant incurred no liability in refusing to permit
its station side track to be further used for loading coal cars from
wagons. Nor do we find that when the trial below ended any issue
of fact as respects this point remained to be settled or decided by the
jury, since ail the material facts upon which the defendant's right to
terminate the practice of loading cars from wagons depended were
practically undisputed, and the existence or nonexistence of that right
was a question of law to be determined by the court.
In the second count of his complaint, as before shown, the plain-
tiff sought to recover damages because, as he alleged, the défendant
had given an undue and unreasonable préférence to other shippers
of coal at the Hartford station. The facts upon which this charge
was based were likewise undisputed, and are as follows : The order
prohibiting the loading of coal from wagons into cars standing on
the house track extended to ail shippers of coal without discrimina-
tion, and was not confined in its opération solely to the plaintifï or
any one else. But while the embargo existed other mine owners who
had constructed spur tracks to their mines, as well as tipples for the
convenient and speedy loading of cars, were supplied with cars, and
during the period in question it seems that some of the parties who
had constructed private spur tracks did load some coal from wagons
into cars that had been set out on such private spur tracks. This was
done, however, as the évidence discloses, only to a limited extent, and
for the purpose of disposing of such coal as was taken out at first in
the process of opening a mine. The practice was not continued when
a mine was fully opened and tipples had been located and built. The
charge of giving other mine owners an undue préférence is founded
452 125 FEDERAL REPORTEE.
upon the facts aforesaid, which the évidence tended to establish, and
none other. We are of opinion that they do not establish a case oî
undue préférence within the meaning and intent of the statute of
Arkansas (Laws 1899, P- 89), which déclares, in substance, that it
shall be unlawful for a common carrier "to make any préférence in
furnishing cars or motive power" for the transportation of persons
or property. The idea conveyed by the word "préférence" is that,
as between two persons ocçupying the same situation or relation to
the carrier, one has been preferred over the other or granted certain
privilèges or facilities that were not extended to the other. Such is not
the case which the évidence discloses. The plaintifï had not provided
himself with a spur track leading to his mine for the storage of cars,
while other shippers had donc so. He desired to make use of the de-
fendant's side track to stand cars thereon while he loaded them by the
slow process of hauling coal to the station in wagons and shoveling
it thence into the cars. The privilège which he demanded was essen-
tially dififerent from that accorded to other shippers who had built
spur tracks on which cars could be placed and handled by the défend-
ant with much less inconvenience and risk than when standing on
its house tracks, which it used for handling other commodities, and
for switching purposes, and probably used at times for the passage of
trains. We fail to see how the delivery of cars to other shippers of
coal on spur tracks which they had caused to be built can be fairly
said to hâve been a préférence extended to them, or a discrimination
against the plaintifï, who desired to use the defendant's house tracks.
The privilège which the plaintjfif demanded was not accorded to other
shippers nor a substantially similar privilège. We think, therefore,
that he has no jyst cause for complaint on this ground.
The views which we hâve thus far expressed are confirmed by the
décision in Oxlade v. North Eastern Railway Company, 15 Common
Bench (N. S.) 680, which is fre'quently cited as an authority and may
be justly esteemed a leading case. The décision in that action was
under the canal and trafific act of 1854. (17 & 18 Vict. c. 31), which in
broad terms declared "that every railway company * * * shall
aflford ail reasonable facilities for the receiving and forwarding and
delivering of traffic * * * ; and no such company shall make or
give any undue or unreasonable préférence or advantage to * * *
any particular person or company * * *; nor shall any such
company subject any particular person or company or any particular
description of traffic, to any undue or unreasonable préjudice or dis-
advantage in any respect whatsoever." It appeared that the railway
company made a practice of carrying coal in very large quantities, but
for convenience in handling the large amount of traffic over its road
it made a practice of carrying coal for collicry owners only, from the
pit's mouth to stations where such colHery owners had cells appropri-
ated to their use for the réception and sale of their coal. The com-
plainant was a coal merchant, and on a certain day he tendered 16
cars or trucks loaded with coal to the railway company at one of its
stations, to be forwarded to three other stations on its road where the
complainant had no cell or siding appropriated to his spécial use for
the réception of his coal trucks and the sale of coal. The railway
453
company declined to receive and haul his trucks, although they were
in a fit and proper condition to pass over its road, whereupon he
sought to compel the company to do so. The court held, in sub-
stance, that owing to the large amount of trafïic in coal over the com-
pany's road it had an undoubted rigbt to say that it would haul coal
for colliery owners only who had acquired the requisite facilities for
receiving and disposing of coal promptly on arrivai at its destination,
as otherwise the carrier would not liave the necessary control over its
road. The court further observed that, if the privilège demanded by
the complainant was accorded to him, it would hâve to be accorded
to ail other persons, and would deprive the carrier of the benefit of an
arangement which it had devised to insure the safe and convenient
opération of its road. The case in question accordingly décides, in
effect, that notwithstanding the broad inhibitions contained in the
English trafHc act, a carrier whose business consisted in part of haul-
ing coal in large quantities was entitled to make régulations with
respect to the manner of receiving and transporting it so that it might
be handled expeditiously, safely, and economically without any un-
necessary interférence with the carrier's other business. It follows,
of course, that régulations made by a carrier which hâve thèse objects
in view, and are well designed to promote them, cannot be complained
of on the ground that they operate as a préférence in favor of one
who does comply with them or as a discrimination against those who
do not.
On the trial of this case in the lower court one of the questions
which appears to hâve been discussed and decided by the learned
trial judge (vide Ii8 Fed. 169, 172) was whether the défendant com-
pany was under an obligation to put in a switch or spur track for the
plaintiiï's convenience at such place as he desired. In their brief
counsel for the plaintifï in error say that they will not discuss this
question, because the plaintifif did not bring his action on account of
any failure of the défendant company to put in a switch, but for the
other alleged wrongs heretofore considered. Besides, the évidence
does not show, we think, that the défendant did décline to put in a
switch or spur track for the plaintifï on the same terms that it was in
the habit of putting in such tracks for other shippers. This latter
question, therefore, according to the concession of counsel, is not be-
fore this court for détermination or considération.
Another question, however, has been debated by counsel for both
parties at some length, and that is whether the Arkansas statute,
above cited, and other statutes of the state of a like nature, hâve any
application in determining the rights of common carriers and ship-
pers of coal as respects coal which is tendered to the carrier for ship-
ment to points outside of the state. The plaintifif in error maintains
the affirmative of this proposition, while the défendant in error main-
tains the négative; contending in efïect, that the local law is ap-
plicable only as respects coal that is tendered for shipment to points
within the state, and that if intended to apply to shipments to other
States and territories would be invalid as amounting to a régulation
of Interstate commerce. We hâve found it unnecessary to consider
or détermine that question, holding, as we do, that the acts proven to
454 125 PBDBEAIi HEPOETBB,
have béen committed by the défendant company were not a violation
of the local law or the common law. Learned counsel for the plain-
tifï in error concèdes in his argument, and in that view we concur,
that it i?_inimaterial in the case in hand "whether it be considered
that the common law contrôla or whether the statute contrôla." The
local statute (aection 6193, Sandels & H. Dig. Ark.)> which déclares
that railroad companies "shall furnish ; sufficient accommodations for
the tranaportation of ail auch passengers and property as shall, within
a reasonable time previous thereto, offer or be offered for transporta-
tion at the place of starting and the junctions of pther railroads, and
at aidings and atopping placea estabHshed for receiving and dischar-
ging * * * paasengers and freights, and shall take^ transport and
discharge such passengers and property at, from and to such places
on the due payment of toUs," etc., cannot be understood as depriving
the carrier of the right to make reasonable regulationa applicable alike
to ail perspna and corporations relative to the manner in which such
a commodity as coal shall be delivered for transportation,: nor as com-
peUing the carrier to set out on its side tracka at stations coal cars to
be there loaded by means of wagons. That view of the statute, if
it was adopted, would deprive the carrier of the power to aerve the
public in the most efficient, speedy, and economical manner, and it will
not be presumed that such was the purpose of the Législature. If the
statute in question opérâtes to modify the common law, it only modi-
fies it, we think, to the extent of compelling railroads to carry ail
kinds of property which is tendered for carriage instead of such prop-
erty as they make a public profession of carrying. It does not de-
prive railway companies of the right to make such reasonable régula-
tions concerning the manner in: which an article like coal shall be de-
livered as are conducive aHke to the guccessful opération of its road
and to the public welfare.
We are of opinion that the case was rightly decided below, and
the judgment is accordingly affirmed.
WHITWELL V. CONTINENTAL TOBACCO CQ. et al.
(Circuit Court of Appeals, Eighth Circuit, November 12, 1903.)
No. 1,902.
1. Anti-Teust Act— What Contkacts, GOmbinations, or Conspiracibs Vio-
LATB. ':
Every contract, comblnatlon, or conspiracy, the neeessary ettect of
which is to stlfle or to aii-ectiy ànd substantially restrict compétition in
commerce among the states, IS In restralnt of Interstate commerce, and
violâtes section 1 of the act bf July 2, 1890, c. 647, 26 Stat. 209 [U. S.
Comp. St. 1901, p. 3200].
2. Bamk— What Acts, ConTeactb, and Combinations do noT Violate.
Acts, contracts, and comblnatlon^ .which promote, or only incidentally
or Indirectly restrict, compétition: ip commerce among the states, while
their miin purpose and chlef effeCt are to f ester the trade and Increase
the business of those who make and operate them, are not In restralnt
of Interstate commerce, or violatlve of section 1 of the act of July 2, 1890,
C 647, 26 Stat. 20O [U. S. Comp. St. 1901, p. 3200].
WHITWELL V. CONTINENTAL TOBACCO CO. 455
8. Same— Construction.
The anti-trust act sliould hâve a reasonable construction^one -which
tends to advance the remedy it provides, and to abate the mischief at
which it was leveled.
4. Same— Attempts to Monopowzb a Part op Interstate Commerce.
Every attempt to monopolize a part of Interstate commerce, the neces-
sary effect of VFhlch is to stifle or to directly and substantially restrict
compétition in commerce among the states, violâtes section 2 of the act
of July 2, 1890, c. 647, 26 Stat. 209 [U. S. Comp. St 1901, p. 3200],
5. Same.
Attempts to monopolize a part of commerce among the states which
promote, or only incidentally or indirectly restrict, compétition in Inter-
state commerce, while their main purpose and chief effect are to increase
the trade and foster the business of those who make them, were not
intended to be, and were not, made illégal or punishable by section 2 of
the anti-trust act of July 2, 1890, c. 647, 26 Stat. 209 [U. S. Comp. St. 1901,
p. 3200], because sucb attempts are indispensable to the existence of any
compétition in commerce among the states.
6. Samb— Restriction of Sales of Qoods.
A manufacturer, a corporation, and its employé restricted the sales of
Its products to those who refrained from dealing In the commodities of its
competitors by fixing the priées of its goods to those who did not thus
refrain so high that their purchase was' unprofitable, while it reduced the
priées to those who declined to deal In the wares of its competitors so
that the purchase of the goods was profitable to them. ïhe plaintiff
applled to purchase, but refused to refrain from handUng the goods of the
corporation's competitors, and sued it for damages caused by the refusai
of the défendants to sell their commodities to him at priées which would
malîe It profitable for him to buy them and sell them again. Beîd, the
restriction of their own trade by the défendants to those purchasers who
declined to deal in the goods of their competitors was not violative of
the anti-trust act.
7. Sales— Restriction— Damages.
The owner of goods may dictate the priées at which he will sell them,
and the damages which are caused to an applicant to buy by the refusai
of the owner to sell to him at priées which will enable him to resell them
at a profit constitute no légal injury, and are not actionable, because
they are not the resuit of any breach of duty or of contract by the
owner.
(Syllabus by the Court.)
In Error to the Circuit Court of the United States for the District
of Minnesota.
Dan W. Lawler (Frank Arnold, on brief), for plaintiff in error.
C. A. Severance and Junius Parker (W. W. FuUer, F. B. Kellogg,
and R. E. Olds, on the brief), for défendants in error.
Before SANBORN, THAYER, and VAN DEVANTER, Circuit
Judges.
SANBORN, Circuit Judge. This îs an action by the plaintiff,
Joseph P. Whitwell, to recover treble damages from the Continental
Tobacco Company, a corporation, and from one of its employés,
George E. McHie, under the anti-trust act of July 2, 1890, c. 647, 26
Stat. 209 [U. S. Comp. St. 1901, p. 3200], on the sole ground that the
défendants refused to sell the manufactured products of the tobacco
Company to him at priées which would enable him to resell them to
others at a profit, unless he refrained from buying, selling, or hand-
456. i 125 FEDERAL REPORTER.
ling plug chewing tobacco made by independent manufacturers who
were competing with thë tobacco company for the trade of the coun-
try. Ail the parties to the suit were engaged in Interstate commerce,
and the products in question were the subjects thereof. The main
question which the case>; présents is,'rnayone engaged in commerce
among the states lawfully sélect his customers, and sell only to those
who do npt buy or sell the wares of his competitors, or is such a
restriction of his own trade by a manufacturer or merchant and his em-
ployés a "contract, combination or conspiracy in restraint of trade"
or an "attempt to monopolize any part of trade," within the meaning
of the act of July 2, 1890, 26 Stat. 209 [U. S. Comp. St. 1901, p. 3200] ?
An analysis of the averments of the complaint to which the court
below sustained a genetal demurrer will demonstrate the fact that
the crucial question in' this case has been correctly stated. The
material facts which those averments disclose are thèse: The plain-
tifif is a jobber of tobacco, and of the products of tobacco, at St.
Paul, Minn. The tobacco company is a manufacturer and merchant,
and McHie is its agent and employé. The tobacco company owns
and controls most of the valuable and leading brands of plug and
chewing tobacco in the United States, and fixes the market priées
thereof. The company and its agent, McHie, had long been, and on
May I,. 1902, still were, in the practice of selling its goods to jobbers
in this way : They allotted to an intending purchaser an amount of
its goods which he was required to buy during each succeeding period
of four months. This allotment was much in excess of the amount
which he would be able to sell during that time. They fîxed the
priées of the goods comprising the allotment so high that, if the
purchaser paid the priées thus fixed, he could not make any profit
hy buying and selling the commodities. They required each pur-
chaser to refrain from dealing in plug chewing tobaccos made by
indepe^ndent and competing manufacturers. If the purchaser com-
plied with this réquirèment, they invariably reduced his allotment
to the amount he was able to sell, and paid back to him such a
percentage of the aggregate price of the goods he bought that the
handling of thèse commodities was by reason of this repayment alone
made profitable to him. If the purchaser refused to comply with
this requirement, they refused to reduce the amount of his allot-
ment or the priées of his goods, so that the business was unprofît-
able to him. The plaintifif had long participated in this method of
transacting business, had been handling the products of the tobacco
company in accordance with it, and had an established business in
the purchase of tobacco and its products, and in the sale of them
throughout the states of Minnesota, North Dakota, and South Dakota,
when on May i, 1902, the défendants made an allotment to him for
the succeeding four months, and oiïered to furnish their commod-
ities to him in accordance with their established practice. He,
however, refused to refrain from handling the goods of independent
manufacturers who were competing with the défendants. Thereupon
the latter refused to reduce the allotment which they had made to
him, or the priées thereof, so that the handling of the goods of the
tobacco company would be profitable to the plaintifif, and he did
WHITWELL y. CONTINENTAL TOBACCO CO. . 457
not purchase, or agrée to purchase, their goods. He was unable to
procure them elsewhere, and sustained damages in the sum of $280.
No other facts are stated in the complaint. There are, however,
allégations that the défendants combined and conspired to regulate
and to raise the priées of their goods, and to control the output
thereof, with the intent to monopolize trade and commerce among
the States of Minnesota and North Dakota and South Dakota ; that
they combined to arbitrarily fix the prices of their goods, independ-
ently of their natural market value, and to refuse to sell them on
equal terms to ail intending purchasers; and that they did ail thèse
things in restraint of trade and commerce among the states. But
the only way in which the plaintiff avers that thèse défendants re-
strained or attempted to monopolize interstate trade, or disclosed
their intent to do so, was by restricting the sale of their own goods
to customers who refrained from handling the wares of their com-
petitors by making their sales on the terms which hâve been stated.
The gênerai averments of the intent, purpose, and efïect of the acts
of the défendants may therefore be laid aside hère. They serve no
purpose save to foreshadow the argument of counsel relative to the
légal efïect of the facts which the complaint sets forth. They neither
State, nor aid in the statement of, any cause of action, because they
disclose no fact, and the only question hère is whether the facts
stated in the complaint constitute a cause of action. The only facts
thus stated arc that the tobacco company and its employé refused
to make sales of its products to the plaintiff, or to others who de-
sired to purchase, on terms that would be profitable to them, unless
they refrained from dealing in the goods of its competitors. Was
this act, or the course of dealing which it illustrâtes, a violation of the
anti-trust law of 1890? That law provides:
"Section 1. Every contraet, combination in the form of trust or otherwise, or
conspiracy, in restraint of commerce among the several states, or with foreign
nations, is hereby declared to be illégal. * • *
"Sec. 2. Every person who shall monopolize, or attempt to monopolize, or
combine or conspire with any other person or persons, to monopolize any part
of the trade or commerce among the several states, • • » ghall be deemed
guilty of a misdemeanor. * • *"
Under this act, every contraet, combination, and conspiracy in re-
straint of trade among the states is illégal. Every person who en-
gages in any such combination violâtes this law, and a corporation
is a person. Act July 2, 1890, c. 647, §§ i, 8, 26 Stat. 209, 210 [U.
S. Comp. St. 1901, pp. 3200, 3202]. Hence the real question in every
case which arises under this law is whether or not the contraet, com-
bination, or conspiracy challenged is in restraint of trade among the
states. It has now been settled by repeated décisions of the Suprême
Court that this question must be tried, not by the intent with which
the combination was made, nor by its efïect upon traders, producers,
or consumers, but by the necessary efïect which it has in defeating
the purpose of the law. That purpose was to prevent the stifling
or substantial restriction of compétition, and the test of the legality
of a combination under the act which was inspired by this purpose
is its direct and necessary effect upon compétition in commerce among
458 ' » ") ' 12S FBDEKAIi RBPOR'TbB.
the States. If Hs néccssâJ'y' efïfect i's to^-stifle or to directly and sub-
stantialiy restrict fféff-^mpetitidni it'is_ a 'ContraGt, Gombination, or
conspiracy in rêst'raint 'df tràde, and it fàlls undèr the ban of the law.
U. S. V. ■ Trâiië-;Missouf i Freight Association, i66 U. S. 290, 339,
340, 342, 17 Sùp: Ct.' 540, 41 L,. Ed. 1007; Addyston Pipe & Steel
Cp. V. U. S., 17S U. S. 211, 234, 20 Sup. Ct. 96, 44 L. Ed. 136; U.
S. V. Joint Tràffic Ass'n, 171 U. S. 505, 576, 577, 19 Sup. Ct. 25, 43
L. Ed. 259; U. S. V. Northern Securities Co. (C. C.) 120 Fed. 721,
725; U. S. V, Jellico ;.Ki;6untâin Coal & Coke Co. (C. C.) 46 Fed. 432,
12 L. R. A. 753; Ivdvvry V. Tile, Maritel & Grate Ass'n (C. C.) 98
Fed. 817, 826; Id. (C. C.) 106 Fed. 40, 45; U. S. v. Addyston Pipe
& Steel Co., 85 Fed. 2j'k, 294, 29 C. C. A. 141, 163, 46 E. R. A. 122;
U. S. V. Coal Dealers' Ass'n (C. C.) 85 Fed. 252 ; Chesapeake & O.
Fuel Co. V. U. S., 115 Fed. 610, 619, 53 C. C. A. 256, 265; Gibbs v.
McNeeley, 118 Fed. 120, 55 C. C. A. 70, 60 E. R. A. 152; Brown v.
Jacobs Pharmacy Co. (Ga.) 41 S. E. 553, 57 L. R. A. 547; Arnot
V. Coal Co., 68 N. Y. 558, 23 Am. Rep. 190; Morris Run Coal Co. v.
Barclay Coal Co., 68 Pa. 173, 8 Am. Rep. 159.
If, on the other hand, it prorhotes or but incidentally or indirectly
restricts compétition, while its mairl pûi-pdse and chief effect are to
foster the trade and to increase the buisiness of those who make
and operate it, then it is not a contract, combination, or conspiracy
in restraint of trade, Within the true interprétation of this act, and it
is not subject to its deiïunciation. Hopkins v. U. S., 171 U. S. 578,
592, 19 Sup. Ct. 40, 43 £;. Éd. 290; Anderspn V. U. S., 171 U. S.
604, 616, 19 Sup.' Ct. 50, 43 L. Ed.. 300; U. S. V. Joint Traffic Ass'n,
171 U, S. 505, 568, 19 Sup. Ct. 25, 43 É- Ed. 259; Addyston Pipe &
Steel Cp. V. U. S., 175 U. S. 211, 245, 2o Sup. Ct. 96, 44 E. Ed. 136;
U. S. Chemical Co. v. Provident Chemical Co. (C: C.) 64 Fed. 946;
California Steàm Navigation Co. v. Wright, 6 Cal. 258, 65 Am. Dec.
SU ; Snialley v. Greene, 52 lowa, 241, 3 N. W. 78, 35 Arn. Rep. 267;
Schwalm v, Holmes, 49 Cal. 665; In re Greene (C. C.) 52 Fed. 104,
115, 116, 117; In re Grice (C. C.) 79 Fed. 627, 644; Allgeyer v.
Eouisiana, 165 U. S. 578, 589, 7 Sup. Ct. 427, 41 E. Ed. 832 ; State
V. Goodwill (W. Va.) 10 S. E. 285, 286, 6 L. R. A. 621, 25 Am. St.
Rep. 863 ; People V. Gillson, 109 N. Y. 389, 398, 17 N. E. 343, 4 Am.
St. Rep. 465; Butchers' Union Co. v. Crescent City, etc., Co., m
U. S. 746, 7S5, 4 Sup. Ct. 652, 28 E. Ed. 585; Welch v. Phelps &
Bigelow Windmill Co./(Tex. Sup.) 36 S. W. 71; Commonwealth v.
Grinstead (Ky.) 63 S. W. 427; Walsh v. Dwight (Sup.) 58 N. Y. Supp.
91, 93; Brown v. Rounsavell, 78 111. 589; Noyés on Intercorporate
Relations, §,388, p. 563.
, In Hopkins, y. U. S.,: 171 U. S. 592, 19 Sup. Ct. 45, 43 L. Ed. 290,
,the Suprême Court saîd;:
"The contraèt (iondemneà by the stattite là one whose direct and Immédiate
eîEect Is à restraint upon that klnd of trade or commerce which is Interstate.
• * * To treat as condemned by the act ail agreemepts under which, as
a resuit, the .cost of conducting an Interstate commercial business may be
Increased, wpiild.énlarge the application of the act far beyond the falr mean-
log of the- lâiigiiàge used. There must be some direct' and Immédiate effect
upon Interstate commerce In order to corne wlthln the act"
WHITWELL V. CONTINENTAL TOBACCO CO. 459
And at page 600, 171 U. S., page 48, 19 Sup. Ct., 43 L. Ed. 290, it
said:
"The act of Congress must hâve a reasonable construction, or else there
would scarcely be an agreement or contract among business m en that
eould not be said to hâve, indirectly or remotely, some bearing upon interstate
commerce, and possibly to restrain it. We hâve no idea that the act covers
or was intended to cover such kinds of agreements."
In Anderson v. U. S., 171 U. S. 616, 19 Sup. Ct. 54, 43 L. Ed. 300,
the court quoted this sentence from the opinion in Smith v. Alabama,
124 U. S. 465, 473, 8 Sup. Ct. 564, 566, 31 L. Ed. 508, "There are
many cases, however, where the acknowledged powers of a state
may be exerted and appHed in such a manner as to afïect foreign or
interstate commerce without being intended to operate as commercial
régulations," and then said:
"The same Is true as to certain klnds of agreements entered Into between
persons engaged in the same business for the direct and bona lide purpose of
properly and reasonably regulating the conduct of their business among
themselves and with the publie. If an agreement of that nature, while
apt and proper for the purpose thus intended, should possibly, though only
indirectly and unintentlonally, affect interstate trade or commerce,' in that
event we think the agreement would be good. Otherwise there is scarcely an
agreement among men which has interstate or foreign commerce for its sub-
ject that may not remotely be said to in some obscure way affect that com-
merce, and to be therefore void."
In U. S. V. Joint TrafRc Ass'n, 171 U. S. 568, 19 Sup. Ct. 31, 43
L. Ed. 259, the Suprême Court, after reviewing and affirming the case
of Hopkins v. U. S. and the rule which has been quoted from that
case, declared:
"An agreement entered into for the purpose of promoting the legitimate
business of an indlvldual or corporation, with no purpose to thereby affect
or restrain interstate commerce, and which does not directiy restrain such
commerce, is not, as we think, covered by the act, although the agreement
may Indirectly and remotely afCect that commerce. * • * To suppose, as
Is assumed by counsel, that the effect of the décision In the Trans-Missourl
Case is to render Illégal most business contracta or combtnations, however
indispensable and necessary they may be, because, as they assert, they al!
restrain trade in some remote and indirect degree, is to make a most violent
assumption, and one not called for or justified by the décision mentioned,
or by any other décision of this court"
'1
The right of each corapetitor to fix the priées of the commodities
which he offers for sale, and to dictate the terms upon which he will
dispose of them, is indispensable to the very existence of compétition.
Strike down or stipulate away that right, and compétition is not only
restricted, but destroyed. Hence agreements of competing railroad
companies to intrust their power to fix rates of transportation to the
same man or body of men (U. S. v. Trans-Missouri Freight Ass'n,
r66 U. S. 290, 17 Sup. Ct. 540, 41 L. Ed. 1007; U. S. v. Joint Traffic
Ass'n, 171 U. S. 505, 19 Sup. Ct. 25, 43 L. Ed. 259; U. S. v. Northern
Securities Co. [C. C] 120 Fed. 721), and contracts of competitors in
the production or sale of merchantable commodities to deprive each
competitor of the right to ûx the prices of his own goods, the terms
of the sale, or the customers to whom he shall dispose of them, and
either to fix thèse prices, terms, and customers by the agreement of
460 125 FBDEBAL EBPORTEB.
the competitorsj or to intrust the power to dictate them to the same
man or body of men (U. S. v. Jellico Mountain Coal & Coke Co.
[C. C] 46 Fed. 432, 12 L. R. A. 753 ; U. S. v. Coal Dealers' Ass'n
[G. C] 85 Fed. 252; Addyston Pipe & Steel Co. v. U. S., 175 U. S.
211, 20 Sup. Ct. 96, 44 L. Ed. 136; U. S. V. Addyston Pipe & Steel
Co., 85 Fed. 271, 29 C. C. A. 141, 46 L. R. A. 122; Chèsapeake & O.
Fuel Co. V. U. S., 115 Fed. 610, 53 C. C. A. 250; Gibbs v. McNeeley,
ti8 Fed. 120, 55 C. C. A. 70, 60 L. R. A. 152; Lowry v. Tile, Mantel
& Grate Ass'n [C. C] 98 Fed. 817; Id. [C. C] 106 Fed. 40), neces-
sarily hâve the effect either to stifle compétition entirely, or to direct-
ly and substantially restrict it, because such contracts deprive the
rivais in trade of their best means of instituting and maintaining com-
pétition between themselves.
In the contract, combination, or conspiracy which is charged against
the défendants in this case there is nothing of this character. The
tobacco Company is a manufacturer and trader, and McHie is its em-
ployé. Conceding, for the purpose of the argument only, but not decid-
ing, that there may be a contract, combination, or conspiracy in re-
straint of trade between an employer and his employé, no such con-
tract, combination, or conspiracy between them can be a violation of
this law unless it is in restraint of interstate commerce; and the only
combination charged against the défendants is their combination to
make sales of the commodities of the tobacco company profitable to
purchasers to those persons only who refrain from dealing in the
wares of their competitors. The two défendants in this case hâve
never been and never intended to be competitors. There has never
been any compétition, actual or possible, between them, and hence
no compétition between them is or can be restrained by their combina-
tion to conduct the trade of the tobacco compàny. The contract,
combination, or conspiracy charged against them did not restrict com-
pétition between them and the independent manufacturers or dealers
who, according to thecomplaint, were their competitors, because it left
the latter free to sélect their purchasers and to fix the priées of their
goods and the terms at which they would dispose of them to ail intend-
irtg purchasers.
The tobacco company and its competitors were not dealing in
articles of prime necessity, like corn and coal, nor were they ren-
dering public dr quasi public servièe, like railroad and gas corpo-
rations. Each of them, therefore, had the right to refuse to sell its
commodities at any price. Each had the right to fix the priées at
which it would dispose of them, and the terms upon which it would
contract to sell them. Each of them had the right to détermine
with what persons it would make itS contracts of sale. In re Greene
(C. C.) 52 Fed. 104, us; In re Grice (C. C.) 79 Fed. 627, 644;
Wàlsh v. Dwight (Sup.) 58 N. Y. Supp. 91, 93 ; Brown v. Rounsavell,
78 111. 589; Commonwealth v. Grinstead (Ky.) 63 S. W. 427; AU-
geyer v. Louisiana, 165 U. S. 578, 589, 17 Sup. Ct. 427, 41 L. Éd. 832.
There is nothing in the act of july 2, 1890, c. 647, 26 Stat. 209 [U. S.
Comp. St. 1901, p. 3200], which deprived any of thèse competitors
of thèse rights. If there had been, the law itself would hâve de-
stroyed compétition more efifectually than any contracts or combi-
WHITWELL V. CONTINENTAL TOBACCO CO. 461
nations of persons or of corporations could possibly hâve stifled it.
The exercise of thèse undoubted rights is essential to the very ex-
istence of free compétition, and so long as their exercise by any
person or corporation in no way deprives competitors of the same
rights, or restricts them in the use of thèse rights, it is difïîcult to
perceive how their exercise can constitute any restriction upon com-
pétition or any restraint upon interstate trade.
The acts of the défendant which are alleged by the complaint in
this action to constitute an unlawful restraint upon interstate com-
merce are nothing more than the lawful exercise of thèse unques-
tioned rights which are indispensable to the existence of compé-
tition or to the conduct of trade. The tobacco company and its em-
ployé fixed the priées of its commodities so high that tlie plaintifif
could not profitably buy them. This was no restriction upon free
compétition, because it left the rivais of the company free to sell
their competing commodities at any price which they elected to
charge for them. It would hâve been no violation of the law under
considération if the tobacco company and its employé had com-
bined to refuse to sell any of its commodities at any price, and to
retire from the business in which they were engaged entirely. Much
less could it be a violation of this act for them to fîx their priées
too high for profitable investment by the plaintifï.
The tobacco company and its employé sold its products to cus-
tomers who refrained from dealing in the goods of its compet-
itors at priées which rendered their purchases profitable. But there
was no restriction upon compétition hère, because this act left the
rivais of the tobacco company free to sell their competing com-
modities to ail other purchasers than those who bought of the de-
fendants, and free to compete for sales to the customers of the
tobacco company by ofïering to them goods at lower prices or on
better terms than they secured from that company. The tobacco
company and its employé were not required, like competitors en-
gaged in public or quasi public service, to sell to ail applicants who
sought to buy, or to sell to ail intending purchasers at the same
prices. They had the right to sélect their customers, to sell and to
refuse to sell to whomsoever they chose, and to fix difïerent prices
for sales of the same commodities to difïerent persons. In the
exercise of this right they selected those persons who would refrain
from handling the goods of their competitors as their customers,
by selling their products to them at lower prices than they offered
them to others. There was nothing in this sélection, or in the means
employed to efïect it, that was either illégal or immoral. It had no
necessary efïect to directly and substantially restrict free compéti-
tion in any of the products of tobacco, and it did not unlawfully
restrain interstate commerce, because it in no way restriçted the
exercise of the rights of the competitors of the tobacco company to
fix the prices of their goods and the terms of their sales of similar
products according to the dictâtes of their respective wills.
It is contended, however, that this sélection by the défendants
of customers who refrained from selling the goods of their com-
petitors violated section 2 of the anti-trust act, because it was an
4Ç2f 125 FEDERAL BBPOBTEB.
"attempt to monopolize * * * part of the trade or commerce
arnong the several states." ït is admitted that the practice of the
défendants was not only an attempt, but a successful attempt, to
monopolize a part of this commerce. But is every attempt to
monopolize any part of interstate commerce made unlawful and
punishable by section 2 of the act of July 2, 1890, c. 647, 26 Stat. 209
[U. S. Comp. St. 190IV p. 3200] ? If so, no interstate commerce
has ever been lawfully conducted since that act became a law, be-
cause every sale and every transportation of an article which is the
subject of interstate commerce is a successful attempt to monop-
olize that part of this cqmmerce which concerns that sale or trans-
portation. An attempt by each competitor to monopolize a part of
interstate commerce is the very root of ail compétition therein.
Eradicate it, and compétition necessarily ceases — dies. Every person,
engaged in interstate commerce necessarily attempts to draw to
himself , and to exclude othe^is from, a part of that trade ; and, if he
raay not do this, he may not compete with his rivais, ail other persons
and' corporations must cease to secure for themselves any part of
the commerce among the states, and some single corporation or
person must be permitted to receive and control it ail in one huge
monopoly. The purpose of the act of July 2, 1890, was, however, to
preveht the stifling of ço™pstition, not tp destroy it or to foster
monopoly, and any construction of any of its provisions which would
give it such an efïect is unreasonable and inconsistent with the
object and spirit of the law. It is an interprétation which fosters
the mischief it was passed to remedy, and destroys the remedy pro-
vided to abate the evil, while a sound construction would tend to
abate the mischief and to promote the remedy. It cannpt, therefore,
be the true meaning of the second section of this law that every
attempt to monopolize any part of interstate commerce is illégal.
The act must, as the Suprême Court has twice declared (Hopkins v.
U. S., 171 Ù. S. 578, 600, 19 Sup. Ct. 40, 43 L. Ed. 290; U. S. v.
Joint Traffic Ass'n, 171 U. S. 505, 568, 19 Sup. Ct. 25, 43 L. Ed. 259),
hâve a reasonable construction. The purpose of the second section
is the same as that of the first — to prevent the restriction of com-
pétition — and the two sections ought to receive similar interprétations.
The Suprême Court has declared that the true construction of the
first section is that no contract, combination, or conspiracy is de-
nounced by it unless its necessary effect is to directly and substan-
tially restrict compétition in commerce among the states. By a parity
of reasoning, the correct interprétation of the second section must
be that no attempt to monopolize a part of commerce among the
states is made illégal or punishable by the provisions of that section
unless the necessary efïect of that attempt is to directly and substan-
tially restrict coinmerce among the states. The acts of the défend-
ants had no such efïect. They evidenced nothing but the legitimate
eflforts of traders to secure for themselves as large a part of inter-
state trade as possible, while they left their competitors free to do
the same. It was not — it could not hâve been— the purpose or the
efïect of the second section of this law to prohibit or to punish the
customary and universal attempts of ail manufacturers, merchants.
CENTRAL GRAIN <Ss STOCK EXCH. V. BOAED OF TEADB. 463
and traders engaged in interstate commerce to monopolize a fair
share of it in the necessary conduct and desired enlargement of their
trade, while their attempts leave their competitors free ta make
successful endeavors of the same kind. The acts of the défendants
were of this nature, and they did not violate the second section of
the law. An attempt to monopolize a part of interstate commerce,
the necessary efifect of which is to stifle or to directly and sub-
stantially restrict compétition in commerce among the states, vio-
lâtes the second section of this act. But an attempt to monopolize a
part of interstate commerce which promotes, or but indirectly or
incidentally restricts, compétition therein, while its main purpose and
chief efïect are to increase the trade and foster the business of those
who make it, was not intended to be made, and was not made, illégal
by the second section of the act under considération, because such
attempts are indispensable to the existence of any compétition in
commerce among the states.
There is another reason why the complaint in this action fails to
State facts sufficient to constitute a cause of action: The sole cause
of the damages claimed in it is shown to be the refusai of the de-
fendants to sell their goods to the plaintifï at prices which would
enable him to resell them with a profit. Now, no act or omission
of a party is actionable, no act or omission of a person causes légal
injury to another, unless it is either a breach of a contract with, or
of a duty to, him. The damages from other acts or omissions form
a part of that damnum absque injuria for which no action can be
maintained or recovery had in the courts. The défendants had not
agreed to sell their goods to the plaintifï at prices which would
make their purchase profitable to him, so that the damages he suf-
fered did not resuit from any breach of any contract with him.
They were not caused by the breach of any légal duty to the plaintifï,
for the défendants owed him no duty to sell their products to him at
any price — much less, at prices so low that he could realize a profit
by selling them again to others. The complaint therefore fails to
show that any légal injury or actionable damages were inflicted upon
the plaintifï by the acts of the défendants and the judgment below
is afïirmed.
CENTRAL GRAIN & STOCK EXCH. OF HAMMOND v. BOARD OF
TRADE OF CITY OF CHICAGO.
(Circuit Court of Appeals, Seventh Circuit October 6, 1903.)
No. 977.
1. FEDERAL Courts— JoRisDicTioN—MnsT Affirmativklt Appeau.
In every case the question with which a fédéral court Is flrst eon-
fronted is that of its jurisdietion both over the subject-matter and of the
party, and this jurisdietion must afflrmatively appear ujMn the record.
2. Samb— FoRBiGN Corporation— Service on Agent.
There are but two means by which a fédéral court can obtain Juris-
dietion oyer a foreign corporation: The one by voluntary appearance,
If 2. Service of process on foreign corporations, see note to EIdred v. Palace
Car Co.. 45 O. C. A. 3.
464 125 FEDERAL EEPOETER.
and the other, îf the corporation Is prosecuting Its business In the state
where sned, by service of process upon some offlcer or agent in that state
appointed to there transact and manage its business and representing
the corporation in such state. Service upon an agent of such corporation
is not service upon the corporation, uniess It be engaged in business in
the state Tvhere the agent is served and he be appointed to act for it
there.
8. Samb.
A returh to prOcesS issued for a foreign corporation as défendant in
an equity suit in a fédéral court, showing service on an oAScer of tUe cor-
poration, is not sufiScient to authorize the court to entertain jurisdlction,
where It does not appear elther by such retum or from the record that
the corporation was at the time engaged In doing business in the state.
4 WlTNBSSBS— COMPBLLING ATTKNDANCB— POWKK TO RbQUIRB CORPORATION TO
Producb Officbr.
A court is without power to compel a corporation to produce one of Its
offlcers, vcho Is beyond the jurisdictlon of the court, as a v?ltness, the
corporation itself having no power, and belng under no légal duty, to
compel the offlcer's attèndance.
5. Process— Motion to Quash— Duty to Détermine bbfokb Considbrino
Merits.
Défendant corporation appeared specially and flled a motion to quash
the service, whlch was referred to a master for hearing. Jurisdlction
over the défendant did not appear from the marshal's retum, or other-
wisefrom the record. EeU, that an order suspending the hearing before
the master untll défendant should produce its président as a witness,
and in the meantlme granting a temporary injunction as prayed in the
bill, was erroneous, both because In the state of the record the court was
without jurisdlction to consider the case on the merits, and also because
It was without rightful authority to compel the défendant to produce
Its olBcer as an adverse witness or to grant the injunction as a penalty
for Its f allure to do so, there being no évidence that It was responslble
for the fact that the offlcer was without the jurisdlction and could not
be served with subpœna.
6. Same— Waivbr of Objection— Gbnbral Appeabancb.
When a party appears specially to object to the jurisdictlon, or to move
to set aslde the service of process, he does not walve the illegallty in the
service If after such motion is denied he answers to the merits, nor by
appealing from a decree or order afCecting the merits entered by the court
while wlthholdlng its judgment on the question of its jurisdlction. Such
illegallty In the service is waived only when, without having Insisted
upon it, he pleads to the merits.
Appeal from the Circuit Court of the United States for the North-
ern District of Illinois.
On December 23, 1902, the appellee, a corporation of the state of Illinois,
filed Its , blU of complaint for an injunction against the appellant, a corpora-
tion of the state of Delaware, of like character with the bill in Illinois Com-
mission Company v. Cleveland Telegraph Company, 119 Fed. 301, 56 C. C. A.
205, to restrain the recel ving, obtainlng, and distributing of market quotatlons
of the appellee until the rlght so to do should hâve been flrst acquired from
the appellee, and subpœna Issued returnable the flrst Monday of February,
1903, with notice of motion for an injunction to be heard on the 29th of
December, 1902. The marshal, on December 29, 1902, returned to the sub-
pœna that he had served. it by dellverlng a copy to Charles W. Blckel, secre-
tary of the company, and was unable to find the président or any other offlcer
of the défendant withln hls district, and had also served copies upon certain
named persons désigna ted as "agents of the said exchange." On that date-
f 6. EfCect of appearance, see note to O'Connell v. Reed, 5 C. O. A. 594.
See Appearance, vol. 3, Cent. Dîg. §S 52, 143; Process, vol. 40, Cent. Dlg..
|25a
CENTRAL GKAIN & STOCK EXCH. V. BOAED OF TRADB. 465
also the appellant, défendant below, appeared specially, and npon the affl-
davit of Blekel that the défendant is a foreign corporation not doing business
in tàe state of Illinois, and was not on the 26th of December, 1902, and
that neither the président nor any other offleer of the company was there
on that day, and is not now there, transacting business for the corporation
or representing it within the state of Illinois, and that the corporation is not
authorized or qualified to do business within the state according to its stat-
utes, and that the défendant corporation had not transacted any business
within the state of Illinois, moved the court tp quash the service of the sub-
pœna on the ground that the return is untrue in fact and insufflcient in law,
and because défendant corporation is not doing business within the state of
Illinois, was not found within the district nor within the state, and is a
nonresident corporation. On December 29, 1902, the motion to quash was
referred to a master to take proofs upon the motion ^nd report within 10
days. On January 16, 1903, upon application of the corâplainant below, and
upon certain affidavits showing inability to serve a subpœna to appear before
the master upon James F. Southard, alleged to be the président of the de-
fendant, the court entered an order reciting the inability to serve the sub-
pœna, and "there is reason to believe that said Southard is evading service
of subpœna," that Southard appear, and that said défendant, so far as it Is
able, cause Southard to appear before the master at a time specifled. On
January 20, 1903, the master reported that Southard failed and neglected to
appear at the time specifled. Thereupon the complainant below moved the
court "to grant an injunction herein, notwithstanding the defendant's motion
to set aside service herein, unless said défendant shall cause its président,
James F. Southard, to appear at once for examination" before the master.
On January 21, 1903, the court ordered that the défendant below produce
Southard for examination before the master at a time specifled, and, upon
failure so to do, a preliminary injunction should issue. On January 28, 1903,
the court entered an order reciting, "It appearlng to the court that the de-
fendant herein has not caused its président, James F. Southard, to appear as
a witness before Master In Chancery Booth and testify in the above-entitled
cause, now, on motion of complainant it is ordered that unless otherwlse
hereafter ordered by this court the said master be direeted to defer the
matter of his report upon the référence to him of the motion to quash service
herein, until said défendant shall cause the appearance of its said président
before him as a witness as aforesald," and also ordered a temporary injunc-
tion restraining the défendant as prayed in the bill of complaint. On Febru-
ary 4, 1903, the défendant below filed its pétition, "saving and reserving to
itself, however, the question of the jurisdictlon of thia court over the défend-
ant, and appearlng only for the purpose of objecting to the jurisdictlon of the
court," and, concelving itself to be aggrleved by the order of January 28,
1903, prayed an appeal to the Circuit Court of Appeals, and with that pétition
filed its asslgnment of errors: (1) In entertaining jurisdictlon of the de-
fendant; (2, 3) In enterlng the order pending the motion to quash the writ
of subpœna; (4) In holding that the défendant had not complied with the
order requiring it to cause Southard to appear as a witness; (5) In making
the order of January 16, 1903; (6, 7) In holding that, by reason of its failure
to comply with the order to produce Southard as a witness, the temporary
Injunction should issue; (8) that it appeared that before the issuance of the
order the défendant had ceased doing business, and was legally dissolved and
out of existence; (9) in issuing the temporary injunction; (10) in taking
jurisdictlon of a nonresident défendant; (11) in directing the master to defer
the making of his report upon the motion to quash until the défendant cause
Southard to appear; (12) because the défendant had not been served with
subpœna within the jurisdictlon of the court; (13) because the persons served
with subpœna as agents of the company were not at the time its agents
within the jurisdictlon of the court, engagea in the business of the company.
On February 4, 1903, the court allowed the appeal, and on February 5th
a bond on appeal was approved by the court and filed in the cause. On
February 26, 1903, the défendant below filed a certificate of the Secretary
8f State of the state of Delaware showing that the corporation, défendant
below, was dissolved January 10, 1903, and on that date the court ordered
125 F.— 30
M9 '■' 125 FBDBBAIj EEPORTHB.
that the, cèrtlflcate be flled nunc pro tune as of January 28, 1903, and further
érdered that the order of January 21, 1903, be modifled to read as foUowB:
"(Phls cause comlng on now to be béard tipon the motion of the défendant to
<îbrrëctthe order enterèd heréln on Tanuary 16, 1903, by striking out of sald
last-tnentioned order so mudh thei'edf as requlred the défendant, so far as It
was able, to cause sald Sputhard tO à^pear, and upon the counter motion of
the complalnant to grant &.n Injunotlon hereln, unless sald défendant shall
cause its président, James F. Southtfrd, to appear at once before Master Booth
for examiiiatlon, It is ordered that tbe défendant cause its président, James
P. Soùthard, to appear as a Witness before Master in Chancery Booth to tes-
tify in tbë ' matters in IssUe upon the référence hereln to said master by
Frldaî», the 23d day of January, 1903."
Jacob J. Kern, John A. Brown, and Lloyd Charles Whitman, for ap-
pellant.
Henry S. Robbins, for appellée.
Before JENKINS, GROSSCUP, and BAKER, Circuit Judges.
JENKINS, Circuit Judge (after stating the facts as above). In
every case the question with which a fédéral court is first confironted
is that of its jurisdictioti,ïboth over the sUbject-matter and of the
party; andthis jurisdiction must afïirmatively appear upon the rec-
ord. So far has this doctrine been carried that judgments hâve been
frequently reversed upbil âppeal because the records did not disclose
the essential jùfisdictional ; facts. Railvvay Company v. Swan, m
U. S. 379, 4 Sup. Ct. SIC, 38 L. Ed. 462; Hancock v. Holbrook, 112
U. S. 229, s Sup. Ct. lis, 28 L,. Ed. 714; Ayers v. Watson, 113 U. S.
594, 598, S Stip. Ct. 641, 28, L. Ed. 1093; Insurance Company v.
Rhoads, 119 U. S. 237, 7 Stip. Ct. 193, 30 L, Ed. 380; Metcalf v.
Watertown, 128 U. S.. 586,, 9 Sup. Ct. 173, 32 L. Ed. 543; Railroad
Company v. Davidson, 157 U. S. 201, 15 Sup. Ct. 563, 39 L. Ed. 672.
Thèse cases are* to the effect that it is absolutely essential that the
jurisdictional facts appçarby the record; that it is error to proceed
unless the junsdiction of the!çourt be so shown; that; the absence of
jurisdictional facts cannot bç waived; that the failure of the record
to disclose such facts shoùld be noticed by the court sua sponte, and'
may be assigned for errot by the party at whbse instance the error was
cdmmitted. _ . ! ,,',; ■/;''■/.
The record hère discloses diversity of citizenshipj showing juris-
diction if and when the process of the court is duly served or if the
défendant should voluritànly appear. The défendant below was a
corporation Of the state ,ôf pèlàware. Thère could bë no presumption
of its présence Ayithin the state of Illinois. There were but two con-
ditions in (Whîch the court below could obtain jurisdiction over the
corporation: The One by volùntaty appearance — -a condition which
did not occur j thé pthér, if the corporation proseçtlted its business in
the state of ijUinois, by service of process upon, some ofïîcer or agent
• in that state appointed to there transact and manage its business and
representing the corporation în such state. Service upon an agent
ofa foreign çbrpbràtion is flbt service upon the corporation unless it
be engaged îri business in ,t|iei state where such agent is served and
he be appointed to act for it there. St. Clair v. Cox, 106 U. S. 357,
I Sup. Ct. 354,; 27 L. Ed. 222; Cooper Manufacturing Company v.
Ferguson, 113 U. S. 727, 735, 5 Sup, Ct. 739, 28 L. Ed. 1137; Fitz-
CENTRAL QEAIN & STOCK EXOH. V. BOABD OF TRADB. 467
gerald & Mallory Construction Company v. Fitzgerald, 137 U. S. 98,
II Sup. Ct. 36, 34 L. Ed. 608; Goldey v. Moming News, 156 U. S.
518, 15 Sup. Ct. 559, 39 L. Ed. 517; Barrow Steamship Company v.
Kane, 170 U. S. 100, m, 18 Sup. Ct. 526, 42 L. Ed. 964; Mutual Life
Ins. Company v. Spratley, 172 U. S. 602, 610, 19 Sup. Ct. 308, 43 L.
Ed. 569; Conley v. Mathieson Alkali Works (decided May 18, 1903)
23 Sup. Ct. 728, 47 L. Ed. II 13; N. K. Fairbank & Co. v. Cincinnati
Railway Company, 4 C. C. A. 403, 54 Fed. 420, 38 L. R. A. 271.
Immediately upon such service by the marshal the défendant below,
appearing specially to object to the jurisdiction of the court over
it, and upon a showing by afïidavits that it had never transacted busi--
ness within the state of Illinois, that no one oT its officers was at the
time within the state engaged in the transaction of business for it,
and that it had not been authorized or qualified to transact business
within that state by the law of the state, moved the court to quash the
service of the writ upon the ground that the return was untrue in fact
and insufïicient in law. The return of the marshal did not show a
service sufïicient to authorize the court to entertain jurisdiction, be-
cause it does not appear by the return or by the record that the cor-
poration défendant was engaged in business within the state o£
Illinois, or that the persons served were transacting business for it
within the state. Therefore it was proper for the court to first ascer-
tain if it had acquired jurisdiction of the person of the défendant, for
the détermination of that question must necessarily précède any
action of the court upon the merits. The court below recognized its
duty în this respect by passing considération of the motion for an in-
junction, and referring the matter of the motion to quash to a master
to take testimony touching the facts essential to the exercise of
jurisdiction, and to report within 10 days. It properly refrained from
entertaining the motion for an injunction until it was first deter-
mined whether it had jurisdiction over the person of the défendant.
It should hâve continued to refrain from any considération of the
merits until the preliminary and fundamental question of jurisdiction
had been determined. The complainant was unable to subpœna one
Southard, the président of the défendant, as a witness upon the hear-
ing before the master upon the question of jurisdiction. The mastér
reported such inability to the court. Apparently entertaining the
suspicion that Southard was evading service of the subpœna, the court
ordered the défendant, so far as it should be able, to cause Southard to
appear before the master at a time specified. The desired witness
still failing to appear, upon motion of the complainant "to grant an
injunction herein, unless said défendant shall cause its président, James
F. Southard, to appear at once for examination" before the master,
the court directed the défendant to produce Southard for examination
at a time specified, and entered an order that upon failure so to do a
preliminary injunction should issue. At the expiration of the speci-
fied time the order hère appealed from was entered, which recites that
the défendant had not caused its président to appear as a witness as
directed, and ordered the master to defer his report upon the motion
to quash service until the défendant should cause the appearance
of its président before him as a witness, and also directed an injunc-
468 ' 125 FEDERAL KEPOETEK.
tion to issue restraining the défendant as prayed in the bill of com-
plaint. We deem this order unwarranted. We know of no légal duty
imposed upon a corporation to produce its officer as a witness when
the process of the court cannot reach him. The duty of an officer
of a corporation is prescribed by law, or by the articles of incorpora-
tion, or the by-laws of the corporation. The power of a corporation
over its ofHcers has respect only to the duties to the corporation which
the law imposes. We know of no légal duty imposed upon an ofhcer
of a corporation to appear as a witness against that corporation,
except in obédience to the writ of subpœna of a court duly served up-
on him. We know of no power in the corporation, or any duty
devolving upon it, to compel its ofHcer to appear as a witness before
a court. We know of no riglit in a court to compel a corporation to
produce its ofificer as an adverse witness. The, law furnishes ample
machinery to procure the testimony ôf any witness, in the service of
its writ and by proceedings for contempt for disobedience of the writ,
or, if the witness is beyond the jurisdiction of the court, by déposition
or upon commission. Besides, the record hère discloses no^ évidence
of évasion of service of the process of the court. The suspicion of the
court, so far as the record shows,-arose from the mère inability of the
ofïicers tO serve the writ, and the absence of the desired witness from
his résidence ; the fact beingi as the record discloses, that the corpora-
tion had been dissolved, and that Southard on the 2d day of January,
1903, and eight days before the issuance of the subpœna, left for the
South for his health. There îs no sort of évidence that the défendant
corporation was a party'to any.attempt of Southard to évade service.
The court had not right to proceed to thé merits of the case until the
question of its jurisdiction had been determined. Nor could it right-
fully in advance of such determinatiori,' if at ail, enjoin the défendant
a;s a penalty for its supposèd failure to produce its président as a wit-
ness upon the disputed question pf jurisdiction. That such was the
réason for the issuance of the injunctipn is'plainly shown by the récital
of the order. This assurance îs madedo'Ubly sure by the motion of the
complainant for an injunctibn and the pfeyious order thereon. The
modification of this pfévious brdef, subseqUently to this appeal, can-
not afifect the order appealed from, upbti the face of which we think
it is manifest that it waS issiied as a penalty for the supposèd disobe-
dience by the défendant çorporaîtion in failing toproduce the witness.
This conclusion is justifiêdby ail the pi;oceedings in the suit. The
jurisdiction of the court being challenged,it refrained from any con-
sidération of the mbrîts, ànd pToceeded tb an examination of the facts
upon which depended its jiiirisdiction ;to act at ail. It then summarily
suspended action upon thé challenge to its jurisdiction, because the
défendant had hot donc that which, as we think, the court had no right
tb require it to db, and théreupôn undértook to détermine the merits
df a pending motion for itijuiiction, when neither the record nor the
rèturn of the marshal to thesubpoena disclosed the facts upon which
thé jurisdiction of the court over the person of the défendant must
rést, namely, that it waS, (Ibing business within the jurisdiction of the
court.
CENTRAL GRAIN & STOCK EXCH. V. BOAKD OF TRADE. d69
It is urged that by appealing the défendant below waived its mo-
tion to quash, and that such act is tantamount to a gênerai appear-
ance. It is indeed said by some courts that one objecting to the
jurisdiction of a court must keep out of court except to object to its
jurisdiction, and that an appeal from a judgment is a gênerai ap-
pearance to the action. Fee v. Big Sand Iron Company, 13 Ohio St.
563 ; Ruthe v. Railway Company, ^y Wis. 344; Hodges v. Frazier, 31
Ark. 58; Railway Company v. Heath's Administrator, 87 Ky. 65 r^
9 S. W. 832. This doctrine has not, however, obtained in the fédéral
courts. It is true a party "may not, in the same breath, dispute the
merits of the cause alleged against him and deny jurisdiction of the
court over his person" (Crawford v. Foster, 28 C. C. A. 576, 84 Fed.
939) ; but when a party appears specially to object to the jurisdiction
or to move to set aside the service of process, he is deemed not to hâve
vi^aived the illegality in the service, if, after such motion is denied, he
answers to the merits. Such illegality in the service is v^^aived only
when, without having insisted upon it, he pleads in the first instance
to the merits. Thus, in Harkness v. Hyde, 98 U. S. 476, 25 L. Ed.
237, process in a district court of a territory was served upon the
défendant within an Indian réservation. The motion to set aside
the service was overruled, and the défendant pleaded to the merits.
The Suprême Court reversed the judgment against the défendant,
«nd remanded the cause with a direction to set aside the service, Mr.
Justice Field, delivering the opinion of the court, remarked :
"The right of the défendant to Insist upon the objection to the illegality
of the service was not waived by the spécial appearance of counsel for him
to move the dismissal of the action on that ground, or, what we considei-
as Intended, that the service be set aside; nor, when that motion was over-
ruled, by their answering for him to the merits of the action. Illegality in
a proceeding by which jurisdiction is to be obtained Is in no case waived by
the appearance of the défendant for the purpose of calling the attention of
the court to such irregûlarity; nor is the objection waived when, being urged,
It Is overruled, and the défendant Is thereby compelled to answer. He is not
considered as abandoning his objection because he does not submit to further
proceedings without contestation. It Is only where he pleads to the merits
in the first instance, without insisting upon the illegality, that the objection
Is deemed to be waived."
See, also, Insurance Company v. Dunn, 19 Wall. 214, 22 L. Ed. 68 ;
Removal Cases, 100 U. S. 457, 475, 25 L. Ed. 593; Railway Company
V. Brow, 164 U. S. 271, 17 Sup. Ct. 126, 41 L. Ed. 431; Powers v.
Railway Company, 169 U. S. 92, 102, 18 Sup. Ct. 264, 42 L. Ed. 673 ;
Louisville Trust Company v. Comingor, 184 U. S. 18, 22 Sup. Ct. 293,
46 L. Ed. 413.
Hère the appellant has at no time — unless by the appeal — con-
sented to the jurisdiction of the court or waived its objection there-
to. No act was donc which suggests such consent or waiver. The
appellant was confronted with an order for an injunction issuing
because it had failed to do that which the court had no right to
require it to do. It had no remedy save by appeal, the court declin-
ing to proceed with the inquiry touching its jurisdiction. Under
such circumstances, to hold that an appeal works a gênerai appear-
ance to the suit — notwithstandmg it was limited to the jurisdiction
470 ,. 125 B-EDEHAL KBPORTEIt.
of the court to make the order^^ — would work a grievous wrong, and
would subject the party to a judgment upoa the merits without rem-
edy, whçn the record doès not disclose jurisdiction of the court, and
notwithstanding the constant objection of the défendant to the ex-
ercise of jurisdiction. Such resuit cannot be warrahted by the law.
A party protesting against jurisdiction may not be compelled to sub-
mit to a. decree upon the merits when the court withhplds its judg-
ment upon its jurisdiction.. Indeed, the allowance of the injunction
under tkecircum stances was in efifect a déniai by the court of the
motion to set aside the service, and that without the évidence before
it, and solely as a penalty for misconduct, unwarrantably assumed.
The only remedy aflforded the party in such case is by appeal from the
wrongful order which dénies considération of the challenge to the
jurisdiction. Within the ruling of Harkness v. Hyde, supra, the par-
ty so debarred of his right may raise the question by appeal from a
judgment upon the merits.
It is said that the eighth and ninth assignments of error go to
the merits. If this were so, the objection would be unavailing, as
we read the décisions of the Suprême Court. But the objection is
not tenable in fact. The erroft assigned, that the corporation had
been dissolved, went to the question of the right of the court to
assume jurisdiction. The error assighed may not be sustainable, but
the objection went to the jurisdiction> and not to the merits. This
is also true of the ninth assignment.
The order of January 28, 1903, is reversed, and the cause is re-
manded With direction to the court below to proceed with the hear^
ing of the motion to set aside the service of process.
CUDAHY PACKING CO. v, SKOTJMAL.
(Circuit Court of Appeals, Eigtitli Circuit. October 12. 1903.)
Np. 1,843.
1 Masteb and Servant— Defeotivb Tools— Asbumption of Risk by Servant .
When a defect in a tool or appliance Is called to the master's attention
by tlie servant who ia wofklrig with it, and the rnaster directs or requests
the servant to continue to use It in its dèf ective condition for the time
beingj promising to bave it «oon repaired or to supply a better, tUe serv-
ant, by complylng with such order or requeàt, cannot be regarded as hav-
Ing assumed the risli of Injury therefrom, unless the danger is so great
or imminent that a persori oï ordinary prudence would not bave continued
to use the defective tool, althougb requested or ordered to do so.
3 Bkvikw on Appeal— Mibcohddct ot Juht— Taking Exeibits to Jcrï
ROOM.
Where certain tools were Introduced In évidence and repeatedly ex-
hibited to the Jury on thé trial of an action for the persoiial injury of
a servant, largely as beafing on the I&sUe of contributory négligence
raised by défendant, the fact that such tools were talten to the jury room,
and were examined by the jury whlle. conslderlng their verdict, even
contrary to the direction of the court, will not vitiate a verdict for plain-
tlff, when It doés not appear that such action was In any way prejudlolal
îl. See Master and Servant, vol. 34, Cent Dig. §§ 642, 645, 647,
CTJDAHT PACKINQ CO. V. SKOOTUI» 471
to the défendant, or that plalntlff -was Instrumental In causing the exhibits
to be so taken by the jury. Especlally such verdict 'wlll not be aet
aside on appeal when It bas been approved by the trial court.
3. Samb— Remarks op ConNBBL — Sufficiknct of Record.
The proper method of bringlng before an appellate court for review
remarks made by counsel, or a Une of argument deemed improper, is to
call the matter to the attention of the trial court by a seasonable objec-
tion, and by taking an exception to the court's action if the objection
is overruled, and incorporating the exception, together with a statement
of the remarks complained of, or the Une of argument pursued, in the
bill of exceptions. An appellate court cannot conslder such matter •where
it only appears in the record from motions and aflSdavits filed after the
trial, in connection wlth a motion for a new trial, and incorporated in the
bill of exceptions; the allowance of such bill not being équivalent to a
certiflcate by the trial judge of the truthfulness of the statements made
in the papers so flled.
In Error to the Circuit Court of the United States for the District
of Nebraska.
Edson Rich and Charles E. Clapp, for plaintifï in error.
Matthew Gering, for défendant in error.
Before SANBORN, THAYER, and VAN DEVANTER, Circuit
Judges.
THAYER, Circuit Judge. This is an action for personal injuries
which Anton Skoumal, the défendant in error, brought against the
Cudahy Packing Company, the plaintifï in error, recovering therein a
verdict against the défendant company in the sum of $5,000. Thé
plaintifï below filed a pétition which contained, among others, the
following allégations, in substance : That during the latter part of
the year 1899 he was employed by the défendant company to work in
its blacksmith shopas a skilled blacksmith; that on January 15, 1900,
while the plaintifï was in the performance of his usual duties, the
défendant company negligently furnished to the plaintifï and to his
helper a hammer and holding iron which were defective and unfit
for use, in that the hammer was too highly tempered and brittle, and
was somewhat broken and worn upon the edges thereof; that after
using the defective hammer and the holding iron for some time prior
to January 15, 1900, plaintifï did on that day direct his helper to report
the defective condition of the hammer, and request the défendant,
through the foreman of its blacksmith shop, to furnish him and his
helper with a new hammer that was fit for use, or to repair the ham-
mer which they were using so that it might be further used without
danger ; that on said day, when this complaint was made to the fore'-
man of the blacksmith shop, he directed the plaintifï to continue to
use the hammer for the présent, until he had finished the pièce of
work upon which he was then engaged, assuring him at the time that
no immédiate danger would be incurred in using it, and promising him
that, upon the completion of the job on which he and his helper were
then engaged, he would obtain and furnish the plaintifï a new hammer
with which to work ; that, in reliance upon such assurance and prom-
ise, he continued to use the defective tool ; that about an hour after
such complaint was made and the promise given, and prior to the com-
4,72 123 E-EUERAL REPORTER.
pletion of the job on which the plaintiff and his helper were then en-
gagea, and while the plaintiff was using the hammer with ordinary
care and caution, a fragment froni the head thereof flew off, striking
the plaintiff in his left eye, and injuring it so that his sight was de-
stroyed, and the eye had to be removed. On the trial of the case,
évidence was produced by the plaintiff which tended to establish the
aforesaid allégations and ail other material allégations of the com-
plaint.
On the trial in the circuit court the défendant Company saved
exceptions to four excerpts from the charge, on which some reliance
seems to be placed for the purpose of obtaining a reversai of the judg-
ment ; but a careful considération of the parts of the charge to which
the exceptions relate has satisfied us that the exceptions are not well
founded, and that the charge, considered as a whole, was substantially
correct, or at least that the plaintiff in error has no just cause to com-
plain. Inasmuch as the paragraphs of the charge which are said to
be erroneous are somewhat lengthy, and consist largely of com-
mentaries on the évidence, such as the trial judge was clearly entitled
to make, it is deemed unnecessary to quote them in fuU. The rule of
law which was enunciated in the several paragraphs in question was
to the following effect: That if Skoumal, the plaintiff below, saw
the defects in the hammer prior to the accident, and continued to
use it in its defective condition, he thereby assumed the risk of injury,
and could not recover, but that he might recover, notwithstanding
he was aware of the defects in the hammer, provided the jury were
satisfied by the évidence that he caused the defective condition of the
hammer to be made known to the foreman in charge of the defendant's
blacksmith department prior to the accident, and the foreman, after
examining the hammer, acknowledged that it was in a bad condition,
but directed Skoumal and his helper to go on with the job then
in hand, promising them that a new hammer would then be suppHed,
and provided, further, that Skoumal, in reliance upon this promise,
continued to use the implement, and was injured by a fragment flying
therefrom before the job was completed. This statement of the law
was supplemented by the further statement, in substance, that, even
on the State of facts last supposed, the plaintiff would not be entitled
to recover, provided Skoumal, as a sensible man, could see that, owing
to the condition of the hammer, there was danger in every blow he
struck, because in that event the danger of using the hammer was so
imminent that he would be guilty of contributory négligence.
As before remarked, we are unable to discover any material error
in. thèse excerpts from the charge, since the law is well settled that
when a defect in a tool or an instrument is called to the master's
attention by his servant, and he directs or requests the servant to
continue to use it in its defective condition for the time being, prom-
ising to hâve it soon repaired or to supply a better implement, the
servant, by complying with such an order or request, cannot be re-
garded as having assumed the risk of getting hurt, unless the risk is
so great or imminent that a person of ordinary prudence would not
hâve continued to use the defective tool, although he was requested
or ordered to do so. It would be little short of absurd to hold that a
CTJDAHT PACKING CO. V. SKOUMAL. 473
servant voluntarily agreed to assume the risk of being injured by the
use of a defective implement or appliance, and to absolve the master
from liability therefor, when it appears that he complained to the
master of the defect, and the master admitted that the complaint was
well founded, but induced the servant to continue using the defective
tool or appliance by promising to repair it within a reasonably short
space of time, or to supply a better. That a servant will not be held
to hâve assumed the rislc of injury incident to working with a defective
implement of any sort, under the circumstances last stated, is well
settled. Hough v. Railway Co., loo U. S. 213, 224, 225, 25 L. Ed.
612, and cases there cited; Homestake Mining Co. v. Fullerton, 16
C. C. A. 545, 549, 69 Fed. 923 ; Green v. Minneapolis & St. Louis
Railroad Co., 31 Minn. 248, 250, 17 N. W. 378, 47 Am. Rep. 771 ;
Wood on Master & Seivant, §§ 378, 379, 380.
Misconduct of the jury in taking certain exhibits to their room at
the conclusion of the trial, and misconduct on the part of counsel for
the plaintifï below in his closing address to the jury, are also as-
signed as reasons for reversing the judgment below.
The record discloses that, when the jury retired to consider their
verdicf, the hammer which is said to hâve caused the injury to the
plaintiÉ's eye, and an iron used in connection therewith, called a
"fîatter," were taken to the jury room, and were examined by the
jurors while they were considering their verdict. Thèse two imple-
ments had been exhibited to the jury repeatedly during the progress of
the trial, because one défense which was interposed by the défendant
Company was to the following efïect : That shortly prior to the acci-
dent Skoumal had tempered the flatter, and had made that tool too
hard and brittle, and that the injury which he sustained was due to
this fact, or, in other words, to the plaintiff's own fault. Whether
he had thus tempered the flatter and made it too hard, and thereby
occasioned the injury of which he complained, was one of the dis-
putable issues of fact before the jury, and experts gave their opinion
as to whether the flatter had or had not been too highly tempered.
The fact that thèse implements were taken to the jury room was made
one of the grounds of a motion for a new trial, and afifidavits on the
part of ail the jurors were filed. Ail of the jurors admitted in their
respective afifidavits that the hammer and flatter were in the jury room
and were examined by the jurors, but none of them deposed that such
examination had had any influence upon their verdict, while at least
ten of the jurors afïirmed that such examination of the two imple-
ments as was made in the jury room did not, in their opinion, hâve
any effect whatever upon the verdict that was ultimately rendered.
In overruling the motion for a new trial, the trial judge remarked that
he had no recollection of having told the jury not to take the hammer
and flatter to the jury room ; but as reputable parties had testifîed that
the court did so instruct the jury, and as the statement of thèse parties
was in no wise contradicted, and as the court had no personal recol-
lection on the subject, it felt compelled to find as a fact that he did di-
rect the jury not to take the hammer or the flatter to their room.
Nevertheless the learned trial judge overruled the motion for a new
trial, and directed a judgment to be entered on the verdict; being
47é 125 FEDERAL REPORTER.
satisfied, apparently, that the présence of thèse impletnents in the jury
room had had no perceptible eiïect upon the verdict.
Thejtiry were clearly guilty of njisbehavior, if, in violation of
directions, given by the trial judge, the tools in question were taken to
their room. But it does not follow that such misbehavior was fatal
to the verdict. In our opinion, it ought not to hâve that effect
unless it is reasonable to conclude that the défendant company was
in some way put to a disadvantage or was prejudiced by the action
of the jury, and did not hâve a fair trial of the issues involved in the
case. It does not seeni reasonable to conclude that either party was
prejudiced by the action of the jury in taking the hammer and the
flatter to their room for the purpose of making a further examina-
tion thereof. They were inanimate objects which had beçn introduced
in évidence and frequently exhibited to the jury in the progress of the
trial. The présence of the | hammer and flatter in the jury room af-
forded the jurors an opportunity to make a doser inspection thereof
than they had been able to make during the progress of the triais
and also enabled them to détermine with greater accuracy whether
the flatter had or had not been too highly tempered. As they could
only be used for such a purpose, and were in fi measure helpful to the
jury in reaching a right conclusion, we can perceive no sufficient rea-
son why they should hâve been excluded from the jury room, inas-
much as the object of ail trials before a jury is to attain a right resuit
as respects questions of fact. In the case of Hix v. Drury, 5 Pick.
296, 302, it was held that if a paper which has not been introduced in
évidence is delivered to the jury, by design, by the party in whose
favorthe verdict is returned, the verdict will be set aside. In Wood-
bury V. City of Anoka, 52 Minn. 329, 54 N. W. 187, a request was
made during the trial that the jury be taken from the courtroom to
view and exainine; the condition of a certain sidewalk which formed
the subject-mg,tter of the controversy. Notwithstanding the refusai
of the court to permit the jury to make the examination, two of the
jurors did examine it with some care during a recess of the court, and
such action on their part was held to be such misconduct as justified
the court in setting aside the verdict. Also, in the case of Consoli-
dated Ice Machine Co. v. Trenton Hygeian Ice Co. (C. C.) 57 Fed.
898, it appeared that, on the trial of an action to recover the price of
an ice pla,nt sold, where the défense rested largely upon the alleged
poor quality of ice which the machine produced, some of the jurors, in
passing out of the courthouse at recess, saw a wagon fiUed with ice
which had been produced by the machine, and paused for a time to
examine the ice, and smelled and tasted it, with a view of ascertaining
if the ice was pf good quality. This was held to be misconduct on
the part of the jury, but inasmuch as it appeared that such misconduct
was known, before the conclusion of the trial, to counsel for the com-
plaining party, against whom a verdict was eventually rendered, and
inasmuch as the fact was not brought to the attention of the court
until after the verdict had been rendered, the court refused to set the
verdict aside.
The foregoing cases hâve been cited by counsel for the plaintifï in
error in support of their contention that the misconduct complained of
CUDAHT PACKIXG CO. V. SKOUJIAL. 475
in the case at bar was such as nécessitâtes a reversai of the judgmcnt.
We think, however, that they do not sustain this contention, for the
reason that in the cases cited it is évident that the jurors, or some of
them, at least, had acted on évidence dehors the record, that was not
introduced during the course of the trial, whereas in the case in hand
it appears that the jury merely took to their room certain exhibits
which had been introduced in évidence, and that such further examina-
tion of the exhibits as was made by the jury, if it had any effect on the
verdict, must hâve aided them in reaching a right conclusion. The
alleged misconduct of the jurors tended to promote, rather than to
defeat, the ends of justice. In such a case as the one at bar, where an
exhibit in the form of a tool, a model, or other inanimate object,
which has been ofifered in évidence or used before the jury in the
progress of the trial, finds its way into the jury room, and is examined
by the jurors in their retirement, we think it is the better doctrine that,
even if such an exhibit is taken by the jury to their room without
proper permission, it is not such misconduct on their part as should
serve to overturn the verdict. Especially should this be the rule
where, as in the case at hand, it does not appear that the prevailing
party was instrumental in placing the exhibit in the hands of the jury,
to be taken to their room. The opinion last expressed seems to be
the one which is entertained, in substance, by other appellate courts
both as respects verdicts in civil and in criminal cases. In Russell
V. State, 92 N. W. 751, 754, the Suprême Court of Nebraska say :
"The modem practice, » * * both in civil and criminal cases, is to
send to the jury room ail instruments, articles, and documents, other than
dépositions, which bave been received In évidence, and which will, in the
opinion of the trial judge, aid the jury in their délibérations."
See, also, the following cases : Blazinski v. Perkins, "Jl Wis. 9, 45
N. W. 947 ; Gresser v. State (Tex. Cr. App.) 40 S. W. 595 ; Hickman
v. Layne, 47 Neb. 183, 66 N. W. 298; Illinois Silver Mining & Milling
Co. V. Rafî (N. M.) 34 Pac. 544; People v. Page, i Idaho, 106; Louis-,
ville & Nashville R. R. v. Berry's Adm'x, 96 Ky. 604, 29 S. W. 449.
We are further confirmed in the view that the alleged misconduct
of the jury did not materially afïect the resuit of the trial by the fact
that the trial judge refused to set the verdict aside and grant a new
trial when the action of the jury was called to his attention, as he
should hâve done if he was satisfied by the showing made, or thought
it probable, that the conduct complained of was in any material respect
prejudicial to the défendant.
The bill of exceptions shows that during the trial the plaintiiî be-
low called as a witness one of the defendant's attorneys, and asked
him. if it was not a fact that he represented the Maryland Casualty
Company, of Baltimore, Md., and if he had not written a certain
letter to the latter company concerning the case against the défendant
Company, which was then on trial. An objection to thèse questions
was interposed, which was sustained, and they were not answefed.
Notwithstanding this fact, it is said that in his closing argument the
plaintiflf's attorney, referring to the incident, said that he had called
one of the defendant's attorneys to the stand and propounded the
foregoing questions, which had been excluded by the court, and, if a
476 125 FEDERAL REPORTER,
judgment was rendered against the deferidant company, lie did not
Know whether it would be paid by it or by the Maryland Casualty
Company. It is urged tliat this was such misconduct on the part of
counsel for the plaintiff below as entitled the défendant company to
a new trial. The statement which the plaintiff's attorney is said to
hâve màde to the jury in his closing argument is only disclosed by an
affidavit pf one of the defendant's attorneys which was made and filed
in support of a motion for a new trial about two weeks after the ver-
dict had bèen rendered. The bill of exceptions proper (and by that we
mean the portion of the bill which purports to give an accurate ac-
count of what transpired at the trial) does not show that the plain-
tiff's attorney made the remarks imputed to him, or, if he did, that
any objection was made thereto at the time, or that an exception was
saved. Ail that this court knows or can know about the incident
is what appears in affidavits that were filed subséquent to the rendi-
tion of the verdict, in support of a motion for a new trial. One affidavit
contained the statement that the remark in question was made and
was excepted to, while a motion that was made at about the same time
to strike this affidavit from the files (which motion is also contained
in the bill of exceptions) contains the statement that such language
as plaintiff's attorney may hâve used was not excepted to at the trial.
Now, it is true that in making up the bill of exceptions, contrary to
the usual practice, ail of the proceedings in the case subséquent to the
trial, including motions that were filed, and affidavits in support there-
of, hâve been incorporated into the bill and made a part thereof ; but
the allowance of the bill in this form, as respects matters subséquent
to the trial, amounts to no more than a statement by the trial judge
that such proceedings were had; that is to say, that certain motions
and supporting affidavits, as set forth in the bill, were in fact filed.
The allowance of the bill in the manner described is not tantamount
to a certificate by the trial judge that ail of the statements contained
in the motions and the affidavits are true. Indeed, it is quite certain
that the trial judge did not intend to certify to the truth or falsity of
any of the statements contained in the motions and supporting affi-
davits that were filed subséquent to the verdict, or to do more than
certify that such motions and affidavits were filed, sincè there appears
to hâve been a controversy as to whether an exception was taken at
the trial to any remarks which plaintiff's counsel may hâve made,
which controversy was left undetermined. The resuit is that we feel
constrained to hold that the record fails to show, in an authentic form,
that an exception was taken during the progress of the trial to the
improper remarks said to hâve been made by the plaintiff's attorney.
The method of preserving the question so that it can be reviewed
on appeal, whether counsel on the trial hâve been guilty of such mis-
conduct as entitles the complaining party to a reversai of the judg-
ment, varies somewhat in différent jurisdictions. In Thompson on
Trials, § 962, it is said that the confusion of views as respects this
question of practice is "not very creditable to the courts." The learn-
ed author, after considering the subject at some length, concludes,
however, that the correct method of bringing a question of this sort
before an appellate tribunal for review is to make a seasonable objec-
CUDAHT FACKING CO. V. SKOUMAL, 477
tion to the improper remarks of counsel when they are made, or to
an improper line of argument when it is adopted, thereby challenging
the trial court's attention to the subject, and by taking an exception
to the court's action, if the objection is overruled, and by incorpo-
rating the exception, together with a statement of the remarks com-
plained of or the line of argument pursued, in a bill of exceptions
signed and sealed by the presiding judge. The method of practice
so pointed out by the learned author was approved by the Suprême
Court in Crumpton v. United States, 138 U. S. 361, 364, 11 Sup. Ct.
355. 356, 34 L. Ed. 958, where that court said :
"It is the duty of the defendant's counsel at once to call the attention of
ll;e court to the objectionable remarks, and request Its interposition, and in
case of refusai to note an exception. Thomp. on Trials, § 962."
The same method of procédure has been adopted and approved in
other jurisdictions, and it would seem to be entirely reasonable to re-
quire counsel for the complaining party to call the attention of the
trial judge to remarks made by opposing counsel, or to a line of ar-
gument pursued by him which is deemed to be improper, and to in-
voke the interposition of the trial judge, and to save an exception
to his action in the usual way, provided he refuses to condemn the
action of opposing counsel, or to arrest his line of argument, or to
grant other suitable rehef. Bradshaw v. State, 17 Neb. 147, 151,
152, 22 N. W. 361 ; McLain v. State, 18 Neb. 154, 24 N. W. 720;
State V. Howard, 118 Mo. 127, 146, 24 S. W. 41 ; State v. Taylor, 118
Mo. 153, 163, 24 S. W. 449; Rudolph v. Landwerlen, 92 Ind. 34,
37; Dowdell v. Wilcox, 64 lowa, 721, 724, 21 N. W. 147; Learned
V. Hall, 133 Mass. 417, 419; Roeder v. Studt, 12 Mo. App. 566.
It goes without saying that a trial judge has the power, and is al-
ways at liberty, of his own motion, to reprimand counsel when they
make use of language or indulge in a line of argument that is im-
proper, unfair, or that is calculated to arouse the préjudices of jurors,
or divert their attention to extraneous matters, or to issues that are
foreign to the case, and no trial judge should hesitate for a moment
to exercise such power, although his intervention is not solicited ;
but, when remarks are made by counsel or arguments are advancecl
that are deemed to be so far improper and prejudicial to the interests
of a party that his counsel résolves to assign them as grounds for re-
versai by an appellate tribunal, he should at least challenge the at-
tention of the trial judge to the matter, and, if adéquate relief is not
afiforded, should thereupon save an exception, and incorporate it in
a bill of exceptions. This was not done in the présent case, or at
least the bill of exceptions does not show that it was done. The re-
mark that is said to hâve been made by plaintifï's attorney on the
trial of the case is subject to just criticism, and should not hâve been
made. We entertain no doubt on this point, and feel free to condemn
it. The trial court, in the exercise of its discrétion, might hâve set
aside the verdict and granted a new trial because of the language
complained of. It did not see fit to do so, however, and its action
in this respect indicates, we think, that, in the opinion of the trial
judge, the remarks which were made did not prejudicially aflfect the
478 125 FEDERAL REPORTER.
rights of the défendant cômpany. ThiS' court is in an entirely dif-
férent situation. Thé judgment below is presumptively right, and
we cannot disturb it e:!icept for errer of law committed by the trial
court, on account of whïch an exception was duly taken and saved
during the progress of the trial. The record, so far as this court is
concerned, discloses ilo such errer, and the judgnlent below must ac-
cordingly be affirmed.
It is so ordered.
ATOHISON, T. & S. F. EY. CO. v. PHIPPS.
(Circuit Court of Appeals, Eighth Circuit. September 7, 1903.)
No. 1,914.
1. Evidence— Hkars AT— S* ATEMÉNTS.
Testimony givlng a etàtement by tlie young daughter of the owner of
a building destroyed by flre as to tlie place where the fire started, made
two hours after the fire broke out, and in another place, was inadmissible
as hearsay. ,
a. Rbvibw on Appbal— Ordbh of Introduction op Tbstimont.
The admission In rebuttal of testimony whlch is properly rebuttal évi-
dence is not error for ^hich the judgment will be revei'sed, merely be-
cause other évidence as to the same matter was introduced in chief ; the
order of the introduction of évidence being a matter in the légal discré-
tion of the trial court, whlch discrétion. In the absence of gross abuse,
is not reviewable by the appellate court.
3. SaMK— iNSTIlDCtlONS. ' ■ ■• *'
The refusai of instructions asked is not réversible error, where the
rules embodied therein are glven in clear language in the charge of the
court, whlch is not exçepted to.
4. Instructions— Infbrencb prom Failurb to Call Witnbsses.
Where persons who had been subpœnaéd as witneéses by both parties,
and whose dépositions had been taken by défendant, were présent during
the trial, but were not caUed by either party, the court properly in-
structed the jury th^t they should draw such inference from the faet
as in their judgment was fàir and reasonable, and properly refused.to
instruct.as asked by défendant, that the jury had a right to infer from
the fact that such witnesses were not called by plaintllï that their tes-
timony would not hâve been favorable, toplaintifC.
5. Rbvibw onAppeal — For^iop Vbrdict— Question not Raisbd Below.
A possible irregularlty in the f orm of the verdict, as where the pétition
contained two counts, on one of whlch the jury were instructed to find
for défendant, and they feturnéd à général verdict for plaintiff , cannot
be flrst urged In the appellate court aë ground for reversai of the judg-
ment, where It does not appear that exception was taken at the proper
tlme in the trial court, or. that such court was asked to cause the flndings
to be stated in the deslired form.
In Error to the Circuit Court of the United States for the Eastern
District of Missouri.
Gardiner Lathrop and Ben Eli Guthrie (George A. Mahan, on the
brief), for plaintiff in error.
Bert D. Nortoni, for défendant in error.
Before SA^fËORN and VAN DEVANTER, Circuit Judges, and
SHIRAS, District Judge.
1 2. See Appeal and Error, vol. 3, Cent. £)ig. § 3851.
ATCHI80N, T. & S. F. ET. CO. V. PHIPPS. 479
SHIRAS, District Judge. From the record in this case it appears
that in September, 1901, William R. Phipps was the owner of a
dwelling house and store building, and the contents thereof, situated
in the town of Ethel, Maçon county, in the state of Missouri; the
named town being a station upon the line of railroad owned and
operated by the plaintifE in error, the Atchison, Topeka & Santa Fé
Railway Company; that on the evening of the loth of September,
1901, a fire destroyed a frame building used as a restaurant and
dwelling by J. W. IvCchliter, situated about 150 feet north of the water
tank of the railway company ; that the fire spread from the Lechliter
building to those adjacent thereto, and was thus communicated to the
buildings owned by Phipps, the store building and contents being de-
stroyed, and the dwelling being damaged. To recover for the dam-
ages resulting from the fire, William R. Phipps brought an action
against the railway company, claiming that the fire which destroyed
the Lechliter building, and thence spread to his premisés, was caused
by sparks thrown out by a locomotive engine used by the railway
company in the opération of its trains. At the December term, 1902,
of the Circuit Court, the death of William R. Phipps was suggested
and the action was revived and continued in the name of Martha B.
Phipps, as the administratrix of his estate, and at the same term of
court the case was tried before a jury.
In the introduction of the évidence the plaintifï maintained the view
that the fire which destroyed the Lechliter building originated from
sparks thrown out by engine No. 75, pulling train No. 3, known as
the "California Limited," which stopped at the water tank within a
few minutes of the discovery of the fire ; there being évidence tending
to show that the engine emitted a large quantity of sparks, which
were carried in the direction of, and upon the roof of, the Lechliter
building. On behalf of the railway company it was maintained that
the fire was communicated to the building from a defective flue therein
which received the pipe from a stove used in the restaurant.
As the statute of Missouri (section iiii, Rev. St. 1899) déclares
that "each railroad corporation owning or operating a railroad in this
State shall be responsible in damages to every person and corporation
whose property may be injured or destroyed by fire communicated
directly or indirectly by locomotive engines in use upon the railroad
owned or operated by such railroad corporation," the question of the
liability of the railway company was narrowed down to the proposi-
tion whether it was shown that the fire which destroyed the Lechliter
building originated from sparks thrown out from an engine used by
the railway company in the opération of its trains, as, under the pro-
visions of the statute, liability for fires communicated directly or in-
directly from the engines used in the opération of the railway is im-
posed upon the company. Upon this issue, the jury found for the
plaintifï below, and, judgment havihg been entered upon the verdict,
the railway company brings the case to this court by writ of error ; it
being stated in the brief of counsel for the railway company that "the
questions involved upon this writ of error are the exclusion of certain
évidence oflfered by the défendant (plaintifï in error herein), the ad-
mission of certain évidence in rebuttal ofïered by plaintifï (défendant in
480 125 FEDERAL KKFOETEIt.
error herein), wliich wâs part of her case in chief, and the refusai of
certain instructions asked; by the' défendant."
It is further stated in the brief of counsel that "the first error tehed
upon is that the Circuit Court erred in excluding the évidence of
what one of the daughters of J. W. Lechliter stated in the présence of
witness H. C. Phillips, who was defendant's assistant superintendent,
at defendant's dépôt, about quarter to twelve on the night of the fire,
as to where the fire occurred." Upon the face of the record, it is
shown that the witness H. C. Phillips was asked by counsel for the
railway company to state what was said by one of the young daughters
of J. W. Lechliter as to where the fire occurred ; the statement called
for having been made at about a quarter to 12 of the night of the fire,
and two hours after the breaking out of the same, when the young
girl was in a small room adjacent to the ticket office in the station of
the railway. Upon objection the court did not permit the question
to be answeréd by the witness, and an exception was duly noted to
the ruling of the court. It is questionable whether, upon the record,
the materiality of the évidence sought to be introduced is shown with
suiïicient clearness to require the court to consider this phase of the
error assigned, due to thefact that thë bill of exceptions does not
show the substance of theoffered testimony. To constitute réversi-
ble error iiïthe rejection of évidence, it inust be made to appear that
the évidence ofïered and êxcluded was Compétent, and of such ma-
teriality and weight that its exclusion might hâve caused injury to
the party> ofïering the same. Packet Company v. Clough, 20 Wall.
528, 22 L. Ed. 406; Railrôad Company v. Smith, 21 Wall. 255, 22
L. Ed. 513; Thompson v. First National Bank, m U. S. 529, 4 Sup.
Ct. 689, 28 L,. Ed. 507; Shauer v. Alterton, 151 U. S. 607, 14 Sup. Ct.
442, 38 L,. Ed. 286; Buckstafï v. Russell, 151 U. S. 626, 14 Sup. Ct.
448, 38 L,. Ed. 292; Origet V. Hedden, 155 U. S. 228, 15 Sup. Ct. 92,
39 L. Ed. 130. The three cases last cited déclare the rule to be, in
cases where the witness testifies upon the trial, that if the question êx-
cluded is of such form asto show clearly that the testimony sought
to be elicited wonld be compétent, and might be favorable to the party
oiïering the same, it is not riecessary to recite in the bill of exceptions
the substance of the expected answer. Doubtless counsel deemed the
question êxcluded in this case to be within this rule, and therefore did
not make an ofifer to show what the substance of the êxcluded évi-
dence was ; but we are rtot called upon to pass upon the correctness
of this view, for the reason that the action of the trial court in ex-
cluding, as hearsay, the statetnent sought to be introduced, is fully
sustained by the ruling of this court in National Masonic Association
V. Shryock, 73 Fed. 774, 20 C. G. A. 3, wherein the question at issue
is very fully and clearly considered.
The second error assigfied is that "the Circuit Court erred in per-
mitting plaintifï's witness Miss Lea Heaton to testify in rebuttal
as to whether the Lechliter côok stove was hot or cold on the night
of the fire ; plaintifï havirig gbne into that question as part of her case
in chief, and because the same was part of her case in chief." The
case of the plaintifï was based upon the allégation that the fire origi-
nated from sparks thrown out from an engine operated by the rail-
AXCHISON, T. & 8. F. BT. 00. V. PHIPP3. 481
way Company, whereas the défendant sought to maintain the proposi-
tion that the fire came from the stove used in the building. Evidence
that at the time the fire broke out the stove was cold would more
pfoperly be in rebuttal of the défense rehed on by the défendant than
in support of the case maintained by the plaintifï, and, as it was évi-
dence properly in rebuttal of that introduced by the défendant Com-
pany, it cannot be said that its admission was error, simply because
some évidence upon the particular matter had been given by a witness
called by the plaintifï in making out her case in chief. The order in
which testimony otherwise compétent and material may be introduced
is a matter very largely within the control of the trial court, and
prejudicial error in its action must be made clearly apparent before an
appellate court is justifîed in predicating error thereon. Thus, in
Goldsby v. United States, i6o U. S. 70, 74, 16 Sup. Ct. 218, 40 L. Ed.
343, it is said:
"This testimony was objected to on the ground that the proof was net
proper rebuttal. The court ruled that it was, and allowed the witness
to testify. It was obviously rebuttal testimony. However, if it should hâve
been more properly introduced in the opening, it was purely within the sound
judiclal discrétion of the trial court to allow it, which discrétion, in the ab-
sence of gross abuse, is not reviewable hère. Wood v. United States, 16
Pet. 342, 361 [10 L. Ed. 987]'; Johnston v. Jones, 1 Black, 209, 227 [17 L. Ed.
117]; Commonwealth v. Moulton, 4 Gray, 39; Commonwealth v. Dam, 107
Mass. 210; Commonwealth v. Meaney, 151 Mass. 55 [23 N. E. 730]; Gaines v.
Commonwealth, 50 Pa. 319; Leighton v. People, 88 N. Y. 117; People v. Wil-
son, 55 Mich. 506, 515 [21 N. W. 905]; Webb v. State, 29 Ohio St. 351;
Wharton's Criminal Pleadlng & Practice, § 566; 1 Thompson on Trials, § 346,
and authorities there clted."
It is also assigned as ground for reversai that the court did not give
to the jury an instruction asked by the défendant Company in the
words following:
"If, after considering ail of the testimony, facts, and circumstances in évi-
dence, the mlnds of the jury are left in a state of supposition as to the origin
of the fire, the verdict must be for the défendant."
It would seem that the words "in a state of supposition" were not
well chosen to express the thought that was probably intended by
counsel, for it is very probable, if the court had given this instruction,
the jury would hâve inferred therefrom that, if there was any doubt
in their minds as to the origin of the fire, their verdict must be for
the défendant. To enable the plaintifï to recover a verdict, it was not
incumbent on her to prove beyond ail doubt, or even beyond ail rea-
sonable doubt, that the fire was caused by sparks emanating from an
engine operated by the defehdant company. The court, in its charge
to the jury, clearly and repeatedly instructed them that, to enable the
plaintiff to recover, she must prove by a fair prépondérance of the évi-
dence, and to the reasonable satisfaction of the jury, that the fire was
started by sparks thrown out by locomotive engine No. 75, operated
by the défendant company, and further that "if, from ail the facts and
circumstances in évidence, the jury are in such doubt as to be unable
to find the real cause or origin of the fire, then they should find for the
défendant." No exceptions were taken by défendant to the charge
given by the court to the jury, and as the rule upon the amount of
125 F.— 31
482 ; / , ■125 î'.BDBïlAI, ,EEPORTEE. ,
proofneedéd to maintajn plaintiff's case was clearly given to the jury,
in terms notexceptedtoby défendant, it cannot be held that it was
error to. refuse the instruction asked for.
It is iurther contended that réversible error was committed in tlie
refusai, of the court to give an instruction asked by the défendant
in the terms following ; i
"By not calllng any of the Lechllter famlly, In whose building the flre
originateâ, as -witnesses &$ to the origln of the fire, the jury hâve a right to
Infer thatthelr évidence would not \)& favorable to plaintifE."
In support of this assignment of error, counsel for the railway
Company cit« many casefe wherein, under varying circumstances, the
rule is fécognized thât where it is within the power of a party to
produce compétent and material évidence upon a question at issue,
which it is not eqùally opèn to the other party to introduce, a failure
to adduce the same gives rise to the inference that the évidence would
be adverse to the party failing to introduce the same. In the con-
sidération bf this question, regard must be paid to the circumstances
undet; "which the réquëst wasmade to the court. It is not claimed
that the XechHté'r îamily were relatives ,of the plaintifï, or that they
were in the employ of the plaintifï, or in any other manner subject to
her influence or eontrol. The record shows that the rriembers of the
Lechlitër fàmily were présent in the çpùrt during the trial, having
been subpœnaed to attend the trial by iDOth the plaintifï and the de-'
fendant. It further appears that the railway company, had caused the
testimony of the members of thé family to be takenby déposition, and
thèse dépositions were under the eontrol of thé défendant railway
company; It also appears that the taîlway company was permitted
to put in évidence the déclaration of J.W. Lechliter, the head of the
family, made shortly after the fîre, in the présence of II. C. Phillips,
the assistant superintendent of the railway company, who testified
that:
"I went up the street to see If I could flnd frbm the peuple how the flre
came to start, and eut in front of the buildings nearest tjie track there was a
small group of people, and aihong others thls taan whd kept the lunchroom,
and he was crying. I don'.t think he had a hat, and he was In his shirt
sleeves, as I reçoUect 11;. Sofliebody a^ked hlm how it started. He just
sald: 'I doh't know. It is ail I had In the vp;orld, and just thèse few cans is
left.' That, of course, gave' me no information to go on, and later in the
evenlng, whën I fonnd thM thé flre started liï this building, I tried to get
from someiof the family an Idea of just how it started. The only statement
I çould get frçm any of thpm, without the direct question, w,hlch I didn't care
to, undejEtake with them' (they were ail very much rattled), was when I was
standing in the ticket office that night."
' ' i . ■ ■■ ' . .1 ,•■'■■ " ■■ . . ' ',
It thus a|)pears that the superintendent of the railway company,
acting in its behalf, immediately after the fire happened, and undoubt-
edly béfore any communication could hâve taken place between the
plaintifï and the members of the Lechliter family, had the opportunity
to ascertairt What kno.wledge they had of the origin of the fire ; that
subsequently.-Jnpreparing this case for trial, the railway company
took the fèstîmotiy of the Lechliter family by déposition; that when
the case Was set fot trial the railway company subpœnaed thèse parties
as witnesses Onrits behalf, and during th^ trial they wére présent in
ATCHI80N, T. & S. F. ET. CO. V. PHIPP3. 483
the courtroom, subject to the call of either of the litigants. Under
thèse circumstances the court, instead of giving the instruction asked
for by the company, charged the jury as follows:
"You are asked by counsel, in their argument, to draw certain Inlerences
from the fact that one side or the other did not call certain available wit-
nesses to prove certaùi relevant tacts. As already stated by me, you are at
liberty to, and should consider such fact, and give to it such reasonable weight
and importance, and draw such reasonable inference therelrom, as, in your
judgment, It is fairly entitled to. Your attention is also called to other
tacts of the case, and you are asked to draw certain inferences therefrom, and
counsel hâve asked the court to instruct you that certain inferences should bo
drawn therefrom. The court, however, Is disinclined, except as already stated,
to express its views as to what inferences of fact should be drawn from
any of the established facts of the case. You are men of expérience, and
bave heard ail the évidence, and are fully compétent to, and should, draw
such inferences as seem to you fair and reasonable from any of the established
facts in the case."
In efïect, the attention of the jury was directed to the fact that
thèse parties were not called as witnesses, and the jury was instructed
that they should consider that fact, and give to it such weight and
draw such reasonable inference therefrom as, in their judgment, it
was fairly entitled to. The argument of counsel for the railway com-
pany, able as it is, has failed to satisfy us that the court erred in re-
fusing the requested instruction, in view of the somewhat pecuhar
facts out of which the question arose. As already stated, the record
shows that the railway company had caused the testimony of the mem-
bers of the Lechliter family to be taken by déposition, and had sub-
pœnaed them to be in attendance at the trial ; and it might very well
be that the counsel for plaintifï presumed that they would be called by
the défendant, and therefore did not call them. With fuU knowledge
on part of the railway comjjany of the character of their testimony,
and with fuU opportunity to put thèse parties on the stand as wit-
nesses, the company did not do so. Is it not the fair inference that
the company did not call them because it knew that their testimony
would not aid the case of the company, and, under thèse circumstan-
ces, was the company entitled to the instruction asked, to the efïect
that the jury must draw the inference that their testimony would be
adverse to the plaintifï's case, or was not the situation fairly met by
the court submitting the question to the jury for their considération
in the terms of the charge given ? Furthermore, in dealing with many
questions that arise in the course of jury trials, it is frequently impossi-
ble for an appellate court to know just how the question was presented
to the jury in the argument of counsel ; and yet it is with référence to
this présentation that the trial court should frame its instruction upon
the matter at issue, and due weight must be given to this considéra-
tion, when exception is taken to the form in which a given point is
submitted to the jury. As already stated, we are not satisfied that the
company has any just cause for complaint with respect to the manner
in which the attention of the jury was directed to the fact that the
membera of the Lechliter family were not called as witnesses, and the
assignments of error based upon the ruling of the court in this particu-
lar are therefore not sustained.
484 125 FBDBKAL RKFOBTEB.
Error is aiso assigned, based upon the failure of the court to give
several, instructions asked by the défendant company, in which the
attention of the jury was calied to certain spécifie matters appearing
in the évidence. The pivotai point in this case was the question
whether the fire which burned the Lechliter building was caused by
sparks thrown out by an engine operated by the défendant com-
pany. This question, with the rules of law applicable thereto, was
very clearly submitted to the jury in the charge of the court, and
in terms not excepted to by the défendant, and réversible error can-
not be predicated on the fact that the court did not give certain in-
structions in the form asked by counsel, even though thèse instruc-
tions may be correct in form and substance. We hâve carefully con-
sidered each of the errors thus assigned, but fail to find ground for
holding that the failure to give the same worked préjudice to the
défendant, and the assignments are therefore overruled without fur-
ther élaboration of our views thereon.
It is finally contended that the judgment and verdict in this case
are so irregular and erroneous that the same must be set aside, be-
cause the same are gênerai in form, whereas the pétition or déclara-
tion contained two distinct counts ; it being claimed that in such cases
the verdict should show the finding of the jury on each cause of ac-
tion declared on. It is true that the pétition, in form, contains two
counts, the one seeking to recover damages for the destruction and
injury to the buildings and their contents, and the other for the dam-
age to the realty, in that it was claimed the fire had destroyed a num-
ber of shade trees, thus lessening the value of the realty. The péti-
tion shows, however, that the cause of action declared on in each
count is one and the same — the escape of sparks from one of defend^
ant's engines, which set fire to the Lechliter building, and thence
spread to the premises owned by William R. Phipps. The situation,
therefore, is not as it would be in a case wherein a plaintifï déclares
upon two distinct causes of action, with respect to which the jury
might find for the plaintifï on one cause of action, and against him
on the other. In such cases there exists good reason for requiring
a finding in the verdict on each cause of action. . In the case now be-
fore us there was but one cause of action declared on, and the court,
in its charge, instructed the jury that there was no évidence to sustain
the allégation of injurj to the shade trees, and that upon the second
count the verdict must be for the défendant. Ail, therefore, that was
submitted to the détermination of the jury upon the question of the
amount of damages, was covered by the first count ; the second hav-
ing been withdrawn from, their considération. There is nothing
shown in the record vi'hich in the slightest degree tends to support
the idea that the jury disregarded the instruction of the court not to
award darhages for the injury to the realty claimed to hâve resulted
from the alleged destruction of the shade trees. If, according to the
contention pi counsel for thè railway company, the jury had found
for the plaintifîf on the first count in the pétition, and for the défendant
on the second count, the daim could hâve been well made that the
verdicts were înconsistent, because the findings were adverse as to
the one cause of action declared on in the two counts. If counsel
UNITED STATES V. BONNESS. 485
had deemed it essential that the verdict should show on its face that
no damages were awarded under the second count, such a finding
could hâve been secured on the coming in of the verdict. A possible
irregularity of the kind suggested in this case cannot be first brought
up in an appellate court and be successfully urged as ground for the
granting a new trial ; it not appearing that exception was taken at
the proper time in the trial court, or that the trial court was asked
to cause judgment to be entered in the desired form. National Bank
V. Butler, 129 U. S. 223-232, 9 Sup. Ct. 281, 32 L. Ed. 682.
Finding no substantial merit in the several errors assigned, the
same are overruled, and the judgment of the Circuit Court is afïïrmed.
TJNITBD STATES v. B0NNE8S et al.
(Circuit Court of Appeals, Elghth Circuit. September 7, 1903.)
No. 1,839.
L United States— Contbact for Sale of Logs— Sélection of Tuées by
QOVERKMBNT AgBNT.
Where the United States, througti its agents, selected logglng super-
tntendents, who were intrusted with supervision of the cutting of timber
on an Indian réservation, and the duty of determining the particular
trees whlch came within the définition of "dead and down timber," which
duty required the exercise of judgment and discrétion, and such judgment
and discrétion were honestly exercised, the government Is bound thereby,
and cannot charge one to whom it contracted to sell the logs after they
should be eut and banked with llability beyond the contract price, on
the ground that some of the logs which were eut and banlied, and which
the purchaser took possession of under his contract, were eut from living
green trees.
In Error to the Circuit Court of the United States for the District
of Minnesota.
Charles C. Houpt, U. S. Atty.
A. Y. Merrill and R. J. Powell, for défendants in error.
Before SANBORN and VAN DEVANTER, Circuit Judges, and
SHIRAS, District Judge.
SHIRAS, District Judge. The questions at issue in this case be-
fore the trial court grew out of certain contracts relative to the cutting
of dead timber on the Chippewa Indian Réservation, in the state of
Minnesota.
Under date of January 23, 1901, a written agreement was entered
into "by and between Captain W. A. Mercer, Seventh Cavalry, act-
ing U. S. Indian agent, Leech Lake Agency, for and on behalf of the
Chippewa Indians, party of the fîrst part, and Lee West, of Bena,
Minn., party of the second part," whereby the party of the first part
agreed to sell to the party of the second part, under the rules and
régulations prescribed by the Secretary of the Interior, December 21,
1900, the merchantable dead timber, standing or fallen, eut from cer-
tain named sections and parts thereof forming part of the Chippewa
Indian Réservation, the logs to be banked at Portage Lake and
486 125 FBDBEAL EEPOKTEB.
L,eeeh river, unless some other place or places should be mutually
agreed upon, payment therefor at tlie rate of $6.50 per thousand feet
for the white pine, and $5.50 per thousand feet for Norway pine, to
be made before the removal of the logs, and not later than April 15,
1901. It will be noticed that under the terms of this contract the
purchaser of the timber, Lee West, had nothing to do with the cutting
of the timber, that matter being left under the control of Captain
Mercer under the rules apprpyed by the Secretary of the Interior
under date of December 21, 1900, a copy of which >vas attached to
the contract between Captain Mercer and Lee West, and expressly
made part thereof, in which rules it is provided that, the acting Indian
agent should hâve supervision of the logging, with power to appoint
foremen for the logging camps, and scalers to measure the logs when
eut; it being further provided that the agent might place in charge
of logging districts, the limits to be defined by the agent, three logging
superinteîidents, whose duty it would be to supervise ail logging
opérations within their districts.
It further appears that on January 4, 1901, Captain Mercer, as
acting Indian agent, for and on behalf of the Chippewa Indians en-
tered into a written contract with one William Douglass for the cut-
ting, hauling, and bankingof the dead pine timber suitable for saw-
logs, standing, lying, or being on certain nanied quarter sections of
land, forming part of the Indian réservation, and on the 22a of Janu-
ary, 1901, a similar contract was entered into between Captain Mercer
and one Henry B. Sherer for the cutting and banking the dead pine
timber on other named sections and parts thereof of the réservation.
The timber to be thus eut and banked by Douglass and Sherer was
the timber agreed to be taken and paid for by Lee West under the
contract entered into by him with Captain Mercer.
A large quantity of timber was eut by Douglass and Sherer and
banked as required by their contracts, which was taken possession
of by Lee West and Frederick W. Bonness, who were, as copartners,
engaged in the lumber business, and to whose benefit the contract en-
tered into by Lee West with Captain Mercer inured, and who paid
for or tendered payment for the logs so taken at the price named in
the contract of purchase.
On behalf of the United States a claim was asserted that in the
cutting of the timber by Douglass and Sherer thèse parties had eut
some 398,400 feet of white pine and 83,560 feet of Norway pine from
live trees, and which did not come within the description of dead and
down timber, and as the logs coming from such live or green trees
had been taken possession of by the défendants, West and Bonness,
it was an unlawful conversion thereof by the défendants, as under
the contract of purchase they were only entitled to the timber eut
from the dead and down trees found upon the sections and parts there-
of included within the contract of Japuary 23, 1901. Based upon this
claim, this action was brought in the name of the United States
against West and Bonness in the Circuit Court for the district of
Minnesota, and at the Màrch term, 1902, the case was tried before a
jury, the verdict being in favor of the défendants.
Upon the face of , the record it appears that two ultimate proposi-
UNITED STATES V. B0NNES8. 487
tions of fact were submitted to the jury: (i) Were there any live
or green trees eut and delivered to the défendants ? which proposition
included the définition of the term "dead and down timber" as used
in the contract ; (2) if so, what was the quantity and value thereof ?
which would call for the rule to be followed in measuring and ascer-
taining the quantity of timber in the trees wrongfully eut.
If upon the first proposition it was found by the jury that in fact
live or green trees, not eoming within the fair définition of dead or
down timber, had been eut by either Douglass or Sherer, and had
been taken possession of by the défendants, then the légal question
would arise whether the latter would be responsible for the aetual
value thereof.
Upon the légal proposition the court instructed the jury that "the
cutting of living trees suitable for luriiber upon Indian réservations
is contrary to law, and the purchaser of logs eut from such living
trees from the person who wrongfully eut them does not acquire title
to them, as the trespasser could hâve no title to convey" ; and further,
that, "if you find from the évidence that living green trees were so
unlawfuUy eut in violation of the aet of Congress and banked by
Douglass and Sherer on Portage Lake and the Mississippi river, and
that such living green trees were reeeived by the défendants or either
of them, then the plaintifïs are entitled to a verdict for the value of
such living green trees at the place where they were banked, and
from which they were taken by défendants. * * *"
Thèse instructions, to which no exceptions were taken, and which
were certainly as favorable to the government as could be reasonably
asked, narrowed the issue of the liability of the défendants down
to the one question of fact, to wit : Did the timber eut by Douglass
and Sherer and taken by the défendants include any living green trees,
not eoming within the term "dead and down timber," as used in the
aet of Congress, which provided for the cutting of such timber upon
the Indian réservation? The définition of "dead and down timber"
given by the court to the jury, was, in substance, that adopted by this
court in the case of United States v. Pine River Logging Co., 89 Fed.
907, 32 C. C. A. 406, and no exception is now urged thereto.
It thus appears that the issue of fact whether any trees other than
those eoming within the terms "dead and down" had been eut was
sent to the jury with a proper définition of the meaning of the term,
and with respect to this issue it is said in the brief of counsel for the
United States: "The issue submitted to the jury was not the amount
of timber eut and removed, but the kind. The évidence is so conflict-
ing that the jury might properly hâve returned a verdict for either
party, but, having found for the défendants, their détermination must
remain undisturbed, unless the charge of the court contains réversible
error."
Much time was taken in the trial before the jury in the introduction
of évidence upon the methods followed in scaling the logs eut, and
exceptions were taken to some rulings of the court upon matters con-
nected with this question; but it is .apparent that we are not ealled
upon to consider any errors assigned except those that bear upon the
one question of fact, to wit, the kind of trees that were eut and taken
488 125 FHDBRAL EEPOBTBB.
into possession by the défendants. Upon this issue the jury found, in
substance, that the logs taken by the défendants did not include any
wrongfully eut from living green trees, and therefore the question
of the rule to be followed in ascertaining the quàntity of green trees
wrongftilly eut was not reached or considered by the jury. The only
error assigned which bears upon the issue upon whieh the verdict
of the jury was based is the sixth, and is in the words following :
"(6) There was also errorin thls: That the court, as a portion of the gênerai
charge, eharged the jury as foUows: 'New, gentlemen, I think It obvions that
when thèse contracts were made it was not the intention of any of the parties
that a détermination as to what tlmber came under the classification of dead
and down tlmber should necessarily be decided by a lawsuit and by a jury.
I do not believe either of the parties had that in their mlnds. In the nature
of things, this was a matter thàt must be determined by somebody, and by
men golng Into the woods, as to whàt trees they should eut or should properly
be eut. Whom was that to be determined by? Necessarily it must be deter-
mined by the men who are intrusted to do the cutting and to look after the
cutting, and those men were ail selected by the government The question
must be determined by men intrusted with the cutting of the trees; it could
not be otherwise. It could not practlcally be otherwise. I say it was In-
trusted to the loggers under the supervision of the logging superintendents,
whose duty it was to go from thne, to time to the différent camps to see to
it that thesè men used proper Judgment and discrétion with référence to cut-
ting the trees. The contract devolved the discrétion especially upon them.
It was a matter of discrétion, and in the nature of things it must be so. A
logger seelng an injured tree, and presumably havlng some knowledge of the
matter, would examine to détermine in hls own mind what that injury was
— whether It was serions, and what Its effect would be; whether the tree
was so injured that it ought to be eut, or whether the Injury was so slight
and trifling that the tree would still grow'and thrive, and that it ought to
be allowed to stand. Whomever under the contract was given that discrétion
was the proper one to exercise it, and, if be exercised it honestly and faith-
fuUy, then that ought to be the end qt the matter. No person should come
in afterwards, after the trees had beén eut under the exercise of the discré-
tion of the man to whom: the power to exercise that discrétion was given
as to cutting the tlmber, and by any fanclful theory with référence to certain
vlews that he might imagine ought to be taken of the matter upset what had
been done. Business carinot be transacted in that way. It is obvious to you,
gentlemen, that sUch must be the case.' "
In determining whether the court erred in this portion of its charge,
the nature of the case and of the issues embraced therein must be kept
in mind. It is not eharged that the défendants had any connection
•with or control over the cutting of the timber. It is not eharged that
the défendants connived with any one else in any scheme to secure the
cutting of logs from Hving trees.
The theory of the government was that if in fact living green trees
were eut by Douglass or Sherer, which passed into the possession of
the défendants, the latter would be Hable for the value thereof, and
the court instructed the jury that such was the law of the case. The
court, however, further instructed the jury, in efïect, that as the de-
fendants had nothing to do with the cutting of the timber, and as the
évidence showed that such cutting was done under the supervision of
persons appointed by the government, and as the détermination of
what particular trees could be lawfully eut was a matter for the exer-
cise of judgment and discrétion, the government would be bound by
the conclusion reached by the persons to whom the cutting of the tim-
TJIÎITED STATES V. BONNESS. 489
ber had been intrusted, so long as such judgment and discrétion were
honestly exercised. In so ruling the trial court substantially followed
the doctrine laid down by this court in the already cited case of United
States V. Fine River Logging Co., wherein it was said :
"The first of thèse instructions might be upheld if the court Intended to
say, and was understood as saying, that the government was not entitled to
recover for timber eut and removed from the réservation in those instances
where, as the resuit of honest mistakes of judgment on the part of the logging
superintendent which were commltted while he was glving due attention to
the performance of his officiai dutles, certain Injured trees were classified as
dead timber, and removed, which in fact ought not to hâve been so classified.
If thus understood, the instruction was substantially correct. The détermina-
tion of what timber was 'dead timber,' in the eye of the statute, as that phrase
has heretofore been defined, Involved the exercise of judgment and discrétion
on the part of the logging superintendent; and, as he had been appointed to
décide such questions, his décisions thereon, if made in good faith, after the
exercise of due diligence to advise hlmself concerning the character of the
timber which was being eut and delivered, ought to be regarded as binding
upon the government. EUiott v. Eailway Co., 40 TJ. S. App. 61, 21 C. C. A.
3, 74 Fed. 707; Lewis v. Railway Co. (C. C.) 49 Fed. 708; Wood v. Railroad
Co. (C. C.) 39 Fed. 52, and cases there cited."
Counsel for the government contend that the triai court erred in the
instructions excepted to, for that "it is the settled law of this court
that the government cannot be estopped or barred of any of its rights
for the lâches or neghgence of its servants" — citing in support of this
contention the case of United States v. Winona & St. Paul Ry. Co., 67
Fed. 969, 15 C. C. A. 117.
The déclaration made in that case, that "the United States is not
bound by any statute of limitations, nor barred by any lâches or négli-
gence of its officers in a suit to enforce the rights or to protect the
interests vested in it as a sovereign government," cannot be ques-
tioned when the facts call for the application of the principle thus
stated ; but this rule is not the one to be applied in cases like the one
at bar.
The question in this case is whether the United States is to be held
bound by the action of persons to whom it had intrusted the super-
vision of the cutting of logs on the Indian réservation, in determining
the particular trees that came within the définition of "dead and down
timber," it being admitted that such action involved the exercise of
judgment and discrétion, and that such discrétion had been honestly
exercised by the agents of the government. It is not sought to bind
the government by the lâches, négligence, or dishonesty of its agents,
but by the results of the action of its agents acting within the scope
of the authority conferred upon them, upon a matter of fact requiring
the exercise of knowledge and discrétion, and in a case wherein it is
not shown that the agents acted dishonestly or with any purpose to
defraud the government. Carried to its legitimate resuit the con-
tention of counsel would necessitate the holding that the government
cannot be bound in any case by the action of its agents, no matter
how faithfully and honestly the duty imposed upon them may bave
been performed.
In Kihlberg v. United States, 97 U. S. 398, 24 L. Ed. 1106, a ques-
tion arose as to the efïect of an order issued by a quartermaster of the
490 325 FfcDÈBÀL BïJPOETKIl.
;United Sfates fixîng the distante^ ;îrhàt were to govern in estimating
the payrtént to be made to KiHlberg for the transportation of army
suppliés uîider a contract Whièh provided that payment was to be
made according to the distance ascertained and fixed by the chief
quarterniaster of the district of iNew Mexico. In passing upon the
force to be given to the action of the quartermaster in lixing the dis-
tances, it yas said by the Suprçniie Çoûirt :
"There is aeither allégation nor;proof'of fraud or bad faith upon his part.
The différence between hls estltuaitej ol. distances and the distances by air
line, or by the road usnally traveled^ Is not so materlal as to Justlfy the in-
ference that be did not exercise the authority given him with an honest pur-
pose to carry ont the real intention of the parties, as colleeted from their
agreement. His action cannot, therefore, be subjected to the revisory power
of the courts without doing violence to the plain words of the contract. In-
deed, It is not at ail certain that the government would bave given its assent
to any contract which did not conf er upon one of its offlcers the authority in
question. If the contract had not provîded distinctly, and in advanee of any
services performed under it, for the ascertalnment of distances upon which
transportation was to be paid, disputes might hâve constantly arisen between
the contracter and the government, resulting in vexatious and expensive, and
to the contracter oftentimes ruinons, litigation. Hence the provision we hâve
been cçnsiderlng. Be thls supposition as it may, it is sufflcient that the parties
expressly agreed that distances should be ascertained and fixed, by the chief
quartermaster, and in the absence of fraud or such gross mistake as would
necessarily imply bad fàith, or a fàilnreto exercise an honest judgment, his
action in the premises is conclusive upon the appellant as well as upon the
government."
The ruling in the case cited was approved and applied by the Su-
prême Court in United States v. Glea:son, 175 U. S. 588, 20 Sup. Ct.
2â8, 44 L. Ed. 284; thé rule being recognized that, in the absence of
fraud or of mistake or négligence so gross as to justify the inference
of bad faith, a court is not justified in' setting aside the décision or
action, upon a question demanding the exercise of judgment and dis-
crétion, of a person to whom, by thé ùnderstanding of the contracting
parties, the matter is intrusted for décision or control, and this rule
was enforced, in the two cases just cited, in controvèrsies to which
the government was a party.
In the case at bar the trial court clearly and repeatedly instructed
the jury that " t)ouglass and Sherer had no right to eut living green
trees, and if logs of that character were eut and taken into possession
by the défendants the latter could get nq title thereto, and were liable
to the government for the value thereof. It being the fact, however,
that, in carrying out the cutting of the dead and down timber, the
question would constantly arise whethér a given tree or trees came
under the classificatioij of deàd arid down timber — -a question which
must be decided and thé decisiôfi acted upon while the loggers were
at work — thé court instructed the jury that the décision was "intrust-
ed to the loggers under the supervision of the Içgging superintend-
ents, whose duty it was to go from tinle tb time to tlje différent camps
to see to it that thèse men used prop'er judgment arid discrétion with
référence to cûtting the trees. The contract devolved the discrétion
especially upon them. It was a matter of discrétion, and, in the
nature of things, it must be so. * * * Whomever under the con-
WILSON V. TOWNLET SHINGLE 00. 491
tract was given that discrétion was the proper one to exercise it, and,
if he exercised it honestly and faithfully, then that ought to be the
end of the matter." Thèse instructions to the jury are fuUy sustain-
ed by the rule recognized by the Suprême Court and by this court in
the cases cited, and the exception thereto is without merit.
The jury having found on this issue that no Uving green trees had
been wrongfully eut, as already stated, the errors assigned on the rul-
ings of the court with respect to the proper mode of measuring the
trees become wholly immaterial, and need net be considered by us.
Upon the pivotai point in the case, and upon which the jury found for
the défendants, we find no error in the ruUngs of the trial court, and
its judgment must therefore be affirmed.
WILSON V. TOWNLEY SHINGLE CO.
(Circuit Court of Appeals. Eighth Circuit October 8, 1903.)
No. 1,563.
1 Patents— Inpringbment—Shinglk-Edging Machine.
The Sears patent, No. 335,635, for an attactiment to sMngle machines
for edging shingles, consists of a combination of mechanical éléments,
ail of whicb were old, to accompUsh a resuit which was not new, slnce
similar machines had long been used to trim boards to a uniform width.
The patent is therefore not of a primary character, and, if it discloses
patentable invention, must be limited to the précise construction shown,
and is not infrlnged by a machine in which any élément of the patented
machine is lacliing.
2. BAMB— SUFFICIENCY DP PrOOP.
A case of Inf ringement is not made ont where the undisputed testimonj-
shows that the alleged infringing machine was made and in use prior to
the flling of the application for the patent sued on, and there is no évi-
dence to carry the date of invention bacls of such flling.
Appeal from the Circuit Court of the United States for the Eastern
District of Arkansas.
W. F. Hill (H. F. Auten, on the brief), for appellant.
N. F. Lamb and J. F. Gautney, for appellees.
Before SANBORN, THAYER, and VAN DEVANTER, Circuit
Judges.
THAYER, Circuit Judge. This is a patent suit, being a bill filed
by T. O. Wilson, the appellant, against the Townley Shingle Com-
pany, a iirm consisting of M. L. Townley and N. H. Townley, ap-
pellees, to restrain the infringement of a patent. Two patents are
found in the record, and considérable testimony relating to each, but
a grave doubt arises in our minds as to whether the bill charges an
infringement of one of thèse patents or both. As originally filed, the
action was founded on letters patent No. 335,635, dated February 8,
1886, and issued to James N. Sears for "a certain new and useful at-
tachment to shingle machines for edging shingles," The bill was
492 125 FEDERAL BilFOBTEB.
in the usual îorm. It alleged that this patent to Seafs had become
the property of the complainant, Wilson, by assignments theretofore
regularly made ; that the Sears patent, subséquent to its acquisition
by the complainant, had been infringed by the défendants; and that
the complainant was entitled to an injunction against further infringe-
ment, and to an accounting of damages and profits, for which he
prayed. After the défendants had answered, denying ail of the ma-
terial allégations of the original bill, and more than a year after the
filing of that bill, the complainant asked and obtained leave to amend,
This was done by filing a supplemental allégation to the efïect that
since the complainant acquired the Sears patent he had obtained
another patent for improvements thereon ; being letters patent No.
459,031, dated and issued September 8, 1891. In the amended plead-
ing the complainant did not allège that the invention or improvement
covered by the last patent had been infringed, while the original bill
charged speciiîcally the infringement of the Sears patent, and none
other; the allégation in that respect being that the défendants had
done certain acts "in infringement of the said exclusive rights secured
to the said James N. Sears by the letters patent aforesaid, and granted
and assigned by him to your orator, as hereinbefore set forth."
Moreover, the patent that was issued September 8, 1891, contained
no référence to the Sears patent, but on its face purported to be a
patent for an independent device for edging shingles, which the com-
plainant had invented. It follows, as a matter of course, that if the
bill does nôt properly charge the défendants with an infringement of
the patent isgued to the complainant on September 8, 1891, the présent
appeal does not properly involve any considération of the infringe-
ment of that patent. Counsel for the appellant seem to contend, how-
ever, that" the machines which the défendants make and use are a copy
of the macMîje described in the patent to Wilson of date September
8, 1891, and that the making and use of such machines is an infringe-
ment of that patent as well as the Sears patent. At one place in their
brief, after referring to the Wilson patent. No. 459,031, they say "and
this is the machine that défendants habitually copy now when they
wish to make and run a dimension shingle maker." There is no évi-
dence in the record, so far as wecan ascertain, that the défendants
ever made or used any other machine than the one which is thus
claimed to be a copy of the Wilson machine. Nevertheless, if we
correctly understand counsel for the appellant, it is urged that the use
of this machine opérâtes as an infringement of the Sears as well as
the Wilson patent. We haVe déemed it best, therefore, to consider
this contention, waiving for the time bèing the suggestion above made
that the bill, when properly interpreted, does not charge an infringe-
ment of the Wilson patent. - ■
Cuts representing the respective machines covered by the Sears and
Wilson patents will be found on the adjoining page. We hâve not
been favored with any eut representing the machines ùsed by the de-
fendants, but must rely on very gênerai oral descriptions of the same.
This defect in the record renders it dimcult to institute a critica!
comparison between the three devices.
WILSON V. TOWNLET SHIÎs'GLE CO.
493
Referring first to the eut representing the Sears machine, ît will
be observed that it consists of a rectangular table or frame, with a
shaft at each end carrying pulleys, an intermediate shaft carrying
saws, to which a pulley, ig, is attached, and another intermediate
countersiiaft to which the pulley numbered 13 is attached. Over the
pulleys, borne by the shafts at each end of the frame, run endless
belts, indicated by figures 6 in the drawing. Between the pulleys and
secured to the frame are spacing boards, 7, which may be of the same
494 125 FBDEEAL REPORTER.
width; or différent widths. Slots are eut in thèse spacing boards,
tlirpugh which the saws profrude. Métal carriers are fastened to the
belts Çy rivets so as to move with them and push the shingle against
the saws. When in opération the butts of the shingles are placed
against certain pins (indicated by figures 12 in the drawing), which
are set at the rear end of the spacing boards. As the belts bring the
carriers around, they serve to push the shingles forward and bring
them into contact with the saws. The object of the device, as it
seems, is to trini the shingles and make them of an uniform width.
The patentée claims, in çombination, first, the structure or frame;
second, the spacing stripsor boards, having slots for the saws, and
pins set at the rear end thereof ; third, the saws secured on the shaft ;
fourth, the belts working over pulleys ; and, fifth, the carriers secured
to the belts — "ail constructed and arranged substantially as shown
and described, and for the purposes set forth."
Referring to the drawing reprêsenting the machine covered by the
Wilson patent, it will be observed that it consists of a rectangular
table or frame, with shafts at each end, carrying wheels or pulleys,
and an intermediate shaft carrying saws which protrude for a short
distance through slots in the top of the table or frame. The shafts
at the respective ends of the table carry sprocket wheels, a^, while
over thèse sprocket wheels pass two endless sprocket chains, a", which
run in grooves in the top of the table. Secured to thèse sprocket
chains are wooden carriers, B, consisting of straight pièces of wood
having slots sawed therein so that they will readily pass over the saws.
In operating this machine the operator stands at the rear end, places
the butts of the shingles against the carriers, B, which push them
against the saws, which in turn trim them to uniform widths. The
claim of this patent is, in substance, for a shingle-edger, consisting of
a frame having saw-slots and ch^în-grooves in its upper side or top ;
side-strips (indicated in the drawing by b') to prevent shingles from
sliding off from the table; the three shafts above described; the
sprocket wheels; the sprocket chains; the slotted carriers; the vari-
ons pulleys or wheels that are borne by the shafts and disclosed by
the drawing ; and also the several belts by which various parts of the
machine are actuated. The location of thèse belts is indicated by the
dotted lines in the drawing on the left-hand side of the frame or table.
There is testimony in the record, which is whoUy undisputed, that,
long before the issuanoe of the patents in suit, circular saws mounted
on a shaft, either singly or in gangs, had been employed to edge
boards and to eut lumber into strips of equal or varying widths ;
also that sprocket chains, propelled by sprocket wheels, and having
metallic or wpoden carriers attached thereto to convey materials
to gang sawsi had been in use for an equal length of time. If there
was no such testimony as this, we could probably take judicial notice
of the facts in question, >eçause they must hâve been observed by ail
persons of average intelligence who hâve seen planing mills, saw
mills, box factories, and machines for cuttihg laths, in opération.
Brown et al. v. Piper, 91 U. S. 37, 23 L. Ed. 200. Ail the éléments of
the machine covered by the çombination described and claimed in the
•WIIiSON V. TOWNLET SHINGLB CO. 495
Sears patent are undoubtedly old. Moreover, the work done by that
machine is not a new kind of work, since the trimming of shingles so
that they will be of the same width is strictly analogous to the cutting
of boards or slabs into strips of the same width. The Sears patent,
therefore, is not of a primary character. He simply niade use of old
mechanical devices in constructing a machine for trimming shingles
when the same devices had long been employed for the purpose of
trimming boards and cutting them into strips. If it be true, there-
fore, that the éléments which make up the Sears combination had
never, before the date of that patent, been placed in precisely the
same relation to each other as he placed them, yet it is by no means
certain that the construction of his machine called for the exercise
of the inventive faculty. In view of the state of the art, it would
seem, rather, that any person who desired to trim. shingles, after they
were sawed, so that they would be of the same width, would hâve
had little difficulty, by the exercise of ordinary mechanical skill, in
producing a machine that would do that work. The construction of
such a machine would not seem to hâve been a dififîcult undertaking.
It merely involved the placing of old and well-known mechanical
devices in such a relation to each other as would naturally suggest
itself to a mechanic who was accustomed to work in planing mills
or sawmills, when he was advised of the end to be accomplished.
In view of the considérations to which we hâve last adverted, it is
certain, we think, that the patentée of the machine in question can-
not invoke a broad construction of the claims of the patent, nor a
libéral application of the doctrine of équivalents, no matter what
view may be taken concerning the question of invention and the
patentability of the Sears machine. The case is one where, even if
the inventive faculty, as distinguished from ordinary mechanical
skill, was exercised, yet, as the invention is not primary, and the
patent of doubtful validity, the patentée should be limited to the
spécifie form of machine which he produced, and describes in his
spécification. He accomplished nothing which entitles him to pro-
tection, save as against those who reproduce his machine, or repro-
duce it with merely colorable évasions of his claims. Railway Co.
v. Sayles, 97 U. S. 554, 556, 24 L. Ed. 1053 ; Morley Machine Co.
V. Lancaster, 129 U. S. 263, 273, 9 Sup. Ct. 299, 32 L. Ed. 715;
McCormick v. Talcott, 20 How. 402, 405, 15 L. Ed. 930; Stirrat v.
Excelsior Mfg. Co., 10 G. C. A. 216, 61 Fed. 980.
The claim of the Sears patent to which the charge of infringement
relates is a combination claim, consisting of five éléments. It goes
without saying that, if any one of thèse éléments is not found in the
machines in use by the défendants, they do not infringe the Sears
patent._ Now, în his spécification, Sears carefully describes what he
termsjn one place "spacing-boards," and in another place "spacing-
strips," having pins set in the rear end thereof, against which the
thick ends of the shingles are placed. He alsb specifically claims
thèse spacing-boards or strips, with the pins set therein and protrud-
ing therefrom, as one of the materîal éléments of his combination.
The défendants' machine, on the other hand, as described by the
(198 125 TBDERAL RSPORTBB.
various witnesses, has no spacing-boards or spacing-strips with pin»
set therein. The top of the table or frame of the défendants' ma-
chine is à plain surface inclined at an angle of about 25 degrees,
along whtch two sprocket chains, to which wooden carriers are at-
tached, travel lengthwise oî the table. No spacing-boards or spacing-
strips are found in the structure, nor are there any pins set in the table
against which the ends of shingles are placed when the machine is in
opération. Sèveral other différences in the method of constructing,
the two machines hâve been pointed out. For exaraple, the défend-
ants' machines hâve no countershaft such as is found in the Sears ma-
chine. The Sears machine also has a greater number of pulleys, and
the power to run it is applied somewhat dififerently. But without
référence to thèse minor différences, we think the fact that the de-
fendants' machines hâve no spacing-boards with pins in the ends there-
of, such as are described and claimed in the Sears patent, and also
shown in the drawingsof that, patent, differentiates the two machines,,
and exempts the défendants from the charge of infringement.
The shingle-edging machines of which complaint is made, that
had been used by the défendants in some of their mills for nearly
10 years before the bill of complaint was filed, bear a strong re-
semblance to the machine described in letters patent No. 459,031,
which was issued to Wilson, September 8, 1891, on an application
filed March 14, 1891, although they are not in ail respects alike.
The chief différences to be noted are thèse : The top of the frame of
the défendants' machine is inclined at an angle of 25 degrees, while
the top of the table or frame of the machine as described in the pat-
ent appears to be nearly level. Again, the défendants' machines hâve
one shaft at each end, which turn in the same direction, while the
Wilson machine has corresponding shafts that turn in opposite direc-
tions. Moreover, there seems to be considérable différence in the
arrangement of the belts by which the respective machines are
actuated. Thèse différences might or might not serve to differentiate
the two machines, but we deem it wholly unnecessary to consider or
express an opinion on that point. One of the défendants, who ap-
pears to hâve beén called as a witness by the complainant, in the
course of his examination testified, in substance, that his firm com-
menced using shingle-edging machines in the early part of the year
1890; that they constructed the machine in question themseîves,.
according to their own ideas, purchasing the necessary irons therefor ;.
and that they had been using such machines in their mills up to the
date of his esçamination, which appears to hâve been taken in January,,
1,901. No efïort was madè, by the complainant to disp'rove thèse
statëments, and permission was given the complainant to take photo-
graphs of the machines then-in use by the défendants in their mills,
to which the testimony related. No such photographs appear tO'
^ave been taken, or, if theg^ were, they hâve not been incorporated in
tjie record. JWe must accordingly assume that the statëments so
made by the witness aforesaid are entirely trustworthy, and as the
Wilson patent was not issued until Septernber 8, 1891, and as the ap-
plication therefor was filedt on March 14, 1891, it appears that the de-
L. E. WATEEMAN CO. V. LOCKWOOD. 497
fendants had constructed and were using the machine which is now
said to be an infringement of the Wilson patent for about a year be-
fore that patent was applied for and issued. No attempt was made by
the complainant to show the actual date of his invention, and in a case
of this sort we will not présume that the invention was made prior
to the time when the défendants constructed and began to use in
their mills the shingle-edging machines which they are now using.
If such be the fact, the complainant should hâve estabhshed it by com-
pétent évidence, or shown that the défendants did not construct their
shingle-edging machine at the time stated, nor until subséquent to the
date of Wilson's alleged invention.
It foUows from what has been said that, even if the bill be construed
as charging the infringement of the Wilson patent as well as the Sears
patent, the charge is not sustained by the proof, while the proof does
show that, if the défendants' machine is substantially likei the Wilson
machine, he was not the first inventor thereof, but the crédit for the
invention is due to the défendants. The decree below was for the
right party, and should be afSrmed.
It is so ordered.
L. E. WATEEMAN CO. v. LOCKWOOD et al.
(Circuit Court of Appeals, First Circuit October 22, 1903.)
No. 447.
1. Patents— Invention — Fountain Pens.
Claims 8, 9, and 17 to 26, inclusive, of the Waterman patent. No.
604,690, for a fountain pen, relate solely to détails in construction, Involv-
ing only mechanical sklll, and are void for lacis of patentable Invention.
Appeal from the Circuit Court of the United States for the Dis-
trict of Massachusetts.
For opinion below, see 123 Fed. 303.
Fred C. Hanford (Walter S. Logan, on the brieî), for appellant.
Oliver R. Mitchell, for appellees.
Before COLT and PUTNAM, Circuit Judges, and BROWN, Dis-
trict Judge.
PUTNAM, Circuit Judge. This appeal is based on patent No.
604,690, issued to Lewis E. Waterman on May 24, 1898, on an ap-
plication filed on August 12, 1895. The subject-matter of the pat-
ent is described as a new and useful invention in fountain pens and
vessel closures. The patent relates entirely to détails, of which it
covers a great number, requiring 26 claims. Those now in issue are
8 and 9 and 17 to 26, each inclusive. For the reason which will
appear we find it necessary to insert only the more generic claims
9 and 19, as foUows :
"(9) In fountain pens, a cap havlng wlthln Its open mouth a conlcal seat or
chamber for tbe conical end of the fountain, also provided at Its mouth with
125 F.— 32
498 125 FEDBBAL RBPÔETER.
an extemaïly beveled elastlc annular lip engaging the conlcal end of the
fonntalp at »nd near Its base.";
•'(19) In fountaln pena, a holder provlded with a tapered hoUow end and
with a cap which Is elastlc and flexible at and near its moutb."
The Circuit Court apparently made some distinction between
clairas 8 and 9 on the one hand and the remaining claims on the
other; but, so far as we are now concerned, the pith of ail of them
is the same. They dififer only in the fact that they apply to différent
parts of a fountain pen, while they serve the same purpose and in-
volve the same principle. The patentée so understood the matter,
as he said in his spécification, "I make a similar joint in a similar
way between the cap, C, and the fountain, F."
The détails are worked out in several différent ways in the claims
which we hâve not quoted. For example, in claim 8 the two mem-
bers makiiig the joint are described as "external and internai conical
members," and the external member is described as provided at its
open end "with an elastic externally bçveled annular lip that en-
gages the opposite part of the internai member with elastic pressure,"
etc. The spécification describes thèse détails at great length. In
fact, a careful reading of it shows that what the patentée devised was
the working out from point to point of mechanical minutise with
more or less skill.
A\\ those portions of the patent submitted to us relate to matters
which were common in thé arts, and common aside from the arts in
the technical meaning of that word; and the détails, therefore, con-
cern merely mechanical skill, and in no degree inventive faculty.
Therefore the case is in line with Rubber-Tip Pencil Company v.
Howard, 20 Wall. 498, 507, 22 L. Ed. 410, and with Perry v. Révère
Rubber Company (passed down in this court on Juné 12, 1900) 103
Fed. 314, 43 C. C. A. 248. It is clear that none of the claims in issue
cover anything which involves patentable invention.
The decree of the Circuit Court is affirmed, and the appellees
recover their costs of appeal.
àMEEICAN SALESBOOK CO. V. CAKTEE-CRUME CO. 409
AMERICAN SALESBOOK CO. et al. v. CAETER-CEUMB CO. et aU
(Circuit Court, W. D. New York. October 20, 1903.)
No. 207.
1. Patents — Suit For Inpringement — Evidence dp Priok Art.
In a suit for infringement, in which the validity of the patent is In
issue, the court ■wlll take judiclal notice of other patents introduced in
évidence in anotlier suit in ascertaining the state of the art.
2. Same— Validity — Détermination on Demdrrer.
Where the want of novelty of a device Is manifestly apparent on the
face of the patent, the Issue may properly be determined at the threshold
of the case on demurrer.
3. Same— Invention— Manifolding Sales Bocks.
The Beck patent, No. 647,934, for a manifolding sales book, the only
élément of novelty being the cutting out of a thumb space in the side
of the carbon sheet to permit the removal of the duplicating sheet with-
out soillng the same or the hands, -whlch resuit was also accomplished
by prior devices, Is vold for lack of patentable novelty.
4. Samb— Evidence dp Invention— Commercial Success.
The commercial success of a patented article can only be considered
on the Issue of invention, ■where such Issue is in serions doubt
In Equity.
M. B. Philipp and H. H. Rockwell, for complainants.
Duell, Megrath & Warfield (C. H. Duell, of counsel), for défend-
ants.
HAZEL, District Judge. This suit is brought to restrain infringe-
ment of patent No. 647,934, granted to Warren F. Beck, April 24,
1900, for an improvement in a manifolding sales book and holder.
The défendants hâve demurred to the bill on the ground that the
patent is void upon its face, and that it lacks invention or novelty.
It is not disputed that manifolding sales books hâve long been in
gênerai use. Everything in the device described by the spécification
is practically conceded to hâve been old or fully covered by antécédent
patents at the time of its invention, except that feature described in
claims 2 and 3, which provide for cutting out a portion of the carbon-
ized sheet to partly expose the sales sheet underlying the carbon sheet
at or near its free end. By the arrangement described in the spécifi-
cation, the user of the manifolding sales book by slight thumb pressure
is enabled to withdraw and remove the leaf next the carbon sheet with
great facility, and without suffering the annoyance of soiling his
fingers or any of the separate sheets underlying the transfer or car-
bon sheet. The court fully appréciâtes that the field of invention is
necessarily limited, and for that reason the simplest altération or
change in the prior art is of the utmost importance. It may fairly
be inferred from an examination of the spécification of the patent in
suit that manifold sales books, which preceded the patent, require
manipulating the transfer sheet with the fingers, and that some an-
noyance attended the opération for the reason that, by repeated con-
tact with the carbon sheet, both the fingers of the user and the sale
H 4. See Patents, vol. S8, Cent. DIg. f 39.
500 125 FEDERAL REPORTES.
sheets as well are apt to become soîled. The object of the patentée,
as stated itt^the spécification, is to construct the parts in sùch a man-
ner as to adapt them to meet this difficulty and obviate the necessity
of such handling. But this idea, as wîli be seen presently, was not
original with the inventer. To carry out the object of the patentée,
the method particularly set forth in the spécification was conceived,
namely, to fasten the carbonized sheet or duplicating sheet at the upper
end in such a way as to overlap the free end of the sales sheets, which
are fastened at the lower end. At the upper right-hand part of the
Carbon sheet a small portion is eut away, giving the appearance of a
semicircular space of sufficient dimensions to permit the free use of the
thumb in the opération of withdrawing the underlying sheet. It is
évident by this method that the thumb space exposes the underlying
leaf or sheet, and enables the user to remove consecutively each sheet
without soiling the fingers or any sales sheets. As has been said,
invention and novelty are claimed only for the additional feature of
thumb spacing. The controverted question appears plainly from the
bill, the patent in suit of which profert is made, and from certain other
patents, namely, the Carter reissue patent. No. 10,359, ^nd Frink
patent. No. 288,048, which were recently considered by this court on
a former hearing between thèse parties, involving the validity of
claims 4 and 5 of patent No. 406,845, granted July 9, 1899, for
manifold sales books. Carter Grume Co. v. American Salesbook
Co. (decidèd June 20, I903) 124 Fed. 903. For the purpose of ascer-
taining the state of the art, judicial notice will be taken of thèse
patents and of the records on file in this court in that case. Authority
for so doing may be found in Cushman, etc., Co. v. Goddard et al., 95
Fed. 664, 37 G. G. A. 221. By such records it appears that the patents
referred to were in évidence in the former suit to illustrate the state
of the art. In View of the conclusions hère annpunced, it is undoubt-
edly better to dispose pf the issues raised by the demurrer in con-
fprmity with the apparently well-settle4 practice of courts of equity
in suits for infringement than to await any évidence on final hearing,
which probably would not be of sufficient force to support the pre-
sumption of novelty and inventipn to which the patent is entitled.
Whether the patent is void uppn its face tnay be determined by what
is commonly known with respect to the art and the functional resuit
achieved by the suggested patentable élément. I am clearly of the
impression that the new élément under , considération is not novel.
Its claim to récognition has not that sure foundatiop upon which the
life of a patent must dépend. There isinothing peculiar or new in
cutting away a portion of a sheet of paper to enable the fingers or
thumb to dexterously and conveniently turn over a leaf or sheet of
paper or withdraw the same from a group of leayes or sheets secured
or lightly held together. No new resuit is added by such a combina-
tion. The most that can be said for it is that it has superior ad>-
vantages which permit drawing or removing sales sheets with alacrity
and with convenience. This is not enough, especially when the patent
beyond doubt lacks patentable novelty. Richards v. Chase Elevator
Go., 159 U. S.. 477, 16 Sup. Ct. 53, 40 L. Ed. 225; Duer v. Corbin
Cabinent Lock Ce, 149 U. S. 216, 13 Sup. Ct. 850, 37 L. Ed. 707/
AMERICAN SALESBOOK CO. V. CARTEE-CRUME CO. 501
National Hollow Brake-Beam Co. v. Interchangeable Brake-Beam
Co., io6 Fed. 693, 45 C. C. A. 544. It is quite truc that want of nov-
elty is a question of fact. Reckendorfer v. Faber, 92 U. S. 347, 23
L. Ed. 719. And, moreover, the patent affirmatively carries with it
the fact of invention and novelty; but whenever it can be said that,
despite the approval of the patent office, want of novelty in manifestly
apparent upon the face of the patent, the issue raised by the demurrer
is properly determinable at the threshold of the case. Richards v.
Elevator Co., supra; Béer v. Walbridge, 100 Fed. 465, 40 C. C. A.
496; Brown et al. v. Piper, 91 U. S. 37, 23 L. Ed. 200; American
Fibre-Chamois Co. v. Buckskin Fibre Co., 72 Fed. 508, 18 C. C. A.
662. The expired Carter patent, dated January, 1882, to which réf-
érence has been made, was conceived to obviate the necessity of
handling the transfer sheet, and to avoid soiling the fingers and the
sales sheet. Apparently, then, the sales sheets may be withdrawn by
the method pointed out in pre-existing patents without the Hability
of soiling. The patentee's trifling variation is not such a valuable
contribution to the art as to entitle him to a monopoly. By way of
analogy, it may be said to be familiarly known that playing card cases
hâve thumb or finger spaces so as to enable the cards to be easily
withdrawn from the card cases. Envelopes having finger dépressions
at their upper edges to allow a quick and convenient withdrawal of
papers between their folds are very old and very familiar. Hence, in
my opinion, invention and novelty are clearly negatived, and under no
perceivable state of the évidence can the plaintiiï fînally succeed in es-
tablishing infringement.
The court is not unmindful of the fact that the manifold sales book
under considération has met with large commercial succcss and is
extensively used by the public. The essential feature upon which
success and public appréciation alone dépends, namely, invention and
novelty, is clearly lacking, and therefore the utility achieved by the
device cannot be considered to ofifset the want of invention. McClain
V. Ortmayer, 141 U. S. 419, 12 Sup. Ct. 76, 35 L. Ed. 800.
The principle that the success of a patented article is only persuasive
in turning the scale in cases of grave doubt respecting the invalidity
of a patent scarcely needs citation of authorities. The conclusion
hère announced is reached irrespective of complainant's antécédent
patented manifolding sales book (Exhibit A), referred to by défend-
ant to further show the prior state of the art. Inasmuch as the pat-
ent referred to at the hearing is not regularly before the court, no
judicial notice may be taken of it. Bottle Seal. Co. v. De La Vergne
Bottle & Seal Co. (C. G.) 47 Fed. 59.
The submitted record upon an application to the Suprême Court for
certiorari in an action at law in the Ninth Circuit in the case of this
complainant against Bullivant, and in which an opinion of the Circuit
Court of Appeals is reported in 117 Fed. 255, afïîrming the décision
of the Circuit Court, and holding the patent in suit invalid for want of
novelty, has not been considered. But such a judgment by a court
of co-ordinate jurisdiction and by the Circuit Court of Appeals upon a
question such as hère présentée! may well be persuasive of the con-
clusion hère reached. It is contended by complainant that the de-
S02 125 FBDEBAL BBFOBTEB.
cision of the Circuit Court declaring the patent void for wïnt of nov-
elty ought not to be persuasive hère, for the reason that the stipulated
tacts io the Bullivant Case do not accurately and sufficiently disclose
the great advantage of the patented sales book in controversy over
those manufactured and sold prior to the alleged patented invention.
In reply to this contention, it is suiïicient to repeat that this décision
is based upon the palpable invalidity of the patent on its face. This
conclusion is fortified and strengthened by earlier patents, to which
référence has been made. The Bullivant Case and the déniai by the
Suprême Court of the pétition for writ of certiorari (American Sales
Book Cdmpany v. Bullivant, 23 Sup. Ct. 855, 47 L. Ed. 1 184) , however,
certaînly strengthen thfc expressed conviction that the patent is abso-
lutely void. The démarrer to the bill is sustained, and the suit dis-
missed, with costs.
HARTFOED FIRE INS. CO. Oï' CONNECTICTJT et al. V,
PEBKINS, Insurance Oom'r.
(Circuit Court, D, South Dakota. November 6, 1903.)
1. FoBBisK Corporations— Statdtbs — CoNSTiTnTioNAi.iTT— Right to Contkst.
SlQce a foreign corporation is entitled to do business In the state only
Et the discrétion of such state, and under such terms and conditions as
It may see fit to enforce, such corporation Is not entitled to contest the
constltutionallty of a state statute imposing tenus on which it may be
allowed to do business within such state.
B. 8amb.
Whether a statute prohlbitlng Insurance companies from combining to
establish rates, etc., and providlng for the revocation of the license of
a foreign conipany faillng to comply therewith, was unconstitutional as
to domestic companies, and therefore was void In toto, could not be de-
termined In a suit by a foreign insurauce company havlng no right to
contest the constitutionaUty of the lav<
On Demurrer to Bill.
Preston & Hannett, for complainants.
Philo Hall, Atty. Gen., for défendant.
CARLAND, District Judge. This is a bill in equîty filed in this
court by the Hartford Fire Insurance Company, the Phœnix Insur-
ance Company of Brooklyn, the Royal Insurance Company of Liver-
pool, the German American Fire Insurance Company, and the Spring-
field Fire & Marine Insurance Company, ail foreign Insurance com-
panies and corporations, against John C. Perkins, commissioner of
insurance for the state of South Dakota, for the purpose of per-
petually enjoining said commissioner from enforcing the provisions
of an act of the Législative Assembly of the state of South Dakota,
approved March 9, 1903 (Sess. Laws S. D. 1903, p. 183, c. 158), and
to hâve said act declared unconstitutional. and void, as being in con-
T 1. Status of foreign corporations, see note to Republlcan Mountain Sllver
Mines v. Brown, 7 C. C. A. 419.
HARTFORD FERB INS. OO. T. PHEKHTS. 603
flict with both state and fédéral Constitutions. The act referred to
is as follows :
"Section 1. Oombinatlons Prohlblted — Penalty for Violation. Any combina-
tion, agreement, confédération, compact or understanding made and entered
into directly or indlrectly, by or between two or more flre Insurance com-
panies Insuring property against loss or damage by lire and loss or damage
from the éléments, transacting business within thls state, or between offi-
cers, agents or employés of any such companies, relating to the rates to be
charged for Insurance, regulating or flxlng the minimum price or premium
to be pald for Insuring property located within thls state, the amount of
commission to be allowed agents, for procurlng Insurance or the manner
of transacting the business of lire or other easualty Insurance within this
state, is hereby declared to be unlawful, and any such company, offlcer or
agent vlolating the provision shall be deemed guilty of a misdemeanor, and
on conviction thereof In any court havlng jurlsdiction shall pay a penalty
of not less than one hundred dollars nor more than flve hundred dollars
for each offense, to be recovered for the use of the gênerai fund of the state.
and any such Company, corporation or association so offendiug shall not be
permltted to transact business within thls state.
"Sec. 2. Affidavit must be Made When Called For. Any flre Insurance
company, corporation or association desiring to transact business within thls
state shall, in addition to the requirements now provlded for by law, furnlsh
the Insurance commissioner. of thls state on or before the flrst day of July
In each year, and at any other time during the year when called upon by
the insuranee commissioner of this state, as one of the conditions for being
permltted to transact business within this state, an affldavit subscribed and
swom to by the président or secretary or managing offlcer of such corpora-
tion or association before compétent authority, stating that said company
of which he is an oflicer has not violated any of the provisions of the fore-
going act. naming them, and such affldavit shall be in the followlng form:
"State of , County of , ss.:
"I, , beIng flrst duly sworn, dépose and say, that I am one of the
managing ofilcers of the company or association, and that said asso-
ciation has not entered and will not enter into any combinatlon or agree-
ment with any other lire Insurance company or companies whatsoever, by
which there is any understanding of whatsoever Icind or character, either
directly or indlrectly, tendlng to flx or establlsh a unlform priée or premium
for flre Insurance in the state of South Dakota, or any agreement whatever,
either directly or indlrectly, relatlng to the rates to be charged for Insur-
ance within said state.
"Sec. 3. Any Oflacer or Employé of Insurance Companies may be Summoned
to Appear before Commissioner. The commissioner of Insurance of this
state is hereby authorized to summon and bring before him for examinatlon
under oath any offlcer or employé of any flre Insurance company transacting
business within thls state suspected of vlolating any of the provisions of
this act; and on complalnt in wrlting made to hlm by two or more résidents
of this state charging such company under oath upon thelr knowledge or
information and belief, with vlolating the provisions of thls act, said In-
surance commissioner shall summon and cause to be brought before hlm
for examinatlon under oath any ofiicer or employé of said company; and
if such examinatlon and the examinatlon of any other witnesses that may
be produced and examlned, the Insurance commissioner shall détermine that
said company is guilty of a violation of any of the provisions of thls act,
or if any offlcer shall fall to appear or submît to an examinatlon after being
duly summoned, said commissioner shall forthwith Issue an order revoking
the authority of such company to transact business within this state, and
such company shall not thereaf ter be permltted to transact the business of
flre Insurance in this state at any time within one year from the time of
such révocation.
"Sec. 4. Testlmony not to be Used against Person Making the Same. The
statements or déclarations made or testified to by any such oflicer or agent
in the investigation before the commissioner as provided in this act, shall
§0$ , tl9 ^BiDOBAI. BBPOBTaB.
notbe nBcd against any person making the same In any criminal prosectK
don àgaimt hlm, and rib person shall be excused from testlfylng for th#
reaBon that hls testlmony so given will tend to criminate him.
"Sec. 5. Kepeal. Ail acts and parts of acts In conflict with tbe foregoim
provisions are hereby repealed.
"Àpproved March 9, 1903."
The défendant has demurred to the bill for want of equity, and
the cause is now before the court after argument upon bill and
demurrer. The bill allèges that complainants are, and hâve been for
many years last past, engaged in the business of insuring property
against loss by fire in the state of South Dakota, and hâve always
heretofore complied with, and are now complying with, ail laws in
force in the state of South Dakota regulating or appertaining to for-
eign insurance corporations except the act hereinbefore referred to,
which as to complainants is alleged to be unconstitutional and void.
The spécifie portions of the state and fédéral Constitutions which it
is claimed are violated by saîd act are as follows : First, it is claimed
that the act violâtes the state Constitution, in that it confers judicial
power upon the insurance commissioner ; second, that it violâtes arti-
cle 14 of the amendments to the Constitution of the United States,
in that it deprives complainants of their liberty and property without
due process of law, and dénies to them the equal protection of the
laws ; third, that it violâtes section 10 of article i of the Constitution
oï the United States, in that it impairs the obligation of contracta or
the liberty to make contracts.
Counsel for complainants in their brief use the following language :
"Ever since the décision of Paul v. Virginia, 8 Wall. 168, 19 L. Ed. 357,
it has been settled that a corporation çreated by one state, or by a forelgn
government, can exercise none of the fonctions or privilèges conferred by
Its charter in any other state or country, esscept by the comlty and consent
of the latter. It follows that sueh assent may be granted upon such terms
and conditions as those states may think proper to Impose. They may ex-
clude the foreign corporation entirely, they may restrict its business to
partlcular localities, or they may exact such security for the performance
of its contracts with their citizens as in their Judgment will best promote
the public interest, and the foreign corporation must assent to the terms
imposed by the state. The state has the absolute right, we admit, to ex-
clude such foreign corporation, or, havlng granted it a license to do business
withln the state, to revoke it, in its discrétion. With the question of the
expediency or pollcy of the statutes imposing thèse conditions upon foreign
corporations the courts hâve Jittle to do."
With this statement of the law this court fully concurs, with the
exception that instead of the words "little to do" this court would
say "nothing to do." If the sole power to say whether a foreign
insurance corporation shall do business within the state of South
Dakota is vésted in the Législative Assembly of such state, how can
any law passed by the Assembly, which afïects the right of foreign
insurance corporations to do business in the state in the future, be
called unconstitutional? The power to exclude a foreig^n insurance
corporation from the state, Or to presçribe the conditions upon which
it may do business in the state in the future, is subject to no limita-
tion of state or fédéral Constitutions. Either this is true, or the law
as stated by counsel is inc01"rect ; for there cannot exist at the same
time the absolute power to exclude a foreign insurance corporation
HARTFORD PIRE INS. OO. V. PEEKINS. 505
if such power is subject xo limitation. To say that a law, which ab-
solutely excludes a foreign insurance corporation from the state or
imposes conditions upon which the corporation may do business in
the State in the future, is unconstitutional, involves a contradiction
of ternis, for the reason that ail the right the foreign insurance cor-
poration has to do business in the state must be found in whatever
law the Législative Assembly passes in that behalf. If such law would
be unconstitutional, if attacked by a citizen of the state of South Da-
kota, still it would avail a foreign insurance corporation nothing to
attack it, as such corporation is not a citizen entitled to ail privilèges
and immunities of citizens in the several states. I am now speaking
of législation which prescribes rules for the future.
In the case of Doyle v. The Continental Insurance Ce, 94 U. S.
535, 24 L. Ed. 148, a law of Wisconsin provided that before a foreign
insurance corporation could do business in that state it should sign
an agreement that in the event of its being sued in that state it would
not remove the case to the fédéral courts, and if said foreign insur-
ance corporation should violate said agreement it should be the duty
of the Secretary of State to immediately cancel the license of said
corporation to do business within the state. The law was confessedly
invalid, so far as it sought to deprive the insurance Company of the
right to remove its cases to the fédéral courts, as was held in Insurance
Co. v. Morse, 20 Wall. 445, 22 L. Ed. 365. Still the Suprême Court
in the case first cited said:
"The effect of our décision In thls respect la that the state may compel
the foreign company to abstain from fédéral courts or to cease to do busi-
ness in the state. It glves the company the option. This is justifiable, be-
cause the complainant has no constitutional right to do business in that
state. That state has authority at any tlme to déclare that it shall not trans-
act business there. This is the whole point of the case, and, without référ-
ence to the injustice, the préjudice, or the wrong that is alleged to exlst,
must détermine the question. No right of the complainant, under the laws
or the Constitution of the United States, by its exclusion from the state, is
infringed, and this is what the state now accomplishes."
Counsel for complainants, in order to avoid the unquestioned law
with référence to the power of the state over foreign insurance cor-
porations, say in their brief :
"Complainants hold that this anti-compact law, in its gênerai frame, scope,
législative purpose, opération, and effect, is to regulate and restrict ail in-
surance companies doing business in the state, and with the prohibitory re-
strictions it conflicts with the Constitution of the United States and the
state of South Daliota. There is nothing in this act that séparâtes foreign
insurance companies from other insurance companies, so the purpose of the
act is directed to ail insurance companies alike. If this act, for the reasons
alleged in the bill of complaint, conflicts with the Constitution, both state
and fédéral, as against domestic companies, then It is unconstitutional and
vold as to ail other Insurance companies."
The weakness of this proposition is found in the fact that it over-
looks the principle that courts do not listen to a party whose objection
to a law is not that his own. rights are affected, but that the rights of
some other party, who is not complaining, are. If this law which is
attacked is unconstitutional as to domestic insurance companies, they
may waive their right to attack it. Cooley's Const. Lim. (5th Ed.)
506 125 FËD^iBAL BEFOBTBB.
2l6. Certainly, until the domestic insurance companies do com-
plain of the law, no court will, at the request of some third party,
détermine that the law is or is not unconstitutional as to them.
In the case of the People v. Brooklyn, etc., Ry., 89 N. Y. 75, the
court says at page 93 :
"A Btatute is assumed to be vaUd untll some one complains whose rlght
It Invades. The landowners are noti bere complainlng, and we do not know
that they ever will. They hâve the power to waive a constitutional pro-
vision made for their beneflt. Possibly they hâve already done so, or may
In the future, we eannot know, and untll they corne and présent their con-
tract and Invoke the constitutional protection no tribunal is called upon to
grant It The state and the landowners must be lef t to settle their own
controversy. This one is between the state and the rallroad companies. It
is only when some person attempts tp reslst the opération of the aet, 'and
calls in the àld of the Judlclal power to proiiounce It vold as to Mm, his
property or his rights, that the objection of uneonstitutionallty eau be pre-
sented and sustained.' In re Wellington, 16 Pick. 96, 26 Am. Dec. 631. A
législative act may be entirely valid as to some classes of cases and clearly
void as to others. So that we are to leave the landowners to vacate their
contract with the state. If they hâve one, ivhen they please and in their
own way."
The same doctrine is stated in Cooley's Const. Lim. (sth Ed.) 197,
and is elementary law.
Clearly, thèse complainaints hâve the option either to cease business
in the state of South Dakota or comply with the law in question.
They hâve no constitutional rights that are infringed by it, and, if
they hâve not, they eannot be heard to say that other corporations
hâve. The attention of thé court has been called to the cases of
Niagara Fire Ins. Co. v. Cornell, iio Fed. 816, in the United States
Circuit Court for the District of Nebraska, and Greenwich Ins. Co. v.
Carroll, 125 Fed. 121, in the Circuit Court, for the Southern District
of lowa. The opinions of the presiding judge in those cases hâve
been examined, but I eannot concur in the resuit reached.
The deniurrer is sustained.
THE CITY OF BIRMINGHAM.
OCEAN S. S. CO. v. ROSS.
(District Court, E. D, New York, October 20, 1903.)
1. Collision— Stbamsbif and Anchobbd Dkbdoe.
A dredge, at work during the day in deepening the channel of the Sa-
vannah river, at night drew to the southward some 200 feet from the
center Une and outside of the usually navigated channel, where she was
anchored in accordancé with her usual custûm, exhibiting appropriate
lights and a green light to îndicate that paSslng vessels should go to the
north of her. A steamshlp passing up the river saw her lights, including
thè green light, when at a distance of 2,300 feet, but failed to make suffl-
clent allowance for the ebb tide which set her to the southward, and she
came Into collision with the dredge, sinking her. The night was clear,
the wind light, and no unusual conditions exlsted to prévent the steam-
ship from passing the dredge in safety, which she would bave done had
she kept In the' usual channel. Beld that, in the absence of any unusual
conditions requirlng it, the dredge was not. In fault for faillng to move
to a greater distance from the channel, but that the collision was due
solely to the fauJt of the steamship.
THE CITY OF BIRMINGHAM. 507
In Admiralty. Cross-libels for collision.
Benedict & Benedict and R. D. Benedict, for libelant Ross.
Wheeler, Cortis & Haight and Charles S. Haight, for SteamshJp
Co.
THOMAS, District Judge. The above actions involve a collision
between Dredge No. 7, anchored in the Savannah river, and the
inbound steamship City of Birmingham, shortly after 4 a. m. on
April I5th. The weather was clear, there was no wind, and the
tide was strong ebb. The libelant, Ross, was using the dredge for
deepening the river, pursuant to a contract with the government.
On the previous afternoon the dredge had been drawn from its work-
ing position adjacent to the central line of the channel to a position
to the southward thereof. While working the dredge was held in
place by five lines, the stern line leading directly upstream, two
breast lines leading from each side directly away from the dredge,
at a point somewhat aft of the bow, and two quarter lines made fast
six or eight feet forward of the stern, and leading forward. The
lines were 500 or 600 feet in length, and were made fast to heavy
anchors, which were placed at points marked by buoys. While the
dredge was at work ail the lines were kept tant for the purpose of
holding her stable. When the dredge stopped work at night, the
anchors remained unchanged, but the dredge was hauled either to
starboard or port, by slacking the hnes on one side and drawing
them in for a distance on the other side. A spud, which was a heavy
timber 24 inches square and about 45 feet long, extending up and
down through the center of the dredge, with a sharp steel point at
the lower end, was sunk into the bottom of the river to assist in
holding the dredge in place. The présence of the dredge at night
was denoted by three white lights hung in a vertical line, under
which was a green Hght, if approaching steamers were expected to
pass to the north of the dredge, and a red light, if they were to pass
to the south of the dredge. The drift of the tide was somewhat
diagonally across the channel, whereby it tended to carry to port
the Birmingham, after she turned Buoy No. 9, but as she approached
Buoy No. 9 she felt the tide on her port bow. The buoy was about
2,300 feet from the bow of the dredge, or some seven lengths of
the steamer, which was 320 feet long. After rounding the buoy,
and thus falling under the influence of the ebb tide, she drifted south-
erly, her speed having been reduced to half speed shortly after
passing or just before passing Buoy No. 9, and, although she re-
versed and went backward at fuU speed before the collision hap-
pened, yet she struck the bow of the dredge slightly to the star-
iDoard of the center of her bow, moving her some 25 or 30 feet north-
erly and westerly, so that she was lying athwart the stream, where-
upon she shortly sank. The damage was of such a nature as to
break oiï the spud, four timbers which were 4% inches square,
the head log, which was 16 by 18 inches, and eut through the for-
ward plank, 6 by 12 inches, and into the bottom log some 6 inches.
The starboard breast line was broken, and the stern line was so
slackened that it was thereafter raised from the water and eut.
508 125 FBiDI'^BAL BËPOBTEO.
Two questions arise: First. Was the location of the dredge the
proximate cause of the accident, and culpable? Second. Did the
steamship negligently contribute to the colhsion?
Capt. Kirwan, of the steamship Lexington, bound upstream, about
four hours before the collision, passed the dredge about 20 feet on
his port hand, as he estimated. He testified: "She was near the
range, but she was a little to the southward. She was to the south-
ward 0;f the range, but near it. I should say not more than 50
feet southward of it." This évidence illustrâtes the gênerai conten-
tion of the steamship company that the dredge was in the center
of the channel, or not more than 50 or 100 feet southerly thereof.
The exact location of the dredge after she sank is known. Her
bow was then between 80 and 90 feet at its neafest point from the
center line of the channel, while her stern was 180 feet from the
center line of the channel. There is considérable évidence, much
discussion, and more spéculation, whether the dredge, after having
been pushed to her port hand by the collision, was again carried far-
ther to the southward by the ebb tide before she settled down, or
whether her final location showed her nearer to the center ■ of the
channel than she was at the time of the coUision. The witnesses
for the libelant testify that the dredge was hauled out from 200 to
250 feet southerly of the center line of the channel. Finney, the
captain of the tug that tended upon the dredge, placed the port side
of the dredge within "jz feet of the starboard breast anchor, which
was 340 feet from the center of the channel. Capt. Berg, of the
steamship, testified, "It looked to me as if she was right in the chan-
nel;" while Dreyer, the mate, put her from 50 to 100 feet south of
the range line. The évidence of Berg and Dreyer shows such in-
ability to appreciate distances on the night in question as renders
unacceptable their estimate as to the distance of the dredge from
the center line of the channel, while the estimâtes of the witnesses
for the dredge, in themselves open to criticism and doubt, are more
in accord with known conditions. It is not probable that the per-
sons who saw the dredge as she was anchored, even in the daytime,
gave sufifîcient attention to the matter to détermine within 25 or 50
feet as to her exact location, while in the night so accurate ob-
servation, if not impossible, rarely happens ; and to such considéra-
tions must be added the usual erroneous estimâtes of distances upon
the water made by witnesses both at night and in the daytime. With
ail the évidence before the court, it is impossible to détermine with
accuracy whether the dredge was drawn 180, 200, or 225 feet from
the center of the channel. The location of the dredge after she was
sunk indicates that her starboard side was at least 180 feet from
the center line of the channel. The dredge was drawn out on the
evening before the accident by pulling on the starboard, breast, and
qUarter lines. The starboard quarter line ran forward to an anchor
located about 250 feet south of the center line of the channel. The
évidence tends to show that the starboard bow of the dredge did
not touch this Une after it was drawn out. The captain of the
dredge drew a diagram purporting to show the positions of the
lines, whereby he made the starboard quarter line lead away from
THE CIXT OF BIEMISGHAM. 509
the dredge, but afterwards corrected his diagram so as to make such
line run dose to the dredge. He testified as follows: "Q. You
said that the starboard quarter Hne lay almost directly ahead? A.
Almost; yes, sir." Eratich, another witness for the dredge, stated
that "the starboard quarter line swung a Uttle rightwise." It is con-
sidered that the starboard quarter line did run somewhat southerly
oi the starboard side of the dredge, and this view is confirmed by
the fact that, if the dredge were as far south as the starboard quar-
ter line, the steamship, in approaching the dredge as she did, would
hâve passed in such proximity to a shoal that there is strong prob-
ability of her grounding.
Upon the whole évidence it is believed that the dredge was about
200 feet south of the center line. This left from 175 to 200 feet
of clear water between her and the center line, on the north oi
which line was navigable water for some 400 feet. The channel
was deepened by dredging for a distance of 120 feet on each side of
the range line for the purpose of allowing ships of large draft to
use such channel. But to the north and south of such lirait there
was navigable water, and, while it was the intention of vessels
passing that point to keep on the range if there was no obstruction,
yet it was quite safe to pass to the north or south of the range for a
distance of several hundred feet, according to the draft of the vessel.
Very much évidence was given as to the former custom of the dredge
and other dredges in drawing out of the channel. Such évidence
was ofïered by the steamship company for the purpose of showing,
as Twiggs, the government inspecter on the vessel, had stated, that
she drew out the usual distance ; that such usual distance was on
the central line, or very near thereto. If the captain of the steamer
knew of this custom, there was greater demand that he keep far-
ther to the north for the purpose of avoiding the dredge. The steam-
ship company contend quite correctly that there was a full oppor-
tunity for the dredge to pull several hundred feet farther to the
southward. The government inspecter insisted vigorously that that
could not be donc, because there was a shoal under her starboard
side. This error he in the end renounced. The dredge could, with-
out serions difïiculty, hâve been drawn much farther to the south-
ward, but this would hâve required the change of her anchors, and
would hâve caused some delay both in moving her at night and
restoring her to her position for work on the following morning.
However, that would hâve been merely a matter of inconvenience,
and the time consumed would not hâve been of great importance,
if she were seriously obstructing navigation.
The problem résolves itself into this : The dredge had been with-
drawn to the southward of the deeply dredged channel, and there
was an abundance of room for the vessels to pass in either direc-
tion. She was not in a position where vessels would ordinarily
navigate, although they might do so under the pressure of unusual
conditions. She maintained the usual lights showing her présence,
and exhibited the green light, which indicated to the approaching
steamers that they should go to the northward of her. Before
reaching Buoy No. 9, and probably a mile away, the steamship
510 125 FEDERAL EBPORTKB,
Birmingham: had seen. the white lights of the dredge, and upon
reaching Buoy No. 9 saw her green light. Further up the river
was a red light, and in the neighborhood of Buoy No. 9 was another
red light, both on the range. The simple problem for the captain
of the Birmingham was to pass the green light. There was no un-
usual embarrassment to navigation. The conditions were precisely
what he might expect to find during good weather at that time and
on that tide. He knew or should hâve known the influence of the
tide upon his vessel. His problem was simply to keep far enough
to the northward to pass the green light. He left Buoy No. 9 about 50
feet on his port hand, and he never had the green light of the dredge
ro the southward of the red light. The steamer rounded Buoy No.
9 southerly of the range line, and néver was on that line before the
collision. Notwithstanding the élaboration of the évidence and the
briefs submitted, it does not seem as if the case ofïers a serions prob-
lem. A dredge, half a mile away, signaled that an approaching
steamship should go to the northward of her, and yet the steam-
ship, with plenty of notice, made such a turn that she never got to
the northward of the dredge. It seems a simple proposition that an
object, clearly seen during good weather, under usually favorable
conditions, should be passed, in the exercise of ordinary care. The
learned counsel for the steamship contends that, although the light
was seen, yet the captain of the steamer could not know how much
it was to the southward of a central line. Its signal declared that it
was to the southward of the central line, and directed the captain
of the Birmingham to pass to starboard. There was ample water
to pass to the starboard, even with the dredge on the range line ;
but Berg, captain of the steaimship, could not help knowing that the
green signal indicated that the dredge was southerly of the range
line. The excuse that the ebb tide carried him to the southward is
not available, for he knew that the tide was there. There was no oc-
casion for his turning 50 feet ofï Buoy No. 9, nor was there any
propriety in his waiting until the tide actually struck his starboard
side, and was appreciably taking him to the southward, before he
put his vessel hard aport. His turning too quickly around Buoy
No. 9, and his failure to keep the bow of his vessel up against the
tide at an earlier time, was his initial fault. It is useless to con-
jecture when he fîrst slowed his wheel. He puts it at one place
before turning the buoy.: The mate puts it at a place after turning
the buoy. The évidence of both as to how far the vessel ran be-
fore she was stopped and backed baffles possible understanding. It
would seem finally, from the captain's évidence, that he did not stop
and back until he was vèry near the dredge. Indeed, on account
of the présence of the shoàl there was a point of time when it would
be dangerous to stop: and back; and just when it should hâve been
donc, or whether, when he saw that he had been carried far to the
southward, he should havé gone full speed ahead, need not be de-
cided. : Itis;decided that he came into his danger by his own négli-
gence in not taking a proper position in turning Buoy No. 9, or,
after turning the buoy, before the tide began to carry him to the
southward. His failure to do so was the proximate cause of the
IN BB 8HEIVEB. 511
accident, inasmuch as he had a plain opportunity to see where he
should go, he did see where he should go, and failed to exercise
proper skill and judgment in making provision for his passage by
the dredge. This and other dredges had been operated for some
time in the river. Other vessels passed them, and it certainly was
not an unusual feat in navigation.
There is no intention of deciding that a dredge or any other ves-
sel may, for its mère convenience, take up any position in the chan-
nel of a navigable stream, and hold another vessel responsible that
shall colUde with it in such a position. But when a dredge engaged
in systematically deepening a channel through a long period of time
has withdrawn herself beyond the limits of the usually navigated
channel to an extent that accords with her usual practice, and an-
chored in a space that may be, but is not usually, demanded, and
at the time in question is not needed, by passing vessels, and there-
upon signais to such vessels that they shall pass on a certain side,
and there is nothing to prevent such passage except the tide usually
obtaining at the time and place, there seems no occasion for holding
that the mère présence of the dredge contributed to the accident.
If there were unusual conditions that made it necessary for the
steamship to use that part of the channel appropriated by the an-
chored vessel, another question would arise.
The libelant, Ross, should hâve a decree, and the libel of the
Océan Steamship Company should be dismissed.
In re SHRIVEK.
(District Court, E. D. Pennsylvania. October 26, 1903.)
No. 1,477.
1. BANKRTJPTCT — DiSCHARGH— FiNDINGS OF ReFEREB.
A findlng of facts on an issue as to the rîght of a bankrupt to a dis-
charge, made by a referee who has seen and heard the wltnesses, should
be upheld, except when it clearly appears to be wrcng, since much may
dépend upon the truthfulness as well as the accuracy of the wltnesses.
In Bankruptcy. On exceptions to report of referee refusing dis-
charge.
Hopper & Buckman, for the bankrupt.
Maurice W. Sloan and John Houston Merrill, for the trustée.
J. B. McPHERSON, District Judge. The facts found by the ref-
eree abundantly justify his conclusions, and, after a careful considéra-
tion of the testimony, I am unable to say that the facts hâve not been
correctly ascertained. In such an inquiry as this much dépends upon
the truthfulness (not merely the accuracy) of the oral testimony. In
determining this question, the referee, who has heard the wltnesses
and has observed their bearing and their manner of testifying, enjoys
so great an advantage over the judge who only reads the written re-
port of the wltnesses' words that I should not be justified in overrul-
ing his fîndings, unless I entertained a clear conviction that he had
512: 125 I"B3DEEAr, REPORTER.
erred. The best that Ican say, however, for the earnest and capable
argument on behalf of the bankrupt, is that I hâve sometimes fait
inclined to believe that it might be correct; but I hâve nevertheless
always returned to the position that the gênerai rule should be fol-
lowed, and that a finding'of fact that dépends upon oral testimony,
and has been made by a tribunal that has seen and heard the wit-
nesses, should be upheld, except when it clearly appears to be v*rrong.
The report of the référée is approved, and the discharge of the
bankrupt is refused.
GEAY V. NEW YORK NAT. BUILDING & LOAN ASS'N.
(Circuit Ctourt, D. Connectlcut. October 22, 1903.)
No. 994.
1. Eqcitt— Hbabino beforb Mastbr— Objections to Findings of Fact.
A party dissatisfled with a master's flndinga of fact should make hîs
objections tbereto to tlie master, and wliere ttiat Is not done the court
cannot consider an exception to a flnding on the ground that facts were
omitted which should hâve been found.
In Equity. On exceptions to report of Spécial master.
George E. Hall, in pro. per.
E. H. Rogers, for défendant.
PLAIT, District Judge. At the oral hearing on October i6th
disposition was made of ail questions which arose, aside from the ex-
ceptions of George E. Hall filed August lo, 1903. He therein ex-
cepts to the third finding of facts, and quotes certain testimony taken
before the master in support of his exception. I think it is too late
novir to make such an exception. He should hâve complained to the
master if he felt that he was injured by the omission of any fact. I
am bound to accept the report as conclusive on the essential facts.
The exception is overruled.
The claimant then excepts to the first and second conclusions of
law. The first refers to his daim for services in the Sullivan loan,
the second to his claim for services and disbursements in the case of
Sughrue v. Hall. The trouble with the claimant's contention is that
under both exceptions he is practically endeavoring to force upon the
court conclusions of fact which the master with great care avoided.
The argument to me was a very proper one to hâve made on the trial
before the master, and I hâve no doubt that it was made with vigor.
It is beyond my power, however, to change the facts, and upon those
facts the master's interprétation of the law is unassailable.
The exceptions are overruled.
BEACH V. MAÇON GKOCEKY CO. 513
BBAOH et al. v. MAÇON GROCERT CO. et al.
(Circuit Court of Appeals, Piftli CircuiL October 17, 1903.)
No. 1,267.
1, Recbivbks— Unauthobized Taking of Pkopkrtt— Cobts and Expbnses.
Where property of a défendant is taken from his possession by a re-
celver against liis consent under an erroneous order wliicli he success-
fully resists in an appellate court, he Is entltled to tlie return of such
property without cliarge of any kind' against it or against liim by reason
of the proceedings. He cannot justly be charged witli ttie cost of keep-
ing stock ao taken on the ground that it was not an expansé of the re-
ceivership, but one Incurred for the préservation of the property, and
especially where he was actually subjected to loss by being deprlved
of the use of the stock.
Pétition for. Revision of Proceedings of the District Court of the
United States for the Southern District of Georgia, in Bankruptcy.
See ii6 Fed. 143; 120 Fed. 736.
John P. Ross, for petitioners.
Olin J. Wimberly (John I. Hall, on the brief), for respondents.
Before PARDEE, McCORMICK, and SHELBY, Circuit Judges.
SHELBY, Circuit Judge. Tliis Htigation was begun by the credit-
ors of Asa N. Beach fiUng a pétition in involuntary bankruptcy and
an ancillary bill in the District Court against him, praying the appoint-
ment of a receiver to take charge of his property. It was alleged that
JuHa M. Dixon claimed to be the owner and was in possession of a
large part of the property, but that her claim was fraudulent and un-
founded, and that the property was in fact owned by Asa N. Beach.
An ex parte order was made appointing a receiver as prayed for.
Answers were filed by Beach and Miss Dixon denying the averments
of the bill, and motions were made seeking the discharge of the re-
ceiver. Thèse motions were denied by the court. On the application
of the receiver, and against the objections of Miss Dixon, the receiver
was ordered to sell part of the property, which he did, and the sale was
confirmed. Beach and Miss Dixon joined in a pétition to superin-
tend and revise thèse orders. Their pétition was granted by this
court, and the several orders of the District Court were reversed. In
the sale by the receiver Miss Dixon had bought the property which
was claimed by her, and regained possession of it. This court directed
that where parts of the property claimed by her had been sold by
the receiver and purchased and paid for in cash by her, the receiver
should be directed to return to her the money so paid by her, and that
she be allowed to retain possession of the property as original claim-
ant in adverse possession, and not as purchaser at the sale. On the
question of the costs and expenses of the receivership the court made
an order taxing the Maçon Grocery Company, Inman Smith & Co.,
and J. Regenstein, the petitioners who instituted the proceedings in
bankruptcy and filed the ancillary bill, "with the costs in this court,
and with the costs of the proceedings on the ancillary bill to appoint
a receiver, and with the costs of the receivership, including the com-
125 F.-33
614. 125 KBDBBAL BBPOETEB. ' : il
pensation of the receiver and his expenses, to be ascertaîned and al-
lowed by direction of the Distrîdt Court." Beàch v; Maçon Grocery
Company, jp6 Fed. 143, 53 ;Ç.Ç. .A. 463. j,
The mandate of this court having gone tô the District Court, ques-
tions were raised as to the construction of the order made by this
court. The prQperty seizedby t}ie receiver cop^istpd in part of 15
mules, I horse, 2 mares, 2' coïts, and some cattle and hogs. The re-
ceiver took' this property, 6t peârly ail of it, from the possession of
Miss E>jjcort;oil a farm in the'.çbuntry, and carried ît into the town,
where it wâs'kept at a, cost of "$13 or $14 a day." It was agreed that
the expenses of the keeping^ofthis stock and feeding' it while so in the
possession of thé receiver iaiïiôùnted in the aggregate to $325. Con-
struing the brdèr and mandate bf this court, the learned judge of the
District Court adjudged that the petitioners and complamants in the
bankruptcy court should! pay to the défendants in the court below
"the araounts heretofore allowed and paid out by the receivei-, out
of the funds in his hands, for costs of the receivership, emhracing the
receiver's compensation and the receiver's own expenses." But the
learned judge added "that thç same does not emb^ace or apply to the
expenses of the receivership in the necessary préservation and keeping
of the estàte and piroperty itt'his hahds, which lastit is brdered and
adjudged is a proper charge against the fund, and shall be deducted
from the amount which is to be réfundèd." Beacb and Miss Dixoti,
défendants in the court below, filed the pétition thât is how before the
court seeking to revise this order. In addition to reciting the facts
relating tO the order soughtto be reyised, référence is made to the
record in the first case (116 Fed. 143, 53 C. C. A. 463), and the rec-
ord in that case is made a part of the pétition.
The District Court held, as we haye gtated, that the expenses
of the receivership in the necessary préservation and keeping of the
estate and property in his hands should be deducted from the amount
which the receiver was to refund to the défendants. Construing that
order by the record in the case, it means that the receiver should re-
tain $325, the amount paid owt for keeping the stock which had been
taken from the défendants', fârmby the receiver and kept by him, as he
States in his report, at a: cost of $13, or $14 a day. It will be observed
that the order of thîs court was not confîned to the compensation of
the receiver and the costs of the receivership;; It includes also "his
eJcpenses.", As no partieular expense or expenses are enumerated,
the order necessarily includes ail of the expenses of the receivership.
That it was not intended that anypart of the money paid into court
by Miss Dixon to obtain possession of her property should be retained
by the receiver on any pretesxt is elearly shown, we think, by the third
paragraph of the order. It is therc said that the receiver should be
directed to return to her the money go paid by her, and that she be
allowed to retain possession of her property she had bought at the
receiver's sale as original claimant iii. adverse possession, and not as
purchaser at the sale. It is not ordered that the receiver be directed
to return the money, less any ef3?penses or costs of the receivership,
or less any charges or disbursements. The plain direction is that,
her money should be:retur<ied-;tp her. We think, therefore, that a
BEACH V. MAÇON GKOCEEY CO. 615
proper construction of the order and mandate of the court, consider-
ing both sections 3 and 6 o£ the order, does not permit the receiver
to retain the $325 expenses paid by him in taking care of the stock.
It is a principle of gênerai application that, if the appointment of a
receiver is erroneous or void, and the adverse party does not acquiesce
in it, but continues to contest it to a successful termination, any com-
pensation which may hâve accrued to the receiver in the meantime,
and his expenses incurred in the administration of the estate, should
be taxed to the parties who applied to hâve the appointment made.
On the other hand, if the appointment of the receiver is sustained, and
the applicant obtains the relief sought by him in the pending suit, the
items of expenses growing out of the receivership are proper charges
against the unsuccessful défendants, and are chargeable and payable
from his property in the possession of the court. We do not under-
stand that the learned counsel for the respondents controverts thèse
gênerai rules. His position is that, the expenditure in question, bav-
ing been made to préserve the property, is not an expense of the
receivership within the meaning of the mandate, and that under the
circumstances of this case the $325 paid to feed and care for the stock
is not "an expense of the receivership." Authorities are quoted to
sustain this contention. Excerpts from three cases are quoted. On
examination of the cases we think that they do not sustain the conten-
tion.
The point decided in Cassidy v. Harrelson, i Colo. App. 458, 29
Pac. 525, is but an afifirmance of the gênerai principle that, "a receiver
having been appointed by the court on application of the interveners
in a cause wherein they were not entitled to intervene, the costs inci-
dent to the appointment were properly chargeable against thera" ;
that is, against the unsuccessful parties. The court did say, as quoted
by counsel, in the course of the opinion :
"It is probably true that tbere are many Items of expense which would be
Incurred in the care and custody of the cattle, in the shape of ordinary ex-
penses incident to the running of the herd, which could not legitimately be
taken as a part of the costs of the receivership. Under the circumstances the
only costs which should be taxed against the interveners because of the ap-
plication are those which are the legitimate and unavoidable incidents to the
appointment."
The statement of the case shows that the cattle referred to were
running on what is known as the "Carizo Range," an extensive
pasture, and that the order appointing a receiver was "based on a
consent filed." In the case at bar the défendants resisted the appoint-
ment until they had it vacated. In the Colorado case, the possession
of the cattle was merely technically changed without inconvenience
to the défendant, and this done by a consent order. In the case at bar
stock needed on the farm for the plow, and fully able to earn their
keep, were taken from the possession of the défendants.
In People v. Jones, 33 Mich. 303, the receiver made certain expendi-
tures which were allowed by the court, and counsel quote the case as
being analogous to the case at bar. The case can hâve no weight in
this connection, because the facts are not analogous, and for the
further and conclusive reason that the court in allowing the crédit
516 123 FEDERAL REPORTER.
claimedby the receiver s^id that it was proper to allow them, "there
being^no objection urged to the allowance of thèse expenditures."
The QnlyjOther case quoted by counsel is Weston v. Watts, 45 Hun,
219. tn that case the opinion of the court was delivered by Daniels,
J. It contains a strong, and, we think, a correct, statement of the
gênerai principles which should govern in taxing the costs and ex-
penditures of receivers. Tjie court said:
"To take a person's prop^rty from hlm by an unauthorized proceedlng, and
place it in the hands of a receiver, and ttien subject him to tlie expenses of
the proceedlng, would be Yery transparently nnjust, even if the courts had
the power to do that. Oases are not uncommon where the resuit would be
ruinons to the injured indivldual."
After citing and commenting on numerous cases which sustain the
gênerai rule, the court disposed of the question before it, saying :
"The daim now made in behalf of the receiver has, by no law, been im-
posed upon thé défendant. Nelther is there any équitable prlnclple which
should require him to pay, before be can secure a return of his property,
the expenses of the unlawful proceedlng by which It has been taken and
withheld from his possession. To require that payment from hlm or his
property would be a wrong which the court has nelther the power nor the
disposition to Infllct upon hlm. ' It may be a hardship upon the receiver him-
self, but It is one of the rlsks which he has voluntarily assumed. He could
hâve avolded it by declinlng to accept the appointment or protected himself
agalnst the logs of his commissions and expenses by flrst requiring securlty
from the plalntlfCs for their payment. If they cannot now be made to pay,
it is more Just and équitable that the receiver shall be depriyed of his fées
and expenses than it would be to require the défendant to defray the ex-
penses of an unauthorized proceedlng, and the cost of depriving him thereby
of the possession of his property."
From the concurring opinion of Bartlett, J., counsel quote a sen-
tence to which our attention is called :
"There mlght be cases whïre a receiver was erroneously appolnted, but not
under such drcumstances as to make the appointment absolutely void, which
would warrant an order that his disbursements be pald ont of the fund; as,
for example, where the property consisted of a herd of cattle for which the
receiver had to buy fodder. In such a case it would be fair and just to charge
the successful party with the cost of feedlng, for he would hâve had to încur
It if the animais had remàlned In his own custody."
This is a mère illustration used by the learned judge in a case which
did not involve the question. The illustration refers to a herd of
cattle, excluding the idea of horses or mules for the plow. "That
there might be cases" where such rule would apply may well be ad-
mitted, for such a case would occur, for example, where the receiver
was appointed by consent. But when dealing with the real question
before the court Bartlett, J., in the same opinion, held that "it would
be a pretty severe rule, even if constitutional, which should compel
a litigant to pay the expense of having his own property illegally taken
out of his custody for a whjle."
We fînd no àuthority that indicates that it would be just or équitable
to make the expenses in question a charge upon the funds in the hands
of the receiyçr. The rçceiyer was appointed byan ex parte order.
He went to the farm bi the défendant, and took possession of her
property. The larger part of it was such property as was useful and
needed on the farm. It is a matter of common knowledge that horses
■ BEACH V. MAÇON GROCERT CO. 517
and mules for the plow are worth more than their food during the
plowing season. It appears from the record in a pétition filed by the
receiver that Miss Dixon was wilHng to keep and feed the stock after
it was seized if she were allowed to hâve the mules and horses worked
on the farm. It is a matter of common knowledge that it is much less
expensive for the farmer to take care of his stock upon the farm than
it is to board them at a livery stable. If it should be held that, al-
though the défendant succeeded in having rêver sed and set aside the
order appointing the receiver, he was responsible for the expenses of
the receiver in buying feed for the stock, the application of such rule,
it seems to us, would lead in many cases to the greatest injustice. If
the litigation was protracted, and some considérable time elapsed be-
fore the order appointing the receiver was vacated, the expenses would
often more than equal the value of the property. Besides, such
charge once being allowed upon the theory that ït is a charge neces-
sary to the préservation of the property, other charges could corne in
on the same principle. Blacksmiths' bills and veterinaries' accounts
and the like would soon be insisted on as coming within the rule.
We cannot sustain such contention. The property having been taken
from the défendants against their consent under an erroneous order,
which they resisted successfully in an appellate court, the only proper
course is to return the property without charge of any kind against
it or against the successful défendants. The défendants should be put
in their former condition as nearly as possible. Instead of any sum
being taxed againt the défendants under such circumstances, they
would be entitled in some jurisdictions to recover damages, in a proper
action, for being deprived of the use of the property. The petitioners
who instituted the proceedings and secured the appointment of a re-
ceiver are properly and equitably chargeable with the costs and
expenses incurred by their wrongful application. In the event of
their insolvency, any expenses incurred by the receiver should fall
on him, and not on the défendants. He need not become receiver un-
less he chooses, or he may require a bond of indemnity before accept-
ing the position. In a case, therefore, where the receiver has been
wrongfully appointed, and the order subsequently vacated, it would
be more équitable that the receiver himself should sustain the loss
or expenses of the receivership paid by him than that they should be
taxed to the successful défendants.
It is ordered that the decree of the District Court of date March 9,
1903, be so revised and amended that no déduction for any expenses
of the receiver for keeping property of A. N. Beach or Julia M. Dixon
be made from the amount which should be refunded to said défendants
in the court below pursuant to the previous opinion and mandate of
this court. The costs of this court and of the District Court must be
paid by the respondents herein.
518 125 Fr.v::?..\h v.".vo:vrvAi, '
ARBOGAST T. AMEKICAN* EXCH. NAT. iBANK OF CHICAGO et al.
(Circuit Court of Appeal?, Seventh Circuit October 6, 1903.)
No. 957.
1. Banks— AcTS ofPbbsidbnt—Authoeitï— Répudiation.
Where the directors of a jDknk had not authorized its président to make
an agreement to extend tlme to a dèbtor or to refrain from selling
pledged stock for ttie liquidation of tlie debt, - and th.e circumstances
raised no implication of authority, and such agreement by the person
who was président was neiver ratifled, the bank was not bound thereby.
2. Samb— Sale op Collatekals—Good Faite.
After more than elght months had elapsed sinCe a debtor's assignment
without any payment having been made on the debt for which coHaterals
had been deposlted, the créditer dèposited the coUaterals with its attor-
ney, with directions to realize thereon, and he nothiéd the assignée that
unless the claim waS pald promptly he would sell the collatéral. After
an extension had beeH refused and thé. assignée was unable to pay, the
attomey notifled him of a bid of $30,000 for the collatéral, and after the
assignée acknowledged his inability to flnd a better one the attomey sold
the collatéral for that price. Eeîd, that the sale was valid.
8. Bamb— Adéquate Remedt at Law. ,, .
Where certain stock was delivered to a bank as crédit for à loan, and,
the loan not having been paid, the stock was sold for àh alleged inadé-
quate priçe, and plaintiff charged thaiithe directors and offleers of the
bank had particlpated In a campaign inaugurated by its président to bear
the stock, but failed to prove that any one connected with the bank,
excepjE thé person who was président, knew of or took part in such cam-
paign, the debtor had' an adéquate reinedy at law for damages against
the persons.who dei>reclated the stock in the market, and he was there-
fore not entitled to relief in equity by rédemption from the bank's sale.
Appeal from the Circuit Court of the United States for the North-
ern Division of the Northern District of IlHnois.
In 3893 Schumacher owéd the American Bxchange National Bank $30,000,
and dèposited as collatéral Security 1,000 shàres of American Cereal Company
stock owned by hlm, with authority to the bank to sell it at public or private
sale, without demand or notice, if the debt was not paid at maturity. On De-
cember 17, 1896, the debt being long past due and unpaid, the bank sold the
collatéral at private sale to Walter D. Douglas for $30,000. In this suit, begun
about a year later, Sèhumacher's assignée songht to redeem the stock on the
grounds (1) that the salé was made in violation of a contract between Schu-
macher and the bank, and (2) that the sale resulted frôm a eonspiracy among
the défendants to depreciate the stock and obtain it at less than its true value.
From a decrée dismissing the biU for want of equity, this appeal was taken.
George W. Ross and Charles P. Abbey, for appellant.
Charles B. Keeler and Charles A. Clark, for appellees.
Before JENKINS and BAKER, Cifcuit Judges, and BUNN, Dis-
trict Judge.
BAKER, Circuit Judge. I. The évidence of the alleged contract
is this : One Stuart was président of the bank, and also treasurer of
the American Cereal Company, of which Schumacher was président.
For many years he had been a friend and associate of Schumacher.
In May, 1896, the aflfairs of Schumacher, who had been on the verge
of failure since 1893, reached a crisis. At the Great Northern Hôtel
in Chicago, Schumacher held a meeting with some friends and advisers.
AKBOGAST Y. AMERICAN EXCH. NAT. BANK, 519
Stuart attended. Schumacher's attorney, after the situation was re-
viewed, stated that whether an assignment for the benefit of creditors
should be made at that time depended on the probable disposition of
the varions holders of Schumacher's collaterals to extend time, and
asked Stuart what course his bank would take if an assignment were
made. Stuart repHed :
"You know that my relations with Mr. Schumacher and the relations of the
bank hâve been very frlendly for many years, and you can always rely on us
to do ail In our power to protect the interest of the estate. If an assignment
Is made, our bank -will be the last to force a sale of the pledged stock."
Thereupon Schumacher assigned.
The bank was not bound. The directors never authôrized its prési-
dent to make such a contract, and never ratified his action, if it is as-
sumed that he was undertaking to act as bank président, and not
merely as Schumacher's friend. The facts warrant no implied au-
thority for holding the bank to Stuart's promise. It never received
any pecuniary or other considération, without surrendering which it
could not disclaim Stuart's action. And if Schumacher changed his
position, through reliance on Stuart's unauthorized promise, he must
look to him.
2. More than eight months having elapsed with nothing paid on
mterest or principal by the assignée, the directors placed Schu-
macher's notes and collaterals in the hands of the bank's attorney,
with directions to realize thereon. On December 7, 1896, he notified
the assignée that unless the claim were paid promptly he would pro-
ceed to sell the collatéral. The assignée was unable to pay, and
asked 60 days in which to endeavor to find means for taking up the
claim. The extension was refused, and on December 11, 1896, the
attorney notified the assignée of a $30,000 bid. The assignée ac-
knowledged his inability to make or find a better one, and thereupon
the sale was made.
There is nothing in the record to impugn the good faith of the bank
and its attorney in making the sale. The directors and officers, other
than Stuart, are not shown to hâve known of or participated in
Stuart's campaign to bear American Cereal Company stock. The
évidence of the alleged conspiracy among the appellees fails. It is
only by long-drawn inferences and suspicions, rather than by satis-
factory proof, that the purchaser Douglas is connected with Stuart's
alleged design. But if it were otherwise, the bank and the other de-
fendants not having participated in the alleged fraud, we think the
plaintifif had an adéquate remedy against the wrongdoers for dam-
ages in an action at law, wherein it would hâve been as easy as hère
to prove the true value of the stock at the time of the sale.
From a careful study of the record we discover no error in the de-
cree, and it is accordingly affirmed.
520 125 FBDBKAL BBFOBTE^.
UNITED STATES T. DJBiaGS.
SAMB V. MILLER.
(Circuit Court, EvD.|Ne;w York. September 28, 1903.)
1. CRimNAi, Law— Limitation of Prosecdtion— Paymbnt to Membbr ci'
CONGHESS FOB PrOCUKING GovERNMKNT CONTRACT.
Rev. st. U. s. §§ ;t781, 1782 [U. S. Comp. St. 1901, p. 1212J, make it a
criminal offense for ahy member of Congress to receive or agrée to re-
ceive any money, property, or other valuable considération for procuring
or aidlng to procure any contract from the government, or to receive any
compensation for services rendered in relation to any claim or contract
In whlch the United States is a party. Section 1781 aiso makes it an
oftensé for any person to give or agrée to glve any money, property, or
other valuable considération for the procuring or aiding to procure such
contract by a meinber of Oongi-ess. Held, tbat thie delivery to a member
of Congress of a nonnegotiable note made by a government contra ctor,
promising to pay a certain sum as Oie proceeds of the contract were re-
celyed, executed pursuant t» an agreement to pay such member for his
services in procuring the contract, did'not constltute thè givlng or receiv-
ing of "property" or a "valuable considération," wlthlo the meanlng of
the statute, such note being made unlawful and ihvalld by the statute
itself ; and that Indlctments under the statute, based on payments subse-
quently made and re(jeived in accordance with the terms of the note,
wère not barred by limitation, where such payments were made within
three years, although the note was delivered more than three years prior
to the flndlng of the Indictments.
Criminal prosecutions. On demurrers to indictments, under Rev.
St. U. S. §§ 1781, 1782 [U. S. Comp. St. 1901, p. 1212].
William J. Youngs, U. S. Atîy.
Hugo Hirsh, for défendant Driggs.
Kellogg & Rose, for défendant Miller.
THOMAS, District Judge. Section 1781, Rev. St. U. S. [U. S.
Comp. St. 1901, p. I2i2]v provides :
"Every member of Congress • * • who, dlrectly or indirectly, takes,
reçoives, or agrées to reçoive, any money, property, or other valuable con-
sidération whatever, from any person for procuring, or alding to procure, any
contract, • * • from the government or any department thereof, • * *
for any p^erson vs^hatever, » • • and every person who, dlrectly or In-
directly, offers or agrées to give, or glves, or bestows any money, property,
or other valuable considération whatever, for the procuring or aiding to pro-
cure any such contract, * ♦ ♦ shall be punished," etc.
Section 1782 provides: '
"No Senator, Représentative, or Delegate, after his élection and durlng his
continuance in office, • • • shall receive or agrée to receive any com-
pensation whatever, dlrectly or indirectly, for any services rendered, or to
be rendered, to any person, elther by himself or another, in relation to any
proceeding, contract, claim, • ♦ * or other matter or thing in which the
United States Is a party."
Some, but not ail, of the indictments allège the following facts,
which by the demurrers are conceded only for the purpose of raising
questions of law :
At a time prior to May 25, 1899, the Edward J. Brandt-Dent Com-
pany made a contract with the United States to furnish 250 or more
U>;iTED STATES V. DKIGGS. 5-1
machines, called automatic cashiers, and on the last-named date such
Company eXecuted the foUowing instrument:
"Watertown, Wls., May 25, 1899.
"For value received, we promise to pay George F. Miller or order, twelve
thousand flve hundred dollars wlthout Interest on reeeipt of the proceeds of
sale of 250 or more automatic casMers, sold May 19, 1899, to tlie United
States Post Office Department."
This instrument was, on or about the time of its date, delivered to
the défendant Miller, who was the agent of the obliger; whereupon
it was delivered by Miller to the défendant Edmund H. Driggs, who
procured, or aided in procuring, the contract from the government.
The instrument of July 26th embodied in part an agreement made by
such obliger, through its agent Miller, with Driggs, whereby Driggs
undertook to procure or aid in procuring such contract. As the gov-
ernment received and paid for the cashiers from time to time, Miller,
acting always as the agent of such corapany, received from it numer-
ous drafts, payable to his order, and indorsed the same to Driggs as
his compensation for procuring or aiding in procuring the contract
from the government; whereupon Driggs caused the drafts to be
cashed, and kept the proceeds.
The défendant Miller is charged in certain indictments, drawn un-
der section 1781, for making such delivery of certain of such drafts
to Driggs, and Driggs is charged separately in several indictments,
drawn, some under section 1781, and some under section 1782, for
receiving drafts from Miller; the charge being that Miller gave,
and Driggs received, such drafts for procuring such contract while
Driggs was a member of Congress. Ail the spécifie deliveries and
receipts of drafts upon which the indictments are based were within
three years next preceding the finding thereof. When the contract
was made, and the instrument of May 25, 1899, delivered to Miller,
and by Miller to Driggs, it is alleged that Driggs was a member of
Congress. Each défendant demurs to the indictments severally
found against him.
The demurrers should be overruled. The important questions are
(i) whether Driggs was a member of Congress when the ofïenses
charged in the indictments were committed; (2) whether the statute
of limitations has run against the actions or any of them.
The indictments charge sufïîciently that Driggs was such member,
and that Miller had knowledge thereof. Therefore the first ques-
tion cannot be determined at this time, although, if the facts be as
claimed by the défendants, a décision of the matter before the trial
might be due both the government and the défendants. It may be
that the objection that the statute of limitations has run against the
actions cannot be taken by demurrer, but that objection has not
precluded the court from examining and deciding the question, and
it is concluded upon the facts as gathered from certain of the indict-
ments (although several of them do not show such facts) that the ac-
tions are not barred. It is not deemed necessary to state at any
considérable length the reasoning by which this décision is reached.
The instrument dated May 25, 1899, was not negotiable, and there-
fore no value could be added to it by transferring it. In any case,
522 125 FEDERAL EEPOETBE.
whethef; î* was "property": or , a "valuable considération," within
the meaning of the statute* ^o that, an indicttnent could be based
upon i|.-withp three yearSjijai^ter its delivery to Driggs, dépends upon
its-jiatm-e' and value at the .ti|iie of such delivery. At the outstart
it is obvious that the ; instrument of , May 25, 1899, embodied in
part thé agreement pursuaht to which Driggs undertook to procure
the contract from the government, and fixed the condition and
times when l>e : should rçiçeive compensation therefor. Although it
be a fragmerjt of such agreement, and such agreement was originally
net in wrifing, the instrument of May 25th has the same qualities
as if it contained ail the terms of the agreement. An indictment,
otherwise correct, çharging that the défendants ofïended by making
the agreement, or by being parties thereto, woiild hâve been valid,
if found within three years from the time of making it, as section
1 781 in terrns forbids such an agreement to be made. But an in-
dictment based upon the instrument as embodying the agreement
is quite différent from an iiidictment for giving or receiving "money,"
"property," or "other valuable considération" upon the theory that
such agreement was itself "property" or "other valuable consid-
ération." The défendants contend that such agreement was in itself
"property" or "other yaluable considération"; that it represented
the money that was thereafter paid and upon which the présent
indictmentB ^re based ; that. the défendants could hâve been indicted,
not only for making the agreement, in part embodied in the in-
strument, but : also for giving or receiving a thing of such value as
the instrument itself has ; that a conviction or acquittai on an indict-
ment for giving or receiviiig it would hâve been a bar to an indict-
ment for thereafter receiving the money provided for by the agree-
ment; and;upon such premises they base the argument that the stat-
ute of limitations began to run from the time the instrument was
delivered, a;nd not from the time that the several payments were
made. Thig contention rests wholly upon the theory that the agree-
ment was itself "property" or "other valuable considération." But
the instrument has no validity,; because it was the very thing against
which the: statute was aimed. It had in légal theory no value for-
the purposçs of sale ; it was not enforceable against the makers ;
its payment depended entirely upon an unconscionable readiness of
the makers to meet an illicit , promise, given as a part of a corrupt
bargain, for, eorrupt practices. The instrument was tainted and made
worthless : by; th^ statute itselfi Could the same statute stamp as
somethingi Valuable, as property, a writing whose existence it had
itthibited ? The statute déclares that a member of Congress shall
not agrée "to receive any money, or property, or other valuable
•considération :;w:hatever, from any persan, for procuring * * *
;any contract -*' * * from the government." If a member of
Congress ànd such person enter into an agreement to do this very
thing, ho* can thé agreement be regarded as property or a valuable
considération? Does the statute refuse the agreement life by pro-
hibiting it, and at the same time, upon its interdicted birth, breathe
life into it, ,aiid: give it the characteris,tics, the protection, and the
equality^ of Iproperty ? According to sùch argument, the statute kills
UNITED STATES V. DKIGÔS. 52â
and quickens the same agreement at the same instant. It stifles
while it animâtes. It precludes its existence, and, being defied, at-
taches worth to its reality. Leavened and vitiated by guilt, and im-
bued and vivified by virttie, by the same statute! One seeks in
vain for fit expression of the contrariety. It must be remembered
always that the very same statute — the same section — that com-
mands that it shall not be, is invoked to vitaUze it into a valuable
entity. The very same agreement for making which the défendants,
under the statute, could be indicted, is exalted, by défendants' con-
tention, to the State of lawful "property" or "other valuable consid-
ération," so that the défendants, under the same statute, could be
indicted for giving or receiving it as such. The forbidden agree-
ment denounced by this section, and demanding the full punishment
provided for it, is claimed to hâve properties that give it worth, so
that the parties to it may be punished by the same section for giving
and receiving it as if it had merit and excellence. A statute that at
one and the same time could make the création of an agreement
a felonious offense, and yet esteem the very same agreement as
property and a valuable considération between the félons, would be
curious in law and logic. It would be diiïicult to think well of a
statute that should say to two men: "I will punish you for making
an agreement, and yet I will regard that agreement as property and
as a valuable considération if you do make it, and also punish you
for passing the agreement from one to the other, simply upon the
ground that it is such 'property' or 'other valuable considération.' "
Such alleged conjunction of validity and invalidity, such compounding
of unlawful existence and légal existence, such fusing of corruption
and incorruption into the same agreement, by the same statute, is not
understandable. A statute that proclaims that an agreement is so nox-
ious to the public good that the parties to it should be imprisoned for
making and delivering it one to the other should not be interpreted to
mean that such agreement is in any degree recognized by the law as
sane, useful, and marketable. The statute prohibited an agreemen* to
do the act, and also giving or receiving compensation for doing it. It
made either a punishable ofïense, but it did not intend to make the
agreement property or a valuable considération. Valuable considéra-
tion for what ? For agreeing to do the act ? That would make the
agreement a valuable considération for its own making. Of course,
the mutual promises contained in the agreement might sustain it,
if the statute did not punish on account of those very promises. But
it is not intended to refîne the argument. The occasion demands
no niceties of reasoning. The very statement of the défendants'
proposition should demonstrate its invalidity. It is so abhorrent
to moral and légal conceptions, so inimical to plain reason, that
some technical rules, elsewhere wholesome and properly applied, but
now skillfuUy invoked by défendants' counsel, must be broken
through and discarded, and ultimate vital judgments allowed to pre-
vail. If any one shall décide, or has decided, that a statute may
be interpreted to denounce an agreement as impossible of worthy
existence, and after it has come forbidden into the light déclare
that it has such worthiness that it may be regarded as "property"
62i' 125 FODBBAL BBFOBTBB.
or "other valuablç considération," for the purposes of the same stat-
ute, the res|)onsibility of such décision shall not rest upon this court.
The contention that an agreement by this statute can be a ground
of punishment (i) because it exists at ail, and (2) because it is a
valuable considération, and should be ranked with property recog-
nized by law, cannot be approved. The statute means by "valuable
considération" not the unlawful agreement to do the act denounced
by the statute, but some valuable thing, like money, property, or
the notes or obligations of third persons or corporations.
But it may be urged that the instrument does not embody the
agreement bet\yeen the parties, It was given to Miller, the agent
of the makefs, for delivery to Driggs. It was not issued or uttered
by delivery to Miller. He received it as agent, from a principal,
for the very purpose of delivery to Driggs. To what end ? To show
by writing, in whole or in part,; what agreement the makers, through
Miller or otherwise, had madè with Driggs. It embodied that agree-
ment in part, To what extent it contains it is unimportant.
Thèse considérations leadi to the conclusion that, while the de-
fendants could bave been indicted for making the agreement in
part embodied in this instrument, they could not haye been indicted
for receiving or giving it, upon the theory that it was "property" or
"other valuable considération/' In point of timc, as each payment
was made ah offense under the statute was committed, and so far
as such payments were made within three years before the indict-
ments were found the indictinents may be based thereon.
Orders will be entered overruling the demurrers, with leave to the
défendants tp plead pver.
NATIONAL FOLDING BOX & f-APER CO. v. ROBBRTSON'S ESTATH,»
(Olrcnit Court; D. Connecticut October 29, 1903,)
No. I,bl9.
I. Patents— iPamages fou Infbinoismïbkt^Incrbasb bt Court.
A court Is warranted Jto exercI^Jjg the discretionary power glven by
Rey. St. § 4921 [U. S. Comp. Sf 1901, p. 3395], to Increase the damagea
found to hâve Been' sustained biy * c6tnplalnant by tiie infrlngement of a
patent, where the Infrlngement fwa* palpable, and défendant persisted In
It after t\i]l knowledge of tljjB paltenta^d an opportunity to settle, and bas
', shown a détermination to Utigftte tp the end, and to cause ail the delay
' and expeïisé possible.
In Equity. Suit for infringeineflt of patent. On defendant's ex-
ceptions to master's report,- and ■xîbmplainant's motion for increased
damages under Rev. St. § 4921 [U. S. Comp. St. 1901, p. 33951
See 112 Fedi 1013. ; '
Walter D. 'Êdmonds, for cdmplâinant.
Charles W. Coinstock, for défendant.
PLATT, District Judge./ The master fias perÎQrmed his dutieS
under the accdunting with 'exemplary and painstaking care and pa-
♦ Rehearing denled February 2, 1904.
NATIONAL FOLDING BOX & PAPEK CO. V. KOBEKT80N S liSTATE. iiZ'o
tience. My labors hâve thereby been much lessened. His action in
regard to the four accounts, where he allows only the profits which
the défendant admits, rather than the damage which the complainant
claims, évidences the exceeding caution which characterized his prog-
ress. The criticisms upon the report which the défendant embodies
in its exceptions do not commend themselves to my mind. The ex-
ceptions are overruled.
Upon Complainant's Motion for Increased Damages. The discré-
tion of the court is invoked, and certain facts are presented wliich it
is claimed should affect that discrétion favorably to the complainant.
The défendant continued making and selling even after the last plain
notice from complainant's attorneys. It knew the plaintifï as a com-
petitor, and had knowledge of the patent in suit under which its boxes
were made. It knew that Gair had been enjoined from making a
similar box. It is not conceivable that an infringement could hâve
been carried on so extensively without, at the very least, inducing
the purchaser to believe that he would be protected from personal
loss. To so act as to induce such belief without actually becoming
responsible for the results would be even worse than to hâve guar-
antied the customer against loss in plain terms. The probable course
of action adopted by it, and which is forced upon me as a conclusion
by an almost irrésistible inference, did a harm both to the owner of
the patent and to the defendant's customers. The défendant appears
to hâve been treated with considération by the plaintiff's manager,
Mr. Walton. It is fair to say that it might hâve averted the consé-
quences of a palpable infringement by a payment of $2,000, and was
given an opportunity to make a counter proposition thereto, if it had
so desired. It is quite évident that it decided, in cold blood, to fight
to the last ditch, rather than pay any considérable sum ; and it has,
without question, carried on such a warfare, and the end is not yet.
In that battle the issue of noninfringement has never been sug-
gested. Resort has been had to every expédient, possible or seem-
ingly impossible, which could make for delay and expense. It is true
that ail thèse doings hâve been expensive to itself as well as to the
complainant, but the discretionary power with which the court is in-
vested by the statute means more than a power to punish the wrong-
doer. The déterrent effect of the punishment upon others should not
be overlooked. Our patent laws are thought by many persons to fur-
nish inadéquate relief to the patentée. The inventor of moderate
means, after sustaining his rights by litigation, is really at the thresh-
old of his contention. The terrors of the açcounting loom up before
him with something of the force which in olden times the suggested
horrors of the inquisition must hâve presented to the Christian mar-
tyr. It would seem to be the time to read a lesson somewhat sharp-
ly to the parties who indulge too freely in such experiments as are
disclosed upon the record in this action. The défendant is not taken
unawares. The plaintifï gave due notice of his intention long before
the conclusion of the controversy. A person may be regarded as
acting "wantonly" who acts without regard to propriety or the rights
of others, or is careless of conséquences, and yet without settled mal-
ice. Looking at the case in ail its lights, the défendant appears to
62l6 125 FEDERAL REPOBTBB.
have been "stubbornly litigious," or at least, to hâve "caused unnec-
essary expense and trouble." Day v. Woodworth, 13 How. 372, 14
L. Ed. 181.
The court cànnot increase profits in equity actions, Covert v. Sar-
gent (Ci C.) 42 Fed. 298. In the master's report, he finds that $66.59
are "profits derived by défendant." I do not think I can increase that
item. The balance, $1,454.02, are damages, and are subject to discré-
tion. The difficulty that the master experiencéd in arriving at the
damages, owing to the lack of identification of the: infringing boxes
in the books of account, makes it quite possible that the actual damage
may have been in excess ôf that found. This fact, and the other
fact that the plaintifï has been kept out of his due for a long time,
count heavily as additional reasons for the demand made upon the
court's discrétion. It is, therefore, in and under ail the circum-
stances of the case, considered a fair exercise of discrétion to increase
the damages to $4,362.06. To this will be added the profits, found
to have been $66.59.
Let a decree be entered for $4,428.65. Interest on the amount
found to be due by the master, should be computed from the date of
his report. Interest on the larger amount resulting from the exercise
of the court's discrétion should commence from the date of the de-
cree.
BRILL V. NÔRTH JERSEY ST. RY. CO.
(Circuit Court, D. New Jersey. November 9, 1903.)
1. Deckee— OPENiNfl— Nkwlt Discovbred Evidence.
A défendant appUed for tbe opening of an interlocutory decree, sus-
talning certain patents and finding infrlngement, on the ground of
newly discovered patents alleged to anticlpate or llmit those in suit, and for
a rehearing of the case after the introduction of such additional patents.
Btld, that the application mu^f bé denled on three independent grounds;
first, because it did not appear that any search prior to the hearlng was
made on the part of the défendant for patents germane or allied to
those in suit according to thelr proper and usual location, arrangement
and classiflcation in the patent office; secondly, because It appeared by
the admission of the solicitors of thé défendant that they had knowledge
for more than a week before the signing of the decree of the existence of
the alleged newly discovered patents and withheld that knowledge from the
court untll several days had elapsed after the decree was slgned, although
both parties by their solicitors were présent before, the court at the time
and had knowledge of tbe formulation and settlement of tbe tenus of
such decree; I and, thlrdly, because from an examinatlon of the patents
sought to be Introduced, in connection with the expert and other affldavlts
and the record of the case, it appeared that those patents were Immaterial
so far as the resuit embbdîed In the decree was concemed.
(Syllabus by the Court.)
See 124 Fed. 778.
Duell, Megtath & Warfield, for petitîoners.
Edmond Wetmore, Francis Rawle, and Joseph L. Levy, for com-
plainants.
BRADFORD, District Judge. An interlocutory decree was made
in this case October 14, 1903, sustaining and finding infringement
BKILL V. NOETH JERSEY SX. ET. CO. 527
of daims 6, lo, ii, 13, 14, 15, 30, 80, 8t and 87 of patent No. 627,898,
gfanted to George M. Brill, dated June 27, 1899, and daims 13 and
17 of patent No. 627,900, also granted to George M. Brill, dated
June 27, 1899, and awarding an injunction and an accounting. The
North Jersey Street Railway Company has applied by pétition for
the opening of the decree and a rehearing of the case to the end
that it may file an amended or supplemental answer setting up cer-
tain alleged newly discovered matter, consisting of patent No. 112,897,
granted to Chauncey S. Buck, dated Mardi 21, 1871, and patent No.
104,876, granted to Addison Overbagh, dated June 28, 1870. This
application must be denied on three several and independent grounds.
First. The affidavits before the court do not négative lâches on the
part of the défendant in failing to produce the Buck and Overbagh
patents in évidence in due course prior to the hearing of the case,
but, on the contrary, strongly tend to estabHsh such lâches. The
firm of Duell, Megrath & Warfield, the présent solicitors of the
défendant, became such prior to the hearing, but not until after the
close of the évidence on its behalf. Mr. Warfield, one of that firm, in
his affidavit, says :
"The facts relative to the Buck and Overbagh patents are withln my Per-
sonal knowledge, as I was the one who discovered such patents. * * *
From time to time since our firm took charge of this case I hâve examined
the patents in the truck art for the purpose of seeing if anything existed
which had not been brought to the attention of the court, and it was almost
an accident that led to the discovery of the Buck patent."
He does not state when or the drcumstances under which the
patents, now sought to be introduced, were discovered, nor the nature
of the accident which resulted in the discovery of the Buck patent.
Nor does he indicate the means or method resorted to by him or
any other person for the purpose of ascertaining the existence of
any patent or patents germane to the defence of anticipation or prior
art. Edgar Peckham, président of the Peckham company, which
manufactured the infringing truck mechanism, in his affidavit says :
"Before our company commenced to manufacture the trucks complained
of herein and which hâve been held to be infringements upon some of the
claims of the two patents In suit, I instructed our then soliciter and counsel,
.1. E. M. BOwen, now déceased, to make a thorough investigation to détermine
whether such trucks would be infringements upon any then existing patents,
and also to thoroughly develop the prior art so that we mlght know what, if
anything, was patentable. Mr. Bowen made such investigation and submitted
the resuit to us. Among the patents developed by this examination was the
Thyng patent, No. 4,276, November 18, 1845, but his search did not diselose
any of the patents now sought to be brought to the attention of the court
herein. After this suit was commenced Mr. Bowen, under our instructions,
made a f urther examination, In order to set up any prior patents hearing upon
the subject which he mlght discover in the answer herein. Such examination
did not disclose the patents now sought to be called to the attention of
the court. After that Mr. Bowen died and we retained Henry P. Wells in
place of Mr. Bowen. Mr. Wells stated to me that he would like to make a
further investigation, and I instructed him to do so and to make it as thorough
as possible.. I was informed by Mr. Wells that he caused such examination
to be made, with the resuit of finding certain patents which we set up in
an amendment to the answer, but such examination did not disclose any of
the patents now sought to be brought to the attention of the court. Mr.
"Wells, in the summer or early fall of 1901, was obliged, owlng to ill health.
528 125 FBDBEAL EBPOBTBK,
to glve up the défense ot thls suit, andour company retalned Duell, Megrath
and WarfleW, who hâve slnce actedlfor the défendant herein. * * * Our
prevlous attorneys were Instructéd tb make the most extensive and tborough
researcb possible, and we were Irifbitaed that they had so done."
Mr. Peckham does not state that he has any personal knowledge
of what was done by any of the solicitors of the défendant in any
effort to ascertain what the records and papers of the patent office
would disclose touching the defence of anticipation or prior art set
up in this case. It appears that his statements on the subject of
examinations made for patents pertinent and material to the défense
were wholly based upon information derived from others. Nor does
he even aver on information and beHef the method of conducting
such investigation nor the extent to which it proceeded. Thèse two
affidavits contain in substance ail that is brought forward to relieve
the défendant from the imputation of lâches. On the other hand,
the complainant has produced a number of affidavits, wholly uncon-
tradicted, clearly shoWing the usual and proper method for con-
ducting an examination in the patent office to ascertain the existence
of patents relating to any art or branch thereof. Among them are
those of George R. Simpson, who for more than eight years has been
examiner in charge of division 34 of the patent office; Howard A.
Coombs, an assistant examiner from May, 1896, to September, 1903 ;
W. W. Hite, who for more than seven years has been chief of the
draftsman's division of the patent office; O. Ellery Edwards, Jr.,
an assistant examiner for more than six years ; and William F. Hall,
John H. Holt, J. Granville Meyers, Jr., William N. Cromwell and
A. V. Cushman, ail of whom are familiar with the system of classi-
fication of patents in the patent office and hâve been actively en-
gaged in searching thé records of the office for patents, anticipatory
or illustrative of the prior art, for periods ranging from seven to
fourteen yeârs. It satisfactorily appears from the affidavits and
exhibits on the part of the complainant that the Overbagh patent
was included in sub-class 240 of class 105, in division 34, of the
patent office, and the Bnck patent in sub-class 243 of the same class
in the same division ; that class 105 has the heading "Railway Roll-
ing-stock"; that sub-class 240 spécifies "Equalizing-levers" under
the headings "Trucks" and "Electric-motor"; that sub-class 243
spécifies "Bogies" under the headings "Trucks" and "Four-wheel";
that the above classification and sub-classifîcation of the two patents
were in existence prior to the time of the institution of this suit,,
and hâve evér since réraained unchanged; that both of the patents
were properly so classified; that both of the Brill patents in suif
properly belong to class 105 in division 34 and to sub-class 239,
specifying "Bogies" under the headings "Trucks" and "Electric-
motor," and are now so classified, and, although it does not appear
when they were first so classified, in the absence of évidence to the
contrary, it may fairly be assumed that such classification was
promptly made in the due performance of officialduty; that the
Brill patent No. 627,899, which was divisional in its relation to the
patents in suit, was duly includçd in sub-class 243, class 105, in divi-
BRHX V. NORTH JEB8ET ST. ET. CO. 529
sion 34; that ail United States patents are classified in the patent
office in accordance with the arts to which they appertain, and are
properly and intelligibly sub-classified ; that one set of copies of ^11
United States patents se classified is distributed among the several
examining divisions of the patent office for the use of the patent
office examiners, and another complète set properly classified is
placed in what is termed the "attorneys' room of the United States
patent office" ; that copies of the patents as arranged and located in
the patent office are readily accessible in the attorneys' room accord-
ing to their classification and sub-classification to attorneys and
others making search as a matter of right, and to attorneys in the
examiner's room as a matter of courtesy; that to hâve fully ascer-
tained the prior art in its relation to the patents in suit a search
should hâve been made extending through class 105 and especially
the sub-classes including the désignations and headings above men-
tioned. A due and careful search for patents, relative to those in
suit, according to their proper and usual location, arrangement and
classification in the patent office, would hâve seasonably disclosed the
Buck and Overbagh patents. There is, however, no direct or suffi-
cient évidence that such a search M^as made on the part of the défend-
ant. Such omission constituted lâches fatal to the granting of the
présent appHcation.
Secondly, it is admitted by the solicitors for the défendant that
copies of the Buck and Overbagh patents were in their possession
for at least a week before the signing of the interlocutory decree
October 14, 1903. The solicitors for both parties were présent at
the formulation and settlement of the terms of that decree, yet neither
the Buck nor Overbagh patent was mentioned to the court, nor was
it in any manner stated or intimated that an application would or
might be made for a rehearing of the case. The défendant should
be precluded from asserting the materialify to the case of the very
patents of which it had knowledge prior to the signing of the inter-
locutory decree, and copies of which, in its possession, it withheld from
the knowledge of the court until after the decree was signed. The
conduct of the défendant amounted to a statement by it that the Buck
and Overbagh patents would not bave changed the resuit had thev
been adduced in évidence. The éléments essential to a technical
estoppel probably are not présent. But, aside from any question of
estoppel, or of the materiality of the évidence now sought to be
introduced, I am satisfied that the granting of the présent application
would establish a précèdent tending to encourage lâches and wholly
irreconcilable with the due, prompt and economical administration
of justice.
Thirdly, it is extremely doubtful whether the Buck and Overbagh
patents are of such a nature as to invalidate or otherwise aflfect the
patents in suit, or either of them, with respect to the claims which
hâve been sustained and held infringed. An examination of the
patents sought to be introduced, in connection with the expert and
other affidavits and the record of the case, leads me to believe that
those patents are immaterial so far as the resuit embodied in the
125 F.— 34
530 125 FDBBBAL BSlPOBTEB.
interlocutory decree is concerîiéd. It^ Wôuld answer ko «seful end,
espéciallytiû viçw of the conelusion's above reachèd, to elaborate
tjjjiis branch of the subject.
The pétition must be denied with costSi
THE MENÔMINEB.
(Ulstrlct Court, B. D. New York. September 23, 1903.)
1 CoLusiOH— Damages— Total Loss of Fishing Vhssbl— IteosPEcrivE Catch.
In case of the total loss of a vessel by collision, damages are llmited to
the value of the vessel, with Interest thereon and pending freight, or
charter hlre In the nature o£;frelght; and tlie rule appliea to a flahlng ves-
sel sunk while on a flshlng voyage, and totally lost, except as to her outfit,
and thé value of her prospective catch' durlng the remainder of the
season ûr of the expédition cannot be allowed as an élément of damages.
In Admiralty. Suit for collision. On exceptions, to report of spé-
cial commissioner as to dajnages.
Wing, Putnâm & Burlingham (Harrington Pu'tnam and Edward S.
Dodge, of counsel), for libelants.
Convers & Kirlin (J. Parker Kirlin and Edward E. Blodgett, of
rounsel), for claimant.
THOMAS, District Jud'ge. The steamship Menominee, by her
own fault, collided ofiE Narituckét with the fishing schooner Lucille,
whereby thé latter was IbsV'and practically evèrything on board,
including 33 barrels of mackerel, and the effects of the master and
crew. "Her two large seihé boats were saved, the crew escaping
in one, which was afteiSvàrds picked up by a fisherman after the
Lucille's crew had boarded the Menominee,, and the other being
found later by the same fîshérniàn, fast by her long painter to the
sunken séhoOnet'. ' Eaçh boât had one of the L,ucille's seines in it
at the time ; and seines and boats, tbgèthër with a few smaller arti-
cles pickéd up, wére bfèught to Glouçester, àiid delivered to the
owners, one of the boats being- somesvhat damaged."
The spécial cbmmissimer found the follôwing damage :
Value of Lucille ...'..'.. ..^. ......................... ..•^■(••^•> ? 5,500 00
Outfit ....:./.........v;;..i...î;v....v...........J. ...:.;..,., 2,797 40
Oaptaln's effects , 236 65
Probable catch ..; ..>;..*>,.* , ' 1,500 00
Use of seines and bpats ;, 23 00
Total $10,057 05
j Because of a stipulation between the parties, that the claimant
should pay 75 per cent, of the; provable damages, the commissioner
found that the libelant was entitled to recover the sum of $7,542.84,
•With interest from^fAugust i, 1901, to June i, 1903, amounting to
$829.72. Inasniuch as the commissioner had aUowed for loss of
Tl. See Corilsion, vol. 10, Cent Dig. §§ 282, 28T.
THE MENOMINEE. 531
probable catch on the voyage interrupted by the collision, interest
was allowed from the time of the probable termination of such voyage,
and not from the date of the collision.
The report of the commissioner is approved, without further dis-
cussion, except as to the probable catch, and, if any amendment of
the libel is necessary on account of the assessment of the value of
the Lucille at $5,500, it may be made.
The allowance of the sum of $1,500 for probable catch, which in-
■cludes the value of the 33 barrels of fish on hand at the time of the
colHsion, should be considered. If such item as a whole should
not be allowed, the 33 barrels of fish, at the market price ascer-
tained by the commissioner, should be included in the decree. The
commissioner finds that the Lucille "left Gloucester July ist, fully
manned and equipped for a mackerel seining voyage, provisioned
for about six weeks, though the ordinary length of such a trip is
about a month. She had already struck fish, and had taken and
salted down 33 barrels of them, which were on board at the time
of the accident." The collision happened on July 7th. The libelant
claimed the loss of probable catch for the entire season ; that is, for
the July voyage, and also for a prospective voyage in August and
September, and probably October. The commissioner allowed only
for the loss of probable catch on the July voyage.
In The Umbria, 166 U. S. 404, 421, 17 Sup. Ct. 610, 41 L. Ed
1053, it is stated that, as a gênerai rule, "in cases of total loss by
colHsion, damages are limited to the value of the vessel, with in-
terest thereon, and the net freight pending at the time of the colli-
sion. The probable net profits of a charter may be considered in
cases of delay occasioned by a partial loss, where the question is as
to the value of the use of the vessel pending her repairs. In such
cases the net profits of a charter, which she would hâve performed
except for the delay, may be treated as a basis for estimating the
value of her use." Had this been other than a fishing vessel, earnings
that she might hâve made, but not assured by definite contract,
would not hâve been allowed; and the question is whether, in the
case of a fishing vessel, totally lost except as to her outfit, net profits,
nonexistent but apprehended, shall be allowed by reason of the fact
that it may be inferred from her own catch up to the time of her
loss, and from the average catch of other vessels in the same vicinity,
that she would hâve had similar good fortune, had not the injury
occurred. Where a vessel is under charter, or has made such en-
gagements as insure her freight, the owner of the vessel is deprived
of vested existing property if the ship be precluded by the fault of
another from continuing her voyage. The enjoyment of such prop-
erty may be prevented by the possible contingency that the vessel
may be unable, by reason of injurious vicissitudes, to perform her
stipulations, or by the failure of the party who has assured the freight.
But there would be a presumption that such vicissitudes or failure
would not arise. If a vessel were going from port to port seeking
freight which was not assured her by contract, it would not be con-
cluded that she would be entitled to recover prospective freight,
basing the conclusion upon the inference that it would hâve been
532 125 FUDERAL KBPOBTEE.
earned because at the time of the collision shç had earned some
freight, ôrjtipon former similar voyages shé had made such earn-
ings, or because other vessels at the same time, and pursuing the
same traffic, had made such earnings ; ahhough in some instances
the history of such vessel and of similar vessels may be used for the
purpose of ascertaining the value of the loss of use of an injured
vessel, where demurrage damages are permissible. The présent
question is not, what would be the juster rule of damages? but,
what is the existing law? By what reasoning, or by what allowablé
solicitude for fishing smacks, should there be an application of one
rule for fishing vessels and another for ambulatory vessels seeking
freight at différent ports to which they might corne ?
In The Hope (D. C.) 5 Fed. 822, and The Freddie L. Porter, Id.,
afifîrmed in 8 Fed. 170, the District Court held that in the case of
a vessel chartered for a fixed term of time, totally lost by collision
while in the performance of her employment, and before the con-
tract had expired, the owners were entitled to recover as damages
the net profits which they would hâve realized under the agreement
for the whole period if the vessel had not been lost. This décision
followed the principles laid down in The Canada, Lushington, 584,
that there should be allowed "the gross freight, less the charges
which would hâve been necessarily incurred in carrying such freight,
and which were saved to the owners by the accident." There was a
similar décision in The Rebecca, i D. & H. 356, by Judge Betts. In
each. case there was a total loss of the vessel. So, in the case of
The Heroine, i Ben. 226, Fed. Cas. No. 6,416, where the vessel was
injured by collision, Judge Blatchford considered that "the freight
which the injured vessel was in the act of earning and has lost is
aJlowed as a just measure of compensation," but that there must
be deducted from the freight the vessel was engaged in earning
the expenses she. would hâve incurred if the voyage had been suc-
cessfully performed. Thèse décisions accord with that in The Balti-
more v. Rowland, 8 Wall. 377, 386, 19 h- Ed. 463.
In The Gleànerj 3 Asp. Mar. Cas. 582, it appeared that while the
fishing smack the Maud and Florence was engaged in drift-net fish-
ing in the North Sea the fishing smack Glèaner ran into and fouled
her nets; that they .becanie so entangled that, after attempting to
haul them in for some hours, the crew of the Maud and Florence
eut them adrift, saving only 10 nets out of 60. The Maud and Flor-
ence was then laid up for the Winter, as the fishing season lasted but
four weeks longer) and the owners were ûnable to procure in time
nets to enable them to résume their fishing. In an action for
damages, in addition to a recovery for the nets themselves, there
was an allowance of ^72 for loss of four weeks' fishing. In making
this allowance it was said:
"It Is to be borne in mind that a smack of this class is solely used for net
fishing, and if its nets are destroyeid, and canhot be renewed at once, the
smack Itself is necessarily laid up unemployed for a certain time at the very
period of the year when it would othçrwise be profltably employed. Accord-
ing, therefore, to the prdinary prinelple on which demurrage and compen-
sation for nonemployment is allowed in respect of a yessel disabled by in-
Jury to her huU and gèar, some compensation is clearly dtie to the plalntiffa
THE MENOMINEE. 533
in this case under that head; and, this being so, I hâve considered that the
ordinary rule of allowing so much per ton per day Is not applicable to a vessel
of this class, which is not constructed and is never employed for the convey-
ance of cargo or passengers, or in eaming freight in the commou sunse of
the term, and that the plaintifEs are entitled to recover the probable net
amount they were prevented from earning by the customary use of their
smack and its flshing gear."
The défendants did not object to the report.
In the case of The Marj Steele, 2 Loweîl, 370, Fed. Cas. No. 9,226,
decided in the United States District Court of Massachusetts, it
appeared that the libel was fîled by the owners and crew of the
schooner Hattie N. Reed and by the owners of a seine used in con-
jiection with such schooner in the mackerel fishery against the schoon-
er Mary Steele, wherein it was charged that the Steele damaged the
sei..", whereby it was rendered useless, so that the libelants were
obliged to carry it to Boston to be repaired, whereby they lost their
trip, and were detained one week, and sufifered damage. It was held
that in assessing the collision damages the probable profits of the trip
should be allowed, as the seine could neither be repaired nor replaced
in less time than a trip would require, and it was of so great value
that to assess it as total loss would exceed the damage incurred by
the loss of the trip. Judge Lowell stated:
"As to the mode of ascertaining the value of the time lost there seems to bo
no other that can be applied than the probable profits. The schooner had n
much larger number of men than merchant vessels carry, and différent out-
flts. There is no customary rate of hire or market priée for such vessels.
and cannot be, from the mode in which the business is conducted."
In The Cohimbia, 9 Ben. 254, Fed. Cas. No. 3,035 (E. D. of N. Y.),
it appears that an excursion steamer, coming from Rockaway to New
York, overtook oiï Coney Inland a schooner on her return from a
catch of menhaden, and towing behind her two boats holding her seine.
The steamer struck one of the boats and carried ofif the seine, where-
by both were lost. Upon a référence to ascertain the damages évi-
dence was taken to show the probable amount of menhaden the
schooner would hâve caught in the three-days delay that was neces-
sary to get another seine and boat, it being just at the height of the
fîshing season. The commissioner found damages for the net lost
and for the beat lost and certain interest, and also "for the fish, being
one-sixth of the three-days estimated catch, at $1.10 per M," which
fînding was affirmed by the District and Circuit Courts.
In The Risoluto, 5 Asp. Mar. Cas. 93, damages for collision on July
6, 1881, between a bark and fîshing brig, were involved. The brig
was on the Great Bank of Newîoundland, and by reason of the col-
lision she had to put into St. Pierre Miquelon, for repairs, whence she
did not get back to the fishing grounds until the 26th of August,
1881. In addition to the cost of repairs, the plaintiffs claimed as dé-
marrage 30,000 francs, grounding such claim on the basis of the loss
of fish which average catches of other vessels showed the brig would
hâve taken from the 6th July, 1881, the date of the collision, to the
26th August, 1881, or 30,000 cod, at an average of i franc per cod.
The registrar reported that the loss sustained by the plaintiiïs
534 125 FEDERAL REPORTER.
amountecî to the sùm stated for loss of fisli during the period men-
tioned. From the report the dépendants appealed to the court, and
notice of objection was filed in the registry by the défendants, the
chief ground as to the demurrage allowed being that the registrar
had estimâted the loss of fishing on wrong principles, and had re-
ceived improper évidence. The report of the registrar was affirmed.
In Guibert & Sons v. The British Ship George Bell (D. C.) 3 Fed.
581 (United States District Court for the District of Maryland),
the question hère involved arose. The libel was filed by the owners
of thè French brig Briha. against the British sWp George Bell for a
colHsion in conséquence of which the fishing vessel was surik with ail
property on board. The ship Bell was solely to blâme, and the case
was referred to a master to compute the damages. The libelants
excepted to the master's report, among other tliings, because the
master disallowed their claim for the probable "catch" which, with
reasonable certainty, thçy wpuld hâve taken if they had been permitted
to fish for the remainder pi the season. The master's report showed
that there remained 30 days of the fishing season, in which with
reasonable certainty those on the Briha might hâve taken 15,000 fish
additional to the car^o then on board. It was held that the master
properly rejected the claim. The learned judge said :
"It îs clearly to be excluded, under the rule hereinbefore adverted to. The
probable earnliigs of a vessel ba,ve sometimes been considered In cases o(
partial loss In collisions, when there was no other means of aseertaining the
loss to the owner by the détention of bis vessel while being repaired; but
In cases of total loss iriterest from thé date of destruction Is given in Heu of
the profit which might bave been gained by the owner by the subséquent
use of his vessel."
In The Columbus, 3 W. Robinson, 159, it was held that:
"Where a vessel is sunk In a collision, and compensation Is awarded by the
court of admiralty to the full value of the vessel, as for a total loss, the
plaintiff will not be entitled to recover anything in the nature of a demur-
rage for loss of the employment of his vessel or his own earnlngs in consé-
quence of the collision."
The action was brought by the owners of the fishing smack the
Tryall for damages for a collision in conséquence of which the Tryall
was sunk. She was raised at the expense of the owner of the Colimi-
bia and carried into Rye Harbor. The full value of the vessel was al-
lowed, but the claim for a sum which her owner stated he would hâve
earned for wages as master of the smack, and for a sum which he
claimed as the avera_ge profits of the same from the time of the col-
lision, was rejected. Dr. Lushington said:
"I do not recollect a case, and no case bas been suggested to me, where a
vessel bas been considered as a total loss, and, the full value of that vessel
having been awarded by the registrar and merchants, any daim bas been
set up for compensation beyond the value of that vessel. When I flrst read
the papers in thls case, I lookéd with much care and attention to see whether
any précèdent could be found, whether any single instance had occurred in
the numerous cases which bave arlsen, not only In my own time, but in that
of my predecessors; but I bave found none; and the learned counsel who has
argued the case on ^ehalf of Mr. Woodward [the llbelant] does not àppear to
hâve been more successful in bis researches."
TBH BIENOMIKEB. 535
The learned counsel for the claimant also cites the unreported case
of The City of Rome, Ad. Div., iith May, 1887, cited in Marsden
on Collisions, p. 135. The text states :
"A fishing smack recovered, besldes the value of her nets and gear, which
she was obligea to eut adrift, the amount she might reasonably bave ex-
pected to earn during the rest of the season [citing the Gleaner, 3 Asp. Mar.
Law Cas. 582; The Clarence, 3 W. Eob. 283, 286; The Eisoluto, 8 P. D. 109].
But It was held by Sir J. Hannen in a récent case that, wbere the boat is
totally lost, • * * the prospective catch of fish could not be recovered,
and the damages were confined to the value of the boat and gear."
In the unreported case of Nègre v. The Obdam, the damages
claimed by the libelant were (i) for loss by collision, (2) her sait and
supplies, (3) the estimated catch for the season, (4) the fish and
oil on board, and (5) the personal efïects of the master and crew.
The Obdam was held Hable, and an order of référence to ascertain
the damages was made. The commissioner disallowed the amount
claimed for damages for loss of profits on the voyage. The libelant
excepted "to the failure of the commissioner to allow the expected
profits of the voyage," but the court overruled the exceptions, and
confirmed the commissioner's report. (Dist. Ct., E. D. of N. Y.)
In Brown v. Hicks (C. C.) 24 Fed. 811, it appeared that the libelant
entered into an agreement with the agent of the bark "to proceed
from the port of New Bedford to Mahe, Seychelles Islands, by steam-
er, and on his arrivai there to take charge, as master, of the bark An-
drew Hicks, and perform a whaling voyage in said bark, not ex-
ceeding three years in duration, and return with said bark to the
port of New Bedford," and the agent agreed to pay him "one-
fifteenth lay or share of the net proceeds of the cargo obtâined by
said bark during the term of his service as master thereof." The
voyage not proving successful, the agent recalled the bark beforc
the expiration of three years. It was held that the libelant was
entitled to recover damages, and that the measure of damages was
the sum which his lay would probably hâve amounted to, calculated
upon the basis of the average catch of vessels on the ground from
the time the libelant received directions to proceed home to the
expiration of the three years, deducting the time it would take for
the return voyage to New Bedford. Parsons v. Terry, i Low. 60,
Fed. Cas. No. 10,782, was cited in support of such holding. There
it was held that, where the master and owner of a whaling vessel
had contracted for a cruise of four seasons at a certain lay, and
was wrongfully deprived of his command at the end of three seasons,
he could recover against his co-owners for damages for his removal
the probable value of his lay for the season on which he was about
to enter when displaced.
The resuit of the inquiry is that the attention of the court is called
to no case where a vessel was lost by collision and there was an
allowance of damages for the use of the vessel after her destruction,
except for pending freight or for charter hire, which is in the nature
of freight. Where the vessel was not regarded as a total loss, and
compensation made therefor, demurrage according to the usual rule
is allowed, and in the case of fishing vessels such demurrage or
'58,? 125JB'BPEBAï,,BBPÇJiyER.
damageç.;îor:i détention haveibeen asçertakied by considering her
probable ppt earnings în, the enterprisë tO'whiçh she was devôted.
So, where ttiere bas béen a contract to :.employ a person upon a
fishing expédition, from which he was entitled to recover for bis
services a certain share of the profits 6f tbe catch, his injury bas
been measured by the probable profits of such catch. In the présent
case, however, the libelants demand to recover not only for the total
loss of the vessel and ail prpperty lost or injured at the time, but
also for her use or earnings during the immédiate voyage in which
she was engaged and the voyages which she might further make
during the seaspn thereafter. Such a rule would keep the vessel
afloat after her destruction, a.nd crédit her with fish in the sea ap-
prehended only in expectation. It is sustained by no known rule of
law, or by no recognized authority. The libelants seek to strengthen
their position by the fact that the outfit,'bearing in value so con-
sidérable a ratio to the vessel, was saved, and that it was rendered
useless for the balance of the season. But such a principle is not
applied in ordinary cases of collision. The fact that some of the
necessary implements for operating the vessel were saved would not
authorize the court to give damages for the total loss of the vessel
and also demurrage for a loss of use. Interest from the time of the
injury takes the place of the value of the use of the vessel and
whatever was damaged in connection therewith. Therefore the re-
port of the cpmmissioner is modified to the extent of disallowing
whatever was found for loss of probable catch, and substituting there-
for the value of the 33 barrels of fish, at the price per barrel as found
by the commissioner, with interest on the amount of damages from
the time of the collision.
FOSTBR V. PEEFBBRBD ACCIDENT INS. 00.
(Circuit Court, B. D. Pennsylvania. November 6, 1903.)
No. 10.
1. Life Insdbanck— Validity of Conteact— Inscbable Ihtebbst dp Bknb-
FICIABY.
A person may eflect Insurance on hls own life In good faitli, paying
the premlums therefor hlmself, and hâve the pollcy made payable to any
beneficlary he chooses, and in such case the company cannot set up the
want of Insurable interest of the beneflélary to defeat the pollcy.
2, Same— EsTOPPBL TO Plbad Défense.
A llf e Insurance company Is estopped to set up the want of insurable
Interest of the beneflciary In a pollcy taken out and maintalned by the
insured, although it contàlned a clause that "ail claims under this pollcy
shall be subject to proof of interesf ' where the company had knowledge
of such lack of Insurable interest from the beglnnlng, the beneflciary be-
ing described in the pollcy as the "frlend" of the insured, but Issued the
pollcy, and continued to receiye the renewal premlums thereon wlthout
objection.
At Law. On motion by défendant for judgment on reserved point
notwithstanding the verdict.
î 1. See Insurance, vol. 28, Cent Dlg. { 188.
FOSTER V. PBBFERRED ACCIDENT INS. CO. 537
Melick, Potter & Dechert, for plaintiff.
Richard C. Dale, for défendant.
J. B. McPHERSON, District Judge. This is a suit upon a policy
of accident insurance taken out in August, 1900, by Charles S. Part-
ridge,' whereby the défendant promised, inter alia, to pay $2,500 to
"Mrs. Mary G. Poster, friend," if the insured should die as the resuit
of an accident. Upon this policy the insured paid nine quarterly pre-
miums, and died from accident on September 8, 1902. The défense is
the beneficiary's want of insurable interest, and upon that point the
undisputed facts are as foUows :
The insured was an attorney at law, and resided in Florida, where
Mrs. Poster also had her résidence until she removed to Philadelphia
not long ago. He came to live with her family when he was 18
years old, received his légal éducation in the office of her husband,
and was considered a member of the family until the day of his death,
although there was no relationship, and although he had not been
living in the same household with Mrs. Poster for several years before
he died. He paid nothing for his boarding during the 10 or 12 years
of his actual résidence in her house, and was in ail respects on the
footing of a near and affectionately regarded relative by blood. When
he died he owed Mrs. Poster $250, which he had borrowed two or
three years before. At the time the policy was taken out, he wrote
a letter to Mrs. Poster, of which the following portion refers to the in-
surance :
"Sanford, Florlda, August 13, 1900. My dear Mrs. Poster: I hâve taken
out an accident policy In the sum of $5000.00 in the Preferred Accident
Assurance Company of New York City, Oapt. Manley of this place Agent,
■who can glve ail particulars. I hâve had the policy made payable to you, so
that in case of any accident resulting in death you can coUect the money.
I do this as my mother is getting old and it would be a burden for her to
hâve It on her mind. I wish you would dispose of the money In case any-
thing should happen as follows: Send my mother $2000, take $2000 for
yourself and the other thousand use to pay any debts etc. that may come up.
Whatever of the balance there might remain from the $1000 you are also to
keep. I think that makes the insurance matter plaln."
Mrs. Poster had nothing to do with taking out the policy, and paid
none of the premiums.
Whether thèse facts would hâve supported a policy taken out and
maintained by Mrs. Poster on the life of the insured may admit of
question. I express no opinion upon this subject, nor upon another"
possible question, namely, whether the testimony should hâve been
submitted to the jury to détermine the good faith of the transaction,
its freedom from the élément of spéculation. The défendant did not
ask that the case should be passed upon by the jury. On the contrary,
the good faith of the parties was not disputed, the sole défense being
that the beneficiary had shown no insurable interest whatever, and
that the court should so déclare as matter of law. The defendant's
argument is that it makes no différence what the form of the transac-
tion may be — ^whether the policy be taken out by the insured himself
or by the beneficiary ; in either case the resuit is that the beneficiary
bas acquired an interest in the contract and in the life of the insured,
and therefore that public policy dénies to the plaintiff the right to re-
538 12i5 FBDEEAL EBPOEÏER.
cover, unless her interest is shown to be such as is recôgnized by the
law as insurable. It is undoubtedly true that during the discussion
and development of the doctrine of insurable interest the courts hâve
used laùgu'âge which supports thïs argument. For example, in Gil-
bert V. Moose's Adm'rs, 104 Pa. 74, 49 Am. Rep. 570, the Suprême
Court of Perinsylvaniadeclared:
"As a benefleiary merely, having no Intei'est.ln the life, It seems to us
very cleat that he [referrlng to a stranger In bloofl, in whose faVor the pollcy
was issuëd] eould lawfully hâve no Interest In the policy; for lî we admit
the contrary* Jtf we admit that one may Insure his life for the beneflt of an-
other, who Is neither a relative nor a créditer, our whole doctrine con-
cerning ■wagerlng poîicles goes by the board. The very foundation of that
doctrine Is that no one shall hâve a bénéficia) interest of any kind In a life
policy who Is not presumed to be Interested In the préservation of the life
insured."
The Suprême Court of the United States has also used similar lan-
guage in several cases, of which Crotty v. Ins. Co., 144 U. S. 621, 12
Sup. Ct. ;^49, 36 L. Ed. 566, is an example. It is there said :
"It Is the settled law of this court that à claimant under a life Insurance
policy must hâve an insurable interest In the life of the insured. Wagering
contraets In Insurance hâve been repeatedly denounced. Oammack v. Lewis,
15 Wall. 643 [21 U Ed. 244], lû WhIch a policy of $3,000 taken out to secure a
debt of $70, was declared 'a sheer wagering policy.' Connectlcut Mutual Life
Insurance Co. v. Schaefer, 94 U. S. 457, 461 [24 L. Ed. 251], in which It was said:
'In cases where the Insurance is effected merely by way of indemnity — as
where a ereditor insures the life of his debtor for the purpose of securing
his debt — the amount of Insurable interest Is the amount of the debt.' War-
nock V. Davis, 104 U. S. 775 [28 L., Bd. 924]."
Upon the other hand, both thèse courts hâve distinctiy declared
otherwise in words that are qiijte as clear. Thus, in Connecticut Ins.
Co. V. Schaefer, 94 U. S. 457, 24 h. Ed. 251, it is said:
"There is no doubt that a man may eflfeet an Insurance on. his own life for
the beneflt of a relative or friend. • • * The essential thing Is that the
policy shall be obtained in good faith, and not for the purpose of speculating
upon the hazard of a life in which the Insured has no Interest."
So, in Ins. Co. v. Robertshaw, 26 Pa. 189, Mr. Justice Sharswood
used the following language :
"For myself, I can see no good reason why a man having an Insurable in-
terest may not Insure It, and présent the pollcy as a gift to a friend; and. If
such an agreement to give be made at the very time of the contract, why
may not the policy be made at once In the name of the donee, the whole
transaction being bona flde, no fraud on the company Intendedî"
In Scott V. Dickson, 108 Pa. 6, 56 Am. Rep. 192, the court said :
"Can there be a doubt that he Intended the pollcy for his friend when he
made the application? Had It been made so in form, had he instructed the
Company to make the loss payable to John F. Scott In case of his death, the
transaction would hâve been perfectly légal, and open to no objection as a
wagering policy. The validity of such poUcies has never been doubted."
In Carpenter v. Ins. Co., x6i Pa. 15, 28 Atl. 944, 23 L,. R. A. 571,
41 Am. St. Rep. 880, the point decided in Gilbert v. Moose's Adm'rs,
supra, is declared to be this:
"Can one having no interest in the life of the insured, for the purpose of
spéculation only, acqulre, by asslgnment or otherwise, such title to the policy
as the law will enforce?"
FOSTEB V. PEEFERRED ACCIDENT INS. CO. 539
In none of thèse cases was the point decided that is now presented,
and the dicta on the one side may be fairly held to balance the dicta
on the other. But there is a Hne of décisions which deal with the
précise question now before the court. That question is whether,
in a suit on a policy that was taken out and maintained by the insured
on his own life, but in favor of a third person as beneficiary, the Com-
pany may set up the beneficiary's want of insurable interest? Or,
to State it in another form, the question is not to whom does the
money properly belong — to the estate of the insured or to the bene-
ficiary? but, should the company be allowed to raise that point? The
courts of numerous states hâve upheld either the complète validity
of such a poHcy, or, at ail events, its validity against the company,
who will not be permitted to set up the beneficiary's want of insurable
interest. In Campbell v. Ins. Co., 98 Mass. 381, where the policy
was in favor of a sister-in-law, the court said :
"The policy in this case Is upon the life of Andrew Campbell. It was
made upon his application. It issued to him as 'the assured.' The premium
was paid by him, and he thereby became a member of the défendant cor-
poration. It is the interest of Andrew Campbell in his own life that sup-
ports the policy. The plaintifC did not, by virtue of the clause declaring the
policy to be for her benefit, become the assured. She Is merely the person
designated by agreement of the parties to recelve the proceeds of the policy
upon the death of the assured. The contract (so long as it remains executory),
the interest by which It Is supported, and the relation of membership, ail con-
tinue the same as If no such clause were Inserted. It was not necessary,
therefore, that the plaintiff should show that she had an interest in the
llf e of Andrew Campbell, by which the policy could be supported as a policy to
herself as the assured. The défendants raise no question as to her right
to bring this action if the policy can be supported for her benefit."
In Provident Life Co. v. Baum, 29 Ind. 236, where the policy was
in favor of a brother, the trial court ruled that it was wholly imma-
terial whether the beneficiary had any interest of a pecuniary nature
in the life of the insured. This instruction was held to be correct,
the Suprême Court saying:
"It cannot be questioned that a person has an Insurable Interest in his own
life, and that he may elïect such Insurance and appoint any one to receive the
money in case of his death during the existence of such a policy. It is not
for the Insurance company, after executing such a policy, and agreeing to
the appointment so made, to question the right of such appointée to maintain
the action."
A similar question was decided by the Suprême Court of Illinois
in Benefit Ass'n v. Blue, 120 111. 121, 11 N. E. 331, 60 Am. Rep. 558.
Blue was the beneficiary, and the association pleaded, in answer to
his suit upon the policy, that he was not a créditer of the insured,
had no pecuniary interest in his life, and no well-founded expectation
of pecuniary advantage to be derived from his continuing to live.
Upon demurrer, the plea was held to be insufficient, because the
insured "had a clear right to procure a policy on his life, and, unless
some principle of public policy is violated, he could make it payable
in case of death to any person whom he might désire." In Heinlein
V. Ins. Co, ICI Mich. 254, 59 N. W. 615, 25 L. R. A. 627, 45 Am.
St. Rep. 4'J^, the court refer with approval to section 112 of May on
Insurance, m which the author states the law to be that, if the per-
540 125 FEDERAL BBPORTBR.
son whose Hfe îs insured pays the premiums, there càn be no doubt
as to the validity of the policy, even if the beneficiary has no interest,
since the insured's own interest supports the policy. The Suprême
Court of Vermont has taken the same view of the question in Fair-
child V. Life Ass'n, 51 Vt. 624. The plaintiff had no insurable interest
in the life of the décèdent, but this was held to be unimportant, as
the poHcy had been taken out and maintained by the insured, althougfh
made payable to the plaintifï. The court quoted with approval from
Provident Life Co. v. Baum, supra, and added, "Nor can the insurer
set up as a défense to an action brought upon such a policy by or
for the benefît of the beneficiary * * * a want of insurable in-
terest in the plaintifï." The New York Court of Appeals is of the
same opinion: "If the contract is with the party whose life is insured,
he may make the loss payable to his own représentatives, or to his
assignée or appointée." Rawls v. Ins. Co., 27 N. Y. 282, 84 Am.
Dec. 280. And in Connecticut, where a policy was payable to the
insured's alfianced wife, the court said :
"Surely [the âeceased] had an Insurable Interest In his own Ufe, and he ob-
tained the Insurance on It; and we know of no law to prevent him from
maklng the policy payable, In case of his death, to the person to whom he
was afflanced." Lemon v. Ins. Co., 38 Conn. 294
In Pennsylvania the dictum heretdfore quoted from Scott v. Dick-
son has been twice repeated with approval (Hill v. United Ins. Ass'n,
154 Pa. 29, 25 Atl. 771, 35 Am. St. Rep. 807; Masonic Ass'n v. Jones,
154 Pa. 105, 26 Atl. 253), and in Overbeck v. Overbeck, 155 Pa. 5,
25 Atl. 646, the point was finally decided. In Texas, where the doc-
trine of insurable interest is peculiar, it nevertheless agrées in this
respect with the décisions just referred to:
"If the Company hàs Issued a policy upon the life of a person, payable
to one who bas po insurable interest in the life insured, * • * the Insur-
ance Company must, nevertheless, pay the full amount of the policy, if other-
wise liable, because it has so contra eted; and it Is no concern of the Insurer
as to who gets the proceeds." Cheeves v. Anders, 87 Tex. 287, 28 S. W. 274,
47 Am. St. Eep. 107.
In other states the same opinion is held, as will be seen by refer-
ring to the cases collected in the notes to section 112 of May on In-
surance (4th Ed.) and to 3 Amer. & Eng. Enc. of Law (2d Ed.) pp.
958, 959, and notes. The doctrine is an exception to the gênerai
rule that an insurable interest must exist in order to qualify one to
be a beneficiary under a life policy, but, so far as I know, it is main-
tained in the State courts wherever the question has arisen.
In the fédéral courts, also, the same view is taken. It was said
by Judge (now Mr. Justice) Brown, in Langdon v. Ina. Co. (C. C.)
14 Fed. 272 :
"But there is no case, to my knowledge, which holds that a party may not
insure his own Hfe, and make the policy payable to any one he may seleet»
though such person mày hâve no légal interest In his life.''
Accordingly he sustained a recovery on a policy made payable to
a brother-in-law, with no insurable interest. This case was succeeded
FOSTEB V. PREFERRED ACCIDENT INS. CO. 541
by Lamont v. Grand Lodge (C. C.) 31 Fed. 177, in which Judge
Shiras, of the Northern District of lowa, takes a similar position :
"A person bas an insurable interest in his own life, and a policy issued
thereon is his property, and by will or any other proper mode lie can deslgnate
the person to whom, at his death, the proceeds of the policy shall be paid;
and the right of a person to thus provide for the future of another cannot
be questioned. Public policy requires that a person having no insurable
interest in the llfe of another shall not be permitted to speculate on sueh
life, and thereby become interested In its early termination; but public policy
does not forbid a person from in good faith making provision for the
future of another in whom he may be interested, even though the latter
may not hâve an insurable interest in his life. If this were not so, then a
person would be debarred from giving a legacy or bequest by will to one
who had not an insurable Interest in his life, because thereby the legatee
would become interested in his early death. To prevent the evlls resulting
from allowing persons having no interest in prolonging the life of another
to speculate on such life, the rule is adopted that one having no insurable in-
terest in the life of another shall not be permitted to contract, either directly
or indirectly, for the payment of a sum upon the death of the other; but it
has never been held that public policy forbids a person from insuriiig his
own life, and by will or otherwise controUing the disposition of the pro-
ceeds of the policy. In such case the beneficiary has no part in the contract
of insurance, and has no control over it."
A décision to the same efïect is Ingersoll v. Knights of Golden "
Rule (C. C.) 47 Fed. 272, where insurance by the deceased on his
own life for the benefit of a brother was said to be"clearly authorized."
So, also, in Robinson v. United States Accident Ins. Society (C. C.)
68 Fed. 825, recovery was permitted upon an accident policy that was
taken out for the benefit of a stranger, and several of the foregoing
cases were referred to with approval. In the same volume, at page
873, 16 C. C. A, 51, is the report of Ins. Co. v. Barr, in which the
Court of Appeals for the Eighth Circuit adopts the same view :
"The insurance was obtained by the deceased on his own life, obviously
for his own benefit, He had the right to designate the person to whom the
indemnlty should be paid in case of an injury resulting in death, and, havin;;
done so, and the company having agreed to pay the indemnity to the person
thus designated, it cannot now insist that such person shall prove an insur-
able interest In the life of the deceased as a condition précèdent to recovery."
The précise question did not arise in Kentucky Ins. Co. v. Hamil-
ton, 63 Fed. 93, 11 C. C. A. 42, a case before the Court of Appeals
for the Sixth Circuit ; but the disposition of the court can be readily
detected, I think, from the discussion on pages roi and 102. The
most récent case in the fédéral courts of which I hâve knowledge is
Fidelity Ass'n v. Jefïords, 107 Fed. 402, 46 C. C. A. 377, 53 L. R. A.
193, in which the Court of Appeals for the Fifth Circuit supported a
policy taken out in favor of a brother, and went so far as to say that
in such a case "it is immaterial what arrangement is made between
them for the payment of the premiums."
In the face of thèse citations, it is impossible, I think, to give much
weight to such gênerai expressions to the contrary as may be found
hère and there among the earlier contributions to the discussion.
They are ail dicta, and whenever the question has come to be ar-
gued, considered, and decided, the décision has been without excep-
tion, .so far as I know, in favor of the beneficiary. Swick v. Ins.
Co., Fed. Cas. No. 13,692, which is sometimes cited as an opposing
542 - 125 FEDSEAiL REPORTEE.;
décision, was a case where the policy was assigned, and therefore
présents , a, différent question, although the case does contain the
dktum, that "no Hfe poHcy is valid if taken for the benefit of a per-
son who has no insurable interest in the risk." Moreover, if the
question were of the first impression, I should incHde to sustain the
policy. In many instances a bénëfîciary does not know that the policy
is in his favor, ànd where this is /the fact no temptation from this
source can arise to put an end to the life insured, nor does the ben-
eficiary suffer any moral décadence' because the passion of cupidity
and of spéculative gain has been âroused. But, obviously, the knowl-
edge or ignorance of the beneficiary on this point could not be safely
made the test qf his interest; otherwïse it would be in the power of
any person to destroy his interest àt any moment merely by com-
municating the fâct that the policy was drawn in his favor. But the
principal reason, as it seems tome, for holding such a policy to be
unobjectionable, is the fact that the insured retains control of the
contract. He pays the premiums year by year, or at the appointed
time, and it is therefore in his power to bring the contract to an
end wheiiever he may désire. li he permits thè pôlicy to lapse, he
defeats at once the interest of the beneficiary, and he may do this
at pleasure. For thèse reasons, and aiso in reliance on the unbroken
line of the décisions, I am of opinioii that an insurable interest was
not necessary to enablë the plaintiiï to recover upon the policy in
suit. ' ■ ■
Nor is this conclusion affected by' the further argument that, what-
ever the gênerai rule of law may bè, the policy in suit contains a
provision under which the compàny may successfully set up the plain-
tifï's want of insurable interest. That provision is this: "AU claims
under this policy shall be subject to proof of interest." As it seems
to me, the Company is estopped from taking advantage of this provi-
sion. Whàtever effect it may hâve in a case where the company has
no knowledge of the I.ac)i of insurable interest upon the part of the
beneficiary until after the death of the insured, it cannot be held to
be available where such lack of interest was communicated to the com-
pany at the time the ins,urançe i^as taken out, and where the com-
pany has received renewal premiums with continued knowledge of the
fact. In such a case ail thé éléments of estoppel by conduct are prés-
ent. The company had timely kndwledge of the fact of which it now
desires to take advantage, but, without ihterposing any objection,
either when the policy was issued, or afterwar4s as it came to be re-
newed, put the insured in a worse position by taking and retaining
his money under thè guise of a contract which it must hâve had no
real. intention tb fulfill. The company was under a duty to speak
if it meant to iUsist upon the provisiqn, and therefore, having misled
the insured by its silence,,, and by receivitig his money, it must be held
to hàvç waivçd, the proof of interest on the part of the beneficiary.
To my. mind it isso clear that the company is estçpped from setting
up this défense that furthei; discussion of the subject.seems to be un-
necessary. ' '' - . "■
The defendant's motion for judgment hotwithstanding the verdict
is therefore Vefusçd, (Exception to défendant.)
BADISCHE ANILIN A SODA FABBIK V. A. KLIPSTEIN & CO. 543
BADISCHE ANILIN & SODA FABEIK v. A. KLIPSTEIN & CO. et al.
(Circuit Court, S. D. New York. October 12, 1903.)
1. FoBEiGN Corporation— Proop of Incorporation.
The testimony of lawyers of a foreign country that certain acts, docu-
ments, and records proved liad the effect of creating complalnant a
corporation under the laws of such country Is sulflcient, prima facie, to
establish the corporate character of complainant; and the court wil!
not undertalce to construe the statutory law of such country for itself, and
therefrom to détermine that such testimony is incorrect.
& Patbnts— SniT FOR Ikfringbment— Bfpect op Prior Décision.
When a patent has once been sustained by an appellate court, a
subordinate court, dealing with the same patent subsequently, inquires
first whether the second record contains anything not before the appel-
late court, and, if It finds something new, inquires next whether the new
matter is of such a character that It may fairly be supposed that the
appellate court would hâve reached a différent conclusion, had it been
advlsed of its existence. The authority of its décision is not limited to
the tacts and défenses discussed In Its opinion, but extends to ail that
were before It in the record.
3. Same— Priob Use — Date op Invention in Foeeign Countkt.
As against an Infringer, the patentée in a United States patent for an
Invention previously made by him and patented in a foreign country may,
to avoid alleged use in this country before the date of the foreign patent,
show the date of the application for the foreign patent, for the purpose of
showing the actual date of his invention.
4. Same— Contbmporaneous Applications— Generic and Specific Claims.
An inventor has the right, by contemporaneous applications, to a
generic and spectflc patents; and, when he has thus applied, he does not
lose the right to his generic patent because one or more of the specific
patents may happen to be issued flrst. Nor does he lose such right by
the subséquent filing of an amended or new application changing the
spécification of the generic invention, where the patent is stlll sought for
the substance of the invention as originally claimed.
6. Same— Proop op Infkinqement— Sale bt Corporation.
Proof of the sale of an infringing article at the place of business of a
corporation by one there found apparently engaged in his ordinary occu-
pation as salesman, and who gives appropriate instructions as to the
method of use of the article, is prima facie proof of Infringement by the
corporation.
6. Same— Sale to Complainant's Agent.
The sale of an Infringing article to an agent of the owner of the
patent, while it may not afCord a basis for the recovery of damages or
profits, constitutes an infringement, which entitles such owner to an in-
junction; and where two such sales are proved, made at différent times
from a stoclî on hand, the seller apparently supposing that the purchaser
was buying in the regular course of business, it is sufficient to support
an inference that other similar sales were made, and to warrant a
decree for an accounting, in the absence of any évidence to contradict or
explain the transactions.
7. Same— Infringement of Patent for Chemical Compound— Proof of
Identity.
Where a compétent expert has analyzed an alleged infringing chemical
compound, applying the tests given in the spécification of the patent, as
well as others, and testifles, as a resuit of such analysis, that the com-
pound is that of the patent, such évidence is suflacient, prima facie, to
prove infringement.
8. Same— Validitt and Infringement— Dtestufp.
The Jullus patent. No. 524,254, for an unsulphonated water-soluble
safranine azo napbthol dyestufC, considered, and Jield valid as against the
544 125 FSDBBAIi EEPOBTBE.
défenses of anticipation by prlor patents and publications, prior use,
and insufflciency of description; also held infriuged as to clalnis 1, 2,
and 4.
In Equity. JPinal heaniïg on pleadings and proofs. The suit is for
infringement of United States letters patent 524,254, August 7, 1894
(application filed April 1,1893), to Paul Julius, assigner to complain-
ant, fdî" safranine azo naphthol lake/ Patented in England, No.
4.543 J: issued January 2, 1892, on an application of March 13, 1891.
Gifford & Bull, for cônjplainant.
Forbes & Haviland, for défendants.
LACOMBE, Circuit Judge. Défendants object to the mainte-
nance of the suit on the ground that there is "no proof of the incor-
poration of the complainant, and therefore of its capacity to sue."
Counsel for complainant contends that such objection can be raised
only by a spécial plea in abatenient or bar. This question of practice
need not be passed upoh, since upon the record the incorporation of
complainant is proved. A corporation is an artifîcial person. Its
birth is regulated by the laws of the sovereignty which permits it
to be created. What acts of private and officiai persons, what docu-
ments and records, shall operate to creàte a corporation, are settled
by the laws — usually by the statute laws — of the state which fathers it.
No one can tell whether or not a corporation has been created un-
less he be familiar with the law of such stàte. One familiar with such
law can easily détermine the question. When the question of incor-
poration is raised, touching an alleged foreign corporation, the in-
quiry calls for proof of the law of a foreign country. The nature of
such proof was discussed by the Court of Appeals in this Circuit in
Herbst v. S. S. Asiatic Prince, 108 Fed. 289, 47 C. C. A. 328, from
which the following excerpt is taken :
"The law of a foreign county [is] proved hère by ealling Its lawyers ♦ * •
and interrogatlng them. That has been done In this case, with a resuit
which certainly warrants the conclusion that the proof is overwhelmingly
the one way. It is true that as to the law of Brazil the only wltness called
by the claimant was a 5'oung lawyer, but hls statements are direct, iwsltlve,
and reiterated, .*■■: * * and there Is no reiCson apparent why his statements
should Bot be accepted."
In the case of The Asiatic Prince, the law sought to be proved was
contrary to that prevailing in ail other maritime countries. The court
proceeds:
"There was abundant opportunlty to také' the testimqny of some other
lawyer, * • • if the statements of claimant' s witness were Inaceurate;
• * * but llbelant has contented himself with printlng coplous excerpts
from the statute law of Brazil, which he inslsts do not sustaln the witness'
statement. * • • Such a method of critlclsing the testimony of a foreign
lawyer as to the law which prevails In hls country is unpersuasive. There
Is much more than the text of a statutory enactment to be considered. De-
partmental régulations, administrative construction, judlcial exposition, are
often quite as- Important The text of thfe act of Congress of February 26,
1885, c. 164, 23 Stat. 332 [U. S. Comp. St. 1901, p. 1290], might well convey to
a Jurist In some foreign country a différent meaning from that which it con-
veys to a lawyer hère, who Is familiar with Holy Trinlty Church v. U. S., 143
U. S. 457 [12 Sup. -et 511, 36 h. Ed. 226]." •
BADISCHE ANILIN <fe SOPA FABBIK V. A. KLIF3TBIN & CO. 545
In the case at bar the law for the introduction of the General
German Comnaercial Code into the grand duchy of Baden, and a part
of said Code, are set forth. Exemplified or sworn copies are also pro-
duced of the articles of association of the complainant company, of a
certain request by such company for entry in the commercial register
at Mannheim, and of two entries in such register — one relative to the
organization of the company, and the other to an extension of its
term. Two German lawyers, duly quaHfied as experts, were sworn
on behalf of the complainant, and testified that such acts, documents,
ànd records, under the German law,. were compétent to make of the
associâtes a corporation for an unlimited period, with capacity to sue
and to be sued. This is certainly prima facie évidence of incorpora-
tion, and, in the absence of any évidence to the contrary (no expert
in German law was called by défendants), must be taken as conclusive.
The brief submitted on behalf of défendants contains an elaborate
and ingenious analysis of the German law, but it is not proof of what
that law is, under the décision in The Asiatic Prince, supra.
The patent sued upon was before this court in Badische Anilin v.
Kalle (C. C.) 94 Fed. 163. It was sustained in ail particulars, and in-
fringement found of claims i, 2, and 4, the same involved hère. The
Kalle Case was appealed to the Court of Appeals in this circuit, and
the décision below was affirmed. 104 Fed. 802, 44 C. C. A. 201.
According to well-settled practice, the earlier décision in this court is
to be followed hère, and the décision of the Court of Appeals is, of
course, controlling upon this court. The Kalle Case was vigorously
contested by counsel of great ability and large expérience. The rec-
ord presented was elaborate and of great length; a large mass of
documentary évidence, patents, and publications was put in; and
II experts testified on behalf of the défendants. The briefs submit-
ted were exhaustive and highly technical, the oral arguments in both
courts were extended far beyond the usual time allowance, and the
opinions of both courts are exceptionally long and elaborate. Dé-
cision under such circumstances means something, and the first ques-
tion presented hère is precisely what it does mean. Défendants ad-
vance the proposition, which no one will dispute, that, since the judg-
ment of a court is founded on facts, it is authority only as to the facts
upon which it is founded. But défendants" counsel go further, and in-
sist that it must be taken that those facts are such only as are found
stated in the opinion. If the important distinction between funda-
mental facts and facts which are merely probative be carefully ob-
served, this proposition, also, might be conceded; but they seem to
ignore ail such distinction, and to contend that, as to every individual,
spécifie fact of which the record afifords proof, but which is not found
restated as a fact in the opinion, the court before whom similar issues
èire again presented may treat it as new, in the sensé that it has not
been passed upon by the court which first tried the issue. To illus-
trate: If, in a suit upon a patent, 17 alleged anticipating patents are
set up, and the court, in its opinion, discusses only 2 of them, which it
thinks most nearly approach the invention of the plaintiflf, another
court dealing with the same patent is not to assume that the first court
considered the other 15 alleged anticipating patents, nor that it held
125 F.— 35
that thëy ndther anticipated nof : narrowed :tlie fieldtof invention too
muqbitbrileave rôOEHi fçrfjplaintifif's -xléviceijtobsliârid. Such a practice.
wouldiÉiake, patent litigation intèrminafile, ahdiWould be intolérable
alike .tOîKt^gantSi to thebar.miidto thexoiirts.: iTheiruie is well set-,
tled "Ij^tvwhen a patent; bas once beèn/sustaiired by an appellate court,;
a subordiriate court, deaiin^ with the same patent subsequently, in-
quires first whether th« îsecond record contains anything not before
the appellate court (whatHierthentionëd in its opinion oi^ not), and, if
it finds''Sohiething new,;iaqkii'és next;whether the new matter is of
such à charactér that it may fairly be;, supposed that the appellate
court woald hâve reached a diffèrent' rconclusion, had it been advised
of its existence.; It iis unfoirtunate that défendants hâve failed to ap-
preciate this rule. Gounsel hâve given a great ambunt of time,
thoughtj and labonto Hhe préparation of an elaborate andhighly tech-
nical brièf and argument^ tîielgreater part df lÀfhichmight.b&most help-
ful on a motion for réaîrgiimeiit of the Kàlle Case, b-ut which, to a
court situated as this is, is nfecessarily unpersuasive and to be dis-
regafded. , '- '■' ' i^:.-
It is unnecessary 'herè: to set forth' the patent, or; to diacuss the
invention tb which ijulius: màde claim. The spécifications hâve been
most, fufly :qubtèd from and the prior sfate of the art set forth in the
opinioiis îrt the Kalle-Câse. It is to be assumed . that no one will
undertakelto read this opinion who bas not familiarized himself with
the earlier ories. It will be' sufficient, therefore, totàke up the sub-
ject where the Kalle Gasé left it, and see whether thére is any new
évidence as 'to; anticipation or the prior art, and what such évidence
amounts to. In the Kalle Gase it was held: that Julius : was the first
to give to the public a safrâniné azo naphthol,i wtûch, although un-
sulphonated,! was soluble in virater. That record contained prior pat-
ents and publications which rdisclosedunsulphonated safranine azo
naphthol,, and set forth: formulas for producing it. Tbe literature of
the art, however, whenever'it made a statement as to such charac-
teristic, referred to it as insoluble in water. Some of the earlier pub-
lications made no such statement (i. e.^ as to whether or not it was
water-soluble),; but their statéments of formulas lacked definiteness.
As to one or more ingrédients, in the language of the court, they "left
a blank," which the art, so far as set forth in literature, did not tell
any one how to fîll so as to get a soltible product. There was much
testimony as to the théories, experiments, and practice of foreign
chemists and dyemakers, ail of which: the court held, under section
4923, Rev. St. Û. S. [U. S. Gomp. St. 1901, p. 3396], was not to be
taken into account.lt was shown as to some of thèse imperfect
formulas, thât, "if the blank be fiUed with a certain quantity of caustic
soda, * i"** *, the resuit will bewaternsoluble safranine azo naph-
thol; but, if the blank be filled with a certain larger quantity of
caustic, soda, the resuit will be water-insqluble safranine azo naphthol."
The Court of Appeals held that to defeat the patent by référence to
what had, taken ipjaçç j^i a forpigajcpjinty-y-Tin.pther words, by showing
that the art ihjad information whipti ;?W0uid ; instruct the (expérimenter
to "fill the blank" as Julius filled it— "référence must be. made, not to
the individual expériences of for^igp, dyestuff raakers, nor to the v,n-
BADISCHE ANILIN & SODA FABRIK V. A, KLIP8IEIN & 00. 547
published théories o£ foreign cheraists, but to the Hterature of the art
— to the 'description in a printed publication' which the statute calls
for." In view of this décision, such new testimony as deals with the
unpublished théories, expériences, experiments, or practice of foreign
experts should be disregarded. As to prior Hterature, not in évi-
dence in the Kalle Case, each patent or pubUcation may be separate-
ly examined.
Agenda 1890 Article.
This was in the Kalle Case. It was quoted in the opinion, and
found inapplicable because it dealt with formation of color on the
fîber. It now appears that the concluding part of the Agenda article
was not in évidence in the Kalle Case. It reads as foUows:
"Brick reds may be obtained by treating the reds obtalned from paran-
itranlline and from beta naphthylamine with a boiling bath of sulphate of cop-
per, 2 grammes to the liter. By printing the thlckened diazo derivative on the
tissue prepared with naphthol and caustic soda, grounds with whltes may
be obtained. Similarly one may make reserves by printing upon the tissue
prepared with naphthol and caustic soda a gum color containing 600 to 80O
grammes of tin salts, and then padding with the diazo solution; now wash
and dry."
Certainly there is nothing hère at ail calculated to modify the dé-
cision of the Court of Appeals as to the nonappHcability of this pub-
lication.
Abel's British Patent of 1887.
This is too long to quote. Ail that is claimed for it in the testi-
mony and briefs is that it showed the use of acétate of soda in form-
ing azo colors in substance, and is an "instance of the common practice
to try the solubility of azo colors in acid."
Allen, Commercial Organic Analysis (18S9}
This is not at the page given in the manuscript index, nor hâve I
been able to find it. It is unnecessary to give any further time to
it, since it is not referred to in the briefs of any of the counsel, nor
indexed under the head "Anticipation by Literature," in the printed
index, presumably because of its unimportance.
Berichte, I5th Year (1882).
The part of this article which is deemed important is quoted in
défendants' brief as follows:
"An acid solution of diazotlzed xylidlne and aqueous solution of resorcine
do not react upon each other even after standing for days. The reaction be-
gins instantly, however, as soon as some caustic or carbonated alkall is added
to the liquid," etc.
It is suggested that, according to this writer, caustic alkali and
corbonated alkali are treated as known équivalents in the making of
an azo phénol, to wit, xylidine azo resorcine, and a more advantageous
resuit is obtained if sodium acétate be used instead of caustic alkali.
Complainant contends that this publication has no relation to safran-
ine azo naphthol, because resorcine is more analogous to the group
of sulphonated naphthols. But conceding for this article what de-
fendants claim, it does not change the situation. The Court of Ap-
548 125 FEDERAL BUPORTËB.
peals, in the Kalle Case, held that it was known before Julius that
"alkalinity might be produced by caUstic soda or by carbonate of
soda," but this I5th Berichte is as barren as was the literature before
that court of any information as to the quantity of either which should
be used to secure a water-soluble product. It fails to fill the blank,
and, that being so, it cannot be assumed that its présentation to the
Court of Appeals in the Kalle Case would hâve led to a différent con-
clusion.
[^prichte, iTth Year (1884).
This refers to the production of oxy-azo bodies from phénols and
diàzo compounds), and shows the equivalency of caustic and corbonat-
ed alkalies for the purpose of inducitig the réaction. It refers to the
improvement which was obtained by substituting sodium acétate for
caustic or carbonated alkali. This is substantially like the Berichte
iSth, just referred to, and may be similarly disposed of.
Benedikt and Knecht — Chemistry of Coal-Tar Colors (1889).
Ail that is claimed for the excerpt put in évidence by défendants is
that it shows the use of tanno metaÎHc mordant before 1891. It is
not apparent that the Court of Appeals supposed it was not known
before thàt date, and the bearing of this évidence upon the question
now at issue is not apparent.
The Chemical News (1890).
No expert seems to haVe testified as to this, but, so far as the court
can make out from its text, it refers solely to dyestufïs of the sulpho-
acid group, and which the Kalle Case held to be outside the pale of
Julius' invention. The article refers only to beta naphthol disulphonic
acid, to beta naphthol monosulphonic acid, beta naphthylamine di-
sulphonic acid, and beta naphthylamine monosulphonic acid.
Clark's British Patent of 1884.
The only proposition that it is claimed this référence tends to es-
tablish is that the use of acétate of soda in the formation of azo bodies
in substance was then known. Such use, however, is mentioned only
in connection with two sulpho-acid bodies.
Fore! Patent of li
This was introduced by complainant. The only référence to it in
défendants' brief shows that no rehànce is placed upon it as anticipat-
ing or circutnscribing the art. The same remarks apply to Wolff
patent of 1888, and Greville-Williams patent of 1889.
Faberwerkç Two Circulars (1889),
Thèse certainly would not hâve modifîed the opinion of the Court
of Appeals, for they are expressly headed, "Production of Insoluble
Azo Dyes Direct upon the Cotton Fiber" ; and, as défendants' ex-
pert testifîes, although they give a list of several shades, they make no
mention of safranine azo naphthol'.' The same remarks apply to
"Organische Farbstoflfe," by Mohlan (1890), and to the Textile Color-
ist article of 1889.
BADISCHE ANILIN & SODA FABEIK V. A. KLIPSTEIS & CO. 549
Friedlander Article (1888).
Ail the pertinence défendants claim for this is that ît shows that the
cost of azo safranine bodies before 1891 was prohibitive. It relates,
moreover, only to the sulpho acids.
German Patent 51,331.
Complainant's expert, on cross-examination, read some excerpts
frorn this patent. After long search, I hâve been unable to fînd in the
record any statement as to its date. As it is not included in the index
to briefs, presumably it is not deemed of much importance.
The Hollidays' United States Patent 241,661 (1881).
This is for same invention as the English Holliday patent 2,757 of
1880, which was in évidence in the Kalle Case.
Hofïman's United States Patent 332,528 of 1885.
This seems to deal solely with the sulpho-acid group.
Kegel's English Provisional No. 13,408 of 1885.
It is not perceived that the excerpt from this which is introduced
changed the situation from that made by the introduction of Kegel's
French patent for the same invention, which was in the Kalle Case.
Lauber's Handbook (1885).
This is a "Practical Handbook of Cloth Printing." The article,
as a whole, and even the excerpts put in by défendant, are too long
to quote. It may be noted that the production of dyestuflfs, in sub-
stance, is an opération quite distinct and separate from cloth printing;
also that the heading of that part of the book in which ail the passages
in proof are contained reads: "Direct Development of Azo Colors
on the Fiber." Défendants' contention with regard to this référence
is that it is particularly important in the three following respects :
First, it gives facts of gênerai interest in the formation of azo dyes ;
second, it shows the différence between preparing an azo dye in sub-
stance, and the production of the same dye on the fiber; third, it
describes the production of safranine azo naphthol. The only produc-
tion of safranine azo naphthol which it describes is Kochlin and Gal-
land's prescription for forming it on the fiber, which was disposed of
in the Kalle Case. As to the second proposition, ail that the article
says is this:
"In the production of azo dyes in the color factoiy, it is customary to allow
the dlazo solution to run Into the alkaline phénol solution. In the production
of the same dyes on the fiber this method Is reversed. The cloth, impregnated
with the phénol, is run into the dlazo solution."
As to the first proposition, it gives prescriptions and practical in-
structions as to the formation of azo dyes, but they ail, so far as the
article indicates, refer to formation on the fiber. Besides the caption
above quoted, the article within the four pages quoted by défendants
States in so many words that it refers to production "on the fiber"
no less than 12 times. It seems entirely clear that, had this article
been before the court in the Kalle Case, it would hâve been disposed
550 125 FEDERAL REPOBTBB.
of as was the article from the Agenda, supra. Défendants' expert
refers to a single sentence in tiiis article'as showing that befoj"e Julius
- tlie liièratûl^ of the art hâd :^tàtéd that unsulphonated safranine azo
iîaphthôi wâs soluble in water. The sentence reads: "The blue ob-
tained according to Koechlin & Galland with safranine is absolutely
not fast." This does npt state, whether it is "not fast" when tried with
water, with soap, or with sùnHght; and complainant calls attention to
the çircuiiiytahçe that this very sentence was in an édition of Lauber's
Handboôk pûblîshed in i8^I, which was beforethe cûurt in the Kalle
Case. :. - - '
Depierre's Treatise (1890).
The daté on title page isl 891, but défendants proved publication
in 1890. Défendants' brief concèdes that "this work gives a descrip-
tion of the Koechlin & ôalland prescription for forming safranine
azo naphthol," although the book itself does not give thèse names. As
we hâve aiready seen, thè prescfiptiofl bf thèse gentlemen related
solely to production of theeolor on the fiber, and there is nothing in
the article to indicate a formation of dyestuff in substance. On the
contrary, its prescription reads : "Otie pads fîrst with naphthol and
cauStic soda bath, containing [certain ingrédients] ; one dries, then
passes * *i * through a mixture of the three solutions following,"
etc. This is: the method of dyeing on: thè fîber, and the Depierre is to
be disposed of as was the Agenda référence in the Kalle Case.
Nietzki Article (1883).
This is also referred to as "Berichte, i6th year." It is an article
in a publication of the Gerraan Chemical Society entitled "On the
Dyestuffs of the Safranine Séries." Complainant's counsel, in both
his briefs, asserts that it was before the court in the Kallé Case, but the
manuscript list furnished after the: case was submitted does not confirm
this assertion, noï does it;9.ppear in the index of exhibits in the Kalle
record. Cornpl^iinant also contends that the article relates not to
safranine azo naphthol, but merely to diazo safranine. Apparently
this contention , is not disputed. Défendants' brief admits that this
article did not couple the diazotizêd safranine with naphthol. Be
that as it may, what is claimed for the article is that it taught those
skilled in the art (i) that the original; chlorine atom of commercial
safranine is not removed by oaustic Soda ; and (2) that : the said atom
plays no part in the diazotization of safranine, for which purpose two
additional molécules of hydrochloric acid are therefore theoretically
necessary. Conceding that such is its teaching, the article certainly
does not state that safranine azo napkthol is soluble in water, nor does
it give such instructions for filling the blank in existing formulas for
its production as would resuit in a vi^ater- soluble product.
Nietzki and Otto in 21k Berichte' (1888).
Refers only to tests for safranine.
Poirriei' & Rosën'stîehl United Stàtids Patent 390,327 (1888).
This is for the production of azo çolprs in substance. Défendants
call attention to the fact that it n^entîptîs, carbonate of soda with both
BADISCHE ANILIN & SODA PABRIK V. A. KLIP8TEIN 4 CO. 551
the sulphonated and unsulphonated naphthols. It is difficult to see
upon what theory it would hâve inducéd a différent conclusion, had it
been in the Kalle Case, in view of its statement :
"Ail the coloring matters descrlbed in thia spécification are soluble in water,
with ttie exception of that from alpha naphthol and from beta naphthol; but,
by treating thèse with sulphuric acld aecording to Unown processes, they are
obtained in the state of soluble sulpho eombinatlons."
This seems to be in complète accord with what the court in the
Kalle Case understood to be the state of the art.
Roussin Patents (1878, 1879),
Thèse are United States patents 210,054, 211,525, 211,671. I hâve
not been able to find testimony of défendants' experts expiaining thèse
patents. The first seems to deal with the sulphonated group, for the
spécification states that the coloring matters sought to be patented are
obtained "by the reaction of the diazoic derivative of sulphanilic acid
upon the aminés," etc. The second, as stated in défendants' brief,
deals with "the formation of an azo body on the fiber." Of the third,
it is stated that it "shows the coupling of alpha naphthol (but not of
beta naphthol) in a nonalkaline bath." The bearing of this fact is
i)ot apparent.
Roscoe & Scharlemmer Treatise (1886).
Ail that is claimed for this is that it shows "that in safranine the
chlorine atom is held even agâinst alkalies by a strongly basic group,
which can neither be diazotized nor acetylized."
Reissig Patent (1890).
A United States patent (No. 431,541), the relevant parts of which
apparently deal only with fluorescence test, which is discussed infra,
i^nder the heading of "Infringement."
Stebbins United States Patent 221,114 (1879).
This shows the production of a yellow-brown dyestulif, of which ît
is stated, "It is not soluble in water, but by converting it into a soda
sait or sulpho sait it is rendered soluble in water." Certainly the
présence of this patent in the Kalle record would hâve made no
change in the resuit.
Vancanceine Blue of HoUiday (1891).
This is referred to subsequently under the heading of "Alleged
Prior Uses."
The following références are apparently not discussed anywhere
in the briefs, and, so far as the court has been able to ascertain, not
in the expert testimony. They are not given in the index to briefs,
and need not be hère discussed; each has been examined and ap-
pears to be unimportant: Lieberman, Berichte, i6th year (1883);
Berichte, 20th year (1887); Witt & Deslichen, Berichte, 2ist year
(1888) ; FeHing's Handwortenbuch (1890) ; Homolka United States
patent 418,916 (1890); Richter Organic Chemistry (1885); Textile
552 125 FEDERAL KBPOKTBR.
Golorist (1884); Villon, Traite Pratique (1890); Weinbourg United
Stales patent 426,345 (1890); Williams United States patent 11,016,
reissue (1889).
Suljsequently, under the discussion as to alleged prior uses, will
be fÔund the reasohs for takiiig the de jure date of the patent as
March 13, 1891. fhat disposes of the following références : Chem-
ical News (1896); Dyër article (1893); Farbenfabriken German pat-
ent 95,483 of 1897; Faberzeitungof 1898; Janbert article (1895);
Knecht, Rawson & Lowenthal's Manual (1893); 1l,èhne's Faberzei-
tung (1891 ; the date is givèn only as 1891, and défendants hâve not
shown it was published prior to Jlarch i3th of that year) ; Lefevre,
Matiers Colorantes (1896) ; Shùltz & Julius Tables of 1894, 1896, and
1897.
. Alleged Prior Uses.
In t^jç Kalle Case there was no évidence of any prior use in this
country. In the case at bar testimony as to three such uses was taken.
Of theseithe latest in point of time is referred to as the Read Holliday
& Sons experiments at their laboratory in Williamsburg. The char-
acter and extent of this alleged "use" need not be discussed, since the
testimony does not bring it baçk of June, 1891- The défendants'
brief states it "as early as June, 1891, if not before," but there is noth-
ing to show it was earlier than the date given. When the patent was
before the Circuit Court, it was held that the de jure date of the in-
vention >yas January 2, 1892, the date of the English patent. Upon
appeal both sides acquiesced in this finding, so the Court of Appeals
took that date as marking the boundary between Julius and the prior
art. Since the décision of the Circuit Court in the Kalle Case, how-
ever, the question of de jure date of an invention previously patented
in a foreign country was before the Court of Appeals in the Second
Circuit, which held:
"As against an Infrlnger, the patentée In a TJnited States patent for an
invention previously made by him and patented in a foreign country may, to
avold alleged use In thjs country by an infrlnger, before tlie date of the
foreign patent, show the date of the application for the foreign patent, for
the puiçose of showing the actual date of his Invention In a foreign country."
Welsbach Light Co. v. American Incandescent Lamp Co;, 98 Fed. 613, 39 C.
Ç. A. 185.
The date of application for Julius' English patent is March 13, 1891,
which éliminâtes this alleged Read Holliday & Sons' use of June,
1891.
The same concern, some time in 1890, had been using a dye which
resembled the dyestuff of the patent in suit in some particulars, but
there is no prool that it was safranine azo naphthol in any form. Ap-
parently défendants do not rely on this alleged use, for with regard to
it their brief contains this statement only :
"Défendants were unable to trace ont the anticipation. Whether the évi-
dence is or is not suflaclent to show a direct anticipation, it shows that
Julius was not the flrst to make a blue color soluble with hydrochlorlc acid
In order that it might be Used to dye on a tanno metalllc mordant."
The last proposition, if conceded, would not defeat the patent, and
the évidence is wholly insufficient to show an anticipation. One wit-
BADI8CHE ANILIN « SODA FABBIK V. A. KLIPSTEIN A CO. 553
ness only testified to the transaction, from his unaided memory of
10 years before, and his statements were vague and unpersuasive.
Considérable testimony was taken as to an alleged prior use irl
1889 at the Merrimac Printworks, in Lowell, Mass. The experiments
testified to were unsatisfactory to those making them, and conse-
quently were abandoned. The dyestuff, moreover, was produced on
the fiber — a circumstance which in the Kalle Case was held suffi-
cient to eUminate an alleged a,nticipating publication which was great-
ly relied on. But it seems unnecessary to discuss thèse experiments
at any length, since the only référence to them in défendants' brief
is tha't they "tend to show that it is impracticable to make safranine
azo naphthol insoluble."
SufBciency of Description.
It is further contended that the description given in the patent
of the manner of carrying the invention into efïect is insufficient. The
spécification calls for safranine T, 7 parts; sodium nitrite, 14 parts;
and other ingrédients. As shown by the testimony, this prescription,
expressed in molécules, is as follows : Safranine T, i molécule ; sodi-
um nitrite, 10.14 molécules, etc. Nevertheless the spécification states
that the 14 parts of sodium nitrite amount to one molecular proportion.
There is manifest error somewhere. Complainant's expert corrected
it by reading 1.4 parts instead of 14 parts of the sodium nitrite; but
défendants ask, and not without reason, why, in the state of knowl-
edge of the art when the application was prepared, one should change
the figures "14 parts" to "1.4 parts," instead of changing the words
"one molecular proportion" to "10 molecular proportions." We need
not go into any discussion of possible corrections. It appears by the
testimony of both complainant's experts that "if one employs ten
molecular proportions of nitrite of soda, instead of one molecular
proportion, one still obtains the water-soluble safranine azo naphthol
of the patent." There is, of course, more waste, and consequentlv
greater expense; but it cannot be said that the spécification, read
either way, fails to show one skilled in the art how to make water-
soluble safranine azo naphthol.
Julius' American Patents.
It is contended that the patent in suit is void by reason of certain
other patents issued to Julius on the same day. Thèse patents are
United States Nos. 524,251, 524,252, 524,253; the patent in suit being
524,254, and ail four of them issued on August 7, 1894. No. 524,-
251 contains a single spécifie claim for the spécifie indoin blue obtain-
able from safranine proper and alpha naphthol. No. 524,252 contains
a single spécifie claim for the spécifie indoin blue obtainable from
dimethyl safranine and beta naphthol. No. 524,253 contains a single
spécifie claim for the spécifie indoin blue obtainable from dimethyl
safranine and alpha naphthol. The fourth claim of the patent in suit
is for the spécifie indoin blue obtainable from safranine proper and
beta naphthol. The second claim, as already construed, is generic,
and covers ail thèse four varieties. As défendants' brief expresses it :
"The distinction "between the four patents is based npon the division be-
Iween saf ranines proper and substituted safranines, on the one hand, and
i'l)et*e©a'aipiiB natphtb&lanê beta nfepbiaibl^^û the other. AH îoUr combi-
nattons «w est olit In [ébe /speeiflcatlonanefl each of the four patents; but
.the flrst, tljrêet [patents] are; restricted. In, tbeir, se veraLoIaluis to the oombi-
ynailons oî the sàjranihes, ôf îte flrst oï thç' two, divisions with alpha naphthol,
and or pafrànlnes. of the secoua 'mViSîoriVKh both alpha ànd betâ nàphthols,
whereas, the'ï)atent in 8ùit,: id addition to elaimlug In clalln 4, the combina-
tioh :,«f ' saf ranlne, proper 'with béta naphthol,; claims iû>:claim 2 the combina-
■ton of any safranine of elth^r division wi1;tt,paphthol in either of its forms."
Of couf se, the more Io|:'{éâl wày woulé-have bëeri to iiiclude the genus
and its Vafiotls speciés m'a single patent, avoiding thus what seems
to be>ri'iinnecéssar;^ niultif^lication bf patents. Bût the rules of the
Patent Office do not allowatiy such simplification, permitting in a
single application only a generic claim and one feJiëciEc claim, and
requiring ail other spécifie çlaims t;o,be each the subject-matter of a
différent patent. It would be; a failufe of justice if the patentée of a
meritorious invention sho,uld be deprjijviçd of the fruits pf his labors
because an arbitrary rul'e' of the Patent Office ;has brought about
complications not çontempl^ted, if 3Utho|-ity can I?e found for securing
it to him. Such authority is not want^ng m this, ,cir|Cuit, where it has
been hël4,tlîat an inyentor has. the rightpy çonterriporaneous applica-
tions to, ^ generic and, spécifie patents, ànd that \yhen he has thus
appliè^ 'h;p .shall not losf;,|iis generic patent because one of or more
of the spécifie, patents n^aty happèp ;to be issued first. , Electrical Co.
V. Brush CQ-. 52 Fed. 137, 2 Ç. C., A. 682;. Thomson-Houston Co. v.
Elmira'Cp., 7I,Fed. 396,, .18 Ç. C. A, 145 ; Thomson-Houston Co. v.
Hoosiçk.'i?.ailway Co,,, 8^' Fed. 461, 27 C. C. A. 419. Julius was care-
ful by cross-^eferenççs iiithe docurnents themselyes to indicate the
relation^,qfh|iS:genericand'^pecific patents.
The diefejfidf^iits, howeyerj contend that the applications for generic
and specifjç. patents were not contemporaneous. The facts are as
foUows : , pri April 21, 1892, four applications were filed. Of thèse,
Nos. 430,111, 430,112, 430,113 are tjieones on which the spécifie
patents were, subsequently granted.; , ,The history of the other ap-
plicatiqn isjthïs: As willbe ,^een from the Kalle opinion and what
has been written supra, the generic invention of Julius was an unsul-
phonated water-soluble safranine azo naphthol dyestufï — an article
not known before to the- ah, '■ and whîch was patentable, however it
;was produced. : ; He lalso discovered two processes for producing it
(both patentably novel), known aS the '^acid process" and the "wash-
ing-out process." Seeraingly he fif.st discovered the âcid process, for
we find it mientioned in his application for thè Englîsh patent, but no
mention of the iwashing-out process until a later period. Apparently
he knew only of the aèid process 'wheh he filed application No. 430,-
iio, on;AprLl 21, 1892, for it says nothing of the other process. In
other respects ithis application conformed sûbstantially to the spéci-
fication of the patent in suit. It contained a generic claim, and a
ispecific claim for the product of safranine' proper and beta naphthol,
and a claim foi" the process. Subsequently becomîng acquainted with
the washing-out processy he sought tb incorporate it, and on March
22, 1893, filed à communication by which the application was "amend-
ed by canceling; the entire spécification, with the exception of the cap-
tion and signatures, and substîtuting therefor" a new spécification.
BADISOHE ANILIN & SODA FABBIK V. A. KLIPSTEIN & CO. 555
which sets forth both the processes, but still contains the generic
daim and the "beta" spécifie claim. For reasons which are net tes-
tified to, but which may readily be conjectured, it was thought better
to make a new application, setting forth both processes under the in-
ventor's oath. This was donc April i, 1893. The new application,
which is No. 468,691, and on which the patent in suit is issued, sets
forth both processes, and contains the generic and the "beta" spécifie
claims. The Suprême Court, in Godfrey v. Eames, i Wall. 324, 17 L.
Ed. 684, says:
"A change in the spécification as flied în the flrst instance, or the subsé-
quent filing of a new one, whereby a patent is still sought for the substance
of the invention as originally claimed, or a part of it, cannot In any wise
affect the sufflciency of the original application, or the légal conséquences
flowing from it. To produce that resuit, the new or amended spécification
must be Intended to serve as the basis for a distinct and différent invention,
and one not contemplated by the spécification as submitted at the outset."
If the generic claim hère is not for the process, but for the new
article, however made, which is formed of designated components and
responds to designated tests, the later and the earlier applications will
be treated, as continuous, for the purpose of saving the patent from the
efïect of an earlier issue of a spécifie patent. That such is the con-
struction of the claim was held in the Kalle Case.
Infringement.
The proof as to infringement may be next considered. On Decem-
ber 31, 1895, on the employment of the agents in this country of com-
plainant, one PoUman went to the regular place of business of A.
Klipstein & Co., and asked for "one pound blue for cotton, the same
color what Kalle & Co. sell hère under the name Bengaline Navy
Blue." He was given one pound cotton navy blue in a can, with in-
structions for use. On May 9, 1899, Pollman made another purchase,
making the same request, and being supplied with another one-pound
can of Klipstein's Cotton Navy Blue; a receipted bill being given
with the same, but no instructions as to use. The contents of both
cans were carefuUy traced to the hands of complainant's expert. De-
fendants suggest that long delay in prosecuting should induce the
court to disregard the sale in 1895. But it appears that the delay
was solely to await final décision in the Kalle Case, which was not only
excusable, but commendable. It is objected that there is no proof
Connecting any of the défendants with this sale. A. Klipstein & Co.
is a corporation, and proof of a sale made by a person found in its
regular place of business, apparently engaged in his ordinary occupa-
tion, and who makes statements as to method of use which are appro-
priate to the sale of such material, is certainly prima facie évidence of
a sale by the corporation. The défendants put in no évidence to con-
trovert Pollman, or repudiate the employment of the persons who
sold him the cotton navy blue. Proof of a sale by the corporation is
therefore shown, but there is no proof Connecting E. C. Klipstein
personally with the transaction. He is an officer of the corporation,
but, in the absence of spécifie proof of personal participation in in-
fringement, should not be singled out for a separate decree.
Défendants contend that it is nowhere shown that the A. Klipstein
556 125 FEDERAL RBPOBTEK,
& Co. from whom the dye was purchased is the A. Klipstein & Co.,
défendant in the suit.. This objectiom is wholly without merit. It
appears from; , the pleadingsthat the; défendant A. Klipstein & Co. is
a corporation doing business in the city of New York, and that E. C.
KHpstein is an officer thereof. Pollman bought dyestufif from A.
Klipstein & Co., at 132 ^^arl street, New York City. Défendants
called one Van der Menlen, a clerk, who testified that he was in the
employ of A. Klipstein & Co., at laaPeari street, New York City.
He produced books of his employer, from which he read the market
price of safranine for several years prior to 1893. E. C. Klipstein, a
défendant, and an ofiicer of défendant Company, was shown the same
books, and testified to the correctness of the figures given therefrom.
To suggest, in the face of this testiiiiony, that there are two corpora-
tions or firms named "A. Klipstein &,Co." at 122 Pearl street, one of
whom sold dyestufï to Pollman, while the other employed Van der
Menlen, is absurd.
Défendants further contend that the sales were not infringements
of which a court of eguity should take notice, because, being made to
its agents, it was as thoùgh Badische Anilin had bought the cans;
that the dyestufif was not épld to a person who intended to dye with
it; and that sales to a patentée are licen,sed sales. A similar objection
was overruled by this dourt in Chicago Prieumatic Co. v. Phila. Tool
Co. ce. C.) 118 Fed. 852, where it was held that, although a com-
plainant might not be able to recover damages or profits for such a
saie, it was , neverthelçss an infringement, entitling complainant to in-
junctive relief. Moreover, when twp such sales on différent dates are
proved, the seller apparently supposing that the purchaser was buy-
ing in the regular course of business, ànd delivering thé goods from
a stock on hand, and no évidence whatever to contradict or explain is
produced by défendant, thefacts proved are broad enough to support
an inference thjat other similar sales hâve been made — sufïiciently so
to warrant a decree (the évidence on, othér points being satisfactory)
for an accounting as welh ; ,
There is no proof a,s to the procèss by which the dyestufif sold to
l^ollman was made. Ip the Kalle Case, howev.er, both courts held
that the patent was ifor a product, irrespective of the process by
which it was made, apd found infringement in an article which re-
spbnded to the tests prescribed in the claims. 1 The same construc-
tion should be followed herç ; but, even if this court were not con-
trolled by the earlier décisions,: and were persuaded^that infringement
could be predicated of a, product which responded to those tests onlv
when it was produced by the processes of the patent, thé complain-
ant's right to relief, upon the record in this case, would not be af-
fected. The prior disctissiori in the. Kallè Case and in;this has resulted
irithe conclusioii that JiiJiusiwas the fi^rst to give to the art an un-
sulphonated ,water-SQli|ble .çafranine; azo naphthol, and was the first
to point .out two ways in .which it might he produced. The washinR-
prpcess, only, was, discussed at length in the Kalle ! Case, but thé
acid.process, as vv^eli, was held to disclose invention. How a chem-
ical productis made ig a question whîth the maker .âlonie can answer
witb ahsolute certainty! AU the experts in the world, if they did not
BADISCHE ANILIN & SODA FABRIK V. A. KLIPSTEIN & CO. 557
see it made, could testify only tb inferences based upon their ac-
quaintance with the literature and practice of the profession. Two
ways, and two ways only, to produce the product defined in the daims
of the patent, are shown to be known to the art. Its literature has
been ransacked. In the Kalle Case and this together nearly a score
of experts, many of them men of the highést attainments, not only
in the art generally, but also in this branch of it, hâve been examined
and cross-examined, and no process other or différent from the two
described in the patent has been indicated. Were such other process
known, it is unthinkable that in this enormous mass of testimony there
should be no hint of its existence. If, then, complainant shows that the
product is within the définition and responds to the tests of the claims,
and nothing further appears, it is a legitimate, and, in the state of the
record, an irrésistible, inference that it was produced by one or other
of the indicated processes. If défendants hâve discovered some new
process, which they wish to keep as a business secret, a court might
not compel them to divulge it, but they could at least show by affirma-
tive proof that some one or more steps (or ail the steps) of the pro-
cesses set forth in the patent had not been foUowed in the manu-
facture of the product. In the absence of any such proof, complain-
ant would establish a prima facie case of infringement, even if the
process were read into the product claims.
The contents of the two cans purchased by Pollman were submitted
to Dr. Henry Morton for chemical analysis. He testifîed on the di-
rect that he had examined and tested the coloring matter taken from
them, and that it substantially consisted of the coloring matter claimed
in claims 2 and 4 of the Julius patent in suit ; one of the cans, how-
ever, containing a mechanical admixture of the dyestuff known" as
méthylène blue. No expert was called by défendants to show that their
cotton navy blue dyestufif would not respond to the tests of the patent,
or that it was not in fact a water-soluble safranine azo naphthol. They
confined themselves to an exhaustive cross-examination of Dr. Mor-
ton, in the course of which he set forth in détail the tests by which
he satisfied himself that défendants' dyestufï was substantially that
of the patent. Briefly stated, thèse were the tests: (i) He placed a
gramme of the dyestufï in 100 grammes of water, with the resùlt of a
solution without precipitate. (2) He stirred a few grains of the dye-
stufï in a little sulphuric acid, whèreupon the sulphuric acid as-
sumed a blackish-green color. (3) He took fiber mordantéd with
tannin and tartar emetic, andintroduced it into a solution of the dye-
stuiï. It is unnecessary to give the détails. The fiber was first
dyed, and then tested by washing in a soap solution, abôut such as
would be used in a laundry. The same pièce of fiber was hung up
in a window, partly covered, and showed no fading after exposure for
several days. (4) He treated anothér portion of the dyed fiber by
zinc dust and âcetic acid— a "Well-recognized ïeduciiig agent" —
whèreupon the red color of safranine was developed. (5) He treat-
ed another portion with caustic soda, and obtainëd a brown color
in solution, which, on addition of a Sait of iron, turned "blàck — a rë-
Sult known to chemists as' the "tannin reactiôn/'r ; (6) He treatéd an-
other portion with dilute hydrochlorîc acid and> âlilphureted hydro-
558 125 FEDERAL BBPORT«E.
gen, sefcuring"the cliaracteriatic Orange pfecipitate of sulphide of
antihiony"-T-a métal. (7) He treated a portion of the dyestuff itr
self ivith ziné. dust andlacetic acid, thereby obtaining a red color,
which, on pushing the réduction, disappeared, but quickly reappeared
on exposure of the solution -to air. .(8) He mixed a small portion
of the red liquor from the last test with alcohol,, and observed the
color by reflected light; the color exhibited being a délicate yellow
tint, which he says is a fluorescence characteristic of safranine. (g)
He redueed the dyestufï with stannous chloride and hydrochloric
acid. The process is too. long to quote, but it resulted in a precipi-
tate of a perfectly white cplor. By observing the behavior of this
substance during the opérations, and by applying a test of perchloride
of iron, he reached: the conclusion that it was aipha amido beta
naphthol, which is onevariety of amido naphthol.
Now, if the three claimsof the patent be referred to, it will be seen
that the above enumeration indludes every test which is set forth there-
in, The expert was a chemist of high attainments and large expéri-
ence, fuUy I compétent to conduct the various technical processes of the
laboratory by which sûch, tests are madc;! He was cross-examined at
great length, and gave the^ détail of thèse processes. The court is
wholly without the professîonal knowledge which would enable it to
décide whether those processes: were , eonducted in conformity to
scientific methods. Upon the borders of the vast wonderland of
chemistry it must perforée :waiit till sorae one skilled in the intricacies
of that science^ and art appeariS;to lead the way through its labyrinth
of terms.and:symbols.: No ex;pert was called by the défendants to
show that> in;this, that, or the other parttcular, Dr. Morton's tests
were improperly cOnducted. , ,No expert testified that he had himself
applied the tests of theiclainis to défendants' dyestuff, with, some other
or différent resuit frpm that obtained by Dr. Morton. No expert was
called to show that the residuum which Dr. Morton satisfîed himself
was amido naphthol was reatlly something else, or that the residuum
which he satisfîed himself was safranine^as not safranine at ail. An
elaborate and highly technical argument is presented in the briefs,
directed to prove this; but, beypnd merely elementary propositions,
the court cannot take its chemistry from counsel. The obscure ac-
tions and reactions of chemiCal processes require for their compré-
hension the study and investigation which qualify the expert, and the
expert's statemept should be given as other évidence is, with full op-
portunity for cross-examination. It îs contended that, upon Dr.
Morton's own showing, he did not sufficiently establish that the red
color (see test 7, supra) was safraninci It is insisted that safranine is
not the only substance with a disappearing and reappearing red color.
The witness, it is true, admitted that there are many coloring matters
of various shades whiçhilose color on réduction and regain it on
oxidation ; butihe addedithat, so far as he knew, "safranine is the only
color which can be obtained from -a blue dyestuff, which on graduai
réduction first;.beçomes, red jthen colorless, recoverîng its color on
exposure to the air." Itimay be admitted that probably there were
dyestuffS'Or <»lors in the wQfld which' the witness had never seen or
heard of, but, when a compétent. expert witness has given such testi-
THE HAETÏOEÏ). 559
mony as is above quoted, the identity of the red color of the test with
safranine is made out prima facie. If there are other colors which will
give the same résulta, it is for the other si de to show some référence
to them in the hterature, the experiments, or the practice of the art.
The complainant is not required to eliminate by affirmative proof every
other substance in the universe. Moreover, the witness appHed an
independent test (the fluorescence test, No. 8, supra) which indicated
that the red color was safranine, as to which test there was no cross-
examination. The only criticism which the brief makes on this test
is found in a dozeil Hnes. It is asserted that Dr. Morton did not lay
any stress on it, and that it is not recited in the patent. Dr. Morton
did assert that the délicate yellow tint displayed was characteristic cf
safranine, and the fact that the patent does not mention it is imma-
terial. What the patent says is that upon a certain réduction "a
safranine is produced." How the expérimenter shall establish the
fact that the residuum produced by such réduction is a safranine, the
patent does not undertake to provide, and any test agproved by skilled
experts may therefore be employed. Two other facts are mentioned
in the brief: That naphthalene red dissolves very readily in alcohol,
with a bluish-red coloration, the dilute solution exhibiting a magnifi-
cent einnabar red fluorescence, and that the ethereal solution of
Reissig's red-colored bases exhibits a yellow fluorescence. It is not
perceived in what way thèse facts afïect the conclusions which Dr.
Morton drew from his fluorescence test. If he had never made the
disappearing color test at ail, it would seem that the identity of safra-
nine was sufficiently estabhshed by this fluorescence test. There is
no controverting évidence whatsoever in the record. The coUrt feels
entirely confident that défendants' dyestuflE is the dyestufif of the pat-
ent. If it were not, complainant's prima facie case as to infringement
might hâve been utterly demolished in a dozen pages of affirmative
proof. The circumstance that défendants hâve chosen instead to de-
vote their énergies, at great cost of time and labor, to elaborate and
refined criticisms of complainant's proof, is persuasive to the con-
clusion that it was the oiily thing they could do.
Under the authority of the Kalle Case, the sale of the dyestufï of
claims 2 and 4, with instructions such as were furnished to PoUman
on the occasion of his first purchase, constitutes an infringement of
claim I.
Complainant may take the usual decree for injunction and account-
ing as to claims i, 2, and 4.
THE HAKTFORD.
THE MANHATTAN.
(District Court, S. D. New York. October 30, 1903.)
Collision— State Rulbs for East River not Affectbd by National
PiLOT RULES.
The State statute requirlng vessels navlgating the East river to keep
near the middle of the river la not changed or superseded by the pilot
-rules establlshed by Act June 7, 1897, c 4, 30 Stat 96 [U, S. Comp, St
1901, p. 2876].
500 125 FiJÈBEAL BKPèSTKK.
2, flAlkiE:4SltÉlLHSHlp:AIID TblT'fePAILUKB OF TuG TO KffiKP IN MiDDLE OF EàST
A tug with a tow M^in t^^^ 'or a collision between her tow and a
ste^gilp In East rlyer' 6n the grpund thàt she was neàr the side of the
river witiioutnecesslty, and in viola tlon of the statutory rule requiring
ail véiéèls to kèep near tié mlddle, and also for her fallure to hâve a
lookont. , :•:.. ■; ^ ■
9, SAME—Iiiàtos— Evidence ColisiDBHED.
Oonfllcting testlmony examlned, and ftéld to clear a steamghip from th&
charge. of rfault In nbt ohservlng a meeting tug wlth a tow In East river,
in tbeinlgjit, in tlme tq avoid, collision with her tow, on the ground tUat
the tiig'S sida lightswéfenot hurnlng.
In Admiralty. Suit for collision,
Carpenter & Park, for libeïants and the claimant of the Manhattan.
Wilcox & Green, for claittiant of the Hartford.
ADAMS, District Judge. ^his action arose out of a collision be-
tween the libellants' barge American Eagle and the "stéamboat Hart-
ford, which happened oii the i7th of May, 1902, a little after 8 o'clock
p. m. in' the yicinity of the Brooklyn Bridge. The bafgè, in tow, on a
hawsef of about 20 fathoms, of the steam lighter Manhattan, in Com-
pany with another vessel aldngside of her, was proceeding to the
westward and the Hartford was going, under her own steam, from
old pier 24, East River, to Hartford, Cipnnecticut. The night was
dark but cléar and the tide the strength of the ebb. The effect of
the collision was to overtùrn the barge, causing the loss of her deck
load of iron and the effects of the crew. The action was brought
against the Hartford and the Manhattan was brought in by pétition.
The collision occurred On the Brooklyn side of the river, where,
on account of the ebb tide, it was necessary for the Hartford to go to
get a heading up the river, but there was no necessity for the tow
being there. The Manhatta.n was out bî her proper place in the river
and this was a fault on her part for which she must be held. The
A. Demarest (D. C.) 25 Fed. 921; Brooklyn Ferry Co. v. United
States (D. C.) 122 Fed. 696, 703.
The rule requiring vessels to keep in the middle of the East River
established by state statufe hâs not been changed by the pilot rules
by Act Cong. approved June 7, 1897, c. 4, 30 Stat. pè [U. S. Comp.
St. 'I901, p. ^876], the ôbject of the local rule bemg to keep ves-
sels away from the vicinity of the piers, in order that vessels prop-
erly using the wharves, shall not be imperiled by vessels going up
or down the river. The Breakwater v. New York, h. E. & W. R.
Co., 155 U. S. 252, 15 Sup; Cf. 99, 39 L. Ed. 139. And the United
States statutory régulations for the prévention of collisions, especial-
ly provide (Article 30) that :
"Nothlng in ftese rules shall Jnterfere wltji the opération of a spécial rule,.
duly made by local authorlty, relative to the navigation of any harbor, river,
or inland -waters,"! Aet A«g. 19, 1890, c. 802, 26 Stat 328 [U. S. Comp, gt,
1901, p. 2871].
ï 3. Signais of meeting vessels, see note to The New York, 30 O. C. A. 630*
THE HARTFOBD. 561
THe Manhatlan was also in fault for not having a lookout.
The détermination of the controversy with respect to the alleged
fault of the Hartford for not observing the Manhattan and for that
reason participating in the collision, turns principally upon the ques-
tion whether the Manhattan, owned by the libellants, had her side
lights set and burning. It was alleged on the part of the Hartford
that there were no colored lights visible on the Manhattan, and that
those navigating the Hartford were not aware, at first, that the tow
was coming down the river but supposed, until the collision was im-
minent, that it was bound up the river, in the same direction as the
Hartford. On the part of the Manhattan, it is alleged that her side
lights were properly set and burning.
Of the many witnesses examined on behalf of the Manhattan, but
few tejtify to the lights being set and burning before the coUision,
viz. ; the master of the Manhattan, her deck hand, a boy on board,
named Becker, and, possibly, a deck hand of the tug Annan, which
was in the neighborhood and took the men off the barge after the
collision. Ail thèse witnesses testified in court excepting Becker,
who was not présent but was examined subsequently out of court.
Their gênerai testimony is met by the testimony of five witnesses on
the Hartford to the effect that they were looking carefully for Hghts
and, while they saw the white lights of the tug and tow, no colored
lights were visible. This was not an after thought, because those on
the Hartford charged the Manhattan with fault in this respect within
five or ten minutes after the collision, when the Manhattan, having
gone down the river to pick up the barge, returned alongside the
Hartford with her lights then burning. And the answer, filed shortly
after the collision, specifically sets forth this alleged fault.
A careful examination of Becker's testimony, particularly the cross-
examination, leads me to the conclusion that the witness should not
in any respect be relied upon. It has also led me to a careful ex-
amination of the minutes of the testimony taken on the trial. When
arrangements were made for the examination of the additional
witness, it was upon the theory that he was a recently discovered
deck hand, who was missing when the trial took place. The witness
who was examined out of court, was a boy, who had been described
by the master of the Manhattan as a passenger, some friend of the
owners, who had just happened to come into the pilot house. Pear-
son, deck hand of the Manhattan, said that he saw the other deck
hand put up the colored lîghts. The absence of this other deck hand
is not sufïiciently accounted for. The witness Becker testified that
he put them up. He said that he was i6 years old at the time of
the collision and getting $25 per month, deck hands' wages, which
is, at least, doubtful. He also said he had within about a week of
the trial been re-employed by the libellants at that rate of wages.
Thèse facts, with some other discordant testimony, discrédit ail thèse
witnesses, and no testimony remains in support of the lights being
set and burning at the time of the collision, excepting, possibly, that
of the witness Gabriel, the deck hand of the Annan mentioned. His
testimony was not particularly impressive. He appeared to be the
only one on the Annan, who was willing to convey the impression
125 F.— 36
562 125 fMdëbal BB#c^iti?EB.
that he ^W tîié ^ffiS'îyiïrnWgkt thé tiirie ôf the cdllîsibti. 'île tes-
tifiedj on crôSS-èMMMéi6n, tliat' hé saw the lights whèh the Annan
cfossed the MàriHàttâh'S-bow, which was after the collision, and it
is likely thât if he açttially feàw the lights, it was after theyWere lighted
subséquent tb thé coUisiort;'
I am inclîned to belîëve from the circumstances and the straight-
forward testimôny frorii' thé Hartford, including thât of a lookout,
that the Manhattan's çoîorèd Hghts were not burning tihtil after the
collision, and it follows that the allégation of fault on the part of the
Hartford for not secingiTië 'Manhattan fails. The Westfîèld (D. C.)
38 Fed. 366; The Monftotithshire (D. C.) 44 Fed. 697;^ The Viola
(D. C.) 59 Fed. 632; The ^vingstôné (D. C.) 87 Fed. 7Ô9, jc/S; The
Laiisdowne (D. C.) 105 Féd. 436. .
Another allégation offàùlt on the part of the Hartford weus, that
she exchànged a signal oftwo whistles with the Manhattan: This she
denied ând her witrièâsés say that the only signal of such character
that she gave was to a tùg, towing twb car fîoats, bbund down the
river oh the Brooklyn sîde; The finding on the Credifaility of wit-
néâses with respect to lights is décisive of this question also.
Libel dismissed as to the Hartford;
In re i. S. PATTBRSON & CO.
•,v, (District Court, N. D. Texas. Aprll 17. im.)
'""'''" " ■'■ ■[' '■ -Ko.4sr. ■■' '-'^^ ■'■■■
1. BANKRUPTfiT-^PRAyDULMT PBRC^ASK OF ÔOODS— RlOHT TO RbCLAIM.
Bankrirpts, who •weï^'retiaiil merchants, made a fliiànclal statêment to
a wliôiêsale hOuse àisf *i:biisls for 'créait, wMdh was: signed, and "stated
thftt -Ifew^s r"a tj;ue iioil lacburate stàtement of oup assets and liabilitles,"
and sJio^dstand as tjj, ail subséquent purchases unless nçtice was glven
qf changé, lanà they bpund themselves to glve such notice in case of any
' '*tfa'atérikl •cbànge. In tiife Itënilzed^ ^tateffient of liabillties Was a question
asking for' thé amoUnt '''due relaticves,*' Which was naânewered, althougb
tbeK at'the time ow'ed ,$3i!5O0 to b, relative. Heli that, umder the gênerai
représentation that It w^^.a true an|a accurate jstatqcnent. the omission
to answëir such questloii'was a concéalflieht which. was équivalent to a
f râilduleit , réj^rèseiitàtioû, and èititled the credltor , to reclaim goods
which wérè shippetâbni <SredIt in reliance on' Suéh Statêment.
2. .'Samb. :. ; .l.i^!i'i .'.■■-■■ .^'•;"'.': ..: ;,•. :■ i' ^ •
The shinment of gQo4g;thi;ee months after^ sucto ,Bt£^tement was made,
; and In , rellance thereon, ■,'^ithout further Inquirles,. no notification of
change having been gi-sreri, wàS iiot such négligence oii the part of the
seller às to%ebaritfi?*m the rt^tto resclnd thfe sale. . ■
In Bankruptcy. On çeftificate from référée.
Sam À. I^eake, for j)etîtioriëfS;
Sidney 1,. Sànluelsi fôf ïi'ùsteè. " •
i MEEK,- JPistrict Judge. J, Si Eattérson & Co.j the bankrupts, were
merchants doing business at Frost> Navarroicounty, Tex- Early in
the yekr lçto2j;Feder, Silberberg'& Co.,. a large mercantile firm doing
businesf'àii Cincinnati, Ohio, received through one of their traveling
IN BE J. S. PATTEESON Js CO. 563
salesmen an order for goods from J. S. Patterson & Co. This order
amounted to $1,133.10, and was sought on a crédit. Feder, Silberberg
& Co. immediately, and before extending the crédit, instituted inves-
tigation, through the usual channels, to ascertain the financial standing
and rating of J. S. Patterson & Co. Not being satisfied with the
information secured through thèse channels, Feder, Silberberg &
Co. called on J. S. Patterson & Co. for a financial statement of their
aflfairs, and sent to them a blank form to be fîlled out. The letter
accompanying the blank form requested that ail questions in same
should be answered "either in dollars and cents, or by the words 'No,
None, Yes, or Nothing.' " J. S. Patterson & Co. complied with the
request, and forwarded the following financial statement :
Crédit Department.
Statement made thls 14 day of Feb. 1902, Feder, Silberberg & Co. Cincin-
nati, O., by J. S. Patterson of the firm of J. S. Patterson & Co. City of
Frost, State of Texas, which firm Is composed of the follo-wing persons (giv-
ing names In full), T. S. Patterson, and J. H. Patterson
(Co-partnership) and engaged in the business of Dry Goods.
( unlimited )
Resources:
Cash on hand or in bank
Cash value of merchandise on hand $7,000
Cash value of book accounts and notes that are good and coHectible 7,000
Cash value lands, houses and other real esta te 3,000
Cash value of Personal and ail other property not specified above 2,000
Are ail the above assets In your name? If any parts are owned
Joistly by busband and wife, so state bere
Llablllties: '
Amount of Indebtedness on merchandise due 1,500
not due 50O
" " notes or other obligations both due and not due
Number and amount of mortgages or deeds of trust beld agaiust real
estate or personal property
Due relatives
Amount of seeurity paper my name Is on, due or not due
Amount of any other liabillty that I may be liable for
Resources Over Liabilities:
How long hâve you been in business? Four years in Frost.
Do you owa storehouse and dwellings? Yes.
Amount of Insurance on stock 5000. On storehouse 1500.
The above is a true and accurate statement of our assets and liabilities,
and upon whlch we désire crédit based, in our purchases from Feder, Silber-
berg & Co. and the same shall stand as to ail subséquent purchases, unless
at the tlme of snch subséquent purchase or purchases we shall notlfy them
of any change in our assets or liabilities, and hereby bind ourselves to glve
such notice in case of any material change in our pecuniary condition; other-
wise ail subséquent purchases to be made on the faith of the above statement.
SIgn hère full name of firm: J. S. Patterson & Company.
By whom slgned: J. S. Patterson. a member of the firm.
Henry Hermann, crédit man for Feder, Silberberg & Co., testified
that on the strength of this statement his house shipped the bill of
goods on February 20, 1902. Some time in May, 1902, another order
for goods was received by the house, through its traveling salesman,
for September delivery, This order amounted to $793.50, and the
goods under it were duly shipped and delivered. j. S. Patterson
564 125 FQDSBAL BEPOaTBB.
& Co. were adjudicated bànkrupts on the çth day of December,
1902. At ths first meeting of creditors it developed from the testi-
mony of J. S. Patterson that at the time of the making of the financial
statement to Feder, Silberberg & Co. his firm was indebted to his
cousin, L. E. Patterson, in the sum of $3,500; that the considération
for this indebtedness was borrowed money. The financial statement
of J. S. Patterson & Co. was shown to be untrue and inaccurate in
several respects, but it is not considered necessafy to state or analyze
such untruthf ul , and inacculrate portions of the statement. Feder,
Silberberg & Co. did not know of the indebtedness of J. S. Patterson
& Co. to L. E. Patterson :until the examination of the bankrupt at
the fîrst creditors' meeting. :They at once filed their application
before the référée to hâve the goods shipped to J. S. Patterson &
Co. under the May order, that were on hand, segregated from the
stock in the possession of the trustée of the bankrupt estate and
returned to them, on the ground that the title thereto had not passed,
by reason of the fraud perpetrated on them by J. S. Patterson &
Co. This application was resisted by the trustée, and a hearing had
on the issue thus made before the référée. Henry Hermann testified
that in extending crédit on the February and .September shipments
he relied oh the truthfulness of the financial statement made in Feb-
ruary; tha:t he relied solely on that statement in extending crédit on
the September shipment; that, if he had.known or discovered the
statement to be false, he would not hâve relied upon it, nor would
he hâve exterided the crédit; that he would not hâve given J. S.
Patterson & Co. the line of crédit hedid, had he known they were
indebted to a relative in the sum of $3,500. The correspondence in
évidence tends to prove thé February order had been accepted by
Feder, Silberberg & Co. before the receipt of the statement, and that
the sellers were only awaiting the arrivai of certain goods to complète
the order beforemaking the shipment. However, the insistence of
Feder, Silberberg & Co, upon â, financial statement^before any ship-
ment bf gqods, and the entire course ofdealing betweentha. parties,
stripped of the polite phrasirig of commercial correspondence, clearly
establishes the truthfulness of Heiiry Hermann's évidence, and that
the Cincinnati'hbuse placed its main reliapce and extended, crédit on
the financial statement. J. S. Patterson testified that;he. knew of
the indebtedness of $3)500 to'.his;'cousin; at the time of making the
statement, but ''justkeiptit private." ^fter hearing, the référée re-
fuséd and dismîsged the application, aii(i thé applicants complairi and
appeal from thiis ruUng, ; ; . . ■.:- '<■''■'' ■ •
In order that the rights of ail partiéSimight be preserved pending
this appeal, the référée Ordèi+ed the 'pf6përty claimed by Feder;; Sil-
berberg & Co, to bè apptai^ed, biit refused to separate and segregate
it, because such ségrégation would involve loss and expense to the
estate. In evehtthe propeity of thé testante is sold by order of the
référée, funds arising from the sale- Of'thfe' goods claimed by Feder,
Silberberg & Co. Will; be sùbjè'ct tO the âctiOn of the court On this
appeal. V' ■' :'•'■'' ■ •' -■';■_ ■,'
It iswell settlèd' that représentations as to the financial status of a
buyer màde as a basis of crédit, îaïidknOwn by the party making
IN RE J. 8. PATTERSON & 00. 565
them to be false, and but for which the sale would not hâve been
made, are fraudulent, and entitle the seller to reclaim the goods so
obtained by fraud. Turner v, Ward, 154 U. S. 618, 14 Sup. Ct. 1179,
23 L. Ed. 391 ; In re Weil (D. C.) m Fed. 897; In re Epstein (D. C.)
109 Fed. 878; Gainesville National Bank v. Bamberger, Bloom
& Co., TJ Tex. 48, 13 S. W. 959, 19 Am. St. Rep. 738 ; Lowdon et al.
V. Fisk et al. (Tex. Civ. App.) 27 S. W. 180 ; Schwartz et al. v. Mitten-
thal et al. (Tex. Civ. App.) 50 S. W. 182; Schram et al. v. Strouse
et al. (Tex. Civ. App.) 28 S. W. 262. Counsel for the trustée contends
that the bankrupts, in failing to set opposite the words "due rela-
tives" the amount owing L. E. Patterson, were not guilty of making
a false statement or misrepresentation ; that the bankrupts had been
requested to answer the various interrogatories in a blank form by
placing opposite thereto the figures in dollars and cents, or by an-
swering "No, None, Yes, or Nothing," as the query and their finan-
cial condition might indicate ; that their failure to place anything
opposite the words "due relatives" gave notice to the parties seeking
the statement that the bankrupts refused to answer the question, and
that therefore the statement could not be relied upon as accurate and
correct in that particular.
The financial statement of Patterson & Co. must be construed as
a whole, and the gênerai statement appended thereto must be consid-
ered in connection with the itemized statement under the heads of
"Resources" and "Eiabilities." They assert, over their signature,
that they hâve set forth a true and accurate statement of their assets
and liabilities, that they désire a Une of crédit based thereon, and that
the statement shall stand as to ail subséquent purchases unless at
the time of such subséquent purchase or purchases they shall notify
the sellers of any change in their assets or liabilities, and they bind
themselves to give such notice in case of any material change in
their pecuniary condition, and, in event no such notice is given, then
ail subséquent purchases are to be made on the faith of the state-
ment given. In view of thèse représentations and stipulations, it is
my opinion Feder, Silberberg & Co. were justifàed in Indulging the
conclusion that J. S. Patterson & Co. owed nothing- to relatives.
They alone were in possession of the necessary information to make
a true and accurate statement of the financial condition of their
firm. They were invited to make such statement by distant mer-
chants, in order that the latter might détermine whether or not they
would be willing to accept their orders and ship valuable merchan-
dise to them on a crédit. J. S. Patterson & Co. accepted the invi-
tation, made a statement and represented it was true and accurate,
and yet, owing a cojisin à large sum of money, they placed no figures
opposite the words "due relatives." It will be noticed that the words
"true and accurate," as used, do not qualify the particular items of
the statement, but qualify the "statement of our assets and liabili-
ties," so that they vouch for the truthfulness and accuracy of the
statement as a whole. Even though the failure to set forth the
amount "due relatives" in the statement were not considered a posi-
tive misrepresentation on the part of J. S. Patterson & Co., yet under
the circumstances it is such a suppression of the truth as amounts
566 '125 S'BDBBAL REVOTER.
to a suggestion of falsehoodj In the case of Stuart v. Wyoming
Ranch Çoiripany, 128 U. 3:1383, 9 Sup* Ct. loi, 32 L. Ed. 439, Mr.
Justice Gr^yj ii) delivering the opinion of the court, says :
"In an actioa of deceit It Is ttue tliàt silence as to a material fact is not
neeessarilyj as anmâtter of law^ équivalent to a fais© représentation. But
mère silence Is.quite différent froçi concealment; aliud est tacere, aliud celare.
A suppressloii bf the trutli may àmount to a suggestion of falsehood; and if,
with intent tb deceive, elther party to a coiltract of sale conceals or suppresses
a material fact, %hlch lie Is in good faith bound to disclose, this is évidence
of and équivalent to a false lepresentatlon, because the concealment or sup-
pression Is in eflEect a représentation that what lis disclosed is the whole truth.
The gist of the actioji is fraudulèntly produclng a false impression upon the
mind of the other jparty; and, If this resuit is àccomplished, It is unimportant
whether the nièans of accbmpliéhing it are words or acts of the défendant, or
his concealment or. suppression of material facts not equally within the knowl-
edge or rïiach pf plalntiff," ,
THe failùfe; Of Pâttérspn & Go. to set forth the amount due rela-
tives, to'getheir vHth the g-erièral représentations made at the end of
the statement, clëa'rly brihgs' this case within the above fuie.
It is also contended by çoiinsel for the trustée that Feder, Silberberg
& Co. were guilty of nèglîg'eâfcie in accepting the May order for goods
to be shipped in September, without niaking additional investigation
as to the fîhàhciàr condition of J. S. Patterson & Co. ; that'they
should not havé relied on the statemeiit made in February as a basis
of crédit for goods ordered in May. The bankrupts had stipulated to
notify them 61 any material Change in their pecuniary condition.
Even though this were not Sufficiènt to félieve Silberberg & Co. from
the exercise of càre and diligence, yet the time intervening between
the date of the stâtemertt ànd the date of the second order and the
delivery of the goods under it was not suifïicîent to deprive them of
the right to. l'ely on it. Sùch statements are made as the basis for
continuing crédit, and it is not necessary that they should be made
exactly at the time of the' skie. S,uch a requirement would be un-
reasonable. The lerigth of time that has elapsed since making the
statement, vvithin reasonable limits, is for the considération of the
court in passing upon the exteht that the sale was actually inflUenced
thereby. Lowdon et al. v. Fisk et al. (Tex. Civ. App.) 27 S. W. 180 ;
Schram et al. v. Strousé et al. (Tex. Civ. App.) 28 S. W. 262.
I àm of the opinion that thç order herétofore entered by the référée
overruling and dismissihg the application of Feder, Silberberg & Co.
is efror, and should be set aside, and that an order should be entered
allowing the application and directing the goods identified as belong-
ing to Feder, Silberberg &,C(3. to be turned over to them, or, in lieu
thereof, the amount of such goods upon sale by the trustée. The
costs of this appeal will be tàxed against the trustée.
THE NEW BRUNSWICK. 567
THE NEW BRUNSWICK.
(District Court, D. Massachusetts. October 30, 1903.)
No. 1,394.
1. Makitimb Liens— Home Port of Vkssel— Place dp Enrollment.
Allégations that a Maine corporation, the owner of a vessel, had its
principal place of business In Boston, and that the vessel was there en-
rolled, are not sufflcient to show that Boston was the home port of the
vessel.
2. Res Jxidicata— Substantial Idkntitï of Causes of Action— Alleqing
Différent Qrodnds fok Relief.
A decree on the merits dismisaing an intervenlng pétition to establish
a gênerai maritime lien on a Maine vessel for supplies furnished in Bos-
ton is a bar to a second pétition to establish a lien for the same supplies,
under the statute of Massachusetts, on the ground that she was a domes-
tlc vessel because enrolled in Boston, since the subject-matter of the two
pétitions is the same and the causes of action substantially identical,
and under the libéral rules of practice in admiralty both grounds for
relief might hâve been alleged in thefirst pétition in the alternative.
S. Same— Mattbrb Concltjded bt Judgmbst.
Under the American rule the identity of the causes of action in two
suits cannot be tested by inquirlng whether the same matters might
hâve been proved under the pleadings, but the second suit will be barred
If the parties and relief sought are the same and the matters essential
to sustain the cause of action alleged might hâve been proved in the
former action under appropriate pleadings.
In Admiralty. On motion to dismiss intervening pétition.
Carver & Blodgett, for petitioner.
Arthur J. Selfridge and Wm. Lewis O'Brion, for claimant.
LOWELL, District Judge. Morrison filed an intervening péti-
tion against the proceeds of the steamer New Brunswick, alleging
that the steamer was of Portland, in the District of Maine, owned by
a Maine corporation; that he had supplied her with coal and labor
while she was lying at Boston; that she was in need of supplies,
and that they were furnished oh her crédit; that he had duly filed
with the city clerk of Boston the statement required by Mass. Rev.
Laws, c. 198, § 15. The pétition thus appeared to assert a lien
of two sorts : First, a gênera] maritime hen ; and, second, a stat-
utory lien upon a foreign vessel, The libel was filed before the
case of The Roanoke, 189 U. S. 185, 23 Sup. Ct. 491, 47 L. Ed. 770,
had appeared in a bound volume of reports. That case decided that
the statutory lien does not afïect foreign vessels, and so Morrison be-
came limited under his pleadings to the gênerai maritime lien. Near
the end of the trial his counsel suggested that the steamer was en-
rolled in the port of Boston, and might therefore be deemed a do-
mestic vessel. He moved to amend his pétition by alleging this, but
the motion was denied upon the ground that it came too late, inas-
much as the case had been tried nearly to a conclusion upon the
undisputed allégation in his pétition that the steamer was a Maine
vessel. The court held, on the évidence, that there was no gênerai
maritime lien upon the vessel, and dismissed the pétition. There-
after Morrison filed a second pétition, which alleged that tjie New
56? 135 rBDEBAI, KBFOETÏÏB.
Brunswick was owned by a Maine corporation which had its usual
place of business in BoStôrt, âiid that the stèàrner was enrolled in the
Boston customhouse; that the coal was needed for the yessel's use,
and was supplièd t'o her by the petitioner, who duly filed the statutory
statement above referred to, and beeame entitled to a statutory lien
upon the steamer. The daimant has moved to dismiss the second
interveniîig pétition upon two grounds: First, that the matter is
res judicata; and, second, that the intervener, by filing the first
pétition, elected to establish hls claim as a général maritime lien,
and by that élection is precluded from claiming a statutory lien.
Is the matter of the second pétition res judicata ? The time for
taking an appeal from the décree upon the first pétition has been ex-
tended, but no question has been made that the decrée is final, nor
has objection bèen made to the form of the claimant's motion to dis-
miss. The question of theiSufSciency of the second pétition is squarely
presented. Upon preciselywhat' grounds Morrison seeks to main-
tain this pétition is not easy t'o détermine. Its allégations dififèr from
those of the fîirst pétition only by thé omission of the explicit alléga-
tion that the steamer was a Maine vessel, and by the addition of alléga-
tions that her owner had its usual place of business in Boston, and
that she was enrolled in the Boston customhouse. In the first péti-
tion the coal is said to hâve been ordered by "her master and agent";
in the second by "the agent for the owner," probabïy the same per-
son. The place of enrollment does not ordinarily détermine the
home port of the vessel as against the plaée of the owner's incorpo-
ration. The Havana, 64 Fed. 496, 12 C. C- A. 361. There ail the
business of the corporatipn, except the transfer of its stock, was
donc in New York or on the high seas (see The Havana (D. C.) 54
Fed. 201), yet the vessel's home was deemed to be in New Jersey.
If the intervener desired to set up that, for the purposes of this case,
by reason pf estoppel or otherwise, the New Brunswick was to be
deemed a Massachusetts vessel, he should hâve done so directly. He
has alleged a statutory lien, but the facts he has set out do not sup-
port the allégation. It is doubtful if the allégation just mentioned,
unsupported as it is by the facts set out, would bar the petitioner
from asserting under his second pétition that he has a gênerai mari-
time lien — the very matter. decided upon his first pétition. The
pétition cannot be sustained as for a gênerai maritime lien, for that
matter îs admitted to be res judicata ; ■ nor as for a statutory lien
against a Massachusetts vessel, for it contains no sufficient allégation
thatthe vessel's home port was in this state.
Even iif the second pétition be deemed to allège' specifically, as
probabïy was intended — otherwise it must undoubtedly fail — that the
New Brunswick was a Massachusetts vessel, thé resuit is the same.
The doctrine ôf res judicata has two applications. In Werlein v.
New Orléans, 177 U. S. 390, 397, 20 Sup. Ct. 682, 44 L. Ed. 817, it
was sajçjithat: ■ ' ■
"À former Judgment between the parties (or thelr prîvlés) tipon the same
cause of action es that state4 in the secbiid case constltutes an absolute
bar to the prosec^tion of the second action, npt only as to every matter
whIch was offered and received to sustain or defeat the clalm or demand,
but as to any Other admissible niatter whlch migUt hâve been offered for
THE NEW BKUNSWIOK. B69
tbat ptirpose. Where tjie second between the same parties Is upon a différ-
ent clalm or demand, the Judgment in the former action opérâtes as an
estoppel only as to those matters in issue, ar points controverted, upon the
détermination of which the finding or verdict was rendered."
See, also, Columb v. Webster Co., 84 Fed. 592, 28 C. C. A. 225, 43
L. R. A. 195; Foye V. Patch, 132 Mass. 105, iio. Does the case
at bar fall within the first category ? Is the cause of action the same?
The same supplies were furnished by the same petitioner to the same
vessel of the same owner, at the same time and place, in the same
manner and with the same need. Nothing has happened or has been
discovered since the fîrst pétition was fîled to affect the rights or rela-
tions of the parties. The only différence between the two pétitions
concerns the home port of the vessel. There is ambiguity, indeed,
in the expression just quoted from the décision pi the Suprême Court
that a former judgment constitutes a bar as to every admissible matter
which might hâve been offered to sustain the demand. The phrase
is a common one, and has been substantially repeated in many con-
sidered cases. Did the court mean to bar only those matters which
might hâve been ofïered to sustain a plaintiff's demand under the
existing pleadings, or ail those matters which might hâve been ofïered
under appropriate pleadings? If only those matters are barred
which might hâve been offered under the existing pleadings, then the
cause of action stated in the second pétition hère before the court is
not the same as that stated in the first. Under the first pétition,
Morrison was not allowed to show that the New Brunswick was a
Massachusetts vessel.
In Hunter v. Stewart, 4 D. F. & J. 168, a bill in equity for the
transfer of certain shares of stock was dismissed on the merits.
Later the original plaintiflf brought a bill for the same relief upon
différent grounds, known to exist when the first bill was brought.
Lord Chancellor Westbury held the former judgment no bar, and said :
"The validity of the défense dépends on the inquiry whether the case
made by the plaintiff in his présent bill be the same with tbat stated in the
former bill, or could hâve been given in évidence under the allégations which
such former bill contained. The conditions necessary lor the validity of a
défense of this nature are, in my opinion, best coUected in a well-known
passage from the commentary of Vinnius on the 4th book of the Institutes,
and which is in thèse words: 'Bxceptio rei judicatœ non aliter agentl obstat
quam si eadem qusestio inter easdem personas revocetur, itaque ita demum
nocet, si omnia slnt eadem, idem corpus, eadem quantitas, idem jus, eadem
causa petendl, eadem conditio personarum.' "
See Paton v. Sterling, Morr. Die. 12,229. In Herman on Res Ju-
dicata, 96, in Chand on Res Judicata, 53, and in Freeman on Judg-
ments, 259, identity of cause of action is tested by the identity of
admissible testimony. See Horton v. Bassett, 17 R. I. 129, 20 Atl.
234. Indeed, the English courts hâve not clearly recognized that the
bar of a former judgment is difïerently limited where the cause of
action is the sarne in the two suits, and where the matter in issue is
the same, but the cause of action is différent. See Barrs v. Jackson,
I Phil. 582 ; Flitters v. Allfrey, L. R. 10 C. P. 29.
Respectable as is the authority in support of the test by identity
of évidence, the law has been settled otherwise by the décisions of
570 125'i'Bi&E}KAL 'EHÎ?bRTBBi
the Supréttl, 0^ùrt. " In ^jëî'i«|in v.\Nçw Orleafls, âbove cited, a bill
ih'eqwHy haq been brQugnt'to^e^^^ allégée! to be illégal be-
cause of certain irregularities, The bill was dismissed. Thereafter
another bjll was brpught, with the sapie parties, to reçoyer the estate
in question, on the grourid that the land was dedicated tb a public
use, and'^pcûuld not be soJd. The coiirt held^that the matter was
res judicàta, aïid said :
"The tliie'titçried sale might imve beçn Illégal for a number of reasons, based
upon widély aiyetgent tacts; but whatever thoâe reasons were, the facts upon
whlch they ïèsted weire opèû' to proof In the chandery action, aioid If tihe clty
deslred, thejibenefit of themthéy shôuld hâve bèen alleged and proved. It
woTjld seepa, to be qulte eiçar that the plalntill could not be pennitted to prove
each indepepijpnt fact 1» a çeparate suit. Suppose the city had only set up
the fact 0* -tilé registry of thè Judgaiie^iit as a grouhd for enjoihing the sale.
and àfter'â trial on thàt lâStté-'lt had' bééii béaten and judènient had gone
against It;: èould the clty aftet that hâve cohimenced another stilt for the same
purpoae, anû set up as a grduusd" lor tiie allegçd, illegality of the sale the as-
signment qt. the judgment hy Klein? In s^cb second action Tfould not the
judgment lii the prior action cdnciûde the çltyï If not, thén on belng beaten
on a trial of that Isâùe tlie 'clty Could commence stlli another ac,tlon based on
the allégation that the Judgmônt had bfeefl pald. Thns, as many différent
actions as the; clty might; allietge' gronnds for clalming the sale wonld be illé-
gal could be.maintained serlait^m, and no one judgment would Gonelude the
city, exeept as to thè pârtlcuiàr ground upon -wlûch the city proeeeded in each
pàrticular casé; ' And yet ail thesé 'dîttererit grounds would sltàply f orm évi-
dence upon whieh: the original eatnse of action was based, hamély,' the alleged
illegality of the apprehendeû sale, i They would form simply facts upon which
the. cause of 8^çtiDri might r^st. Thçre Is no différence In the nature of the
groùnd now urgêd In tliis ca'ée froni the other grounds actually'set up in the
chancery suit." 177 TJ. S. 399, 400, 20 Sup. Ct. 686, 44 L. Ed. 817.
Like décisions hâve beçn rékched in the highest courts of many
States :, ïvamb V. McCpiikey, 76 lowa, 47, 40 N. W. yy, Sayers
V. Auditor General, 124 î^ich. 259, 82 ]^. W, 1045; State v. Brown,
64 Md. 199, I, Atl. 54, 6 Atl. 172,; înColumb V. Webster Mfg.
Co., above cited, the acts of négligence alleged in the second déclara-
tion could not hâve beeil givén in évidence under the fîrst. See
So. Minn. Ry. Extension Go.; v^ St. Paul, etc., R. R., 55 Ped. 690,
694, 5 C. C. A. 249. In Qare v. N.Y: & N. E. R. R., 172 Mass.
211,51 N. E. 1.08^, the plaintiff had brought suit under thé employers'
liability act, arid the, court heïd in substance that, by a judgment in
that suit, he was barred ofhis commôn-law remedy, though he might
not hâve been able to obtain that remedy under his original déclara-
tion. In Wildman v. Wildman, 70 Conn. 7Ô0, 41 Atl. i, the plaintiff
brought suit for the delivery up of dee4s alleged not to hâve been
executed or delivpred.: There was judgment for the défendant, and
the judgment was held to bar a second siiit for the same relief, based
upon an alleged cancellation of the deeds after delivery. The court
said:
"If the platntlff'8 complaint In :the former-: action was so framed that he
could not avail hlmself of ail the évidence Whlch he had to prove his right to
recover, and so sutfered defeat» it may be hla misfortune, By that Judgment
the plaintifiE is bound. He spught an amendment to enlarge the issue, but at
so late a stage of the trial that the judge for tiiàt reason dlsallowed the mo-
tion. His cause of action had been adjudlcated. He cannot now hâve an-
other trial to enable him to use such other évidence to obtain the same^
remedy."
THE NEW BRUNSWICK. 571
; Even the English courts hâve hesitated to allow a plaintiff to bring
a second suit for the same relief sought in the first, merely by al-
leging additional grounds for relief, similar to those alleged in the
first suit, yet not strictly admissible under the pleadings therein.
Phosphate Sewage Co. v. Molleson, 4 A. C. 801. But in order to bar
a second suit in England or Scotland, as it seems, the identity in the
cause of action must be more complète than is required for the same
resuit by most courts in the United States.
In his first pétition, Morrison alleged that the New Brunswick was
a Maine vessel. This was not disputed, and was material to his case,
as he understood it. There is hère no question of mère variance in
the proof of a fact not material to the maintenance of the suit. To
permit a plaintiff to seek the same relief regarding the same subject-
matter by several actions, each setting up a différent ground for re-
lief, is to give a plaintiff an advantage over a défendant. A. sues B.
for breach of contract under seal. B. has three défenses — invaHdity,
performance, and satisfaction. If he sets up only one défense and
fails, he cannot, in gênerai, avail himself thereafter of the others in
défense to the action. Why should B. be able to bring three suc-
cessive bills in equity for a cancellation of the contract, each upon
one of the grounds mentioned? That the same rule should be ap-
plied to those matters which sustain and to those which defeat a de-
mand is implied in the first extract from the opinion in Werlein v.
New Orléans, above quoted. That there is an essential différence
in this respect between the situation of plaintiff and that of défendant
was asserted, indeed, by Lord Campbell in McDonald v. McDonald,
I Bell, App. 819, 829, but the Suprême Court must be taken to hâve
disapproved the doctrine of the House of Lords in the last-named
case.
While rejecting the test of identity of testimony, it must be ad-
mitted that the courts of this country hâve proposed no applicable
test to take its place. Identity of relief is not an adéquate test. In
suits upon several coupons, for example, the relief sought is identical,
but the causes of action are not the same. A prior judgment does
not bar ail demands which might hâve been prosecuted in the first
suit without misjoinder. As was said in Werlein v. New Orléans, the
"proper appHcation" of "the law in relation to the effect of a judg-
ment between the same parties" "to particular cases is sometimes
difficult to détermine." The substantial identity of two causes of
action dififerently expressed is deemed within the direct knowledge
of the court from the circumstances of the case, without need of
canons of distinction. This is not altogether satisfactory, but is per-
haps unavoidable. Hère it is sufiScient to say that the causes of
action stated in Morrison's two pétitions are nearer identity than
causes of action hitherto deemed to be identical by courts of authority.
It was argued that the second pétition can be maintained because
otherwise there might be a failure of justice. A petitioner may be
in real doubt about a vessel's home, and may conceive that he has a
valid lien upon her in either case — a gênerai maritime lien if she be a
foreign vessel, a statutory lien if she be domestic. But both thèse
contentions can be joined in one libel or pétition. The forms of
572 135 FEDERAL EBPOBÏEB.
pleading ;Îr adtniralty are unusually libéral and free from technicality.
If the libe.l£^1ît tias a good cause of action upon one or other of two
théories pra.ctically inconsistent, and he is doubtful which theory is
correct, he may, with proper allégations, plead in the alternative.
The cause of action in the second pétition,, so far as one is set out,
was heard aild determined upon the first pétition, and cannot be liti-
gated again. '
Pétition dismissed, with costs.
In re WALSHE!.
(Circuit Court, D. Indlanà. November 2, 1903.)
No. 10,250.
1 Extradition — Tkbatt with Qrbat Britain — Placb op Prelimtnaht
Heaking.
Tlie extradition treaty bètween Great Brltaln and the United States,
and Eev. St. § 5270 [tJ. S. Comp. St. 1901, p. 3591], enacted to carry
Into efflect the provisions 'of extradition treatles, do not vest a commis-
Bioner with power to issue a warrant upon which the accused may
lawfully be arrested In another state and returned for examlnation be-
f ore such commissioner, , To authorize the extradition of a person un-
der such treaty the charge must be one which would constitute an
offense uiider the laws ôf the felace where he Is found, and the évidence
such as would justify hls appréhension and commitment for trial if the
offense had been there commltted; and, slnce the treaty recognlzes the
dual nature of our govemment, and the laws governing the offense may
be elther national or local, It Is clearly contemplated thàt the hearing
shall be withln the state, district, or terrltory where the accused is
found.
Habeas Corpus. On exceptions to marçhal's return to writ.
Winter & Winter, A, C. Harris, Henry N. Spaan, and A. W.
Wishard, for petitioner.
Jesse J. M. LaFollette, for respondent.
BAKER, Circuit Judge (orally). On the pétition of Thomas
Walshe a writ of habeas corpus was issued in this case, and the return
of the marshal justifies the détention of the petitioner by virtue of a
writ issued by United States Commissioner Shields in the Southern
District of New York, addressed to any marshal of the United States,
and commanding him to arrest and bring before the commissioner for
hearing one James Lynchehaun, as a person who had been convicted
in Ireland of the offense of assault with intent to kill, and who had
escaped with the sentence unexecuted.
The exceptions of the petitioner challenge the legality of this writ,
which was the only Justification set up in the return.
Passing over those objections that go to the foi;mality of the writ,
and the questions presented as to the scope that this hearing on
habeas corpus might take, I come to the one question that seems to me
controlling, and that is the power of the commissioner in the South-
ern District of New York to issue a warrant upon which the mar-
shal of this district may lawfully arrest thé accused and return him
IN RE WALSHE. 573
to the court of the commissioner in New York. The solution of
that question dépends upon the terms of the existing treaties between
this country and Great Britain and the statute of the United States
enacted to carry the provisions of such treaties into effect. If a
construction of the statute and treaties had been given by the Suprême
Court of the United States to the efifect that a commissioner of one
district may lawfully cause the arrest of an accused person at any
place he may be found within the sovereignty of the United States,
I would be constrained to foUow such an interprétation. No décision
of the Suprême Court to that eiïect has been cited, and my own ex-
amination of the authorities has failed to disclose one. Certain dé-
cisions in courts of the United States hâve been referred to. In the
Henrich Case, in S Blatchf. 414, 11 Fed. Cas. p. 1143, arising under
the treaty of June 16, 1852, with Prussia, the language of article i
thereof being identical with article 10 of the treaty of 1842 with Great
Britain, it was expressly decided that a warrant issued and returnable
in New York was legally served in the state of Wisconsin, and that
the return of the accused person from Wisconsin to New York for
the purpose of the extradition hearing was warranted by the treaty
and statutes.
In the case of Re Fergus (C. C.) 30 Fed. 607, the Henrich Case
is referred to, but the question was not in any way involved in the
case, and it does not appear that the court in that instance made an
independent examination of the treaties and statutes for the purpose
of forming and announcing a judgment of his own. The citation of
the Henrich Case in the Fergus Case is simply a passing allusion.
The case of In re Baruch (C. C.) 41 Fed. 472, is also referred to,
but in that case the question was not raised and decided, nor was
the matter contained in the dictum in the view of the décision of the
Henrich Ca.se. The Baruch Case simply shows that the prisoner was
brought forcibly from New Jersey to New York, and was discharged
in New York because the showing against him was not sufïicient.
The case exhibits circumstances under which the question now pre-
sented might hâve been raised, but it was not.
In Grin v. Shine, 187 U. S. 181, 23 Sup. Ct. 98, 47 L. Ed. 130, the
Henrich Case is referred to on page 187, 187 U. S., and page loi, 23
Sup. Ct. The observation is made that the Henrich Case was vigor-
ously contested because the warrant was executed without the limita
of the District of New York and within the state of Wisconsin.
There is no expression of opinion on the question whether the exé-
cution of the warrant in Wisconsin was lawful.
So that, as a matter of authority, the only case that has been pre-
sented, or that I can find, in which the question now presented is
decided, is the Henrich Case. It is my duty to give to the décisions of
the fédéral courts in other circuits the weight and considération to
which they are entitled in view of the ability and learning of the
judges who decided them; but they are not binding in this circuit
as authorities and précédents, and finally are entitled to only such
considération as the reasoning of the case justifies. In the Henrich
Case I do not find any considération given 'to some features of the
treaty and statute that are controlling with me at this hearing, and
574 125 FEDERAL BOPORTEB.
thereiorCi as a matter 6f author ity and précèdent, I find tiiyself com-
pelkd tobe actuated solely by my own judgment a$ to the scope of
the treàtiés and statute.
In article lo of the treaty of 1842 it was pro-vided that the United
States and the king of Great Britain, uixin mutual réquisitions, should
<leliverup to justice ail persons who, being charged with certain
spécifiée crimes, should seek an asylum or should be found within
the territoriès of the othçr, provided that this shall be done only
upon such évidence of criminality as, according to the laws of the
place where the fugitive or person so charged shall be found,
would justify his appréhension and commitment for trial if the crime
or offense had been there committed. The pètitioner in this case
is charged with being an.'éscaped convict. So far as the issues to be
tried before the examfning magistrate that may arise upon the
sufficiency of the record of conviction to be presented by the de-
manding. gqvernment are eoncerned, and so far as the détermination
of the issue made by the petitipner's déniai that he is the person who
was convicted is eoncerned, it is yery çlear to me that those issues
would bcrcontrolled by article ip of the. treaty of 1842^ in connection
with section 5270 of the statutes relating to extradition.
In the récent case of Wright v., Henker, 23 S. C. 7S1, 47 L. Ed. 948,
it is very clearly determined that the représentatives of the two gov-
ernments in makîng the treaties of 1842 and 1889 had respect to the
dual form of the government of the United States. Of course, the
treaty-making power ,is with the national end of our duality, but it
was compétent for the national government to make the test of the
existence of extraditable primes, and to make the test of the défini-
tion of the crime dépend upon the state law; and in the treaty, as
the words of, the treaty themselves clearly , indicate, the test of the
right of the British government to demand the return of an accused
person was made to rest upon the law of the place where he was
found, that place being determinable by the linps of the states, dis-
tricts, and territoriès that make up the United States; and I hâve
no doubt that such is the .situation with respect to the provinces and
colonies of Great Britain, because the contracting parties referred
to an accused , person "who sliall seek an • asylum or who shall be
found within the territoriès of the other," and tliat the return could
only be had upon évidence sufficient, ^ccording to the laws of the
place where the person shall be found, to justify his commitment if
the ofïense had been committed there. And in section 5270, Rev. St.
[U. S. Comp. St. 1901^ P- 3591]. enacted to carry the provisions of
extradition treaties into effect^ the magistrate referred to may, upon
complaint made ùnder oath charging any person found within the
limits of ajiy state, district, or territory with having committed within
the jurisdiçtion of the foreign governjqient an extraditable crime, is-
sue his wartaiit, etc. So that it is absolutely clear to my mind that
the one ri^tipri was, not deaHng with, the other merely as a national
entity. It ,\vas in that çapacity only that they could exécute the
treaty, but each had regard to the situation of the other, and on the
part of the British government the dual character of our institutions
was very. clearly recognized. We hâve no common-law crimes in this
IN RE WAL8HB. 575
country. The pénal code enacted by Congress îs very limîted. The
great bulk of the crimes that are defined by the statutes are found in
the pénal codes of the states alone; and so, if an accused person is
found in Indiana, and his return to Great Britain is demanded, the
right of extradition stands upon whether or not the offense with
which he is charged is an offense under the laws of Indiana. That
is the substance of it, for it is made a condition upon which the return
may be had that the évidence of criminality shall be determined ac-
cording to the law of the place where the person is found, and shàll
be such as would justify his commitment for trial if the crime or of-
fense had there been committed. Article lo of treaty of 1842.
If an offense is committed in Indiana, of course it is contemplated
by the law of Indiana that the preliminary hearing and the commit-
ment for trial shall be in Indiana. Neither o{ the treaties nor the
statute says in so many words that the hearing shall be had in the
place where the accused party is found, but, inasmuch as the laws
of the place where he is found, not only with respect to the substan-
tial définition of the crime, but also with respect to the competency
of witnesses and the admissibility of évidence, are made controUing,
it was also intended that the hearing should be had at the place where
he was found, particularly in view of the référence to the fact that
the return is only justified under those circumstances that would
warrant his commitment if the offense was committed in the juris-
diction where he was found. Of course, if an offense is committed
there, his prehminary hearing must be had in that jurisdiction.
Now, returning to the Henrich Case, I observe that the court
thought it sufïicîent ground upon which to décide that the warrant
was one that runs throughout the United States to note the fact
that the extradition is arranged for by treaty between the two coun-
tries in their national capacities. Of course, that is necessarily so.
The treaty-making power is lodged in the national part of our insti-
tutions. But because the United States, as a national entity, alone
has authority to make the treaty, it does not follow that the basis of
returning people who are demanded under an extradition treaty is
to be thé national law, or under the national définition of crime.
No attention was paid in the Henrich Case to the fact, which has
been thoroughly established by the courts, that the operative basis of
extradition treaties is the law of the place where the accused person
is found.
Now, while it is true that the court in New York may décide the
questions according to the law of Indiana — and therefore the décision
of Wright V. Henkel is not conclusive upon the question now before
the court — yet, inasmuch as it would be necessary to hâve a person
committed in Indiana for an oflfense in Indiana, before a magistrate
of Indiana, I shall hold, until controlled by explicit législation, or
until the Suprême Court shall by definite construction déclare that
the makers of the treaty intended that an accused person presumably
innocent could be taken from Alaska to New York for the purposes
of a preliminary hearing, or that an American citizen presumably
innocent could be taken from Australia to London for the purpose of
a hearing, that no such intention was within the view of the makers
576 125 Fi^QRAIi BBFOBTBB.
of this treaty, and that they inténded that, when the basîs of the
extraditability of the crijne was made the law of the. place where he
was found, the hearing woûld be had there, similarly to the hearing
where he would be eommitted for trial if the offense hadbeen com-
mitted in the place where he, was foundi. :
So I will sustain the exceptions of the petitioner to the return of
the marshal, and, as coijnsel for the British government hâve indi-
cated that they do npt: désire io amend, the petitioner may be dis-
charged.
In re FRED|3EI0 L. GRANT SHOB 00.
(District Court, W.D. New York. September 2, 1903.)
; , No. 1,502.
1. Banerdptot— Involuntart Pbtitionbrs— Cheditor Hating UNinitriDATED
Claim.
A credltor havlng a provable debt, although the amount is unllquldated,
may file à pétition in bankruptcy against bis debtor, and, where a jury
trial on thé pétition Is demandedi the amount of petitioner'B claim may be
llquidateda&d'determined on the same trial.
In Bankruptcy. On motion to dismiss pétition.
McGuire & Wpod, for petitioning creditors.
Satterlee, Bissell, Taylor & French, for défendant.
HAZEL, District Judge. Motion to dismiss pétition in bankrupt-
cy. The question presented on this motion to dismiss the pétition
in involuntary bankruptcy is whether a créditer having an unliquidat-
ed claim may file a pétition in bankruptcy against a debtor, and how
such a claim may be liquidated in accordance with the provision of
section 59b of the bankrupt act (Act July i, 1898, c. 541, 30 Stat. 561
[V,. S. Comp. St. 1901, p. 3445]). The debt which is unliquidated
and disputed by, the bankrupt is for damages arising oyt of a breach
of warranty upon the salé of personal prciperty. - This précise question
has been decided by Judge Bro^n and by Judge Th<jmas in Re Man-
hattan Ice Co. (D. C.) 7 Am. Bankr. R. 408, 114 Fed. 399, affirmed
8 Am. Bankr. R, 569, 116 Fed. 604, 54 C. C. A. 60. It was there held
that a créditer having an unliquidated debt may file a pétition in bank-
ruptcy to hâve the debtor adjudged bankrupt, provided the debt is
provable. As the petitioniijig creditor hère has a provable debt,
though the amount thereof is undetermined, the rule announced by
Judge Brown will be followed. As a jury trial has been demanded,
the amount of petitioner's claim may be established upon the trial
in connection with petitioner's other proof.
Motion to dismiss denied.
BEOWN V, PEGKAM. B77
BROWN et al. y. PEGRAM,
(Circuit Court of Appeals, Third Circuit October 80, 1903.)
No. 46.
1. Negotiable Instruments— Notes Qivbn for Patent Rights Indicatihg
considkkatiok.
Act Fa. April 2, 1872 (P. L. 60) § 1, providing tliat, when a negotia-
ble instrument is given in considération of patent rights, tlie words
"given for a patent riglit" shall be put on tlie face tliereof, and ttie In-
strument In the liands of any purcliaser or holder sliall be subject to the
same défenses as in tlie hands of the original owner or holder; and sec-
tion 2, providing that if any person shall take or transfer a negotlable
instrument not having such words on its face, knowing that the consid-
ération was patent rights, every such person shall be guilty of a mis-
demeanor — does not make void a negotlable instrument given for such a
considération without such words on its face, or affect the right of re-
covery thereon of a bona flde purchaser without notice of its considéra-
tion.
2. Same— Action bt Plbdgee— Creditino Money Rbceived from Thibd
Person.
The pledgee of a note in an action against the maker need not crédit
money received by him from a person who was only secondarily llable
on a guaranty of payment of the pledgor's debt.
In Error to the Circuit Court of the United States for the Eastern
District of Pennsylvania.
For opinion below, see 122 Fed. 1000.
Reynolds D. Brown, for plaintiffs in error.
Richard C. Dale, for défendant in error.
Before ACHESON and GRAY, Circuit Judges, and McPHER-
SON, District Judge.
J, B. McPHERSON, District Judge. This case was tried without
a jury, and the following facts were found by the court :
"The plaintifE adduced in évidence a promissory note dated December 12,
1901, for $20,000, payable June 10, 1902, at 817 Drexel Building, Phlladelphia,
signed, 'American Alkali Company. A. K. Brown, Président. Clayton E.
Pratt, Treasurer.' This note was payable to the order of the American
Alkali Company, and was Indorsed by the same offlcers of that company who
had signed it. It was protested upon June 10, 1902. The plaintiff also ad-
duced In évidence a like note for $30,000, bearing the same date and paya-
ble at the same time as the note above mentioned, and in like manner ex-
ecuted, indorsed and protested. By this proof the plaintiff established a
prima facie right to recover the amount of said notes, wlth interest and costs
of protests. This Is not questioned, and, as respects the défense It Is said
in the defendant's brief, that 'the plaintifC's requests for findings of fact cover
the material facts in the case, and défendants concède them ail,' with two
'qualifications,' which, as they do not challenge the correetness of the state-
ments of fact to which they relate, but merely présent the claims of the de-
fendants as to their effect, need not be at this point considered. I accord-
ingly flnd the following facts:
"(1) The American Alkali Company Is a corporation organized under the
laws of the state of New Jersey, and has its principal office in tbe clty of
Camden, N. J. It also malntains an office In the Drexel Building, in the clty
of Philadelphla.
"(2) By agreement in writlng dated May 6, 1899, the American Alkali Com-
pany agreed to purchase from the Commercial Development Corporation, Lim-
125 F.— 37
578:, 125 JFODBBAL . BBPOBTBB.
Ited, organized under the laws of Great Britaln, letters patent of the United
States Nos. 608,300 and SOl.JSa, d^ted respectively Ajugnst 2, 1898, and July
18, 1893, and also letters patent of Canada No. 61,368, and to pay in con-
sideratlOfi! CM thB -as^gnment therefor tonr hundred and seVentj:-nin6 tbou-
sand nine hundred and sixty shàres of the common stock of the American
Alkali Company, full pald and nonasSesSsfble, and $1,000,000, payable as fol-
lows: One, accepted blll at not to exceed pne hundred and eighty days for
$l()ÔjO()0, à note or notés hiade by the company to Its own order and Indorsed
by the co^lpapy, and at pot later than June Ist, and for $500,000, and four
accepted dtafts at not to eiéeed twelve months for $100,000 each.
"(3) Among the acceptèsd drafts thus given was one for $100,000, dated
May 18, '1899, payable tiyelve months after date. When this matUred, $50,-
000, in cash was pald on acëount and two new drafts were given, one for
$33,000' ând ahother for $20,000. Thèse matured in May, 1901, and were re-
nè*ëd by t'WP drafts oi like amoUnt, whlch were the drafts hypothecated
by the Commercial Development Company to the plaintiff on November 5,
1901. Th'ése were not pàld at maturlty, but vere renewed by the drafts in
suit, whiiib.bear date December 12, 1901, and matured June ijl, 1902.
"(4) The eohtract of May 6, 1899, was executed at the ofllce of the Amer-
ican Alkati Company Ih Fhlladelphia, and the drafts and notes were there
executed. In the negotiations the Commercial Development Corporation,
Ijimitëd, -was répresentèd by A. R. Harvey; its attorney in fact, and a man-
aging dlreetor specially authorized to act in the premlses. Authority for the
exécution of the contract and the Is^ue of the drafts referred to therein was
given at a meeting of the stoCkhOlders of thé American Alkali Company held
May 5, 1899, at its office in Oamden, N. J.
"(5) About the Ist of November, 1901, Thomas Pegram, residing in Liver-
pool, Englàhd, was requestèd to make a loan to the Commercial Development
Corporation, Limited, of £10,000. The application was made through a so-
lieitor, Mr. Alderman Fred Smith, senior partner of the flrm of Grâce, Smith
& Hood, and a maglstrate of Liverpool. The statement was made that the
loan of £10,000, was but foï a short tlme, and that as collatéral Mr. Peg-
ram should reçoive the rights of the Commercial Development Company un-
der a contract with a flrm named Perrins, Limited, any funds coming to the
Commercial Development Company from the flotation of certain Spanish tin
mines, and the American Alkali bills for $52,000. After a negotiation last-
ing a few days, on November 5, 1901, the plaintiff loaned the Commercial
Development: Corporation Company, Limited, £10,000, glving them his check
for that amèunt on Lloyd's Bank, Limited, of Liverpool, whieh check was
forthwith presented and paid in due course. To secure the loan the Com-
mercial Development Company, Limited, executed a writing under date of
November 5, 1901, reciting that, in considération of the sum of £10,000 paid
them they hypbthecated in favor of Pegram, first, the sum of $52,000, paya-
ble in respect of the two bills of exchange dated. the 15th April, 1901, for
$32,000 and $20,000, respectively, payable to the order of the American Alkali
Company and endorsed by It, and, second, the moneys payable to us in re-
spect of the flotation of the Spanish Tin Mining Company, and under-
taking to pay the said sum of $52,000, and the said moneys payable in re-
spect of the flotation of the said Spanish Tin Mining Company immediately
upon receipt of the same to the extent of £10,500.
"At the date of this transaction the Alkali bills of exchange above men-
tioned were in the possession of Messrs. Chapman & Co., bankers of New
York, for the açcount of the Commercial Development Company. On De-
cember 10, 1901, $2,000 was pald on account thereof by the American Alkali
Company to Messrs. Chapman & Co., and the notes in suit were given for
the balance of $50,000. Mr. Pegram received no part of the $2,000 which
was paid by Chapman & Co^ to the Commercial Development Company.
Subsequently, upon hearingof thèse facts, the plaintiff took the notes in suit
out of the hands of Chapman & Co.,; and placed them in the hands of the
Canadian Bank of Commerce, to be held for his pwn account.
"In making the loan to the Commercial Development Company the plain-
tiff had no notice or information that the considération for the American
BBOWN T. PEGKAM. 579
Alkall bills was the assignment Of the letters patent above mentioned. The
loan was made in good faith, and with nothing to impair the plaintiff's rights
as a purchaser for value wlthout notice.
"(6) IJnder date of December 5, 1901, A. R. Harvey executed a writing in
favor of the plaintiff, In words following:
" 'In considération of your not requirlng payment forthwlth of the sum of
£10,500 due to you from the Commercial Development Corporation, Limited,
I hereby guarantee the payment by them to you of the said sum of £10,500
on the flfth day of January, 1902.'
"On January 9, 1902, a further writing as follows:
" 'In considération of your not requiring payment forthwith of the sum
of £10,500 due from the Commercial Development Corporation, Limited, to
you, I hereby consent to your extending the tlme for payment of the said
sum and to the corporation giving you further security for the same.'
"And ou April 29, 1902, a further writing as follows:
" 'In considération of your extending the time for payment by the Commer-
cial Development Corporation, Limited, of the sum of £11,000 to the 7th
proxlmo I hereby guarantee the payment by them to you of the said sum
of £11,000 on the 7th proxlmo, but this guarantee is not to be enforced before
the 12th day of June next.'
"And on April 30, 1902, Ruth L. Harvey, the wife of A. R. Harvey, ex-
ecuted writlngs in words following:
" 'In considération of your extending the time for payment by the Commer-
cial Development Corporation, Limited, of the sum of £11,000 to the 7th
proximo I hereby charge ail my interest in "Ramleh" (exclusive of the charge
of £4,500 already upon it), and also the furniture and flxtures upon whlch
there is no charge. I also undertake that no charge wlll be made upon
"Ramleh," or upon the said furniture and flxtures, and that I will not re-
move or disturb anything at Ramleh between the présent date and the 12th
day of June next.'
" 'In considération of your extending the tlme for payment by the Commer-
cial Development Corporation, Limited, of the sum of £11,000 on the 7th
May, 1902, I hereby guarantee the payment by them to you of the said sum
of £10,750 on the 7th May, 1902, but this guarantee is not to be enforced be-
fore the 12th day of June, 1902.'
"(7) In June, 1902, the Commercial Development Company was placed in
the hands of a recelver and llquidator, and out of that receivership the
plalntlfC realized nlnety pounds on account of the indebtedness. As agalnst
the amount thus realized he pald out in sundry expenses connected with the
receivership and keeping the corporation in life £400.
"In September, 1902, the plaintiff received the check of Mrs. Ruth L. Har-
vey for £6,000 on account of her guaranty. In part, at least, this represented
the proceeds of the sale of certain chloride shares which the plaintiff had
obtained from W. W. Gibbs on account of an obligation of W. W. Gibbs
to A. R. Harvey which had corne into the plaintiff's possession in the course
of the dealings. To what extent this check for £6,000 in fact représenta
moneys of Ruth L. Harvey and to what extent moneys of A. R. Harvey, the
plaintiff was unable to state.
"Other than the moneys herein stated, the plaintiff bas received nothing
on account of the loan made by him to the Commercial Development Com-
pany on November 5, 1901, either by way of payment or in reallzation of any
of the collaterals.
"The défendant admits that the plaintiff Is entitled to recover the bal-
ance now due to him by the Commercial Development Company, Limited,
on account of his loan of ten thousand pounds to that Company, made No-
vember 5, 1901; but Inslsts that the plaintiff's claim to recover the full
amount of the notes sued on cannot be sustalned, because neither they nor
any of the preceding drafts of which they constitute renewals had the
words 'Given for a patent right' wrltten or prlnted on their face, although
the original draft of the séries was In fact part of the considération for a
purchase of patent rights. This insistence rests upon a statuts of Pennsyl-
vania, as follows:
580 125 FEDERAL REPORTER.
"•An act to regulate the exécution and transfer of notes glven for patent
rights.
" 'Section i. Be It enaeted by the Senate and Honse of Représentatives
of tbe Coipipionwealtb of Pennsylvania in General Assembly met, and it is
hereby enaeted by the authority of the same, that whenever any promissory
note or other negotlable instrument shall be given, considération for which
shall consist In -whole or in part of the right to make, use, or vend any pat-
ent invention or Inventions, claimed to be patented, the words. "Given for
a patent right," shall be prominently and legibly written or printed on the
face of such note or instrument, above the signature thereto; and such note
or instrument, In the hands of any purehaser or bolder shall be subject to
the same défonces as In the bands of the original owner or bolder.
" 'Sec. 2. If any person shall take, sell, or transfer any promissory note or
other negotlable Instrument, not having the words "Given for a patent right,"
M'ritten or printed legibly and prominently on the face of such note or in-
strument above the signature thereto, knowlng the considération of such note
or Instrument to consist In whole or in part of the right to make, use, or
vend any patent invention or Inventions claimed to be patented, every such
person or persons shall be deemed guilty of a misdemeanor, and upon con-
viction thereof, shall be ilned in any sum not exceeding $500, or imprisoned
in the county jail not exceeding sixty days, or both, in the discrétion of the
court' "
P. L. 1872, p. 60.
The décision of the case was put upon the point that the act of 1872
violated the Constitution of the United States, because (to use the
language of the circuit judge) "the monopoly which a patent grants is
a property right created under the Constitution and laws of the United
States, and by those laws made assignable ; and therefore a state law
which prescribes that negotiable instruments in the ordinary form
shall not be given or accepted for an assignment of the patent itself
is as plainly obstructive of the exercise of a right vested by the fédéral
law as would be the inhibition of payment in the current funds upon
the sale of a patent for cash." We express no opinion concerning the
correctness of this ruling, believing that the case may be properly de-
cided upon another ground, namely, upon the true construction of
the Pennsylvania statute.
The attack made by the plaintiffs in error upon the notes in suit
dépends wholly upon the efïect that should be given to the second sec-
tion of the statute. The argument may be stated in thèse words:
The second section déclares it to be a misdemeanor, punishable by
fine or imprisonment, or both, if any person, with knowledge that a
negotiable instrument hasbeen given in whole or in part for a patent
right, shall take, sell, or transfer such instrument, unless the words
"Given for a patent right" appear upon its face. Therefore, upon
familiar principles, since it is a crime to make such an instrument, the
instrument itself is void in the hands of the original payée ; and, even
in the hands of a bona fidé pledgee, who is therefore a purehaser for
value, it is so far invalid that it may only be enforced to recover what-
ever balance may be still unpaid. We are unable to assent to the
soundness of this argument, and believe that further considération
of the statute and of the Pennsylvania décisions tliereon will show
satisfactorily that a différent conclusion should be reached. The act
was first considered by the Suprême Court of Pennsylvania in Haskell
V. Jones, 86 Pa. 173. The opinion of the court was delivered by Mr.
Justice Sharswood, and is as follows:
BBOWN V. PEGRAM. 581
"If the act entitled 'An act to regulate the exécution and transfer of notes
given for patent rights,' passed April 12, 1872 (P. L. 60), makes absolutely
Toid ail such notes in -which tbe words 'Given for a patent right' aie not
prominently and legibly written or printed on the face of such note above
tbe signature thereto, there would be great reason for the contention that
the act is unconstltutional and void. No state can so interfère with the
right of a patentée, secured to him by the acts of Congress, to sell and
assign his patent. But such is not the opération of the act, according to its
letter and spirit. By the express provision of the statute the only efCect
of the insertion of such words is that 'such note or instrument in the hands
of the purchaser or holder shall be subject to the same défenses as if in
the hands of the original ovpner or holder.' By necessary Implication, notes
without such words inserted in them remain on the same footing as be-
fore the act. The sole object of the Législature was to secure, so far as
could be done consistently with the rights of Innocent third persons, that
notice of the considération should be given to ail who should take the paper.
Nothing is better settled than that between tbe original parties to a note given
for a patent right it is a good défense to show that the alleged patent is void;
in other words, that it is no patent right at ail, and that the considération bas
therefore entirely failed. Bellas v. Hays, 5 Serg. & R. 427, 9 Am. Dec. 385;
Geiger v. Cook, 3 Watts & S. 266; HoUiday v. Rheem, 6 Harris, 465, 57 Am.
Dec. 628. Ail who take with notice of the considération, take necessarily
subject to the same défense. There is nothing in ail this which interfères
with any Just right of the holder of a valid patent under the acts of Oongress,
nor that the maker of the note shall be permitted to show against a holder
with such notice that it was obtained by fraudulent misrepresentation. This
very plainly distinguishes our act from the statutes of other states which
hâve been held unconstltutional.
"To secure the insertion of thèse words, the second section of the act
makes it a misdemeanor, punishable by fine or imprisonment, or both, for
any person 'knowing the considération of a note' to be the sale of a pat-
ent right to take, sell, or transfer it without the words 'Given for a pat-
ent right' inserted, as provided by the act. It is too plain for argument
that this section in no way afCeets the right or title of the holder of such a
note who takes it, not knowing that the considération was the sale of a
patent. He commits no illégal or indictable offense. The negotiabillty of a
note in which the required words are not inserted is in no way affected by
the act. The innocent holder, who takes It before maturity for value, without
knowledge or notice of the considération, takes it as heretofore, clear of ail
equities between the original parties."
In Hunter v. Henning-er, 93 Pa. 373, the court again said :
"The act of 12th Aprll, 1872, was intended to destroy the negotiable char-
acter of notes given in whole or part for 'the right to make, use, or vend
any patent invention,' In order that the makers thereof might bave the right
to défend as well when said notes were passed to third parties as when
in the hands of the original payées. In furtherance of this intent, the act
requlres the indorsement, 'Given for a patent riglit,' to be made across the
face of such notes; and this In order that no one may ignorantly purchase
paper of this kind. Without this, of course, the innocent purchaser for value
would not be alïected. He would hold as the indorsee of any other negotiable
paper. Not so, however, as to one knowing the considération of a note given
for a ïiAtent right, for such a one is, by the act, guilty of a misdemeanor, if
he reçoives this kind of paper without having the words above stated writ-
ten upon Its face."
The only other décision upon the subject is Shires v. Common-
wealth, 120 Pa. 368, 14 Atl. 251, which adds nothing of présent value
to the previous cases. The brief per curiam opinion is as follows :
"There is nothing in the act of April 12, 1872, which infringes the Con-
stitution of this commonwealth, nor do we think it conflicts with the féd-
éral Constitution. As a police régulation the statute bas proved itself to be
valuable in that it bas been the means of preventing gross frauds upon our
582 125, PHDBEAL EEPOETBE.
citlzens, to whlch, before Its enactnjent, they were subjected. Under thèse
ciçcumstances we are not disposed to pronounce tMs law Invalid."
As we understand thèse décisions, the resuit is that a note made in
violation of the statute is not void in the hands of any holder what-
ever, whether he be the original payée or a subséquent innocent in-
dorsëe or pledgee. To take the position that the note is made
whôUy void by the statute is, we think, to overlook the necessary
effect of the first section. This déclares in plain language that when-
ever a negotiable instrument shall be given for a patent right the
words "Given for a patent right" shall be put upon the face of the in-
strument, and that à negotiable instrument thus rnarked shall, in the
hands of any purchaser or holder, be subject to the same défenses as
in the hands of the original owner or holder. The object of the stat-
ute is thus declared, namely, to destroy the negotiable character of
the instrument, and there is nothing expressed to warrant the con-
clusion that the Législature intended to make the instrument void
altogether. Neither should such a conclusion be readily impHed, for
ihe mischief at which the act was aimed was fully remedied by pre-
aerving whatever défenses the maker might hâve against the original
payée. If the maker. had been tricked or defrauded into making the
note, or if a spurious or worthless patent had been foisted upon him
by a clever knave, he was fully protected (if the act was obeyed, and
the paper was marked) by permitting him to prove the fraud or fail-
ure of considération against the title of any holder whatever. But, to
deal fairly with subséquent purchasers, it was necessary to put them
upon notice. Clearly, if the paper were unmarked in ordinary negoti-
able form, an innocent purchaser would take an indefeasible title, and
therefore it was required that the paper should carry with it a plain
notification to the world that unknown défenses might exist. With
both reasons in mind— the protection of the maker, and notice to
subséquent purchasers — ^the second section was added, in order that
the command of the first section might hâve the sanction of the crim-
inal law, and therefore be less frequently disobeyed. To suppose that
the législature intended to make void a negotiable instrument given
for a valid patent in a perfectly fair transaction, an instrument to
which no défense whatever could be interposed, simply because by
mistake or ignorance or carelessness the words "Given for a patent
right" do pot appear upon the instrument, is a supposition not easily
to be entertained. We should only be wiUing to accept such a con-
struction of the statute because we could find no other, and were left
no alternative by the plain direction and positive language of the
Législature. As it seems to us, no such situation is presented. The
two sections of the act are to be taken together, and when they are
thus considered and are read in the light of the construction adopted
by the Suprême Court of the state they lead naturally and without
difficulty to the conclusion already stated — that the act does not make
the unmarked negotiable instrument void, and goes no further than
to save the défenses of the maker in two instances : First, where the
note is marked as required by the first section; and, second, where
it is sued upon by any person who takes it subsequently, with knowl-
edge that the considération was in whole or in part the right to make,
PEACOCK V. TXNITED STATES. 583
use, or vend any patented invention, or invention claimed to be pat-
entée.
If this conclusion is correct, the foundation of the défense is de-
stroyed. No défense against the original drafts is suggested other
than the argument, already considered, that the second section of the
act made them void, and no other défense is suggested against the
renewal notes in suit. It follows that the défendant in error was en-
titled to the fuU amount of his claim, for upon a valid obligation of
the maker, who was also the primary debtor, the pledgee was certainly
not bound to crédit the money that he had already received from an-
other person, who was only secondarily liable, upon a separate and
collatéral undertaking. Whether, even if the drafts had been void
in the hands of the original payée, the défendant in error would hâve
been obliged to give crédit for this money, is a question upon which
we are not called upon to express an opinion.
The judgment of the court below was right, and is now affirmed,
with costs to the défendant in error.
PEACOCK V. UNITED STATES.
(Circuit Court of Appeals, Ninth Circuit October 3, 1903.)
No. 943.
1. Pleading— Motion to Strike Dut.
Portions of a pleading wliich are objectionable as belng evasive, am-
biguous, or uncertain may appropriately be attaclied by a motion to strilîe
out.
2. Same— Denials in Answeb.
A déniai, in an answer, on Information and belief, of allégations of
fact made in the complaint whleh are elearly within defendant's knowl-
edge, or are matters of public record within his reach, is insufflcient, and
will be treated as an évasion.
8. Same — Sopficiency of Answer.
In an action by the United States to recover the penalty Imposed by
Kev. St. § 4143 [U. S. Comp. St. 1901, p. 2809], for mailing a false oath
to secure the registry of a vessel, averments in an answer setting up
that défendant was ignorant of the law, and, regarding the proceedings
for the registry as purely formai, did not read the papers he slgned, con-
stitute no défense, and were properly strlclien out on motion as immate-
rial and impertinent.
4, United Statbb — Action to Recover Penalty— Pétition for Remission.
The provisions of Rev. St § 5292 [U. S. Comp. St. 1901, p. 3004], giv-'
ing any person who has incurred a penalty or forfeiture under the laws
relating to the collection of duties or taxes or to the registration of ves-
sels the right to prefer a pétition through the judge of the district for a
remission of such penalty or forfeiture by the Secretary of the Treasury,
does not require the court to postpone the trial of an action brought to
recover the penalty on the presenting of such a pétition, the secretary
having the same power to remit the penalty after as before judgment
thereon.
5. Evidence— Weight and Sufficienct— Proof of Alienagb.
Proof that a défendant was naturalized as a citizen of the United
States on a certain date, and took the usual oath, is sufflcient, prima facie,
to establish the fact that he was an alien prior to that time.
584 125 FBDHKAL EEPOETER.
Appeal from the District Court of the United States for the Dis-
trict of Hawaii.
The pétition in thls case présents the nature and character of this pro-
ceeding. It reads as follows:
"The United States of America, plalntlff, complalns of Walter C. Peacock,
défendant, for cause of action against the said Walter C. Peacock, allèges
as.follo-<ys, to wit: That heretofore, and on, to wit, the 2d day of July, A. D.
1902, In order to secure thè registry, under the laws of the United States,
of a certain vessel known as the 'Julia E. Whalen,' the said Walter C. Pea-
cock dld take an oath at the port of Honolulu, in the district and territory
of Hawaii, before one R. O. Stackable, spécial deputy coUector of customa
in and for the district and territory of Hawaii, the said R. C. Stackable be-
ing then and tbere an olficer authorlzed to make such registry. That in.
said oath so taken as aforesaid the said Walter C. Peacock, under and by
the name of W. C. Peacock, dld swear, according to the best of his knowl-
edge and bellef, amongst other things, that he, the said Walter C. Peacock,
was a citizen of the United States of America, and that he, the said Walter
O. Peacock, was at the time of the making of the said oath the sole owner
of the vessel Julia E. Whalen, and did further make oath, to the best of hIs
knowledge and belief, that no such subject or citizen of any foreign power,
elther dlrectly or indirectly, by way of trust or confidence or otherwlse, was
interested in the said vessel, or in the profits or issues thereof. That at the
time of the taking of the oath aforesaid the said Walter O. Peacock in truth
and in fact was not a citizen of the United States of America, but was a
subject and citizen of a foreign power, which said fact was within the knowl-
edge of the said Walter C. Peacock. That at the time of the taking of the
oath as aforesaid, a subject and citizen of a foreign power, to wit, the said
Walter C. Peacock, was interested in the said vessel Julia E. Whalen, and
was the sole owner thereof; and in truth and In fact, wlthin the knowledge
of the said Walter C. Peacock, the statement made by the said Walter C.
Peacock in said oath so taken as aforesaid that no subject or citizen of said
foreign power was interested in said vessel was not true. That the value
of the said vessel JuUa E. Whalen is the sum of twenty-five hundred (2,500)
dollars. That by reason of the facts aforesaid, and by force of the statutes
of the United States of America, to wit, sections 4142 and 4143 of the Ke-
vised Statutes of the United States [U. S. Comp. St 1901, p. 2809], the said
défendant, Walter C. Peacock, forfeited and became llable to pay to the
United States of America the value of said vessel, to wit, the sum of twenty-
five hundred (2,500) dollars, and an action bas accrued to the said United
States of America, to demand and bave of the said défendant the sum of
twenty-five hundred (2,500) dollars. Yet the said défendant, though request-
ed, has not paid to the United States of America the said -sum of money, or
any part thereof, but refusés so to do; to the damage of the said United
States of America In the sum of twenty-five hundred dollars. And there-
fore the said United States of America brlngs thls suit, and prays judgment
against the said défendant in the sum of twenty-five hundred (2,500) dollars,
together with its costs herein expended."
This pétition was duly verlfled by the United States Attorney for the
District of Hawaii, and filed in the United States District Court October 2i,
1902. The défendant interposed a demurrer to the pétition, which was over-
ruled, and In due time filed bis answer, which, among other things: "(1) Dé-
nies that at the time of taking the oath in said pétition averred, if in fact
taken by him, it was within the knowledge of the said défendant, although
It was within his supposition, that in truth and in fact he was not a citizen
of the United States of America, or that he was a subject or a citizen of a
foreign power; and as to whether in fact or in law he took the oath in said
pétition mentioned this défendant has no information or bellef upon the sub-
ject sufflcient to enable him to answer the averment of said pétition of that
behalf; and therefore, placing his déniai on that ground, he dénies that he
took the oath in said pétition averred. (2) As to whether this défendant,
at the time averred In said pétition, was not a citizen of the United States,
but a subject and citizen of a foreign power, thls défendant has no informa-
PEACOCK V. UNITED STATES. 585
tion or belief sufflclent to enable hlm to answer the averments of said péti-
tion of that behalf. Therefore, placlng his deniala on that ground, he dénies
tbe said averments, and each of them. (3) Dénies that at tlie time of the
taking of the oath aforesaid, if in fact he took the said oath, he, the said
défendant, knew, although he supposed himself to be, a subject or a citizen
of a foreign power, and dénies that wlthin the knowledge of this défendant,
in truth or in fact, the statement of this défendant in the said oath, if there
contained, that no subject or citizen of a foreign power was interested in
said vessel, was not true. * * * And the défendant, as a separate and
distinct answer to the said pétition, • * * further avers: (1) That at
the times, or any of them, in the said pétition averred, this défendant in-
dividually had no interest whatever in the said vessel, the Julia B. Whalen,
except that the légal title to the said vessel stood temporarily in his name,
while the bénéficiai interest therein was in the Marcus Island Guano Com-
pany, a corporation duly organized, existing, and doing business under and
by virtue of the laws of the territory of Arizona, United States of America.
That the said Julia E. Whalen was purchased by this défendant for said
corporation at San Francisco, state of California; and that, at the city of
Honolulu, Island of Oahu, territory of Hawaii, aforesaid, and on or about
July 2, 1902, this défendant was informed and instructed that it was ex-
pédient to take out a register for the said vessel under the laws of the
United States. That he applied for said register on or about the date afore-
said, and, being then and there under the belief that the proceedings in
référence thereto were purely formai, and having no knowledge of the laws
of the United States in that behalf, and having no interest in the said vessel,
except as aforesaid, signed a paper submitted to him for that purpose, at
the office of R. C. Stackable, spécial deputy collector of customs for the
district and territory of Hawaii, but then and there did not read and had no
knowledge of the contents of said paper, but supposed and believed the said
paper to be purely formai, and then and there had no knowledge or belief,
if such be the facts, that the said paper represented this défendant to be
a citizen of the United States, or that no subject or citizen of any foreign
power, either directly or Indlrectly, by way of trust or confidence or other-
wise, was interested in the said vessel or in the profits or issues thereof;
and that the said paper may be the oath mentioned and averred in said
pétition, but as to whether it is or no, or of the actual contents of said paper,
this défendant has no knowledge, although he is Informed and belleves that
the said paper and the oath so averred in said pétition are identical. Where-
fore this défendant prays that he may be hence dismissed, with his costs."
The court, upon motion of the United States attorney, struck out the aver-
ments 1, 2, and 3 on the ground that each thereof was sham, evaslve, am-
biguous, and uncertain, and constitutes no déniai; and also struck out the
nverment above quoted as a separate and distinct answer to said pétition
on the ground that ail of the allégations therein contained were sham, ir-
relevant, and immaterial, and not a déniai of any probative fact in the case.
The défendant thereafter, by leave of the court, filed an amended answer
to the pétition, which quotes the différent paragraphs of the pétition, "and
as to each and every clause of said quoted paragraphs this défendant neither
admits nor dénies the same, and leaves the plaintitt to make such proof as
it may be advlsed."
The amended answer, as well as the first answer, denied that the value
of the vessel Julia E. Whalen exceeded $2,000, and denied that by reason
of any of the facts stated the défendant forfeited or became liable to pay
the value of the vessel.
The case thereafter regularly came up for trial. A stipulation was filed
waiving a jury, and tlie case was tried before the court At the time of
trial counsel for défendant called the attention of the court to the fact that
a pétition for a remission of the penalty incurred by défendant had been
prepared, under the provisions of section 5292, Rev. St. [U. S. Comp. St
1901, p. 3004], on the ground that défendant herein had not been gullty of
any moral turpitude whatever, and that no benefit had accrued to him, and
no injury resulted to others, and praying that the judge should in a sum-
raary manner Inquire Into the elrcumstances presented by this pétition, and
586 IZo Vntà&RÀli EEPORTEK,
cause tîie.saine to be transmlttëd to the Secretafy of the Treasury; and
thèfeupon tliè défendant moved the court "that the trial of sald cause be
postponéd untll after the hearlnè and other proceedings upon the pétition
aforesaid." ThiS motion was denied. The trial was then had, and resulted
in a decree in favor of the plaintifE against défendant in the sum of $2,000
and costS. ï'rom this decreé the appeal was taken.
Henry E. Highton and Thomas Fitch, for appellant.
Marshall B. Woodworth, U. S, Atty., N. D. Cal., and Robert W.
Breckons, U. St Atty., D. Hawaii.
Beforé GILBERT and ROSS, Circuit Judges, and HAWLEY,
District, Judge.
HAWLEY, District Judge, after stating the facts, delivered the
opinion of the court.
1. It is claimed that the motion to strike out portions of the an-
swer was an inappropriate remedy ; that the points should hâve been
reached by demurrer, by motion to render the answer more definite
or certain, or by motion for judgment on the pleadings. Conceding
that the objections to the averments might hâve been presented by
either of the methods suggested, it does not foUow that the course
pursued in this case was either inappropriate or erroneous. The
remedy to strike out portions of a pleading which are objectionable
upon any of the grounds stated in the motion has been frequently
recognized and enforced by the courts. Denver R. h. Co. v. Union
Pacific (C. C.) 34 Fed. 386, 390; Buller v. Sidell (C. C.) 43 Fed. 116;
Gilchrist v. Helena S. & S. R. Co. (C. C.) 47 Fed. 593; Tabor v.
Commercial Nat. Bank, 62 Fed. 383, 387, 10 C. C. A. 429; Wallace
V. Bacon (C. C.) 86 Fed. 553; McDonough v. Evans Marble Co., 112
Fed. 634, 50 C. C. A. 403; 14 Ency. PI. & Pr. 80, and authorities
there cited.
2. It is! next urged that the déniais in the answer which were
stricken out wéire sufRcient. A bare reading of the statement of facts
will carry conviction to the mind that this contention cannot be
sustained. The averments in the answer were clearly evasive, and in
several respects were ambiguous and uncertain. It is true that, where
the facts alleged in a complaint are not within the knowledge of the
défendant, and which, from tbeîr nature and character, are such as
might not readily be ascertainéd by him, the défendant may so state
in his answer, and place his deniaî on that ground, and in such a case
the def endajit ought at least to show how it h,appened that he was
without knowledge as to such: facts. As was said by Justice Field in
Curtis v. Richards, 9 Cal. 33, 38 :
"If the facts alleged in the complaint are presumptively within the knowl-
edge of the défendant, he inuist answer positively, and a déniai upon in-
formation and .b^llef will be treated as an évasion."
See, also, Gas M. Co. v. Neusë M. Co., 91 N. C. 74.
In the présent case it clearly and alïirmatively appears upon the face
of the pétition that the matters therein alleged were matters of public
record withiri';the reach of the défendant, and by an examination
thereof he coùtd readily hâve ascertained the truth or falsity of the
FEACOCK V. UNITED STATES. 587
averments which he was called upon to answer. It further appears
that he was directly connected with the transactions set forth in the
pétition, and must hâve known what did occur in relation thereto.
Or, if the matters referred to had escaped his memory and recollec-
tion, he could and should hâve gone to the records and ascertained
the facts before making his answer. In Bliss on Code PI. § 326, the
author said:
"If the fact charged Is evMently within the defendant's knowledge— as an
act done by himself, and within the period of recollection, or where he bas
the rueans of Information— a déniai of information in the language of the
statute would be clearly false or evasive, and such an answer should be
dlsregarded."
Dixon, C. J., speaking for the court in State v. McGarry, 21 Wis.
496, 500, where the facts were similar to the case in hand, said :
"I do not think, in cases of this description, that a défendant should be
allowed to close his eyes and ears, and set up a want of knowledge or in-
formation."
The rule is universal that matters ot public record within the
reach of the défendant cannot be denied on the ground that he had
no sufficient information or belief concerning them. Wallace v.
Bacon, supra ; Elmore v. Hill, 46 Wis. 618, 624, i N. W. 235 ; Union
L. Co. v. Board of Supervisors, 47 Wis. 245, 248, 2 N. W. 281 ; Car-
penter v. Momsen, 92 Wis. 449, 456, 65 N. W. 1027, 66 N. W. 692;
Brown v. Scott, 25 Cal. 189, 195, 196; Loveland v. Garner, 74 Cal.
298, 300, 15 Pac. 844; Gribble v. Columbus B. Co., 100 Cal. 68, 75,
34 Pac. 527; Mulcahy v. Buckley, 100 Cal. 484, 488, 35 Pac. 144;
I Ency. PI. & Pr. 813, and authorities there cited. In Union L. Co.
V. Board of Supervisors, supra, where certain alleged irregularities
were specified in the complaint, which affected the legality of the
taxes, the défendants answered that they had no sufficient knowledge
or information to form a belief. The court said: .
"This answer is manifestly evasive and bad, because the public records
within the reach of the défendants would enable them to positively and
distinctly deny thèse defects in the tax proceedings if they did not exist.
Mills V. The Town of Jefferson, 20 Wis. 50. This is really ail the answer
contains which professes to meet the case made by the complaint; and it is
very évident that it shows no défense whatever, for the answer does not
traverse and deny nor confess and avoid any of the material allégations of
the complaint"
3. It is apparent that the separate and distinct answer to the péti-
tion was properly stricken out, because it does not deny any of the
material facts alleged in the pétition. It only seeks to set up the
excuse that he did not know what the law was, and believed that ail
of the proceedings in relation to the registry of the vessel under
the laws of the United States were "purely formai," and that he did
not read the same, or know the contents of the papers fîled by him.
Thèse averments were immaterial and impertinent, and could not be
received as a défense to the recovery of the penalty imposed by the
law. As was said by the court below, to allow such averments to
remain "would be trifling with public justice, and would create false
issues to be tried in said cause." They certainly are not consistent
588 125 FEDERAL EBPOKTBR.
with the solemnity of sworn pleadings before any legally authorîzed
tribunal.
4. The court did not err to the préjudice of appellant in declining
to postpone the trial of the cause until the Secretary of the Treasury
should act upon the pétition of défendant for a remission of the
penalty. Section 5292, Rev. St. [U. S. Comp. St. 1901, p. 3004],
impHes that such steps may be taken before the proceedings which
hâve been instituted for a recovery of the penalty are tried. But it
does not déclare that upon the présentation of such a pétition the
proceedings in court shall be stayed until action is taken by the
judge and by the secretary upon the pétition, or that the pétition can-
not be acted upon after the judgment and decree are entered in the
court. The action of the court in refusing to postpone the trial
does not prevent action being taken upon the pétition for a remis-
sion of the penalties. The pétition can be acted upon after the
decree is entered as well as before. The trial by the court in this
case was no invasion of the right of the Secretary of the Treas-
ury to grant the remission of the penalty after the judgment was
rendered, if, in his judgment and discrétion, the case, as made in the
pétition, would warrant it. United States v. Morris, 10 Wheat. 246,
291. 29s, 304, 305. 6 L. Ed. 314; The Laura, 114 U. S. 411, 415, 5
Sup. Ct. 881, 29 X. Ed. 147; Brown v. Walker, 161 U. S. 591, 601,
16 Sup. Ct. 644, 40 L,. Ed. 819.
5. It is contended that the évidence admitted on the trial was in-
sufficient to justify the decree rendered by the court, in this: "That
there is no évidence in the record to show that on july 2, 1902, the
appellant was not an American citizen. The only attempted proof
was that on September 9, 1902, he was naturafized in the court be-
low, and abjured allegiance to the British crown." The record in
the office of the Collector of Customs containing the oath taken
by Mr. Peacock to secure the registry of the vessel called the "Julia
E. Whalen" was produced in évidence, and the oath read therefrom
by E. R. Stackable, the collector. The oath, as shown by the rec-
ord, was administered by "R. C. Stackable, spécial deputy col-
lector." The signature to the oath was proven to be in the hand-
writing of W. C. Peacock, appellant herein, and the testimony shows
that on this oath the Julia E. Whalen was registered under the nav-
igation laws of, the United States. The collector was not présent
when this oath was administered. When this fact appeared, the court
said: "Doès the défendant deny that the oath was administered by
some pne? Mr. Breckons: He admits it. The Court: If that is
so, we will not hejir any testimony about it." No objection was
made or exception taken to this ruling. Erank L. Hatch, deputy
clerk of the United States District Court, testified that he adminis-
tered the oath of haturalization to W. C. Peacpck on September 9,
1902. Ce:;taîn objections were made to questions asked as leading,
ana then "the défense, admits that the défendant was naturalized on
the 9th day of September, and took the usual oath." This was
sub.stantially ail of the évidence in the case upon the part of the gov-
ernment. W. C. Peacock was then called, and testified in his own
beha,lf as follows: "Q. You hâve heard read the oath admitted in
CONTINENTAL INS. OO. V. GAEEETT. 589
évidence purporting to hâve been taken by you on the 2d of July,
1902? A. Yes, sir. Q. I will ask you whether you did on that oc-
casion, on the date fixed by that oath, you remember being sworn.
A. I hâve no recollection of it." It is suggested by counsel for
appellant that the naturalization oath may hâve been procured by
appellant "to settle a doubt or to record a certainty," but there was
no évidence whatever tending to show that such was the purpose.
The pleadings and the évidence establish a prima facie case, and
fully sustain the order, judgment, and decree of the court, which are
hereby afiîrmed, with costs.
CONTINENTAL INS. 00. v. GAERETT.
(Circuit Court of Appeals, Sixth Circuit. November 3, 1903.)
No. 1,198.
1. InSUHANCK— AWARD— CONFOKMITT TO SuBMISSION— PaILCRE TO FiND SOCND
Vai.uk.
Where both an Insurance policy and a submission to appraisal tliere-
under require the finding of botli sound value and damage, a failure of
the appraisers to find the sound value is a fatal variance, which cannot
be helped by assuming that the blank left in the award -where the sound
value should hâve been inserted was intended as a finding that there was
no Sound value, nor by a contention that the finding of sound value was
immaterial.
S. Same— Notice of Heabing— Failukb to Givb— Effeot.
Where appraisers appointed to estimate a loss under an Insurance pol-
icy on a brick building, the woodwork of which had been completely de-
stroyed, and the walls partially broken down, failed to give notice to the.
parties of the tlme and place of the appraisal, so as to permit the pro-
duction of évidence, the award was void.
8. Same — Waiver.
The fact that an insured, after a submission to appraisal of a loss un-
der hls policy, saw the appraisers on the street, but failed to ask to be
heard, or to object to their proceeding without notice, he did not thereby
waive notice of the time and place of the appralsement.
4. Same — Soit Sktting Asidb Award — Damages — Jubisdiction op Equity.
Equity, having obtained jurisdictlon for the purpose of setting aside an
award of Insurance arbitrators, may properly retain the case to déter-
mine the amount of damages, and render decree therefor.
Appeal from the Circuit Court of the United States for the Middle
District of Tennessee.
This is a bill to set aside an award made by appraisers appointed under
the usual clause to that effect in a policy of flre Insurance. The subject of
Insurance was a dwelling house sltuated in Carthage, Tenu. The contract
Insured against loss and damage to the extent of $5,000. The loss was ap-
praised at $3,409.72. The insured, claiming that hls loss and damage was
$5,000, flled this bill, attacklng the award upon several grounds. Upon the
pleadings and évidence, the court below held the award void, and entered a
decree appralsing the complainants' damage at $5,000, for which sum, with
interest, a decree was directed. Erom this decree the Insurance eompany has
appealed.
If 1. Conditions of Insurance pollcies as to arbitration, see notes to Insur-
ance Co. V. Alvord, 9 C. C. A. 628; Assurance Co. v. Decker, 39 0. C. A. 389.
î 2. See Insurance, voL 2S, Cent. Dig. § 1429.
590 125 FBDBBAL BBPORTBBi ,
J. C. Bradford, for appêllant.
G.;N. Tillman and A. ;E. Garrett, for appellee.
Before LURTON, SEVERENS, and RICHARDS, Circuit
Judges.
LURTON, Circuit Judge. I. Thé policy provided that in default
of an agreement the loss should be ascertained by "two compétent
and disinterested appraisers," one to be selected by each party, and
an umpire selected by the two thus chosen, to whom any différences
should be submitted. It also provided that the appraisers should
together "estimate and appraise the loss, stating separately sound
value and damage." A disagreement as to amount of loss having
occurred, appraisers were chosen ; the insurers selecting one, and the
insured another, and thèse two selecting a third as umpire. The sub-
mission Was duly signed, and provided, among other things, that the
appraisers "should ascertain the sound value of and the loss upon
the property damaged and destroyed," etc. For their government
in making the appraisement, it was also provided, that, "it is further
expressly understood and agreed that, in determining the sound
value and the loss or damages upon the property hereinb'efore men-
tioned, the said appraisers are to make an estimate of the actual
cost of replacing or repairing the same or the actual cash value there-
of, at and immediately preceding the time of the fîre; and in case
of dépréciation of the property from use, âge, condition, location or
otherwise, a proper réduction shali be made therefor." It was fur-
ther provided that the award of aily two of the appraisers thus chos-
en, "made in writing in accordance with this agreement, shall be
binding upon both parties to this agreement as to the amount of
such loss." The award made was signed by the appraiser chosen
by the insurer, and by the umpire. The appraiser selected by the
insured refused to sign.
The award is in thèse words :
"To the Parties Interestefl: We hâve carefully examlned the premises and
remains of the property herelnbefore specifled In accordance with the fore-
golng appolntment, and hâve determlned the sound value to be dol-
lars, and the loss and damage to be thirty-four hundred and nîne and 'Vioo
dollars ($3,409.72).
"Wltness our hands this the 28th day of January, 1901.
"W. H. Robinson, Umpire.
"H. Griffln, Appraiser."
Is this award in accordance with the submission? The agreement
under which the appraisers were selected was at once the source and
limit of their authority, and the award, to be binding, must, in sub-
stance and form, conform to the submission. 33 Ency. of Law &
Proced. 674; Toomey v. Nichols, 6 Heisk. 159; Palmer v. Van
Wyck, 92 Tenn. 397, 21 S. W. 701. The submission required the
appraisers to détermine two things, and two things only, for the
submission was only for the purpose of determining the amount of
loss, and no other défense open to the insurer was submitted. The
policy itself required that the appraisers should state "separately
sound value and damage," and the submission, in jio less than four
CONTINENTAL INS. OO. V. GAEEETT. 591
distinct paragraphs, required that both the sound value and loss or
damage should be estimated or appraised. Sound value is the cash
value, making an allowance for dépréciation due to use, etc., at and
immediately preceding thè time of the fire. This définition is plainly
implied by the paragraph from the submission set out above. The
award is therefore not in accordance with the submission, because
the sound value has not been estimated or appraised.
The able attorney who represented the insurance company in this
court has attempted to meet this departure from the submission by
two suggestions : First, that the award should be construed as a
finding that the "sound value" was nothing ; second, that the failure
to estimate and appraise the sound value is immaterial, and there-
fore not fatal. But if "sound value" be the cash value of the insured
premises before the damage by fire, the award would be absurd, for
it would be équivalent to saying the cash value of the premises be-
fore the fire was nothing, but that by the fire a loss and damage has
been sustained of $3,409.72. Upon the other hand, a more reason-
able implication from the loss and damage appraised is that the cash
value immediately before the fire was at least not less than the
amount of loss and damages sustained. But was the cash value of
the premises immediately before the fire greater than the loss and
damage resulting from the fire? If any, the difiference must be the
value of the remains. If the appraisers had been governed by the
agreement of submission, we should not be guessing as to whether
the appraisers regarded the loss or damages greater or less than the
cash value of the premises just before the damage occurred. The
arbitrators hâve failed to décide a matter which they were required
to décide. The cash value before the fire, less dépréciations, is ail
that the insurer was obliged to pay. If the loss and damage was less
than this sound value, it could not be required to pay more than the
least of the two sums, and the loss and damage could not be greater
than the cash value. Hence it was material to the insurer to hâve
both appraised. The award would not conclude the company, there-
fore, if this sound value was not found, and it might refuse to abide
by it. An award ought not to be vaHd or void at the option of one
only of the parties. The award should hâve pursued the submis-
sion, so as to hâve been obligatory upon both parties. Smith v.
Sweeny, 35 N. Y. 291, 293 (opinion of Peckham, J.) ; Cyclopedia of
Law & Procédure, vol. 3, p. 713 ; Brown v. Warnock, 5 Dana, 492 ;
Harrington v. Brown, 9 Allen, 579. But the direction to assess both
the sound value and the loss and damage cannot be said to hâve been
immaterial to either party. If followed, the appraisers would hâve
been compelled to hâve exercised much care in their estimate, in-
asmuch as the appraisement of the sound value and the loss and
damage to that would necessarily involve an assessment of the value
of the remains. Thus some security was provided against incon-
sistent appraisements. Neither is this such an award as should be
upheld by any strained interprétation that the appraisers meant by
the unfilled blank in their written award to find that the sound value
was identical with the loss and damage reported. This would be an
inference in the teeth of an overwhelming weight of évidence show-
592 125 FEDEBAIi IIBPOBTBB.
ing that the sound value was not less than $S,ooo, after allowance for
dépréciation. It is therefore inferable that if the appraisers had
obeyed the submission, and appraîsed the sound value as they were
directed tG;.do, they would hâve appraised it at $S,ooo. Such a resuit
as this would hâve checked the possibility of assessing the loss and
damage at any less figure, except as a resuit of an estimate of the
cash value of the ruins as equal to such différence. But hère, again,
the évidence forbids any such intendments for the purpose of uphold-
ing a defective award, for the almost conclusive évidence is that the
remains of the burned building were not worth more than the cost
of remôval from the site. We cannot, therefore, assume that the
détermination of the sound value was for the sole benefit of the in-
surer, or that the failure of the award to find and report that value
has not been of détriment to the assured.
2. Objection is made to the validity of the award for want of no-
tice to the insured. The submission does not, in terms, require
notice, or that the appraisers should follow the law. In such circum-
stances, if appraisers act in good faith, the award is not invalidated
because they hâve erred as to the facts or respecting the law, unless
the award shows a purpose to follow the law, and a plain mistake.
3 Cyclopedia of Law & Procédure, 740, and cases cited; Tenn. v.
Ward & Briggs, 9 Heisk. 100, 116; Nance v. Thompson, i Sneed,
325. Section 5198, Shannon's Code of Tennessee, requiring notice,
seems to apply to statutory arbitrations conducted under that chap-
ter, and not to abrogate the common law in respect of arbitrators
and awards. Halliburton v. Flowers, 12 Heisk. 25. That notice
shall be given to the parties of the time and place of the hearing is
ordinarily required, from the commonest principles of justice. Lutz:
V. Linthicum, 8 Pet. 165, 8 L. Ed. 904; Elmendorf v. Harris, 23
Wend. 628, 35 Am. Dec. 587; Vessel Owners Co. v. Taylor, 126 111.
250, 18 N. E. 663 ; Warren v. Tinsley, 53 Fed. 689, 3 C. C. A. 613.
But if the character of the matter submitted and of the arbitrators-
chosen is such as to justify an inference that the appraisers were
selected to act as experts, and adjudge the matter from their own
knowledge, it is not essential that notice shall be given or évidence
heard unless the submission so provides. 3 Encyclopedia of Law
& Procédure, 638, 640; Warren v. Tinsley, 53 Fed. 689, 3 C. C. A.
613, 616; Liverpool Ins. Co. v. Goehring, 99 Pa. 13; Hall v. Nor-
walk Fire Ins. Co., 57 Conn, 105, 17 Atl. 356; Straw v. Truesdale,.
59 N. H. 109, 112. In the présent case the arbitrators were to as-
certain and appraise the sound value of a brick dwelHng which had
been so completely destroyed by fire as that substantially nothing re-
mained of the woodwork, inside or out. The walls themselves were
in part fallen. Thus a mère examination of the premises could not,.
on the évidence in this record, havé informed them as to the char-
acter of the finishing of the interior work, and its condition before
the fire. The appraisers were experienced contracting builders, but,,
without some évidence, how was it possible for them to know the
sound value ôr the loss and damage. Under such circumstances,.
appraisers should give notice to both parties of the time and place
of hearing, and require évidence in respect of facts which they could
PHILLIPS V. lOLA PORTLAND CEMENT 00, 593
not otherwise know. The mère fact that the assured saw the ap-
praisers on the street, and that he did not ask to be heard, or object
to their proceeding without notice, is not a waiver. The appraisers
were not in session when complainant saw them, and he was not
présent when they examined the ruins or acted in any way in the dis-
charge of their duty, and he had no notice of either the time or place
of their session. In favor of an apparently just award, many pre-
sumptions may be indulged, but in this case the resuit reached is so
apparently unjust as not to justify any indulgent view of the conduct
of the arbitrators. If the appraisers heard évidence as to the char-
acter and finish of the interior of this house without notice, they were
guilty of misconduct. On the other hand, if they undertook to ap-
praise the loss and damage resulting to the assured without other in-
formation as to the character of the interior work than that to be
derived from such a ruin as this was, they were equally neglectful of
their duty, and exhibited an indifiference to justice most culpable.
3. A question has been made upon the partiality of the appraiser
selected by the company, but we think it unnecessary to go into this
question, in view of the fact that the award must be set aside without
regard to this matter.
4. There was no error in the rendition of a decree for the loss and
damage as shown by the évidence in the cause. The court, having
obtained jurisdictian for the purpose of setting aside the award, which
had been pleaded as a bar to the pending "suit at law upon the policy,
might retain the case for the purpose of determining the loss and
damage, or, in its sound discrétion, remit that subject to a court of
law. Peck v. Ayers & Lord Tie Co., 116 Fed. 273, 27s, 53 C. C. A.
551 ; Ward v. Todd, 103 U. S. 327, 26 L. Ed. 339; Ôber v, Galla-
gher, 93 U. S. 199, 23 L. Ed. 829.
The decree is accordingly afifirmed.
PHILLIPS V. lOLA PORTLAND CEMENT CO.
(Circuit Court of Appeals, Elghth Circuit. November 12, 1903.)
No. 1,888.
L Akti-Trcst Act — Test of Validitt of Contbact or Combination undkr.
The test of the violation of the anti-trust act of July 2, 1890 (26 Stat.
209, 0. 647 [U. S. Comp. St. 1901, p. 3200]), by a contract or combination,
is its effect upon compétition in commerce among the states. If its
necessary efCect is to stifle or to directiy and substantially restrict Inter-
state commerce, It falls under the ban of the law, but If it promûtes, or
only Incldentally or indirectly restricts, compétition, while Its main pur-
pose and chief eflfect are to prompte the business and increase the trade
of the makers, it is not denounced or avoided by that law.
Si. Samb — Contract Restricting Tbrritory within Which Purohasers mat
SblIi.
A contract of sale by a manufacturer to jobbers of some of its product,
to be shipped across state Unes to the latter, whereby the parties agrée
that the purchasers shall not sell, shlp, or allow any of the product thus
purchased to be shipped, outside of a certain state, is not lu restraint
of trade or illégal under the act of July 2, 1890.
(Syllabus by the Court.)
125 P —38
594 125 FBDBBAL BEPOETEE.
In Error to the Circuit Court ùi the United Stateâ for the Western
District of Missouri.
John Charles Harris (Edward F. Harris, on the brief), for plain-
tiff in error.
James G. Williams, for défendant in error.
Before SANBORN, THAYER, and VAN DEVANTER, Circuit
Judges.
SANBORN; Circuit Judge. This is a writ of error to review a
judgment for the plaintiff below, the lola Portland Cément Company,
a corporation, against Thomas H. Phillips, in an action for damages
for the breach of a contract of sale of cément. The company was a
manufacturer of cément in the state of Kansas. The' défendant be-
low, Phillips, was a member of the copartnership of William Parr &
Co., who were merchants engaged in business at Galveston, in the
State of Texas. On January 24, 1901, Parr & Co. made a contract
with the cernent company whereby they agreed to purchâse of it,
during the year 1901, 50,000 barrels of Ibla portland cernent to be de-
livered free on board the cars at lola, in the state of Kansas, and to
pay therefor $l.20 per barrel. They further agreed "not to sell said
cément, ship same, or allow same to bè shipped," outside of the state
of Texas. Under this contract they accepted and paid for 24,580
barrels of the cernent, and refused to accept 25,420 barrels thereof.
The cément company brought an action against them to recover
the damages which it sustained by the failure of the purchasers to
accept and pay for thèse 25,420 barrels, and Phillips, the only de-
fendant served with process, answered that the contract was illégal
and void under Act Cong. July 2, 1890, c. 647, 26 Stat. 209 [U.
S. Comp. St. 1901, p. 3200], because it provided that Parr & Co.
should not sell the cément, ship it, or allow it to be shipped, without
the state of Texas.
It is now settled by repeated décisions of the Suprême Court that
the test of the validity of a contracta combination, or conspiracy chal-
lenged under the anti-trust law i s the direct effect of such a contract
or combination upon compétition in commerce among the states.
If its necessary efïect is to stifle compétition, or to directly and sub-
stantially restrict it, it is yôid. B:ùt if it promotes, or only incideritally
or indirectly restricts, compétition in commerce among the states,
while its main purpose and chief efïect are to foster the trade and en-
hanee the business of those who make it, it does not constitute a re-
straint of Interstate commerce withm the meaning of that law, and
is not obnoxious to its provisions. This act of Congress must hâve
a reasonablé construction. It was not its purpose to prohibit or to
render illégal the ordinary contracts or combinations of manufac-
turers, merchants, and traders, or the usual devices to which they re-
sprt to promote the success bf their business, to enhance their trade,
and to make their occupations gainful, so long as those combinations
and devices do not necessarily hâve a direct and substantial effect to
restrict compétition in commerce among the states. Hopkins v. U.
S., 171 U. S. 578, 592, 19 Sup. Ct. 40, 43 L. Ed. 290; Andersen v.
PHILLIPS V. lOLA POETLAND CEMENT CO. 595
U. s., 171 U. s. 604, 616, 19 Sup. Ct. 50, 43 L. Ed. 300; U. S. v.
Joint Traffic Ass'n, 171 U. S. 505, 568, 19 Sup. Ct. 25, 43 L. Ed. 259;
Addyston Pipe & Steel Co. v. U. S., 175 tJ. S. 211, 245, 20 Sup. Ct. 96,
44 L. Ed. 136; U. S. V. Trans-Missouri Freight Ass'n, 166 U. S. 290,
339» 340. 342, 17 Sup. Ct. 540, 41 L. Ed. 1007 ; U. S. v. Northern Secu-
rities Co. (C. C.) 120 Fed. 721, 725. The application of this rule
to the facts of the case in hand leaves no doubt that there was nothing
in the contract before us obnoxious to the provisions of the anti-trust
law of 1890. The lola Cernent Company had no monopoly of the
manufacture or sale of cément in the United States. It was surround-
ed by competing manufacturers, and the contract which it made with
Parr & Co., of Galveston, had no direct or substantial effect upon
compétition in trade among the states. It left the manufacturers who
were competing with the plaintiff for the trade of the country free
to sélect their customers, to fix their priées, and to dictate their terms
for the sales of the commodities they offered, so that in this regard
no restraint whatever was imposed. If it had the efïect to restrain
Parr & Co. from using the product which they purchased to compete
with other jobbers or manufacturers in the country beyond the
limits of the state of Texas, this restriction was not the chief purpose
or the main efïect of the contract of sale, but a mère indirect and
immaterial incident of it. The agreement of sale imposed no direct
restriction upon compétition in commerce among the states, did not
constitute a restraint of that commerce, and was not obnoxious to the
provisions of the act of July 2, 1890.
For a more extended considération of the principles upon which
this décision is based, for a citation, review, and analysis of the au-
thorities which sustain them and which compel the ultimate conclusion
which we hâve reached in this case, référence is made to the opinion
of this court in Whitwell v. Continental Tobacco Co. (which is filed
herewith) 125 Fed. 454. A répétition of the citation and review of
authorities, and of the more exhaustive discussion of principles there
indulged in, would be useless hère, and it is omitted.
The évidence disclosed the fact that shortly after the expiration of
the year within which the défendants had agreed to receive and pay
for the cernent the plaintifï sold the 25,420 barrels, which the défend-
ants refused to take, for $1.10 per barrel. The président of the plain-
tifï testified that the cost of selling this cément was about 10 cents
per barrel, that it did not cost any more to sell the cernent which had
been previously sold to Parr & Co. than it did to sell any other
cernent, but that the cost of selling any cernent was about 10 cents
per barrel. The court below instructed the jury that, if they beHeved
that the cost of selling this cernent was 10 cents per barrel, they might
allow that amount as a part of the damages which the plaintifï was en-
titled to recover. This instruction is assigned as error. But it was
manifestly right. The plaintifï had once incurred and paid the cost
of selling the cernent in question to Parr & Co., and had obtained a
valid contract for its purchase price. Their failure to comply with this
agreement imposed upon the plaintifï the necessary expense of making
a second sale of that portion of the cernent already sold which the
défendants refused to accept.
596 125 FEDBEAL EEPOETBB.
It is àssigfned as error that the court below refused to admit in
évidence a telegram from the président of the lola company to Parr
& Co., datéd January 24, 1901, the day of the date of the contract,
to the efïect that the plaintifi would guaranty a rate of freight of five
cents per hundred less than Kansas City rates to ail Texas points.
But there was no error in this ruiing. The telegram was not admissi-
ble to establish any agreement to guaranty this rate of freight, and a
breach of that agreement as a défense to the action, because no suclî
défense was pleaded. It was not admissible to modify or change the
written contract of January 24, 1901, because if it was sent before or
at the time that the contract was executed it was merged in that con-
tract and became inefifective, and if it was sent after that contract was
made it was not pleaded and had no place in the trial of this case.
Another alleged error specifîed is that the court below refused to
admit in évidence a letter from the plaintifif to the défendants, dated
February 10, 1902, in which they wrote that they had not done an
agency business and requested a proposition. It is contended that
this letter was compétent to establish the fact that the relation be-
tween the plaintifif and thë défendants under the contract in suit
was that of vendor and vendee, and not that of principal and agent.
Conceding that this letter had a tendency to establish that fact, its
rejection did not préjudice, and could not hâve prejudiced, the défend-
ants, because the relation of véndor and vendee was proved by the
contract, because the case was tried, and the court charged the jury,
and this court has determined the case, upon that theory, and error
without préjudice is no ground for reversai.
The judgment below is affirmed.
H. HACKFELD & GO., lilmited. v. UNITED STATES.
(Circuit Court of Appeals, Ninth Carcuit. October 5, 1903.)
No. 940.
1. Alibns — Déportation— Esf!A3*B pïtoit Vessel— Liabimtt of Owners—
Ebkor IN LowBR Court. i
Aet Cong. March 3, 1891, c. 553,, 26, Stat. 1086 HJ. S. Comp. St. 1901,
p. 1299], Eoakes gullty of a misdemeànor the o-w^ner of a vessel who,
having recelved back on board aliens ordered to bé deported, neglects
to detain themthereon, or refuses or neglects to return them to tbe port
from whlch tl;ey came. In a prosecutlon under this act, It was stipulated
that In returnlng Japanese Immigrants défendants steamship arrtved
at Honolulu; that the Immigrants vere loeked in a room, and bètween
midnight and 5 o'clock effected thelr escape through a porthole nearly
25 feet from thé water; that this method of escape could not hâve been
reasonably anticipated by the mister or offlcers; and that thé escape
dId not occur' by reason of any négligence or lack of proper care on thelr
part. The court below made no flnding of, fact further than that dé-
fendant was gullty as charèed. Held, that as, nptwithstanding the stipu-
lation asito absence of négligence, the court might hâve foUnd that de-
fendant's agents were négligent, the question of liabillty In the absence
of négligence was not presented fOF, rèviewl
In Error ,tD the District Court of the United States for the District
of Hawaii. . ; . '
H. HACKFELD <fe CO. V. UNITED STATES. 597
An Information was flled against H. Hackfeld & Ce, Limited, a corporation,
charging it with violatlng the provisions of section 10 of the act of Congress
entitled "An act in amendment to the varions acts relative to immigration
and tlie importation of aliens under contract or agreement to perform labor,"
approved March 3, 1891, c. 551, 26 Stat. 1086 [U. S. Comp. St. 1901, p. 1299],
•vvhicti provides as follovcs: "Tliat ail aliens wlio may unlawfully come to
the United States shall, if practicable, be immediately sent back on the vessel
by which they were brought in. The cost of their maintenance while on land,
as well as the expense of the return of such aliens, shall be borne by the
owner or owners of the vessel on which such aliens came; and if auy master,
agent, consignée, or ovyner of such vessel shall refuse to receive back on
board the vessel such aliens, or shall neglect to detaln them thereon, or shall
refuse or neglect to return tliem to the port from which they came, or to
pay the cost of their maintenance while on land, such master, agent, con-
signée, or owner shall be deemed guilty of a misdemeanor, and shall be
punished by a fine not less than three hundred dollars for each and every
offense; and any such vessel shall not hâve clearance from any port of the
United States while any such fine is unpaid." The Information alleged, in
substance, that the appellant dld refuse and neglect to return to the port of
Yokohama two Japanese immigrants, Terujiro Yamoto and Hachiero Irie,
whom it had brought from that port to the port of San Francisco, and who
had been denied admission to the United States at the latter port. The case
was tried before the court without a jury on an agreed stipulation of the
facts. The stipulation of facts contains the foUowing: "That on the 12th
day of November, A. D. 1902, the said steamship Korea did arrive at the
port of Honolulu, in the district and territory of Hawaii; that at the time
of the arrivai of said steamship Korea at said port of Honolulu the said immi-
grants were still on board of said vessel; that said Japanese immigrants,
together with certain deported Chinese, were placed in a room on board said
vessel, and locked up by the steerage steward of said vessel; at 12 o'clock
midnight, of said 12th day of November, A. D. 1902, «aid Japanese were still
on board said vessel in said room; that between that time and 5 o'clock on
the morning of the 13th day of November, A. D. 1902, said Japanese had
effected their escape; that the only method of egress was through portholes,
which were nearly twenty-five feet above the water; that this method of
escape could not hâve been reasonably anticipated by the master or otïicers
or agents of said steamship Korea; that said escape did not occur by vis
major or inévitable accident, and that said escape did not occur by reason
of any négligence or lack of proper care on the part of the offleers of the
vessel or said défendant; that the said défendant made search for said
escaped immigrants, but up to the présent time hâve not apprehended the
said immigrants, and said immigrants bave not been returned to Japan."
On this stipulation of facts the plaintiffi in error was found guilty of the mis-
demeanor charged, and was adjudged to pay a fine of $600. To review that
judgment the writ of error is taken.
J. E. Foulds and Kinney, Ballou & McClanahan, for plaintiff in
error.
Marshall B. Woodworth, Robert W. Breckons, and Benjamin L.
McKinley, Asst. U. S. Atty., for défendant in error.
Before GILBERT and ROSS, Circuit Judges, and HAWLEY, Dis-
trict Judge.
GILBERT, Circuit Judge, after stating the case as above, delivered
the opinion of the court.
The plaintif! in error invokes the rule that a pénal law must be
strictly construed, and contends that within the meaning of section
10 of the act of 1891 there can be no neglect to comply with the obli-
gation thereby imposed, if a reasonable attempt be made to perform
the same. The case of Warren v. United States, 58 Fed. 559, 7 C. C.
598 125 FEDEEAIi EBPOHTBB.
A. 368, decided by the Circuit Court of Appeals for the First Circuit,
is an authority adverse to this contention; but the plaintifï in errer
earnestly urges that the doctrine of that case involves a misconception
of the true meaning of the statute, and it cites the case of United
States V. Spruth (D. C.) 71 Fed. 679, in which the District Court of
the Eastern District pf Pennsylvania doubted the wisdom of such a
construction of langtiage in a criminal statute. In the view which we
take of the record which is before us, it becomes unnecessary to enter
intp a discussion of this question. The case was tried before the
court without a jury upbn an agreed stipulation of the facts. In the
stipulation appears the fact that the two Japanese who were ordered
to be deported, and who had been taken by the plaintifï in error on
its steamer from San Francisco' to Honolulu en route to Japan,
escaped from the vessej while she was lying at anchor at the port of
Honolulu, and that they made their escape through portholes, from
which they dropped or descended into the sea. The record contains
no fînding of fact by the court further than that the plaintifï in error
was found guilty as charged, nor does it state the ground on which
the trial judge found the plaintifï in error guilty of the misdemeanor
charged. For aught that we know, the court found that by placing
the men in the room, as it did, without taking précautions against their
escape through the portholes, the plaintifï in error neglected to per-
form the obligation imposed upon it by the statute. It is true that the
stipulation of the facts recites that the escape did not occur by reason
of any négligence or lack of proper care on the part of the ofiicers of
the vessel or of the plaintifï in error, and that the method of the
escape could not hâve been reasonably anticipated. But the court
was not bound by thèse récitals, nor was it prevented thereby from
placing upon the stipulated facts the construction which in its judg-
ment they should properly bear. Haight v. Green, 19 Cal. 113. The
assignment of error is that the court erred in rendering judgment
upon the pleadings and the facts therein stated. If the trial court
entertained the opinion, as may well hâve been the case, that the plain-
tifï in error was guilty of négligence in placing the deported persons
in a room on board the vessel from which portholes, visible and open,
afïorded means of escape to any one who could swim a short distance
to the shore, we, in our own view of the facts, could find no ground
to question the correctness of that conclusion. The rule is that the
burden is on the plaintifï in error to show error in the trial court.
In this case we think it bas failed to meet the requirement of the rule.
The judgment will therefore be afRrmed.
BOAK V. UNITED STATES. ■ 699
BOAK et aL v. UNITED STATES.
(Clrcnlt Court of Appeals, Seventh Circuit October 13, 1903.)
No. 943.
1. C3D8TOM8 DoTiBs— Classification— Fox Bbbrieb.
Held, tbat ttie expression, "berries, edible, In thelr natural conaition,**
In paragraph 262, Tariff Act July 24, 1897, c. 11, 5 1, Schedule G, 30 Stat
171 [U. S. Comp. St. leoi, p. 1651], means berries -wiiicb are In thelr
natural condition as imported, and are edible either in tbat state or after
cooking, and that fox berries imported in barrels filled wlth water are
In their natural condition, and are ineluded wltbln said provision in para-
graph 262, and not wlthin paragraph 559 of said act, section 2, Free list,
30 Stat. 198 [U. S. Comp. St. 1901, p. 1679], relating to "berries, green,
ripe, or dried, • • • not specially provided for."
Appeal from the Circuit Court of the United States for the Northern
Division of the Northern District of Illinois.
The facts are stated in the opinion of the court,
William Brace, for appellants.
Albert H. Washburn, for appellee.
Before JENKINS and GROSSCUP, Circuit Judges, and SEA-
MAN, District Judge.
GROSSCUP, Circuit Judge, delivered the opinion of the court.
This is an appeal, by the importers of merchandise known as fox
berries, from the decree of the Circuit Court sustaining a décision
of the Board of United States General Appraisers (Ga. 5142).
Fox berries grow on small bushes in mountainous régions in Nor-
way, Sweden, Nova Scotia, and the Canadian provinces; and are
utilized for sauce, tarts and pies, so resembling, both in appearance
and uses, the cranberry, that they are sometimes called the hanging
cranberry.
The fox berry is imported in casks filled with water. There is
some contention in the record that the water carries a sait, thus
making it a brine, but this is not satisfactorily shown. The func-
tion of the water is not to chemically change the berry, or to act as a
preservative, but to furnish a cushion against the injuries incident
to transportation, similar to that furnished by sawdust in the trans-
portation of grapes. We are of the opinion that fox berries thus im-
ported, are, within the meaning of the tariff act, imported "in their
natural condition."
The importations in dispute were between November I7th, 1900,
and November i8th, 1901, and were assessed for duty at one cent per
quart under paragraph 262 (Act July 24, 1897, c. 11, § i, Schedule G.,
30 Stat. 171 [U. S. Comp. St. 1901, 1651]), which reads as follows:
"Apples, peaches, qulnces, cherrles, plums, and pears, green or ripe, twenty-
five cents per bushel; apples, when dried, desiccated, évapora ted or prepared
in any manner, not especially provided for in this act, two cents per pound;
berries, edible, in thelr natural condition, one cent per quart; ciaaberries,
twenty-five per centum ad valorem."
600 125 FEDEKAL REPORTEE.
The contention of the government is that the third clause of sec-
tion 262 includes ail edible berries, as distinguished from berries
used for drugs, dyeing, &c. ; and ail berries imported in their natural
condition, as distinguished from berries imported in a dried, evap-
orated, or other prepared, condition. If this interprétation of the
clause is maintainable, the duty was correctly assessed by the Board
of General Appraisers.
The contention of the importers is, that the third clause of section
262 embraces berries edible in their natural condition, as distin-
guished from berries edible only after cooking; but if this be re-
jected, and the clause interpreted to cover berries imported in their
natural condition whether edible before cooking or not, the impor-
tations in question are not included, because, before being imported,
they underwent a water treatment.
The use of water, as already indicated, was not in the nature of
a chemical process to change the natural condition of the berries, but
was a mechanical médium only, to secure the berries against crush-
ing in transportation. The condition of the berries, as imported,
was their natural condition. This disposes of the second contention.
Nor do we think that the third clause of section 262 was meant
to be confined to berries edible only in their natural condition. The
adjective is meant, in our opinion, to qualify the noun, so as to dis-
tinguish, generally, berries edible, from berries non-edible. The tariff
act of 1897 opens with the gênerai clause, that there shall be levied,
coUected and paid upon aÛ articles imported from foreign countries,
and mentîoned in schedules therein contained, the rates of duties
therein named; and then proceeds directly to the schedules, in each
paragraph of which, for thé sake of ready référence, the noun stands
first with the qualifying words following. Thus, the first paragraph
reads "Acids, acetic or pyroligneous * * *; boracic * * *;
citric * * *"; &c., Coming to paragraph 2(i2, the transposed
îorm of expression continues : "Apples, peaches, * * * green or
ripe * * *; apples, peaches * * * dried, desiccated, evapo-
rated * * *; berries, edible, in their natural condition." In
View of this studied transposition of nouns and adjectives in the tariff
act, and reading the opening language of the act into paragraph 262,
it would stand as if the language used were "edible berries imported
in their natural condition." This disposes of the first contention.
Nor do we think that thèse importations are governed by paragraph
559 (section 2, Free List, 30 Stat. 198 [U. S. Comp. St. 1901, p.
1679]), providing that fruits or berries, green, ripe, or dried, and fruits
in brine, not specifically provided for, shall be put on the free list.
Assuming that edible berries imported in their natural condition — the
conclusion just stated — are within the meaning of paragraph 262,
the importations in question are, by its express terms, excluded from
paragraph 559.
The decree of the Circuit Court, sustaining the décision of the
Board of General Appraisers, is alfirmed.
UNION BISCUIT OO. V. PETEES. 601
UNION BISCUIT CO. et al. v. PBTERS.
(Circuit Court o£ Appeals, Blghth Circuit November 23, 1903.)
No. 1,904.
1. Patents— Patentable Novkltt— Packaob for BtscniTS.
The Peters patent, No. 621,974, for a method of and means for packing
biscuit, crackers, or the like, which consists o( placing upon a carton
blank of any suitable sliape a sheet of waxed or parafflned paper and
folding the two together in completing the carton, so that the ends of ttie
two sheets are interfolded, the purpose belng to more effectually exelude
dust or moisture, is vold for lack of patentable novelty, In view of the
prior art, which disclosed both the cartons and the parafflned linings.
3. Same — Evidence op Invention— Utility.
The utility of a device is not in itself évidence of patentable invention,
although it is entitled to weight when that question is doubtful.
Appeal from the Circuit Court of the United States for the Eastern
District of Missouri.
For opinion below, see 120 Fed. 679.
This action was brought by Frank M. Peters, the appellee, against the
Union Biscuit Company, Adolph E. Winkelmeyer, and Hartwell B. Grubbs,
the appellants, to restrain an alleged violation of letters patent No. 621,974,
issued March 28, 1899, to Frank M. Peters, the complainant below and the
appellee in this court.
The nature of the invention Is fuUy disclosed by the foUowing excerpts
from the spécifications. Relative to the gênerai objects of the invention, the
patentée says:
"This invention relates to an improved method of and means for packing
biscuits, crackers, and other articles, and has for its object to provide an in-
expenslve package whereby bakery goods of this description may be kept
fresh and in proper condition for consumptlon by effectually excluding
moisture therefrom, and whereby the goods wlll be firmly packed and held
and thereby prevented from rattling and breaklng in the package.
"Heretofore substantlally air-tight and moisture-proof metallic cases or
boxes hâve been employed for the purpose of preserving the freshness of
biscuit or the like; but the use of thèse cases involves considérable expense.
and they hâve only been employed in eonjunction with the hlghest priced
goods, their cost being too great to permit their use wlth less expensive goods.
It has been customary heretofore to pack thèse less expensive goods in car-
tons or paper boxes, and in some cases thèse cartons or boxes hâve been
provided with a linlng of what is known as 'waxed' or 'parafflned paper';
but In such packages as heretofore constructed this linlng has not been so
dlsposed as to close the openings or folds of the box, and has itself presented
openings through which the moisture has had direct access to the contents
of the package. By reason of thèse facts such comparatively inexpensive
packages hâve failed to protect the goods from moisture, and they bave
quickly lost their freshness.
"It is the prlmary object of my Invention to obviate thèse difflculties, and
to provide a package which, at an expense practically no greater than that
«f the ordinary lined carton package, wlll effectually protect the goods and
préserve their freshness.
"A further object is to provide a package of this character which In its
assembllng or making up wlll be tightly drawn around the goods, and wlll
therefore firmly hold the same, and prevent looseness and con.«!equent break-
age."
^2. See Patents, vol. 38, Cent. Dig. § 39.
602
125 FEDERAI, EEPORTEK.
Relative to the method of constructlng the patented device or box, tîie
patentée says:
"In carrylng out my Invention I provide a blank of pasteboard, strawboard,
or other sbeet material of sufflcient tblckness and strength to properly pro-
tect the contenta of the box or carton made from such blank. (See figure 1.)
Thls blank may be of any Bultable form which Is adapted for the purpose
of being folded up Into a box or carton, and is provlded wlth overlapplng
ends, which are folded over and Interlocked witj? eaeh other to form the ends
of the box, In connection wlth such a blank I employ a sheet of thln flexible
paper, preïerably a molsture and grease proof paper, such as what is known
as 'waxed' or 'parafflned' paper, and which is thin and flexible, yet strong.
(See figuré 2.) Thls sheet Is of a wldth equal to the width of the blank and
of a length at least equal to the length of thebody of the blank plus the
width of tfte top of the conipleted box or carton, and, since the tuck-fiap of
the blank is usually about equal to thls surplus wldth, the sheet may be sald
to be snbstantlally equal both In wldth and length to the extrême correspond-
Ing dimensions of the blank. The sheet is laid upôn the blank, and the two,
both sheet and blank, are then folded around the crackers, the linlng sheet
being next to the crackers and being folded along with the blank, its latéral
edges being thereby Interfolded Ihto the spaces between the end flaps of the
box, while its front and back edges are folded over the crackers and over
each other, and flrmly held in place by the top and tuck flaps of the box.
By thls method of production a package is formed in which the crackers or
biscuit are Inclosed in a complète protective enveiope of paper wlthout any
direct openings through which air or molsture may hâve aceess to the con-
tents of the package, and are further inclosed in a paper box or carton, wlth
the ends of which the protective enveiope is so interfolded as to effectually
close thèse ends and at the same tlme prevent any movement of the lining
relatively to the box or carton. Moreover, in thls foldlng of the two parts,
to wit, the blank and the sheet of lining, around the crackers, the lining is
UNION BISCUIT CO. V. PETEES.
603
drawn tightly around thèse latter and helfl In that position, so as to firmly
hold the crackers together and prevent relative movement and conséquent
breakage of thèse latter.
"I wUl now proceed to describe a package embodylng my Invention in one
form and the method of making tbe same, It being understood that the par-
tleular form of blank set forth is employed merely for purposes of illustra-
tion, and that any other well-known form of blank adapted to be folded to
form a box or carton by the overlapping and Interlocking of its parts may
be employed."
After describing the method of folding the carton and superimposed sheet
o( paraiBned paper so as to form the box, the patentée says :
"The resulting package is one In which the crackers are completely en-
veloped and inclosed in a protective envelope of paper, preferably waxed or
parafflned paper, which is molsture-proof and grease-proof , without any open-
mej;r-isi
Ings which may gap and admit moist air to the contents; and thls envelope
Is interfolded with the varlous flaps and sections of the paper box or carton,
within which it and the crackers are Inclosed In such a manner that the
Interfolded portions of the Ilning sheet close the spacea between the flaps
of the box or carton and more effectually protect the contents thereof, while
at the same time both the linlng sheet and box or carton are so interfolded
as to form, in efCect, a unltary structure, it being impossible for the Ilning to
move relatively to the box or carton, and the two holding the crackers firmly
in place and preventing movement and conséquent breakage of thèse latter."
804 125 FEDERAL BBPOBTBB.
For the purpose of Indicatîng olearly that the patentée does not désire ta
confine hls clàims to the partlcular klnd of box described In hls spécifications,
he says:
"As already stated, the partlcular form of box-blank shown Is chosen
merely for purposes of Illustration, and other well-known foi-ms of folding
box-blanks may be employed In Its stead. Moreover, even with the partlcular
form of blank shown, the précise order of folding in the several parts may
be varled, It being only essentlal for the purposes of my Invention that the
linlng sheet shall be folded along with the blank and Interfolded wlth the
parts of thls latter. If It be deemed désirable, the lining sheet may be se-
cured to the box-blank before folding by means of a suitable paste applied
between the two along such Unes or at such places as may be deemed neces-
sary.
"Whlle I hâve described my improved package and method of making
same as appUed more particularly to the packing of biscuit, crackers, or the
llke, it is obvions that the same package and method may be employed for
other articles — ^as, for instance, lard and similar compounds — and in such a
case the eharacter of the protective lining of paper will vary according to
the charactèr of the article to be protected, being elther moisture-proof or
molsture and grease proof, or having other characteristics, such as the cir-
cumstances may require. In the case where the package is used for crackers
or other similar bakery goods, a moisture and grease proof lining is désirable,
and for this purpose, as well as for gênerai use, I prefer to employ what 19
known as 'waxed' or 'parafûned' paper, which is both moisture and grease
proof, although any équivalent paper adapted to be folded in the manner set
forth may be substituted therefor."
The patentée claims as his Invention:
"(1) The herein-described method of packing biscuit, crackers or the like,
whlch consists in completely enveloping the same in an uncut or contimious
linlng or protective sheet and an outer sheet or blank of heavler but flexible
material provlded with marginal flaps, by superposing the lining or protective
sheet upon the blank and then simultaneously folding both said sheet and
said blank by the ald of a suitable former into the form of a box or carton,
overlapping and tucklng said flaps during said folding and thereby interfold-
ing the marginal portions of the lining or protective sheet with the flaps of
the blank and securing the flaps to hold the package closed, substantially a»
described.
"(2) The herein-described box or carton for crackers, biscuit or the like,
comprising an internai linlng composed of a sheet of protective paper com-
pletely enveloping the contents, and an outer sheet of heavier but flexible
material having overlapping and interlocklng flaps with which the marginal
portions of the lining Sheet are interfolded, substantially as described.
"(3) The herein-described box or carton for biscuit, crackers or the llke,
comprising an internai protective lining composed of a single continuons or
unbroken sheet of material such as waxed paper and an external covering of
heavler but flexible material suitably eut and scored to provide overlapping
and tucking flaps, said sheets being adapted to be simultaneously folded
whlle one is superposed upon the other and said flaps being overlapped and
tucked and the marginal portions of the linlng interfolded therewlth and the
package thereby secured without extraneous fastening means or perforating
the lining, substantially as described.
"(4) The herein-described box or carton comprising an Internai protective
lining composed of a single continuons or unbroken sheet of material, such
as waxed paper, and an external covering of heavler material suitably eut
and scored to provide overlapping and tucklng flaps, and said linlng sheet
being of such dimensions as to provide a top fold adapted when folded to
^fford a trlangular flap of gréa ter length than the width of the box, and to be
ehgaged by the top flap of the external covering and pass therewlth into the
space between the edges of the front of the covering and the lining sheet,
said flaps being overlapped and tucked and the marginal portions of the lin-
ing interfoldeid therewlth, and the package thereby secured without ex-
traneous fastening means or perforating the lining, substantially as de-
scribed,"
UNION BISCUIT CO. V. PETEES. 605
The trial below resulted in a decree in favor of the complainant, and the
défendants hâve brought the case to this court on appeal.
Paul Bakewell (Frederick R. Cornwall, Dorsey A. Jamison, and
Nelson Thomas, on the brief), for appellants.
C. K. OfBeld and Edmund Wetmore (Charles C. Linthicum, F. W.
Lehmann, and Earl D. Babst, on the brief), for appellee.
Before SANBORN, THAYER, and VAN DEVANTER, Circuit
Judges.
THAYER, Circuit Judge, after stating the case as above, delivered
the opinion of the court.
The principal question that arises in this case, and the only one
which we hâve found it necessary to consider, is whether the inventive
faculty was exercised in the construction of the paper box or carton
which is described in the Peters patent, and is claimed as a product
in the second, third, and fourth claims of that patent, and as a method
of packing crackers in the fîrst claim. This question, as a matter of
course, must be determined upon a full considération of the state of
the art to which the patent in suit appertains and in the light of the
well-estabHshed doctrine that the patent itself créâtes a presumption
of patentable novelty, which must be fully overcome by the appellant
before it can be adjudged invalid.
The spécification of the Peters patent contains a gênerai admis-
sion that prior to its issuance paper boxes or cartons, as they are
sometimes termed, had been used to pack crackers and biscuits and
other like articles ; also the admission that in some instances such
cartons had been provided with a lining of waxed or parafhned paper
to pretect the inclosed article from dampness. It is said in the
spécification, however, in substance, that heretofore the lining of
such cartons had not been so disposed as to fully exclude moisture,
and the chief object of the patentée seems to hâve been to so con-
struct a paper box with a lining of wax paper that it would more
efïectually exclude dampness and dust. A merely cursory examina-
tion of the art shows that this was a necessary admission on the part
of the patentée. Paper boxes had been made and were in use for the
purpose of holding and carrying crackers, berries, candy, ice cream,
lard, butter, and a great variety of other articles long before the
date of the Peters invention, and many patents describing a method
of conëtructing such boxes had been granted. Indeed, so common
has the use of paper boxes become that, without resorting to patents
or other printed documents, this court would be justified, by its every-
day expérience, in taking judicial notice of the fact that paper boxes,
both lined and unlined, were in common use for at least lo or 15
years prior to the date of the patent in suit. As a gênerai rule, sucïi
boxes were made in substantially the same way; that is to say, by
taking thick heavy paper, either pasteboard or strawboard, and cut-
ting it into such a shape that when folded along certain lines a box of
a certain desired shape would be formed. The boxes were either left
open at the top, or were provided with an overlapping cover, or were
entirely closed. Very frequently the paper which was used to construct
such boxes was eut so as to hâve angular or curved flaps which, in the
606 125 FEDERAL EEPOETEE.
process of folding, were însertecl in slits eut in the side or top of the
box so as to hold it togefher. On the trial of this case in the lower
court a large number of patents were ofïered in évidence for the pur-
pose of showing the state of the art in question and establishing the
fatt that very many persons had described methods of making paper
boxes long before the date of the Peters patent, and that, as a rule, the
processes so described were very much alike, and substantially as
last above described ; the only différences in the processes being that
the paper out of which the boxes were made was eut at times in a
différent form, so as to produee boxes of a différent shape, which
would be best adapted to the uses to which they were to be put.
For the purpose of showing that the art of making paper boxes was
old and well understood when the Peters patent was issued, it is only
necessary, we think, to refer to the following patents by name and
number, without describing them in détail: United States letters
patent No. 164,099, dated June 8, 1875, issued to James L. Moore;
United States letters patent No. 183,950, dated October 31, 1876,
issued to Charles L. Lockwbod; United States letters patent No.
268,311, dated November 28, 1882, issued to Hugh R. Stewart;
United States letters patent No. 285,456, dated September 25, 1883,
issued to August Brehmer ; United States letters patent No. 556,675,
dated March 17, 1896, issued to W. B. Howe; and United States
letters patent No. 511,080, dated December 19, 1893, issued to W. B.
Howe and F. B. Davidson. An examination of thèse patents has
satisfied us that when Peters entered the fîeld as an inventer it was
well known to those familiar with the art of making paper boxes that
they could be produced in any desired form by simply cutting the
paper out of which the box was to be made in a certain way and with
the necessary flaps and slits, before it was folded.
Other patents, which the record contains, show with equal cer-
tainty that Peters was not the first person to suggest the idea of lin-
ing paper boxes with waxed or parafïined paper, or with any other
kind of paper, for the purpose of more efïectually excluding mois-
ture. This idea was suggested by Smith as early as May 9, 1882.
Vide United States letters patent No. 257,522; by Albert, United
States letters patent No. 355,496, issued January 4, 1887; by Bower,
United States letters patent No. 232,930, issued October 5, 1880; by
Munson, United States letters patent No. 288,255, issued November
13, 18S3 ; and by some others. The conclusion, therefore, is in-
évitable that when the patent in suit was applied for the art to which
it appertained had reached a high state of development, and that,
because it was à very simple art, little, if anything, remained to be
done to perfect it. Paper cartons in many forms had already been
made and applied to a great variety qf uses. They had been made
wîth a lining ànd without a lining, depending generally upon the use
to which thej werê to be applied; and, when lined, the lining had'
sometimes been stufïed in after the box was formed, as shown by the
Smith patent, No. 257,522, while in other instances the lining had
been pasted în places to the outer covering, so as to be folded with
it integrally in the process of making the box, as shown in the Albert
patent, No. 355,496.
UNION BISCUIT 00. Y. PETEBS. 607
In view of what has been said, it is difficult to understand in what
respect the Peters spécification discloses patentable novelty, whether
we consider the described method of making paper boxes claimed in
the first claim or the product of the process. Novelty does not réside
in the manner of cutting the pasteboard or strawboard blank out of
which the box is formed, because the patentée himself says that the
blank so eut "may be of any suitable form which is adapted for the
purpose of being folded up into a box or carton and is provided with
overlapping ends." Besides, it was a well-known fact, when the pat-
ent in suit was issued, that cartons of any desired shape could be made
if a little attention was given to cutting the blank before folding. Nor
does the novelty of the device consist in providing cartons with a
lining of any sort, because cartons with linings were in coramon use
long prior to the date of the application for the patent. If we cor-
rectly understood learned counsel for the appellee, it was frankly
conceded on the oral argument that, if what Peters accomplished rises
to the dignity of an invention, it is because he was the first to suggest
the idea of laying a sheet of waxed or paraffined paper on top of the
blank carton and folding them together so as to form a unitary struc-
ture. This method of making a carton, it was said, was of great im-
portance, because it had the efifect of interfolding the ends of the two
protective envelopes in such a way as to more "efïectually close thèse
ends, and at the same time prevent any movement of the lining rela-
tively to the box," and because more dampness and dirt was thereby
excluded from the inclosed article. Did this suggestion involve the
exercise of the faculty of invention? We think not. In the first
place, the idea of placing the lining sheet on top of the blank carton,
and folding the two together was not new, but was disclosed by United
States letters patent No. 355,496, issued to Albert on January 4,
1887. That patent covers a paper box for carrying fruit, oysters,
and other like articles. The box was made water-tight by pasting
a sheet of thin manilla paper on top of the blank carton and folding
the two at the same time so as to form the walls of the box integrally
out of the two sheets. The patentée of this box pointed out as one of
its chief merits that when a box was thus constructed the lining
could not be torn out or displaced. Again, in a patent granted to
Cooke on December 3, 1895 (United States letters patent No. 550,-
870), a paper box for shipping currency is fully described, which was
constructed by placing the blank carton on top of a sheet of wrapping
paper and pasting the two sheets together at the place where they
united to form the bottom of the box. The patentée of that box also
suggested that the two sheets might be pasted together where they
united to form one side of the box. The carton was then folded in
the ordinary way, to form the box, and after it was formed by insert-
ing the flaps in the appropriate slits, the wrapping paper at the sides
and ends was folded around it in the ordinary way to serve as an
outer covering. One of the appellants' experts on the trial expressed
the opinion, in which we fully concur, that, if the process of construct-
ing a box which Cooke described was reversed by placing the wrapper
on top of the blank carton, and then folding the two^ together to form
a box, the resuit would be a carton for packing crackers that would
125 FEiDBBAL BBPOBTEiB.
exclude moisture and dirt as effectually as the Peters box. The
examiner of the Patent office to whom Peters' application for a patent
was first submitted also called attention to the Cooke patent» and in
rejecting the appHcation made the following statement in which we
fully conctir : "It would not involve invention to place the wrapper
on the inside of the box instead of the outside."
But, aside frpm the foregoing view of the case, the sole object
which Peters seems to hâve had in view in folding the lining and the
blank carton together was to more effectually close the ends of the
box so as to exclude more dirt and moisture. Let it be assumed that
this object was attained, or was attained to some extent, and yet it
does not appear, we think, that the method of folding thus suggested
was newj.or was so far new as to amount to invention. It was sub-
stantially: the same method of folding two sheets of paper which
grocers hâve employed from time immémorial when they hâve had
occasion to wrap up sugar, sait, flour, rice, and a hundred other like
articles, using for that pufpose two sheets of paper, one laid on top
of the other. When two sheets are thus used instead of one, for the
purpose of wrapping up an article, the ends of the two sheets are nec-
essarily interfolded practiçally in the same manner which Peters de-
scribes ; and the effect ôf , such interfolding is to more "effectually
close the ends," and prevent the inner sheet from moving relatively
to the outer sheet.
It is urged, however, at great length, and with considérable force,
that the demonstrated utility of the Peters carton as a means of pack-
ing crackers and preserving them from moisture in damp climates en-
titles him to favorable considération and a monopoly of the use of the
carton which he has constructed. It is said, in effect, that the great
utility of the carton is sufîicient évidence of invention. In view of
this line of argument we hâve considered the évidence of utility with
some care, and, while it is sufficient to show that the cartons in ques-
tion do operate to exclude the outer air and moisture to a considérable
extent, yet we are by no means satisfied that this resuit is due to the
carton, or to the manner in which the ends of the lining and carton
blank are interfolded. The testimony shows that when the carton is
fully made up in the manner described in the patent, and filled with
crackers, it is then carefully covered With an outer wrapper, which is
closely sealed along the edges so as to entirely exclude the outer air.
It admits of very little doubt, we think, that this outer cover, which
is not mentioned or described in the patent, has as much, if not more,
to do with protecting the contents of the box from dampness and dirt
as the carton itself. But, even if this were not so, and if the carton
possesses ail the merit that is claimed for it, its mère utility would
not sufifice to render it patentable. It sometimes happens that an im-
provement in a machine or device, which is the resuit of ordinary
mechanical skill, adds much to the utility of the device or machine,
but this fact does not render it patentable. If a doubt arises in the
considération of a patented article or device whether the inventive
faculty has been exercised, the fact that the article in question has
gone into gênerai use, that there is a large demand for it, and that it
seems to possess great utility, is entitled to great weight; but when
EQUITABLE LOAN & SEGUEITT 00. V, E. L. M033 & 00. 609
it îs apparent that the inventive faculty has net been exercised, and
that nothing more has been accomplished by the alleged inventor than
might hâve been done by an ordinary workman or mechanic acquaint-
ed with the art, if his attention had been directed to the subject, a
patent, if granted, cannot and ought not to be sustained. The law
to this efïect is well settled. McClain v. Ortmayer, 141 U. S. 419,
427, 428, 12 Sup. Ct. 76, 35 L. Ed. 800; Duer v. Corbin Cabinet
Lock Co., 149 U. S. 216, 13 Sup. Ct. 850, 37 L. Ed. 707; Fox v.
Perkins, 3 C. C. A. 32, 52 Fed. 205, 213; Dueber Watch Case Mfg.
Co. V. Robbins, 21 C. C. A. 198, 75 Fed. 17; Lovell Mfg. Co. v. Cary,
147 U. S. 623, 63s, 13 Sup. Ct. 472, 37 L. Ed. 307; Falk Mfg. Co. v.
Missouri Railroad Co., 43 C. C. A. 240, 103 Fed. 295, 302, and cases
there cited. In the case in hand it is plain, we think, upon a fair con-
sidération of the State of the art at the time the patent in suit was ap-
plied for, that Peters' patent is lacking in patentable novelty, and
that he is not entitled to a monopoly of the manufacture, use, and
sale of the article in question. Indeed, we think it would be a perver-
sion of the patent law to hold that one who has made no greater ad-
vance in the art of manufacturing paper boxes than he appears to hâve
done, is entitled to a patent. Considering the fact that Peters merely
suggested the idea of folding the carton blank and superimposed
lining sheet together, or at the same time, so that the two sheets, at
the ends, would be interfolded, as always must be the case when any
package is wrapped up in two sheets of paper instead of one, we may,
with great propriety, apply to the alleged invention the oft-quoted
remark of Mr. Justice Bradiey in Atlantic Works v. Brady, 107 U. S.
192, 200, 2 Sup. Ct. 225, 231, 27 L. Ed. 438, that:
"The design of the patent law is to reward those who make some sub-
stantial discovery or invention which adds to our knowledge and makes a
step in advance In the useful arts. * ♦ * It was never the object of
those laws to grant a monopoly for every trifling device, every shadow of a
shade of an idea, which would naturally and spontaneously oecur to any
skilled mechanic or operator In the ordinary progress of manufactures. Sucb
an indlscriminate création of exclusive privilèges tends rather to obstruct
than to stimulate invention. It créâtes a class of spéculative schemers who
make it their business to watch the advancing wave of împrovement and
gather its foam in the form of patented monopolies which enable thcm to lay
a heavy tax upon the industry of the country without contributing anything
to the real advancement of the arts."
We are of opinion, for the reasons heretofore expressed, that the
Peters carton or paper box fails to disclose patentable novelty, and
that the decree below ought to be reversed, and the bill dismissed. It
is so ordered.
EQUITABLE LOAN & SEOURITY CO. v. R. L. MOSS & CO. et al.
(Circuit Court of Appeals, Fifth Circuit. October 17, 1903.)
No. 1,299.
1. BaNKRUPTCT— MORTGAGED PkOPERTT — SUBRENDER TO MORTGAGEB.
Where it appears that the entire assets of a bankrupt corporation con-
sist of a manufacturing plant incumbered by a mortgage for more than
its value, that the trustée, after diligent effort, has been unable to sell
the same, either at public or private sale, for any sum near Its value,
125 F.— 39
610 125 FEJCJEBf Ifi BHPOBTBB.
and that the property Is a soraree of expense, the court of fcankruptcy
shouM permit It to be turned oVer to the mortgagee, subject to the right
' of the trustée or gênerai creditors to contest the valldity of the mortgage,
îf deaired, In any court havlng Jurlsdlction.
Pétition for Revision of Proceedings of the District Court of the
United States for the Southern District of Georgia, in Bankruptcy.
H. E. W. Pairner, for petitioner.
Geo. S. Jones and Thos. F. Green, for respondents.
Before FARDEE, McCORMICK, and SHELBY, Circuit Judges.
PER CURIAM. It appeariiig from the record -that the Quintette
Manufacturing Company, à manufacturing corporation, was adjudged
an involuntary bankrupt on the 24th of October, 1902, and that ail of
its assets consisted of a cotton milling plant, and that the same was
incumbered by a mortgage to the Equitable Loan & Security Com-
pany, executed more than four months before the filing of the péti-
tion in bankruptcy, for a sum which, with interest, amounts to about
$28,000; and that the entire value of the plant does not exceed $20,000,
and that- the trustée, T. G. Greene, being placed in possession of the
plant, has diligently endeavored, under orders of the District Court,
for the past six months or longer, to sell the same, and has not been
able to do so either at public or private sale, and has had no bid or
of?er made to him néarly equaling the amount of the incumbrance,
and that it is necessary to insUre the property and to employ a night
watchman to guard it, and that, therefore, the property is burdensome,
and without a value to the trustée for the benefit of the gênerai credit-
ors; and, it appearing that the interest of both parties requires a
speedy disposition of this case, the court, reserving the right to fîle
a more elaborate opinion herein, if deemed advisaj)le, now orders,
adjudges, and decrees that the petitioner is entitled to relief ; that the
order of the district court, of date August 10, 1903, be revised; and
that the trustée is directed to release and surrender the possession
of the mortgaged property, and that he no longer hold or seek to
hold and control the same. Inasmuch as the attorney for the peti-
tioner in the court below and in this court offered to pay "the taxes
and the insurance premiums on the property and the hire of the night
watchman," this order is made on condition that it reimburse the
trustée so far as he has heretofore paid such taxes, premiums, or hire,
less any amount which the trustée has received, if any, for rent of the
mortgaged property; the amounts of such expenditures and receipts,
if not agreed on, to be ascertained under the direction of the District
Court. This decree is without préjudice to the right of the trustée
or the creditors of the bankrupt to contest the validity of the mort-
gage by suit or otherwisein any court having jurisdiction.
The respondents R. U. Moss & Co. are taxed with the costs of this
proceeding in this court and in the court below.
OOEEIGAN TRAN8P, CO. V. SANITAEr DISTRICT. 611
OORRIGAN TRANSP. CO. t, SANITART DISTRICT.
(District Court, N. D. Illinois, N. D. October 13, 1903.)
No. 9,457.
1. Navigablb Strbams— Obstruction op Navigation bt Creatino Curhent
IN Chicago River— Liabihty of Sanitary District.
The sanitary district of Cliicago, having been authorlzed by the state,
and by the United States government through the Secretary of War, to
construct the drainage canal and connect the same with the Chicago
river, Its use of the river for that purpose is lawful, and it cannot be
held Uable for damages resulting therefrom so long as such use is reason-
able and within the authority conferred. The provision in the permit
granted by the Secretary of War that the district must assume ail re-
Bponsibility for damages to property and navigation interests by reas'on
of the introduction of a current in the river does not create a llabllity, but
merely undertakes to impose on the district such llabllity as may legally
arise; and the création of a mean current throughout the length of the river
of 1% miles an hour, which at congested points, such as bridge draws, is
augmented, and opérâtes to obstruct or retard the passage of vessels,
especlally those of large displacement, is not an unreasonable or unau-
thorized use of the river, whlch renders the district llable to a vessel
for the additlonal expense and delay resulting, in the absence of any ex-
ercise by the secretary of the power reserved by Mm to regulate the cur-
rent should it prove unreasonably obstructive.
In Admiralty. Suit to recover damages for obstructing navigation
of the Chicago river.
Harvey D. Gaulder and C. W. Greenfield, for libelant
Seymour Jones, for respondent.
KOHLSAAT, District Judge. Libelant seeks to hold the re-
spondent for damages alleged to hâve been incurred in towing the
barge Algeria from Elevator C, on the Chicago river, west of Halsted
Street, to a point near the mouth of the river, by reason of the
current created by respondent's canal or drainage channel. The
barge is 288 feet long, has 44.6 feet beam, and draws, vvhen loaded,
16^ feet of water. Libelant claims : (i) The barge was delayed
about 12 hours ; (2) that she incurred an extra expense of tug hire
of $328 ; and (3) that she sustained damage by the straining of fines
and timber heads.
The above items, it is insisted, were ail caused by the greatly in-
creased rapidity of the current. Owing to this cause the tugs were
unwilling to start with the barge until daylight on October 5, 1900.
She started down the river about S o'clock in the morning in charge
of two tugs — one forward and the other at her stern. Thèse, it is
claimed, would hâve been adéquate in a current not exceeding 1%.
miles per hour. In passing through the Halsted street draw a third
tug was engaged — ^two forward and one astern. She was half an
hour in clearing the bridge draw. The same trouble was repeated
at each draw from Twenty-Second street to Washington street.
Tbere a fourth tug was procured, and the trip down the river was
finally concluded. While the current offered considérable résist-
ance ail the way down, the greatest current was encountered at
the bridges by reason of the conjested channel at such point and the
obstruction caused by the barge herself.
612 125 FBOaBAL BBPOBTBB.
I4belant Insiçts that respondent is liable for any damage caused
by its acts in increasing the current, claiming incidentally that the
increase was largely in excess of the i}i miles per hour alleged to
be contemplated by the Secretary of War, Respondent, on the
other hand, claims that its acts in respect to an increase of the car-
rent were under the control of the government of the United States,
that it was acting under the permit of the Secretary of War, and that
it committed no illégal act in accelerating the river current.
By Act Cong. March 3, 1899, c. 425, § 10, 30 Stat. 1151 [U. S. Comp.
St. 1901, p. 3541], it was provided that it should be unlawful to
modify the condition or capacity of the channel of any navigable
water of the United States, "unless the work has been recommended
by the chief of engineers and authorized by the Secretary of War
prior to the beginning the same." This act covers the Chicago river.
The respondent was organized in 1890, under the act of July i, 1889
(Laws 1889, p. 125), in référence thereto, passed by the Législature
of Illinois, in which state the Chicago river is wholly situated. The
district was by said act authorized to construct a drainage channel
of suiïiciént size and capacity to produce and maintain a flow ci
water of 300,000 cubic feet per minute, and a current of not exceed-
ing three miles per hour. Provision was also made for the increase
of flowage, in the event of a greater population, without an increase
of speed of current.
In pufsuance of and conformity to the above act, respondent pro-
ceeded to and did construct a drainage channel from Robey street,
in the city of Chicago, in said state, to Lockport, 111., a distance of
about 28 miles ; it being the intention to use the Chicago river from
Robey street to L,ake Michigan as a connection between said chan-
nel and the lake. On June 16, 1896, the respondent, by its prési-
dent, made application to the Secretary of War for permission to
make such improvements and changes in the Chicago river as would
meet the requirements of the said channel and the law under which
it was constructed, and submitted therewith a map of the proposed
changes. On the recommendation of the government engineer, the
Secretary of War granted a qualified permission on certain condi-
tions. Clause 2 of this permission provided that the authority
granted should "not be interpreted as an approval of the plans of the
sanitary district of Chicago to introduce a current into Chicago
river. This latter proposition must hereafter be submitted for con-
sidération." Clause 4 provided "that the United States will not be
put to expense by reason of this work." The other clauses are not
pertinent hère. Afterwards more complète plans were furnished
by respondent, whereupon, on November 16, 1897, upon the recom-
mendation of the government engineer, the Secretary of War ap-
proved the same, and granted a permit, subject to the same condi-
tions as above set out.
Some time prior to April 24, 1899, application was duly made to
the Secretary of War for leave to connect the said drainage channel
with the Chicago river at the south branch thereof at said Robey
street. This was referred to the chief government engineer. On
May 8, 1899, the Secretary of War granted permission to respondenf
to make such connection, subject to certain réservations, to wit:
COREIGAN TRAN8P. CO. V. SANITAKT DISTRICT 613
(i) That the matter should be submitted to Congress, and the per-
mit should abide its action there ; (2) that, if at any time the current
should be found to be unreasonably obstructive to navigation or in-
jurious to propert]', the right was reserved to close or modify the
discharge through said channel to such an extent as may be de-
manded by navigation and property interests along said Chicago
river and its South branch; (3) that respondent must assume ail re-
sponsibility for damages to property and navigation interests by
reason of the introduction of a current in Chicago river. In January,
1900, the connection was made, since which time the water from the
river and lake hâve flowed into the drainage channel. The current
resulting from this flow is alleged by libelant to be the primary
cause of the damage complained of.
It is évident that, should the theory of libelant prevail, it would
make respondent hable for any and ail damages arising from the
increased current, no matter how slight the increase. Not only navi-
gation interests, but abutting property interests, would be in position
to make claims for damages growing out of any increase in cur-
rent. The matters involved herein are therefore of very grave im-
portance. The évidence as to the rate of speed of the current is
uncertain. It would seem to be fairly established by respondent's
witnesses that the average or mean rate of speed along the whole
line of the river does not exceed ij4 miles per hour, as a resuit of
a fîow of 300,000 cubic feet per minute. But at ail congested points,
such as bridge draws and other narrow points, it is much greater,
and when augmented by the displacement and résistance of vessels
this speed is further increased.
It would seem from the évidence that an average speed of even
one-half a mile per hour would in such circumstances exceed 1J-4
miles per hour. The only theory upon which this rate of speed, i. e.,
134 miles per hour, is involved in this case, is that respondent in
its application for leave to make changes in the river says : "It is
desired to so correct and regularize the cross-section of the river as to
secure a flowage capacity of 300,000 cubic feet per minute, vvith a
velocity of one and one-quarter miles per hour ;" and the récital in
the engineer's recommendation to the Secretary of War, that the
respondent's engineer estimâtes the mean current, with 300,000 gal-
lons per minute, to be 134 miles per hour, which estimate he déclares
to be simply an assumption based on an unobstructed flow, together
with the récital in the preamble to the final permit of the Secretary
of War, granting authority to connect the river and the channel,
to the effect that the Secretary of War has heretofore granted re-
spondent permission to make improvements in the river "for the
purpose of Connecting and regulating the cross-section of the river
so as to secure a flowage of 300,000 cubic feet per minute, with a
velocity of 1^4 miles an hour." It will be seen from above that the
Secretary of War does not in any manner undertake to ûx the rate
of speed of the current, or the amount of flowage, but simply re-
serves the right to regulate the same as expérience may make dé-
sirable. The clause of the final permit above quoted requiring the
respondent to assume ail responsibility for damages in the premises
614 125 FEIDEBAL BSPOBTBB.
cannot bç çonstrued as meaning more than that, that whatever
damages may legally arise are to be assumed by respondent. It
does not create any îiability, but would seem to hâve been inserted
as an extra précaution. The Secretary of War could neither crçate
nor wipe out a légal cause of action. The Iiability referred to is a
"légal Iiability," springing out of the acts of respondent, existing,
if at ail, entirely independent of said clause. The issue, then, must
be narrowed down to the single proposition: "Is the sanitary dis-
trict of Chicago liable for damages growing out of its manipulation
of the Chicago river, such acts being done with the consent of the
fédéral government and the state of Illinois ?"
A number of cases hâve been cited holding that a party obstruct-
ing navigable waters is liable for damages resulting therefrom, but
■ in each of such cases the obstruction was an illégal one ; that is, not
done under authority of the government. In the case at bar there
was no illégal act on the part of respondent. The improvement was
lawfully made. Had Congress not legislated with regard to the
Chicago river, the state would hâve the power to direct and control
it to the extent of closing it. Congress lias, however, so legislated,
but has, through its proper officer, released to a degree something of
its control. To the extent of such release may it not be said that
the state is reinvested with control. The act creating respondent
(Laws 1889, p. 125) by, section 7 provides that the trustées of a sanitary
district shall hâve power to provide for the drainage of such district
by laying out, etc., one or more channels, etc., for carrying oiï and dis-
posing of the drainage, etc., "together with such adjuncts and additions
thereto as may be necessary or proper to cause such channels or out-
lets to accomplish the end for which they are designed." It provides
for the drawing of water from lake Michigan, and in section 27 enacts
that, if any such channel "receives its supply of water from any river
or channel Connecting with lake Michigan, it shall be çonstrued as
receiving its supply of water from Lake Michigan." It would seem
then that so far as the state had the power it authorized the respond-
ent to use the Chicago river. Can itbe claimed that the government
had not the power to permit such a u^se of the river as to it should
seem reasonable, reserving the right to regulate that use as it deemed
consistent with the rights of navigation and property owners? Has
the gênerai government not the power to so reconstruct or change
navigable strearas as it may deem best for the public use ? Certainly, if
it has, it can permit others to do so. The drainage channel is a vast
public improvement. The government has recognized it as such, and
permitted a reasonable use of the Chicago river in connection with it.
It has reserved the power to control the flow of water. This power
it may exercise at any time.
Whether or not it is within the power of the government to ar-
bitrarily permit the increase of the current in a navigable river to
such an extent as to make navigation thereon more tedious and ex-
pensive, it must be conceded that the welfare of several millions of
its citizens is a considération which might well be pleaded as a suf-
fîcient grçiund for a reasonable modification of the existing current.
Were it either necessary or désirable to find other considération, it
COEEIGAN TEAN8P. CO. V. SANITARY DISTRICT. 615
may be found in the act of incorporation itself, wherein it is provid-
ed that when the channel is completed, and 300,000 cubic feet of water
per minute turned therein, the same is declared to be a navigable
stream, and that, whenever the gênerai government improves the
Des Plaines river for navigation to connect with this channel, said
gênerai government shall hâve full control over the channel, subject
to the right of the district for drainage purposes. It may well be as-
sumed that the government, through its proper ofificers, had this in
mind.
My conclusion upon the matter is this : By permission of the gên-
erai government the respondent connected the channel with the
South branch of Chicago river. Such permission was vi'ithheld until
certain requirements were complied with. Respondent took ail neces-
sary légal steps, and acted within the permit. Whatever damage
accrued to libelant grew out of the congestion of the channel by
reason of the bridge piers or abutments which were not under its
contract. There is no undertaking with navigators, express or im
plied, that the current of the river shall not exceed a certain rate of
speed, except the three-mile provision of the act creating the district.
The damage complained of would not hâve accrued to a smaller vessel.
It was the résistance of the current as augmented by the narrow draw
and the great bulk of the vessel, the latter being such as to practically
fill the draw and stop the flow beyond the bow. Thèse three causes
combined brought about the damage claimed. Was the additional
current an unreasonable use of the permission given by the govern-
ment? I think not. It was also a reasonable exercise of the power
vested in the Secretary of War. I fînd no adjudicated case dealing
with the rights of navigators with référence to difiSculties of naviga-
tion caused by increased speed of currents resulting from acts ap-
proved by the proper government officers.
In the case of Cummings v. Chicago, 188 U. S. 410-431, 23 Sup.
Ct. 472, 47 L. Ed. 525, Justice Harlan lays down certain gênerai
principles affecting the relative powers of the United States and of the
state with référence to navigable waters, which, while not bearing
directly upon the facts of this case, would seem to indicate that it
was not the purpose of the act of i8go to deprive the state within
whose limits the navigable water is whoUy situated of ail reasonable
control for local purposes.
On gênerai principles, however, the rights of navigators must be
held to be subject to the exercise of such power by the government.
The most that can be said for libelant is that it has made out a case
of damnum obsque injuria.
The libel is dismissed.
61.6 125 FEDERAL BEPOBTBB.
UNITBJD STATB3S V. WHELPLBY et al.
(District Court, W. D. Virginia. November 7, 1903.)
1. Criminal Law—Lotteriks— Transportation op Tickets— Statdtes— Con-
struction.
Aet March 2, 1865, e. 191, 28 Stat. 963 [U. S. Comp. St. 1901, p. 3178],
provldes tliat any person who shall cause to be brought withln the United
States from abroad, for the purpose of disposing of the same, or carry
from one state to another In the United States, any ticket of a lottery,
shall be punished, etc. EeU, that such statute did not prohibit the trans-
portation of lottery tickets from a state to the municipality of the Dis-
trict of Columbia. '
3. Same.
Such section did not prohibit the transportation of lottery tickets from
one state "through" another state or states, where the ultimate destina-
tion of the shipment was not withiu one of the United States.
Thos. L. Moore, U. S. Atty.
J. B. Stephenson, for défendants.
McDOWELL, District Judge. The défendants hâve been indict-
ed for a violation of the act of March 2, 1895, c. 191, 28 Stat. 963
[U. S. Comp. St. 1901, p. ,3178], in relation to the suppression of the
lottery tfafific. The fîrst count of the indictment charges that the
défendants shipped by express certain lottery tickets from Dayton,
Va., to West Virginia, for the purpose of disposing of the same.
The second count charges that the défendants shipped by express
lottery tickets from Dayton, Va., through West Virginia, to Mary-
land, for the purpose of disposing of the same. The third count
charges that the shipment was from Dayton, Va., to the District of
Columbia, for the purpose of disposing of the same. The défend-
ants demur to the third count, on the ground that a shipment to the
District of Columbia is not prohibited by the statute.
The act, so far as now material, reads:
"That any person who shall cause to be brought wlthin the United States
from abroad, for the purpose of disposing of the same, or deposited in or
carrled by the mails of the United States; or carried from one state to an-
other in the United States, any » ♦ » ticket • * • of a lottery
» • * shall be punlshable • • *."
The point made is that the language, "carried from one state to
another in the United States," does not include the District of Colum-
bia. This is a highly pénal statute, which makes a crime of an act
which was formerly not a crime. Such a statute, subject to the rule
that "a statute is never to be construed against thé plain and obvious
dictâtes of reason," should be strictly construed. See France v. U.
S., 164 U. S. 682, 683, 17 Sup. Ct. 219, 41 L. Ed. 595 ; Justice Har-
lan's dissenting opinion in Francis v. U. S., 188 U. S. 381, 23 Sup.
Ct. 334, 47 L. Ed. 508; U. S. V. Ames (C. C.) 95 Fed. 453. If the
intent was to prohibit shipments of lottery tickets from a state to the
District of Columbia, such intent can be arrived at only by construing
the word "state" as including the municipaHty of the District of
Columbia. Assuming the constitutionality of the statute thus con-
strued, I fînd no certain indication in the act that Congress intended
UNITED STATES V. WHELPLBT. 617
that it should thus be construed. And certainly, when a criminal
statute is in question, the proper course is to solve a substantial
doubt as to the meaning of the statute against, rather than for, the
government. If such construction be wrong, Congress can readily
prevent a répétition of the error by making clearer its meaning by an
amendment. So far as I am able to say, Congress may hâve inten-
tionally omitted an expression to the effect that the word "state,"
where used in this statute, shall embrace the territories and the Dis-
trict of Columbia. Assuming the power of Congress to forbid ship-
ments of lottery tickets (such being "commerce" — Lottery Case, i88
U. S. 321, 23 Sup. Ct. 321, 47 L. Ed. 492) from the District of Colum-
bia to a State or territory, or from any territory to a state or another
territory, or to the District of Columbia, yet when the inhibition is
against a shipment made from a state to a territory or to the District
of Columbia there might seem to some minds to be reason to doubt
the power of Congress.
"Congress shall hâve power * * * to regulate commerce with
foreign nations, and among the several states, and with the Indian
Tribes." Thus reads section 8, art. i, Const. If Chief Justice Mar-
shall's ruling in Hepbum v. EUzey, 2 Cranch, 445, 2 L. Ed. 332, is to
be the guide in construing the meaning of the word "state" as found
in the Constitution, it may seem difïïcult to iind in the commerce
clause authority to forbid shipments from any state to a territory or
to the District of Columbia. I am not myself expressing an opinion
on the constitutionality of an act of Congress regulating commerce
from a state to the District of Columbia. I am inclined to think that
the implication from the décision in Stoutenburgh v. Hennick, 129
U. S. 141, 9 Sup. Ct. 256, 32 L. Ed. 637, and the language of Mr.
Justice Holmes in Hanley v. Kansas City Southern R. Co., 187 U.
S. 619, 23 Sup. Ct. 2T4, 47 L. Ed. 333, are sufficient to prevent a sub-
ordinate fédéral court from holding such an enactment invalid, even
if so inclined. I am, however, arguing that Congress, or some of
its members, may hâve doubted the power of Congress to forbid
shipments of lottery tickets from a state to a territory^ or to the Dis-
trict of Columbia. It was said in the dissenting opinion of Mr. Jus-
tice Miller in Stoutenburgh v. Hennick, supra: "Commerce by a
citizen of one state, in order to come within the constitutional pro-
vision, must be commerce with a citizen of another state ; and where
one of the parties is a citizen of a territory, or of the District of
Columbia, * * * it is not commerce among the citizens of the
several states."
In the opinion of the court by Mr. Justice Miller in the Trade-
Mark Cases, 100 U. S. 96, 25 L. Ed. 550, we find this :
"When, therefore, Congress nndertakes to enaot a law, which can only be
■valid as a régulation of commerce, it is reasonable to expect to find on the
face of the law, or from Its essential nature, that it Is a régulation of com-
merce with foreign nations, or among the several states, or with the Indian
tribes. If not so limited, it Is In excess of the power of Congress."
It may be safely asserted that at every session of Congress there
are some members who are "strict constructionists." And it is at
least possible that, because of some doubt on the part of at least
618 125 FEDERAL EBPOETEE.
some of its taeinbers as to its power to so legislate, Congress inten-
tionally Omitted to indude shipments of lottery tickets from states
to a territory or the District of Columbia. If tliere be the slightest
force in this suggestion» it aflfords an additionàl reason for refusing
to read into the statute in question an inhibition which is not unmis-
takably eipressed, and is not necessarily or clearly impHed from
what is expressed.
It is true that in the Interstate commerce act (Act Feb. 4, 1887,
c. 104, 24 Stat. 379 [U. S. Comp. St. 1901, p. 3154]) Congress has
undertaken to regulate commerce from any state to any territory or
to the District of Columbia. And I do not at présent recall that
the validity of this feature of the act has ever been assailed. But
this does not entirely answer the suggestion. The Forty-Ninth Con-
gress, which enacted the interstate commerce act, and the Fifty-
Third Congress, which enacted the anti-lottery act, were composed
to a considérable extent of différent individuals. The committees
which reported thèse two bills may hâve been, and doubtless were,
difïerently constituted. The views of the strict constructionists may
hâve been given more weight in 1895 than in 1887. I hâve not un-
dertaken to examine the history of the enactment of the act of 1895,
if there be such availablë, as I hâve not the time for such examina-
tion, and as such exarrtination would probably be fruitless, or at
least quite inconclusive.
I hâve considered the efïect of the statutes which by the second
section of anti-lottery act are made to "apply in support, aid, and
furtherance of the enforcement of this act," but I find nothing in
them which seems to bear on the question under considération. I
am of opinion to sustain the demurrer to the third count.
Counsel requested that, in the event the above conclusion was
reached, I express my opinion on another point. It is agreed that
the facts in this case are that the défendants made one shipment by
express of lottery tickets from Dayton, Va., to some person in the
city of Washington. This package passed through West Virginia
and Maryland ,en route to Washington, and it is solely on this fact
that the counts allegihg shipments to West Virginia and to Mary-
land are based. The intention of the United States attorney is to
dismiss this prosecution if my opinion on this question is also against
the government.
Congress has not expressed an intent to inhibit shipments of lot-
tery tickets through any state. As to shipments through a state
destined for a foreign country Congress doubtless had no intent to
legislate. There was no necessity to inhibit a shipment from a state
through another stâte if destined for still another state. To forbid
shipments frçm any state to another state (meaning by the latter
the state ofthe ultimate destination of the shipment) was sufficient.
Shipmeiits from a stàte to the District of Columbia, through some
state other than that frQfh which the shipment started, may possibly
hâve been, as hereinabove suggested, intentionally omitted from the
inhibitions of the act.
It is true that under the facts in this case there was literally a car-
riage from Vifginia tô West Virginia, in that the package passed
IN EE BLUE KIDGE PACKING CO. 619
from the one state into the other. But I am of opinion tliat Con-
gress had in mind the place of shipment and the place of ultimate
destination only, and did not intend to forbid a mère carriage through
a State.
Moreover, I am inclined to think that the words, "for the purpose
of disposing of the same," are properly to be considered as governing
the inhibition against causing lottery ticlsets to be carried from a
state to another. The indictmeiit is drawn on this theory ; but the
governraent now takes the position that such allégation is unneces-
sary and mère surplusage. The statute is rather badly expressed,
but the act of carrying lottery tickets to a state for any other pur-
pose than to dispose of them is a rather harmless act to be the sub-
ject of congressional action; and the shipment might be made for
a legitimate purpose, for instance by a government agent for the pur-
pose of using the tickets as évidence. While it may be within the pow-
ers of Congress to forbid Interstate shipments of lottery tickets
through any state, even when their ultimate destination, and the place
where they are to be disposed of, is a territory or the District of
Columbia, yet I cannât think that such was the intent of this statute.
If a shipment were made from New Jersey, through New York, to
Canada, it seems very clear that the statute in question would not sup-
port an indictment for making such shipment. And unless we can say
with certainty that the word "state" in this statute was intended to
include the territories and the District of Columbia we hâve no more
warrant for holding that there is any expressed or clearly implied
intent to forbid shipments from one state through another state to a
territory or to the District of Columbia than for holding that a ship-
ment from New Jersey to Canada is prohibited.
While the word "state" has sometimes been construed to include
the territories and the District of Columbia (Talbott v. Silver Bow
County, 139 U. S. 444, II Sup. Ct. 594, 35 L. Ed. 210; Metropolitan
Railroad v. District of Columbia, 132 U. S. 9, 10 Sup. Ct. 19, 33 L.
Ed. 231 ; Geofroy v. Riggs, 133 U. S. 268, 10 Sup. Ct. 295, 33 L. Ed.
642), still Congress surely may be assumed to hâve known that the
word "state" had often been held not to include the territories or the
District of Columbia ; and if we give that body, which always num-
bers many able members of the légal profession among its members,
crédit for such knowledge, we cannot say with certainty that it in-
tended the word "state" to mean territory or District oî Columbia.
In rc BLTJE RIDGB PACKING CO.
(District Court, M, D. Pennsylvanla. November 3, 1903.)
No. 355.
Bankrdptcy— Meeting dp Creditohs— Allowanoe of Paetictpatino Claims.
The fact that at the head of the proof of a claim in bankruptcy the
title of the court is not given, as requlred by Gen. Order 21 and Fonn No.
31 (89 Fed. ix, xlii), Is not sufBclent to vitiate the proof so as to prevent
the creditor's participation in the creditors' meeting.
620 125 FEDERAL EEPOKÏEIl.
2. Saub.
Where the considération for a clalm agalnst a bankrupt Is stated In the
proof to be for "pHntIng done for sald bankrupt at his request heretofore,
to -wlt, In September, 1903, as per blll rendered," the spécification Is In-
sufflcient, as the Items of the account should be given; and the creditor
is not entitled to partlclpate In the eredltors' meeting.
8. Samb.
Where, In the proof of a credltor's clalm In bankruptcy, the debt Is
Baid to be for "goods, wares, and merchandise sold and dellvered by
daimant to bankrupt, at Its request, conslsting of green truck and vege-
tabjes, amounting to said sum of $140, with interest from * * *,
being the balance dne on said elaim on book account," the spécification
Is insufflcient, in the absence of the items of the account, and the creditor
Is not entitled to partlclpate In the eredltors' meeting.
i. Samk.
Where the proof of a credltor's clalm In bankruptcy récites that the
considération Is "2,500 jar tops at $2.00 per 1,000=$50. % blue, % white,
% red" — the spécification is sufflcient, and the creditor is entitled to par-
tlclpate In the eredltors' meeting.
S. Same.
The absence of thé date to a credltor's claim In bankruptcy Is a fatal
defectj which will prevent his participation In the creditors' meeting.
9. Samb— Lktter of Attobnbt.
In bankruptcy proceedings under Gen. Order No. 21, requiring that a
letter of attorney executed on behalf of a partnership must show that
the pérson executing It Is a member of the firm, the fact that such state-
ment Is contalned in the proof of debt accompanying the letter, though
absent from the letter Itself, is suflicient to entitle the attorney to repre-
sent the creditor In the eredltors' meeting.
7. Samb— Proof. of Claim— Suppicikncy.
Where, in a credltor's proof of clalm in bankruptcy, the considération
Is stated as "goods and merchandise sold," as evidenced by two notes, a
mémorandum of which is said to be given in the bill attached, the spécifi-
cation is Insufiiclent to entitle the creditor to partlclpate in the creditors'
meeting, for. If he Intends to stand on the account, he should hâve given
the Items, and. If on the notes, they should be produced and flled.
8. Same— PbodÙ'ction of Letter of Attorney— Termination op Meeting.
Where a power of attorney authorizing its holder to represent a créd-
iter at a meeting of a ibankrupt's creditors is mislald, and not produced
until the meeting is over, the attorney is properly refused the right to
partlclpate.
9. Same— Trustées- Quaupication.
The fact that one who is chosen by the creditors as trustée In bank-
ruptcy advised the voluntary assignment under the state law which con-
stituted the act of bankruptcy, does not render him incompétent as
trustée.
10. Same, j
The fact that oné who is chosen' by a bankrupt's creditors as trustée
bad a law office wIth an attorney who represented certain stockholders
of the bankrupt, who clalmed to be creditors, but whose daims were to
be contested, and that thèse persons were former clients of the trustée,
and put thelr clalms iifpo ,hls associate's hands at his suggestion, and that
the trustee's élection was with the aid of such persons, is insufflcient to
make his sélection an improper one, but merely calls for its clpse scrutiny,
tl. Samb,
The sélection by a bankrupt's credftors of a trustée is not to be Inter-
fered with by the court unless It clearly Imperils the falr and efficient
administration of the. estate.
In Bankruptcy. On certificâte from référée.
R. L. Cannon, for the exceptions.
H, W. Dunning, opposed.
IN EE BLUE RIDGE PACKING 00. 621
ARCHBALD, District Judge. The exceptions are directed to the
action of tlie référée in receiving and rejecting claims at the meeting
of creditors called to elect a trustée, and to his approval of the person
there chosen. Objection is made to the allowance of the claims of
W. M. Alexander and of A. G. Helfrich because the title of the court
is not given at the head of the proof in accordance with gênerai order
21 and form No. 31 (89 Fed. ix, xlii). But this is a mère informality,
not enough to vitiate the proof if otherwise good, as it appears to be.
There are other signs of carelessness in it, but the substance is there,
and I think the claim was properly received.
The claims of Harrold & Fernsler, William Price, and Fred N. Bert
were thrown out on the ground, in each case, that the considération
was not sufïîciently stated. So far as the first two are concerned,
this ruling was unquestionably correct. In the Harrold & Fernsler
daim the considération is said to be for "printing done for said bank-
rupt at its request heretofore, to wit, in September, 1903, as per bill
rendered." This is clearly an insufiîcient spécification. It may in-
form, to a certain extent, of the cri gin and character of the debt, but
the item.s by which it is made up should be given. In re Elder, Fed.
Cas. No. 4,326; In re Scott (D. C.) i Am. Bankr. R. 553, 93 Fed. 418.
If this bill was represented by an account, as seems to be implied,
other creditors are entitled to hâve it in ail its particulars just as it
stands.
In the Price claim the debt is said to be for "goods, wares, and,
merchandise sold and delivered by claimant to bankrupt at its request,
consisting of green truck and vegetables, amounting to said sum of
$140, with interest from * * *^ being the balance now due.
on said claim on book account." Hère there admittedly is an account,
and the claimant is therefore bound to give the items, without which
there is nothing in any way sufficiently informing. But I cannot
agrée with the référée that the same is true of the claim of Fred N.
Bert. This is for $50, and the considération is declared to be for
"2,500 jar tops at $2.00 per 1000 = $50. J^ blue, Ys white, Yz red."
For ail that can be seen, this is as complète as it could be made. The
real objection to this claim is that there is no date. This is certainly
necessary to help individuate the debt, as well as to show that it is not
outlawed, and, while it was not objected to on that ground, the defect
is too patent to be passed by.
Begs and Graham made proof of claim, and were represented by
power of attorney to Wm. N. Reynolds, Jr., which was held defective
because not properly acknowledged. By gênerai order 21 (89 Fcl.
ix), when a letter of attorney is executed on behalf of a partnership,.
the person executing it must make oath that he is a member of the
fiirm. There was no such oath upon this instrument, but there was
in the proof of debt which accompanied it, and I see no reason why
that was not a sufïicient compliance without swearing to the same
thing a second time. Both were executed on the same day, and pre-
sented at the same time, and they should hâve been received.
The Hazel Atlas Glass Company daim is clearly defective. The
considération is stated as "goods and merchandise sold" as evidenced
by two notes, a mémorandum of which is said to be given in a bill
622 125 FBDBBAC RBPOBTBR.
attached. If the creditors intend to stand on the account, they should
hâve giyen the items; ifon the notes, tbey should hâve been produced
aiid filed. Bankr. Act July i, 1898, c. 541, § S7b, 30 Stat. 560 [U. S.
Cbmp, St. 1901, p. 3443]-
The daim of H. N. Schooley & Son was sought to be represented at
the meeting by Mr. Canhon, but, failing to produce a power of attor-
ney to do so, it was rejected. Later in the day, and after the élection
had been held and closed, the missing paper was brought forward,
but the référée held that this was too late. If the meeting of creditors
to elect a trustée was still in progress, the vote should hâve been re-
ceived ; but, according to the report of the référée, which is uncontra-
dicted, it was not, and, if so, the power was produced too late. The
other creditors who attendéd the meeting had the right to inspect it,
as well as the proof or debt on which it was based, for the purpose of
making possible objections, which they could not do after the meeting
had broken up and they had left.
The action of the référée being thus sustained in every instance but
one, the resuit of the meeting is not changed. A. L,. Williams was
elected over D. A. Fell by a vote of 14 to 8, the debts represented by
the majority in number constituting aiso a vast prépondérance in
amount. The only question, therefore, is whether the sélection so
made should hâve been approved. Mr. Williams is objected to be-
cause he advised the assignment for the benefît of creditors under the
State law, which was the act of bankruptcy complained of, and was
himself the assignée; but I fail to see how this unfits him to act now.
The assignment, in purpose, was for the benefit of creditors, and was
neither illégal nor fraudulent, whatever ground it may hâve laid for
the présent proceedings. Randolph v. Scruggs, 190 U. S. 533, 23
Sup. Cl 710, 47 L. Ed. 1165. It is also urged that he is intimately as-
sociated with Mr. Dunning in the law, the two having offices together,
ahhough not partners; that Mr. Dunning represents certain stock-
holders of the bankrupt corporation who claim to be creditors, but
whose claims are to be contested; that thèse parties were former
clients of Mr. Williams, and put their claims into Mr. Dunning's
hands at his suggestion; and that both of them worked with thèse
and other creditors to secure Mr. WilUams' élection. But, notwith-
standing ail that is so charged, I am satisfied of the qualification and
integrity of Mr. Williams, who is personally known to me, and I take
the same vieMV of the matter as does the référée — ^that thèse things do
not necessariiy make the élection an improppr one, but only call for a
close scrutiny of it; and, àfter a careful examination of the whole situa-
tion, I see no occasion to disapprove. It is to be remembered in ail
such cases that the choice of a trustée is lodged by the law with the
creditors constituting a majority in number and amount, and that their
sélection îs not to be interfered with, unless it clearly imperils the fair
and efficient administration of the estate. I am not persuaded that
there is any such danger in the présent instance, and, if it should prove
othei-wise, the objecting creditors hâve their remedy by an application
hereafter to remove.
The exceptions are overruled, and the action of the référée, except
în the one particular noted, is approved.
BOTEE V. UNITED STATES HEALTH & ACCIDENT INS. CO. C23
BOYEE V. UNITED STATES HEALTH & ACCIDENT INS. CO.
(Circuit Court, D. Connecticut. November 5, 1903.)
No. 536.
1. PlBADING— SUFFICIKNCT OF COMPLAINT— MOTION TO StUIKE OuT.
Allégations of a complaint in an action for breacli of a contract appolnt-
Ing plaintiff agent for the procuring of Insurance business for défendant
considered, and held good as against a motion to strike out.
At Law. On motion to strike out paragraphs 5 and 7 of the first
count of the substituted complaint.
Wm. H. Ely and H. C. Webb, for plaintifï.
James H. Webb and Walter Pond, for défendant.
PLATT, District Judge. The contention is either very simply
solved or raises a compHcated situation. Which horn of the dilemma
confronts us dépends upon a construction of the meaning of para-
graph 5 of the first count of the substituted complaint. I quote the
count in its entirety :
"(1) On the first Tuesday of October, A. D. 1902, the plaintifC and de-
fendant entered Into a contract in writing, a copy of which contract is hereto
attached, and marked 'Exhibit A.'
"(2) Thereafter the plaintiff entered upon the discharge and performance
of bis duties in accordance with the terms of the contract, Exhibit A, and
continued in the f aithful discharge of his said duties, and fully performed ail
the duties imposed upon him by the terms of said contract.
"(3) On the 15th day of May, A. D. 1903, the défendant canceled the con-
tract with the plaintifC without giTing him any reason therefor, and in truth
and in fact up to that time the plaintifC had fully performed ail his duties.
"(4) Between said Ist day of October, 1902, and the 15th day of May, 1903,
the plaintifC, by himself and his agents, obtained for the défendant, and there
were issued by the défendant by reason of the services and acts of the
plaintifC, a large number of policies, which, under the terms of the contract,
Exhibit A, had earned for the plaintifC on the lôth day of May, 1903, a large
sum of money, to wit, $2,000, which the défendant has never paid to the
plaintifC.
"(5) Under the terms of said contract, the business obtained by the plaintiff
would, had not the défendant canceled said contract, hâve netted the plain-
tifC a large sum of money, to wit, $20,000.00.
"(6) The plaintiff, in obtaining said insurance for the défendant, paid out
and expended a large sum of money for expansés necessary and proper for
the obtaining of said business, to wit, the sum of $2,000.
"(7) By the act of the défendant the plaintiff has sufCered damages to a
large amount."
Exhibit A is a voluminous contract between plaintifï and défend-
ant. The essential parts of it are thèse. Défendant, on October i,
1902, appoints plaintifï its agent to canvass for applications for health
and accident insurance. The territory assigned comprises the states
of Rhode Island and Connecticut, and the counties of Westchester
and Putnam, in the state of New York. The "full and complète
compensation" for "ail business procured" and for "ail services per-
formed" is fixed as foUows :
"(1) On commercial business, thirty (30) per cent, of the gross premiums on
ail policies or renewals thereof procured through said agency as aforesaid,
which thirty (30) per cent, shall include the cost of collecting said premiums.
624 125 FEDERAL EEPOKTBK.
"(2) On Industrîal business, ail the proceeds of the polîcy fee collected by
the agent, and &ve (5) per cept. of the subséquent premiums received on such
business In sàld terrltory, wliich flve (5) per cent, shall cover the cost of col-
lectlng said premiums.
"(3) The further compensation of thirty-flve (35) per cent, of the net profits
derived by the company from such commercial and industrîal business in the
aforesald terrltory, such net profits to be ascertalned In the foUowing manner."
Then follows a mass of détail as to the manner of fixing up the
crédit and débit sides of the account.
The continuance of the contract is provided for in paragraph "p" :
"(p) This contract shall remain in full force and eflfect only so long as the
.•igent shall faithfully discharge his duties strictly In accordance wilh ail the
terms and conditions herein expressed. In event of the cancellatlon or termi-
natlon of this contract for any reasôn, the agent shall be entitled to receive
compensation upon the basis herelnbefore provided, only for the perlod of
time up to the date of such cancellatlon or terminatlon; however, ail sums
of money due and accrued to said agent at that tIme shall be retained by
the Company until It shall ajppear by the records of the home office of the
company that ail clalms, accounts and expenses of every kind and nature
whatsoever, Incurred by or with the consent of the company In said terrltory,
during the continuance of this contract, or for which the company is liable,
hâve been fully paid, after whicb the profits or losses shall be ascertalned
and shared by the company and agent as herelnbefore provided."
It will be noticed that the défendant canceled the contract on May
15, 1903, without giving any reason therefor, and that up to that
time the plaintiff had fully performed ail his duties.
It is conceded that form 85 is a proper form to use in the com-
mencement of an action in ail cases where any of its clauses contains
a gênerai, although defective, statement of the cause of action which
the pleader intends to pursue. It is furnished as a time-saving appli-
ance to the pleader who wishes to préserve his client's rights on rhe
instant, but, as it may lead to the most serious complications, its use
should not be too lightly invoked. The objection to its use in this
case is that none of its provisions form a stock upon which the présent
complaint can be grafted. The plaintiff vigorously combats that
contention.
At this point it must be évident that it becomes of vital importance
to know what the pleader had in mind when he prepared paragraph
5. If he means that the work performed and services rendered prior
to the cancellatlon of the contract are worth $20,000, he is, as I
view it, clearly within his rights. I understand that to be his mean-
ing, after a careful examination of the Une of reasoning set forth in
the latter part of the brief filed with me by his counsel, and, so un-
derstanding it, paragraphs S and 7 of the substituted complaint may
stand.
The motion to strike out is therefore denied.
On the Motion for Bill of Particulars.
The motion îs granted in the terms set forth therein, eliminatîng
therefrom, however, on the first page the clause beginning "together
with a statement," and ending with "contract," and on the second
page beginning at "showing the dates" to the end of the motion.
Let the plaintiff comply with this order within 30 days.
UNITED STATES V. BOHL. 625
UNITED STATES v. BOHL.
(District Court, D. Connecticut. October 15, 1903.)
No. 1,400.
t. Rbnovatbd Butter— Pbovision for Inspection and Markinq— Construc-
tion DP Statuts.
The purpose of section 5, Act May 9, 1902, c. 784, 82 Stat. 196 [TJ. S.
Comp. St. Supp. 1903, p. 269], relatlng to proeess or renovated butter,
la to provide for the sanitary inspection and the marking and branding
of such butter at the place of manufacture, to the end that none shall be
Bhlpped from the factory which can In any way be Injurions to the health
of the consumer, and the section authorizes the Seeretary of Agriculture
to cause such inspection to be made, and to "make ail needful régula-
tions for carrylng thls section Into effect." A régulation, however, which
prohibits a dealer, recelving or handling such butter after it has been
duly Inspected, marked, and branded, and shipped from the factory, from
obliterating the marks or brands thereon bas no relation to such san-
itary purpose, and finds no warrant in the statute, being calculated only
to prevent fraud on the part of the dealer In hls relations with his cus-
tomers, and there is nothing in the statute which wlll support an indict-
ment or information for the violation of such a régulation.
On Demurrer to Information.
The material part of the information was as follows :
"Francis H, Parker, attorney for the United States for the district of Con-
necticut, who in thls behalf proseeutes In the name of the United States and
for the United States, comes hère into sald court on thls the twenty-flfth
day of August, In the year of our Lord one thousand nine hundred and three,
in his own proper person, and, with leave of the court, for the United States
gives the sald court hère to understand and be informed that heretofore,
to wit, on the nlnth day of February, in the year of our Lord one thousand
nine hundred and three, at the town of Waterbury, In the county of New
Haven, in the state and district of Connecticut, and within the jurisdietion
of this court, Valentine Bohl, of sald town of Waterbury, dolng business
under the name of the "Valentine Bohl Company, and being then and there
a Wholesale dealer in méats, butter, renovated butter, and other food products,
then and there had in his possession for sale. In the usua4 course of his said
business, a tub of renovated butter eontaining thirty pounds, more or less,
in welght of sald renovated butter, packed In a solld body or mass therein,
into the upper surface of which butter, so packed in a solid body or mass
in said tub as aforesaid, had been stamped and branded a mark and brand
eonsistlng of the words 'Renovated Butter,' in letters not less than one-half
inch square, in gothic style, and depressed not less than one-elghth inch,
which said mark and brand In the upper surface of said butter was in ail
respects as required by the statutes of the United States in such case made
and provided, and by the rules and régulations made under date of October
20, 1902, and promulgated under date of November 1, 1902, by the Seeretary
of Agriculture, pursuant to authority vested in him by statute law respecting
the marking and branding of renovated butter, said rules and régulations
requiring that 'when packed In a solid body or mass there shall be stamped
or branded into the upper surface of the butter the words "Renovated But-
ter" in one or two Unes, the letters to be gothic in style, not less than one-
half inch square, and depressed not less than one-eighth inch'; which sald
renovated butter so packed in a solid body or mass in said tub as aforesaid
was made and marked and branded as aforesaid, in factory number 5, in the
Tenth Internai Revenue Collection District in the state of Illinois, after the
first day of July, A. D. 1902, and was thereafter transported from sald fac-
tory, in said state of Illinois, to the sald town of Waterbury, in the state
of Connecticut. And said attorney for the United States further gives said
court to understand and be informed that sald Valentine Bohl, dolng busi-
125 F.— 40
626' 125 FEDERAL EEPOETEB.
ness as aforesald, on salfl nlnth day of February, A. D. 1903, at sald town
of Waterbury, then and there having in his possession for sale as aforesald
sald tub of rpnovated butter, so lawfully marked and branded as aforesald,
dld then and tbere knowlngly, wrongf ully, and unlawf ully deface and destroy
the sald mark and brand consisting of the words 'Renovated Butter,' as
aforesald^ so stamped and branded In letters of the slze and style aforesald,
and depressed to the depth aforesald Into the upper surface of the butter,
paeked In a soUd body or mass Into said tub as aforesald, thereafter holding
in hîs possession for sale the renovated butter In sald tub contalned without
the said mark or brand by statute law of the TJnlted States and the rules
and régulations made and promulgatéd by the Secretary of Agriculture re-
qulred as aforesald, whlch said defacing and destroying of sald mark and
brand so Stamped and branded Into the upper surface of sald renovated but-
ter, so paeked as aforesald In a solid body or mass in the tub aforesald, was
and Is agalnst the peace and dignity of the United States, and contrary to the
form of tiip Btatutes of the TJnlted States in such case made and provided,
and to the rules and régulations of the Secretary of Agriculture made and
promulgatéd in pursuance bf such sta tûtes; for whlch said offense said Val-
entine Bohl, upon a complalnt agalnst him, in writing and under oath, was
duly examlned before William A. Wright, a United States commissioner, by
whom probable cause to hold sald Valentlne Bohl to bail to answer in thls
court thei-efor was duly found, as by a transeript of the proceedings before
said United States commissioner on file in this court fuUy appears."
Francis H. Parker, U. S. Atty.
Nathaniel R. Bronson, for défendant.
PLATT, District Judge. The subjects of section 5 of the act of
May 9, 1902, c. 784, 32 Stat. 196 [U. S. Comp. St. Supp. 1903, p.
269] , are clearly "process or renovated butter," and the niarking and
branding thereof, prior to transportation. It is equally clear that the
purposes of the section are to provide for the sanitary inspection of
such butter at the place of manufacture, and to take every précaution
in order that none shall be shipped from the fadtory which can in any
vay be injurions to the health of the consumer.
The acts of August 30, 1890, and March 3, 1891, ce. 839, 555, 26
Stat. 414, 1089 [U. S. Comp. St. 1901, pp. 3185, 3189], as amended
March 2, 1895, c. 169, 28 Stat. 727, so far as they touch upon thèse
subjects and purposes, are ingrafted into section 5 of act of 1902,
and ail rules and régulations adopted by the Secretary of Agriculture,
which are calculated tocarry such subjects and purposes into full
effect, hâve ail the force of the statute itself. Other portions of the
act in question may gain their efficacy from the taxing clause of the
Constitution, but section 5 goes to the commerce clause as the foun-
tain whence its vigor springs.
It is idle to discuss whether or not the tub of butter, when it reaches
the wholesaler, is still an article of Interstate commerce.
Our crucial question is this : Does a rule or régulation forbidding
the oblitération of the brand, as charged, tend in any manner to aid
in the enforcement of strict sanitary inspection and care, or, if it
pleases the inquirer, in the collection of the tax thereon? It is my
opinion that the rule was of no value in either regard ; it was, on the
contrary, calculated to prevent fraud and subterfuge on the part of
the dealer in his relations with the consumer. I do not décide that
Congress has no power to take up that matter. I am content to say
that in section 5 no such action was taken, nor was any attempt made
UNITED STATES V. SING LEE. 627
to do so. Beyond ail this, if the Congress did intend to take such a
step it signally failed in its effort.
It would be necessary to read into section 5, not only the gênerai
provisions of the acts relating to the inspection of méats and car-
casses, but also the definite penalty inflicted for an infraction of the
former laws, in a situation analogous to that which the Secretary of
Agriculture attempts to provide for in his rules and régulations under
this act. Such action is not permissible, either on strict légal prin-
ciples or upon the basis of fair dealing with the individual citizen.
It follows from what I hâve said that the statute in question afïords
no warrant for the information which the learned District Attorney
seeks to found upon it. The demurrer is sustained.
Let the information be dismissed.
UNITED STATES v. SING LEB.
SAMB V. HAY FOON.
(District Court, W. D. New York. October 8, 1903.)
1. Chinese Excldsion— Procbeding for DErOKTATiON— Bueden op Peoof.
The burden of proof rests upon a Chinese person arrested for déporta-
tion, as being unlawfuUy -within the United States, to sustain his right
to remain, although based on a claim of citizenship, or, in case he Is
ordered deported, to sustain his claim of right to be removed -to a country
other than China, on the ground that he is a subject or citizen of sucli
country.
S. Bame— 80FPICIENOT DP Evidence.
The findings of a commlssioner against the right of a Chinese person,
claiming to be a native of the United States, to remain in this country,
and against the right of another to be deported to Canada as a naturallzed
British subject, held justlfied under the évidence.
Proceedings for Déportation of Chinese Persons. On appeal from
décision of commlssioner.
Mcinerny & Bechtold, for appellants.
Wesley C. Dudley, for the United States.
HAZEL, District Judge. The Chinese persons above named are
awaiting removal from the United States to China pursuant to an
order of removal dated June 3, 1903, made by Commlssioner Heb-
bard, before whom the appellants were adjudged Chinese laborers
unlawfuUy in the United States. From the decree of déportation they
hâve appealed to the District Court within the period of 10 days al-
lowed by law. For Sing Lee it is contended that he is a British sub-
ject, and that, having been found to be unlawfuUy in this country, his
removal therefrom should be to the Dominion of Canada, his place
of domicile, and the country of which he is a citizen. Upon the hear-
ing the appellant, in corroboration of his testimony as to citizenship,
produced a passport issued and dated as long ago as January 17,
1901, by the Under Secretary of State of the Dominion of Canada,
certifying that a Chinese person by the name of Sing Lee is a British
subject by naturalization. It is provided by section 2 of the Chinese
628 125 FBDBBAL EBPOKTBR.
exclusion act of May 5, 1892, c. 60, 27 Stat. 25 [U. S. Comp. St. 1901,
p. 1319], that a Chinese person who is unlawfully within the United
States shall be removed therefrom to China, unless it shall appear to
the commissioner before whom the trial takes place .that such Chinese
person is a subject or citizen of some other country, in which case the
decree of déportation shall direct the removal to such country. But,
in any case where such country shall demand any tax as a condition
of the removal to that country, then such Chinese persons shall be
removed to China. At the argument counsel for the appellant con-
tendèd that the évidence conclusively established Sing Lee's right to
removal to the Dominion of Canada, and it was said that he or friends
for him would pay any tax that might be demanded or imposed upon
his return to Canada. This question is not before the court for déci-
sion, as the évidence fails to establish the appellant's right to removal
to the Dominion of Canada, irrespective of the question of head tax.
It need hardly be said that the passport is not conclusive évidence
of its contents. The cross-examination of the appellant by the United
States attorney quite clearly shows the danger of giving undue weight
to the facts asserted in the passport. Its possession by the appellant
was not satisfactorily accounted for. The document upon its face
bears the name of Sing Lee, written in English, and purports to be
the signature of the bearer. The appellant, however, admits the sig-
nature is not in his handwriting, and fails to give any further informa-
tion regarding it. The burden of proof in this class of cases, both as
to the right to remain within the United States and the right of re-
moval to a country other than China, rests upon the accused. A
United States commissioner before whom a Chinese person claimed
to be unlawfully in this country is tried, is charged in the first instance
with ascertaining aud determining the facts regarding the illégal entry
into the United States. He is not obliged to accept as true the tes-
timony of the person proceeded against, even though such testimony
is uncontradicted and appareritly corroborated. The gênerai rule that
where unimpeached witnesses testify distinctly and positively to a fact,
and are uncontradicted, their testimony should be credited, is well un-
derstood to be subject to many exceptions. Elwood v. Western
Union Telegraph Co., 45 N. Y. 549, 6 Am. Rep. 140; Quock Ting v.
United States, 140 U. S. 417, 11 Sup. Ct. 72>2» 851, 35 L,. Ed. 501.
The exception to the rule, wllich niay be said to be almost as fîrmly
established as tlie rule itSelf; was, I think, properly applied in this case.
In the absence of particularity in thé statements of the appellant, the
commissioner might well believe that the pretended passport was im-
properly procured to aid in evading the law and to delude judicial
vigilance.
For Hay Foon, it is asserted that he is a citizen of the United States
by birth, and his permanent domicile and résidence is in the city of
Baltimore. The appellant's testimony tended to establish his asserted
citizenship and his right to remain in this country. Chew Wing, a
witness for tlie appellant, gave testimony in support of this claim.
As has beén stated, the exclusion act expressly puts the burden upon
Chinese persons to establish their right to remain in the United States.
The burden does not shift because of the asserted claim of citizenship.
IN RE CHAMBERLAIN. 629
The récent case of Chin Bak Kan v. United States, i86 U. S. 193, 22
Sup. Ct. 891, 46 L. Ed. 1121, is décisive authority upon this point.
Chief Justice FuUer, writing for the Suprême Court, uses this lan-
guage :
"By the law the Chinese person must be adjudged unlawfuUy within the
United States unless he 'shall establish by affirmative proof, to the satisfaction
of such justice, judge or commissioner, his lawful right to remain in tlie
United States.' As applied to aliens there is no question of the validity of that
provision, and the treaty, the législation, and the circumstances considered,
compllance with Its requirements cannot be avoided by the mère assertion of
citisienship. The facts on which such a claim is rested must be made to ap-
pear. And the inestimable héritage of citizenship is not to be conceded to
those who seek to avail themselves of it under pressure of a particular exi-
gency, without being able to show that it was ever possessed."
I am unable to say from the évidence that the commissioner erred
in not giving credence to appellant's professions of citizenship. Hav-
ing had the witnesses before him, he was enabled to carefully observe
their manner and conduct in giving testimony; hence his judgment
and décision upon the disputed facts must be given great weight.
Some slight contradictions appear in the appellant's showing; but
the government does not rest upon any assumption that might arise
therefrom. Evidence was given tending to show that, on the day
preceding his unlawful entry into the United States, Hay Foon was
seen by a government inspector on a passenger train proceeding from
Hamilton, Canada, to the frontier at Buffalo, N. Y. He was accom-
panied by the appellant Sing Lee, and by another Chinese person
named Chong Due, who was also found by the commissioner to be
unlawfuUy in this country, but who has not appealed from the decree
of déportation. The évidence on this point is positive and direct.
Hay Foon testifîed, by way of explanation, that he went to Buffalo
from Baltimore to meet his cousin Sing Lee, and awaited his arrivai
from Toronto at the dépôt in Bufïalo, from whence he (Sing Lee) and
Chong Due proceeded to the city of Rochester, where ail three were
arrested and tried. Evidently the commissioner discredited the show-
ing of the appellant and gave credence to that of the government.
Sufificient reason does not appear for disturbing the finding of the
commissioner.
The order of removal in each case is afSrmed.
In re CHAMBERLAIN.
(District Court, W. D. New York. September 25, 1903.)
No. 1,083.
BaNKUDPTCY— COKTESTED APPLICATION rOK DiSCHARGE— BUHDEN OT" pROOF.
The burden of proof is upon an opposlng créditer to establish the
ground for refusing a discharge by clear, positive, and direct évidence;
and where the ground speclfled is the fallure to keep books, and the ad-
judication was prior to the amendment of the bankruptcy act of 1903, It
must be satisfactorily shown that the fallure to keep books was with
fraudulent intent and In contemplation of bankruptcy.
IT 1. See Bankruptcy, vol. 6, Cent. Dlg. |§ T20, 752.
630 125 FBDBBAL BBPOKTÏJB.
8. Samb— Failube to Kbep Booes.
The fact that a bankrupt falled to keep books fully showlng his true
flnancial condition does not warrant a refusai of his discharge, where
there was no concealment or destruction of books, no fraudulent dlsap-
pearance or shrinkage of assets at any tlme, and where the bankrupt ap-
peared and testifled fully and with apparent candor In respect to ail his
business transactions, and produced such books and records as he kept,
whleh contalned no false pr mlsleadlng entries.
In Bankruptcy. On motion to confirm referee's report recom-
mending the bahkrupt's discharge,
George E. Zartman, for objecting creditors.
George F. Ditmars, for the bankrupt.
HAZEL, District Judge. This is a motion to confirm the report
of Asa B. Priest, référée, as spécial rhaster, upon the hearing of cer-
tain spécifications filed in opposition to the bankrupt's discharge.
The bankrupt was adjudicated on June 17, 1902. The objections,
therefore, to his discharge, and the évidence adduced to establish the
spécifications, are governed and controlled entirely by the provisions
of the bankrupt act (Act July i, 1898, c. 541, 30 Stat. 544 [U. S. Comp.
St. 1901, p. 3418]) as it existed prior to the amendatory act of 1903.
The sole ground for refusing a discharge reHed upon by counsel for
opposing creditors is that the bankrupt has failed to keep prôper
books of account or records from which his true financial condition
may be ascertaihed. The évidence admitted to sustain this objection
is wholîy insufficient. The master has correctiy applied the rule that
spécifications in opposition to the debtor's application for a discharge
must be substantiated by évidence which is clear, positive, and direct.
See In re T. R. McGurn, 4 Am. Bànkr. R. 461, 102 Fed. 743, and
cases cited. The burden of proof is upon the opposing creditor to es-
tablish the ground for refusing a discharge by satisfactory and suifi-
cient évidence. In re Hixon (D. C.) 93 Fed. 440. Moreover, it must
satisfactorily appear that the bankrupt's failure to keep books of
account or records from which his true financial condition may be
ascertained must hâve been with fraudiilent intent to conceal such
■condition, and in contemplation of bankruptcy. In re Idzall (D. C.)
96 Fed. 314; Brandenburg on Bankruptcy, p. 230. The évidence
disclosed that the bankrupt repeatedly appeared before the master at
the request of counsel for creditors, giving his testimony without
hésitation, to disclose his t'rue financial condition. There is much in
the évidence justifying the inference that ail the questions propound-
ed to the bankrupt were answered fully and truly. There was no
concealment or destruction of books ; no fraudulent disappearancè or
shrinkage of assets at any time preceding the bankruptcy. Neither
were there any false or misleading entries in such books as were pro- ,
duced. The évidence, in its entirety, shows a willingness on the part
of the bankrupt to explain his business transactions, and the absence
of more complète books and records. The bankrupt was engaged in
a small way in the business of buying and selling pianos, organs, and
musical instruments generally. He kept no accurate books from
which the number of organs and pianos sold, to whom sold, and the
priées received, might be ascertained. Books were produced by the
JOHNSON V. BEIDGEPORT DEOXIDIZEB BEONZE & METAL CO. 631
bankrupt showing bills payable, and some sales of pianos and priées
received subséquent to the year 1900. A few entries of sales of
pianos after January i, 1899, were made ; but such books do not con-
tain ail the sales since that period, as appears not only by the évidence
of the bankrupt, but by conditional sales contracts, which enabled the
bankrupt to testify as to the number of sales of pianos and organs, and
the priées received. The bankrupt appears to hâve used thèse con-
tracts of sales which were in his possession as a substitute for a com-
plète set of books. No knowledge or contemplation of insolvency
can be predicated upon the mère failure to keep more complète books.
If the évidence warranted finding that the bankrupt knew of his in-
solvency preceding the filing of the pétition to be adjudged bankrupt,
and because of his insolvency he failed to keep proper books and
records, a difïerent question would be presented. In re Feldstein,
8 Am. Bankr. R. 160, 115 Fed. 25g, 53 C. C. A. 479. No inference
of fraudulent intent to conceal his property, within the meaning of
section 14 of the original act (30 Stat. 550 [U. S. Comp. St. 1901, p.
3427]), can fairly be drawn from the bankrupt's failure to keep more
accurate books, and therefore the authorities cited by counsel for
creditors do not strictly apply. The évidence of the bankrupt, as a
whole, leads to the conviction that his failure to keep more complète
books of account than such as were exhibited at the hearing was not
owing to any fraudulent intent or in contemplation of bankruptcy.
The fraudulent intent was the primai élément necessary to bar a dis-
charge under section 14, prior to the amendatory provision. Such
a finding is not warranted by the évidence.
The report of the spécial master is confîrmed, and an order dis-
charging the bankrupt may be entered, with costs of the référence to
the spécial master against the objecting creditor.
JOHNSON V. BRIDGEPORT DEOXIDIZED BRONZE & METAL CO.
(Circuit vCourt, D. Conneeticut. Oetober 20, 1903.)
No. 512.
. Fbdehal Courts— Followittg State Practice.
It Is the settled rule of the fédéral court In Conneeticut tliat It ■will
follow the practice of the state court which permits a défendant to suffer
a default and hâve a hearing In damages to the court.
. REMOVAii OF Causes— CoNDrrioN of Cause After Removal.
A défendant in a state court in Conneeticut, who, after filing notices
of his intention to suffer a default and to refuse to plead over and to move
for a hearing in damages to the court, in accordance with the state prac-
tice, removes the cause into the fédéral court, is not required to flle such
notices a second time in that court, the cause standing after removal in
the same condition as it did before in the state court.
On Plaintifï's Motion for Assessment of Damages by Jury.
D. G. Perkins, for plaintiff.
S. C. Loomis, for défendant.
î 2. See Removal of Causes, vol. 42, Cent Dig. J 241.
632 125 FBDBEAL BEFOBTEB.
PLATT, District Judge. Since the décision of Judge Shipman iiï
Raymond v. The Danbury & Norwalk R. Ce, 14 Blatchf. 133, Fed.
Cas. No. 11,593, *^^^ court has invariably followed in this matter the
practice which has prevailed for âges in the state courts. The stat-
ute upon which the practice is founded is undoubtedly peculiar, but
the Raymond Case settled absolutely for this court that it touches only
upon a matter of practice, and in no sensé invades a constitutional
right. The line of argument is too threadbare to endure répétition.
The main contention of the plaintifif is therefore easily disposed of.
In the case under considération, however, the plaintifï raises an
additional objection to the well-established rule by reason of the fol-
lowing facts: The action under discussion was made returnable to
the superior court for New London county on the fîrst Tuesday of
December, 1901. On December 3, 1901, the défendant filed with
the clerk of said court his notice of intention to suffer a default, and
to refuse to plead over, and to move for a hearing in damages to the
court. On the same day he also filed with the clerk his notice of
défense, as required by the statutes and by rules of the state courts.
Having filed thèse notices, he proceeded in the usual manner to bring
about the renioval of the cause to this court, and on December 6,
1901, the order of removal was passed. Separate notices were not
filed in this court within the time required by the statute and rules of
the state court. It is beyond dispute that the cause cornes into this
court laden with whatever proceedings had properly attached thereto
in the state court before its removal, but the plaintiff stoutly contends
that the notices of intention and of défense only apply to the cause
in the condition it was in at the time, and in no sensé évidence his
intended action in the later forum to which he, of his own motion, has
removed it. Such position is altogether too narrow and technical.
If the cause had been removed to some other county under the state
practice, the objection would hâve been quite as meritorious as it is
hère. Any person familiar with the machinery of the fédéral and
state courts in Connecticut can easily imagine a situation in which, if
the plaintifï's contention prevails, it would be impossible for the de-
fendant to avail himself of a right which the local statute has given
him. Passing that, however, I think that he is wrong on principle.
It iç a notice of intention to take a certain position in any forum,
fédéral or state, where jurisdiction of the controversy attaches. The
cause enters this forum with that intention, and proceeds according
to the fédéral statute, as if it had been brought hère originally. The
motion filed by plaintiiï on October 13, 1903, is denied. The damages
will be assessed by the court.
In view of the stress of affairs which burdens the présent incumbent
of the bench, the clerk may hear the facts and report his conclusions,,
if the parties désire such action.
IN EE HAWKIN8. .63à
MAETHINSON et al. v. WINTAH LUMBBR œ.
(Circuit Court, D. Soutli Carolina. June 24, 1903.)
1. ESTOPPEL BT PLEADING— ErRONEOUS ALLEGATION OF ClTIZENSHIP.
Ttie fact tliat a complalnant in a blll, which he afterward dismlssed
througli an error, styled bimself a citizen of tlie District of Columbia,
floes not estop him from stiowing in a second bill tliat lie Is in fact an
alien.
In Equity. On motion by défendant to dismiss.
Mordecai & Gadsden and Montgomery & Stackhouse, for com-
plainant.
Walter Hazard, for défendant.
SIMONTON, Circuit Judge. The complainant in this case some
time heretofore filed a bill against this same défendant, styling bim-
self a citizen of the District of Columbia. Discovering bis error, tbe
complainant discontinued those proceedings, and bas filed the prés-
ent bill, styling bimself an alien, subject to the King of Denmark.
Tbe plea having been flled, the complainant did not answer same until
two rule days after tbe filing of tbe plea. A motion is now made
to dismiss the bill upon the ground that the replication to the plea
in abatement was not filed in time, and upon the further ground
that the complainant, having instituted proceedings styling bimself
a citizen of tbe District of Columbia, is estopped from filing a subsé-
quent proceeding styling bimself an alien. He is not estopped, be-
cause in bis first bill he styled himself a citizen of the District of Co-
lumbia, from sbowing that he is in fact an alien. Carson v. Hyatt,
Ii8 U. S. 279, 6 Sup. Ct. 1050, 30 L. Ed. 167. Tbe testimony sub-
mitted shows conclusively that he never was a citizen of tbe United
States, having been born a subject to the King of Denmark and
never been naturalized.
With regard to tbe failure to reply to tbe plea on tbe rule day after
the plea was filed, sufficient excuse has been shown by complainant's
attorney, and tbe motion of tbe défendant is overruled on botb
grounds. An order will be entered accordingly.
In re HAWKINS.
(District Court, W. D. New York. September 17, 1903.)
No. 1,322.
1. Bankrcptct— Privatb Sale of Property of Estate— Discrétion of
REPEREE.
A court of bankruptcy or a référée has discretionary power to order
a private sale of a banknipt's property, with or without notice, and the
action of a référée in directlng such a sale ought not to be disturbed,
unless it clearly appears that his discrétion was improvidently exercised.
In Bankruptcy. On motion to vacate private sale of bankrupt es-
tate by trustée pursuant to directions of référée.
63é 125 FEDERAL EEPORTBB.
Werner & Harris, for objecting creditors.
E. J. Fisk, for trustée.
HAZEL, District Judge. The Suprême Court, by gênerai order
No. i8, subd. 2 (i8 Sup. Ct. vi), must be regarded as giving a con-
struction to the bankrupt act authorizing a court, including the
référée, to direct a private sale, with or without notice, for good and
sufîficient cause Shown. District rule 14 carries out this view. On
May 28, 1903, an application was made by the trustée to the référée
for leave to sell the property of the bankrupt at private sale. The
référée bçcoming satisfied that the bankrupt estate, on account of
the reasonS Set forth in the application, would be benefited by pri-
vate sale, directed such sale without notice to creditors, and pursuant
thereof certain property of the bankrupt has been sold and deliv-
ered, and th? purchase price fuUy paid. The sale of other property,
consisting of lands situated in a Western state, has been agreed
upon, the terms being satisfactory to the trustée, who is ready to
deliver the deed upon recçiving the purchase price. The discre-
tionary power of the référée directing a private sale of a bankrupt
estate ought not to be disturbed, unless it clearly appears to hâve
been improvidently exercised. The facts appearing by the moving
papers do not disclose an abuse of discrétion or lack of good faith
by the trustée or the appraisers or any one acting in behalf of the
bankrupt estate. In the absence of such a showing the judgment
of the référée that "the trustée has done remarkably well as regard
both the Personal property and real estate in realizing a sum therefor
equal to the appraiser's valuation," will be accepted by this court
as final.
Motion denied.
. HBLMBATH y. UNITED STATES.
(Circuit Court, D. Massachusetts. May 26, 1903.)
No. 1,121,
L CnsTOMs Ddties—Classifioation—Leathbr— Seins foe Mokocco— Sheep-
SKINS.
The provision In Tarife Act July 24, 1897, c. 11, § 1, Schedule N, par.
438, 30 Stat. 192 [U. S. Comp. St. 1901, p. 1676], for "skins for morocco,"
is not limlted to goatskins, but includes also certain sheepskins known
as "New Zealand basils," or "Cape sheepskins."
On application by the importer to review a décision of the Board
of General Appraisers, which afSrmed the assessment of duty by the
collector of customs at the port of Boston on the importation in
question.
The décision of the hoard was an unpuhllshed one, followlng In re Goat &
Sheepskin Importlng Company, Q. A. 4885, which reads as follows:
"FISCHER, General Appralser. The merchandise In question conslsts of
tanned, but unflnished, sheepskins, which were returned for duty by the local
appralser as 'leather not speclally provlded for.' Duty was assessed thereon
at the rate of 20 per cent, ad valorem, under the provisions of paragraph 438
of the act of July 24, 1897, e. 11, § 1, Schedule N, SO Stat. 192 (U. S. Oomp.
FENNO V. PKIME08B. 635
St 1901, p, 1676). The Importer claims sald merGhandlse is dutlable at the
rate of 10 per cent, ad valorem, under the provisions of sald paragraph, as
'skins for morocco, tanned but unflnlshed.' Thèse are skins of the sheep
known as 'New Zealand basil' or 'Cape sheep.' The évidence fully convinces
us that the morocco leather of commerce is made only from the sklBs of
goats, and that the class of leather made from the kinds of skins before us
is not known as morocco, but Is known as imitation morocco. Commerce
clearly dlstinguishes between the two. When morocco leather is asked for,
leather made from goatsklns is clearly Intended, and when dealers buy leather
made from sheepskins it Is designated as imitation morocco. Upon ail the
évidence before us, we find that the articles in question are not skins for
morocco, and overrule the protest. Référence is made to the case of United
States V. Stone, 101 Fed. 713, 41 0. C. A. 624, whereln the United States Cir-
cuit Court of Appeals held that paper known commercially as 'imitation parch-
ment paper' was not dutlable as parclmient paper, but as paper not otherwlse
provided fon"
On proceedings to review this décision before the Circuit Court much évi-
dence additlonal to that before the board was taken in behalf of the importer,
eight or nlue witnesses being examined, whose évidence showed that, while
goatskins are chieily used for maklng morocco, certain kinds of sheepskins,
particularly the kind in question, known as "New Zealand baslls," or "Cape
sheepskins," are not only chiefly used for this purpose, but almost exclusively.
J. Stuart Tompkins and Charles P. Searle, for the importer.
Mr. Garland, Asst. U, S. Atty.
COLT, Circuit Judge. By the great prépondérance of évidence in
this case, a large proportion of which was not before the Board of
General Appraisers, the importations in question are shown to be
"skins for morocco, tanned but unfinished," and therefore dutiable at
10 per cent, ad valorem, under Act July 24, 1897, c. 11, § i, schedule
N, par. 438, 30 Stat. 192 (U. S. Comp. St. 1901, p. 1676). It follows
that judgment must be entered for the petitioner.
Judgment for the petitioner.
Order,
The court fînds that the term "skins for morocco" îs nol a com-
mercial or trade term or désignation defînitely, uniformly, or gen-
erally used in the United States, and applied to the class of merchan-
dise in controversy. The court further fînds that "skins for mo-
rocco," in the commercial sensé of the term, describes the merchan-
dise in controversy. Upon the foregoing findings of fact the court
rules that the merchandise in question is properly dutiable at 10
per cent, ad valorem, under paragraph 438 of the tarifï act of 1897,
as "skins for morocco, tanned but unfinished."
FBNNO et al. v. PRIMROSE et al.
(Circuit Court, D. Massachusetts. October 28, 1903.)
No. 1,580.
L Equitt— Pbocedurb— Praming Issues for Jurt.
A fédéral court of equlty will not, on demand, after the Joining of Issue
by the pleadings, but before the évidence has been taken in accordance
with the usual practlee in equity, frame issues to be submltted to a jury,
«specially when It cannot be known at that stage of the case that 6uch
lssut!8 will be décisive or even materiaU
636 125 FBDEB^L REPORTEE.
, In Equîty. On application to frame issues for a jury.
See ii6 !Fed. 49.
Storey, ThOrndike, Paliiier & Thayer, for complainants.
Whipple, Sears & Ogden, for défendants.
PUTNAM, Circuit Judge. This is an application of complainants
m a cross-l?ill in a cause in equity to frame issues for a jury. The
case has been put in issue by an answer and replication, but bas pro-
ceeded no further. The opposing party claims that at this stage of
the case the court has no power to grant the application. Of course,
following the usual définition of power as frequently used in equity
proceedings, this means that at this stage of the case the court cannot
properly exercise judicial discrétion in behalf of the application.
The court inquired of counsel at the hearing whether the ordinary
practice in this particular had been modified by late statutes in référ-
ence to the method of taking proofs in equity, having spécial référ-
ence to Act March 9, 1892, c. 14, 27 Stat. 7 [U. S. Comp. St. 1901,
p. 664]. Apparently neither party is of the opinion that the statute
is relevant. Whatever doubts the court might hâve had on that
question are removed by the practical construction given this statute
by the Suprême Court in the rule adopted at the October term, 1892,
promulgated in the appendix to 149 U. S., and now constituting the
last paragraph of rule of practice in equity No. 67, according to the
authorized édition of the rules of 1903. This reads as follows :
"ITpon due notice given as prescrlbed by previous order, the court may, at
its discrétion, permit tlie whole, or any spécifie part, of the évidence to be
adduced orally In open court on final hearing."
The limitation of this rule of the application of the statute to final
hearings clearly removes it from our présent considération.
The bill and the cross-bill relate to certain consignments of wool
by the plaintiffs in the cross-bill to the défendants therein, as to which,
among other things, the plaintiiïs in the cross-bill maintain that the
défendants therein disobeyed instructions with référence to sales, and
otherwise fàiled to properly perform their duties as consignées. In
the proposed issues for the jury the word "défendants" means the
défendants in the cross-bill, and the word "plaintififs" the plaintifïs
therein. The proposed issues are as follows :
"(1) Were the sales of wool made by the défendants between January 18,
1898, and November 8, 1898, Inclusive, made in the service of reasonable
skill and prudence on the part of the défendants, and at priées authorized or
ratifled by the plaintiffs?
"(2) Did the plaintiffs authorlze or confirm the sale of Denver and TJtah
wool made by the défendants, except wlth the understanding that the priée
realized for the whole lot should be twenty cents ail around?
"(3) Were the sales of wool made by the défendants between July 31, 1899,
and September 2, 1899, Inclusive, made by the défendants In the exercise
of proper skill, discrétion, and Judgment, or not?
"(4) If this question Is answered in the n^atlve, hâve the sales of wool
made by the défendants between July 31, 1899, and September 2, 1899, been
ratified aijd conflrmed by the plaintiffs?
"(5) Hâve the plaintiffs ever authorized or ratified the sales of wool which
were not reported to them, made by the défendants between March 11, 1899,
and June 13, 1^9, inclusive?
FENNO V. PEIMROSE. 637
"(6) Did the défendants agrée to crédit the plaintiffs wlth a rebate of two
per cent, on the twenty thousand dollars advaneed by the plaintiffs to the
défendants?
"(7) Did the défendants hâve authority to sell any wool on behalf of the
plaintiffs after October 12, 1899?
"(8) Did the défendants on or before October 12, 1899, wrongfully exercise
the power of disposition over the plaintiffs' wool then in their possession, and
thereby or otherwise couvert the same to their own use?
"(9) Did the défendants on or after October 12, 1899, fail to exercise rea-
sonable care, skill, and diligence in the performance of their duty as com-
mission merchants in référence to the plaintiffs' vfool then in their possession;
and, if so, what is the amount of damage, if any, which the plaintiffs suf-
fered thereby?"
If thèse issues involved only a single fact, which lay at the very
foundation of the suit, as to which it was apparent to the court that
the détermination thereof by the jury, at least in one direction, would
dispose of the litigation, it would probably be within our discrétion
to direct the framing of issues at this stage. Such apparently seems
to be the rule as stated in Daniell's Chancery Practiçe^ vol. 2, 735,
édition of 1840, which édition has been accepted by the Suprême
Court. On the other hand, the same author, at the same page, says,
"In gênerai, however, the court will not grant an issue upon motion
before hearing unless upon consent." But the rule is laid down
positively in an authority which we need not go beyond. Adams,
Equity (8th Ed.) *376, speaking of framing an issue, says :
"It can, however, only be adopted where the évidence créâtes a doubt, and
not as a snbstitute for omitted évidence, and therefore the party clalming the
issue must first prove his case by regular dépositions."
The reason of this rule is apparent, and it is well illustrated by an
inspection of the proposed issues submitted to us. At this stage it is
impossible to détermine whether such issues will ever become mate-
rial, or, if yes, whether they can now be put in such form as to an-
swer the purpose sought to be accomplished, or whether, when the
proofs hâve been taken according to the ordinary procédure in equity,
any substantial dispute will be left in référence to any of them. In
other words, with issues of this character, it is apparent that at this
stage the court, if it ordered a trial by jury, would hâve no reason-
able certainty of accomplishing anything thereby, except plunging the
parties into expensive, protracted, and useless collatéral litigation.
The applicants call attention to the facts that the issues they pré-
sent arise peculiarly at common law, as to which there is ordinarily
a clear right to a trial by jury, and that they attempted to présent
thèse issues in a suit brought by them, which suit was restrained by
the bill to which they hâve replied with the cross-bill, raising the
controversies which the issues seek to présent. The court has not
overlooked thèse propositions, but they do not outweigh the diffi-
culty we hâve explained. Of course, there is a probability that at
the proper time the court may permit framing issues covering the
substance of what is now proposed, or may direct the pith of them to
be tried in the pending suit at law, either of which it may do accord-
ing to the settled practice in equity, provided it hereafter appears
that either party would be duly advantaged thereby. Consequently
the order dismissing this application will be a qualifîed one.
638 125 FEDERAL EEPOUTEK.
The application of the plaintifïs in the cross-bill that issues may
be framed for a jury is denied, for the reasons stated in our opinion
passed down this day, without préjudice to a renewal hereafter.
SCHNEIDER v. BLDREDGB.
(Circuit Court, N. D. Illinois, N. D. November 2, 1903.)
No. 26,690.
1. Removal, dp Causes— Causes Kemovable— Suit on Claim Against Estate.
A suit on a clalm against the estate of a décèdent is within the removal
act, although the claim was originally flled In the probate court.
8. SAMB— DiVKRSITY DP CiTIZENSHIP— RBAL PaUTY IN IkTKUEST.
TJnder the Illinois statute, which gives any one aggrleved by the order
of a probate court allowing a claim the rlght to appeal, as construed by
the Suprême Court of the state, any person appealing, other than the
administrator, may prosecute the appeal in his own name. Held, that
where the claimant was the administrator, and an administrator pro
tem. was appointed by the probate court to represent the estate, but
the çlalm was actually contested by an helr of the décèdent, who ap-
pealed frOm an order allowing the claim, the question of diversity of
eitizenship between the parties was to be determined upon the citizenship
of sueh appellant, and not upon that of the administrator pro tem.
3. Samb— Time eor Rbmotal— Trial in Pbobatb Court.
An heir of a décèdent, who contests a claim against the estate in the
probate court in lUinoi?, which is a court of record, and there goes to
trial on the merits, eannot thereafter remove the cause from the circuit
court, to which he bas taken it on appeal.
On Motion to Remand to State Court.
H. M. Kelly and F. D. Ayers, for claimant.
John F. Haas and Frank E. Hayner, for objector.
KOHLSAAT, District Judge. Plaintifif was duly appointed and
qualified as administratrix of the estate of Bertha C. C. Schneider,
deceased, by the probate court of La Salle county, 111. On November
19, 1901, while still acting as such administratrix, she filed her two
claims against her decedent's estate, one in the sum of $550, for
moneys paid out by her for her intestate, and the other in the sum
of $7,200, for services as nurse and for care and maintenance. On
November 25, 1901, the probate court appointed Edgar Eldredge
administrator pro tem. in both causes. On November 26, 1901,
William F. Mayer appeared as an heir at law of claimant's décèdent,
and filed his objections to the allowance of said claims, setting up
that he had an interest in the estate which would be afïected by the
allowance or rejection thereof. On December 10, 1901, claimant
was permitted by the court to increase her demands in the sum of
% 1. Probate jurisdiction of fédéral courts, see note to Bedf ord Quarries Oo.
V. Tomlinson, 36 C. C. A. 276.
1 2. Diverse citizenship as ground of fédéral jurisdiction, see notes to Shipp
T. Williams, 10 C. C. A. 249; Mason v. Dullagham, 27 C. C. A. 298.
T 3. See Removal of Causes, vol. 42, Cent. Dig. § 10.
SCHNEIDER V. ELDEEPGE. 639
$876. On January 2, 1902, the said daims were Consolidated. On
january 3, 1902, a trial was had before a jury of six men, who ren-
dered a verdict for claimant in the sum of $7,595-39. and the court
thereupon allowed said consolidated claims for said sum as of class 7.
From this order said Wm. F. Mayer prayed an appeal to the circuit
court of La Salle county, aforesaid, which was granted upon his
filing his appeal bond in the pénal sum of $250. On January 11,
1902, the same was approved. The appeal was afterwards duly per-
fected, and the cause proceeded, entitled as above. Afterwards the
said circuit court forced the cause to trial, and rendered judgment
for the claimant against the protest of Mayer, who then took an
appeal to the proper appellate court. On hearing had, that court
reversed the said circuit court judgment on the ground that the court
had not at the time of such action jurisdiction in the matter for
that purpose. Said cause was docketed in the appellate court under
the title of Wm. F. Mayer v. Mary L. C. Schneider. Afterwards, and
on March 9, 1903, and in due time, said Mayer presented his pétition
and bond for removal, which were in proper form. On March 19,
1903, the pétition was denied by said La Salle county circuit court.
Thereupon the record was on March 26, 1903, duly filed in this court.
The cause now cornes on to be heard upon motion to remand.
In support of the motion, plaintiflf insists :
(i) That because the suit is founded upon a daim filed originally
in the probate court it does not come within the meaning of the
statute granting a removal. I do not deem this point well taken, and
it is overruled.
(2) That the administrator pro tem. and the plaintifif both being
citizens of this state, there is no diversity of citizenship. It appears
that défendant Mayer is now, and was when the claim was filed, and
also at the time of filing the pétition for removal, a nonresident, and
a citizen and résident of Columbus, Ohio. Was the question of
diversity of citizenship to be determined upon the citizenship and
résidence of the administrator pro tem? Under the statute of Illi-
nois, any one aggrieved by the order of a probate court allowing
a claim has the right to appeal. Section yz of the administration
act of Illinois (Hurd's Rev. St. 1899, c. 3) provides that, "when an
administrator or executor présents a claim against the estate of his
décèdent or testator, the court shall appoint some discreet person
to appear and défend for the estate, and upon the hearing the court
or jury shall allow such demand or such part thereof as is legally
established. * * * Should any executor or administrator appeal
in such case, the court shall appoint some person to défend as
aforesaid." While this, by its terms, applies only to appeals by the
claimant, executor, or administrator, it détermines the status of the
administrator pro tem. His duties would seem to end with the
probate court. However that may be, in the case of Pfirshing v.
Falsh, 87 111. p. 260, the court holds that, under the statute allowing
any one aggrieved an appeal, any person, other than the adminis-
trator appealing, may prosecute the appeal in his own name, and need
not use the name of the administrator. The appeal in this case
seems to hâve been docketed by the clerk of the circuit court iu
640 125 FEDERAL BEPORTEB.
the name ôf the admînîstrator pro tem., who, it seems, did not appear
nor pay any further attention to the case. There would seem to be
some confusion as to the manner of docketing such cases in the
circuit court, as the statute does not prescribe the method. But,
from the records of ail three of the courts in which the case was
heard, it is manifest that Mayer was the only moving party, espe-
cially in the circuit and appellate courts. It is true that the record
does not disclose the condition of decedent's estate as to whether
there will remain anything for distribution to the heirs at law of dé-
cèdent. In the absence, however, of any suggestion of such a situ-
ation in the record, I must assume that the défendant Mayer has a
substantial interest in the case. While it is well establishêd that the
résidence of the représentative of a deceased person contrôla the
question of jurisdiction, yet in a case such as this, considering the
Illinois law, this court will take into considération the actual party
in interest, Mayer, as though he were the original défendant. He
was at the time of the filing of the claim, and at the time of filing of
the pétition for removal, a nonresident and a citizen and résident of
Ohio. The diversity of citizenship required by the statute in such
case is therefore establishêd.
(3) The claim that both of the heirs of claimants décèdent should
join in the pétition for removal is not well taken, and is overruled.
(4) It is urged that Mayer did not file his pétition to remove the
cause in apt time. Under the removal act of March 3, 1887, c. 373,
24 Stat. 552 [U. S. Comp. St. 1901, p. 508], and Act Aug. 13, 1888,
c. 866, 25 Stat. 433 [U. S. Comp. St. 1901, p. 508], the cause was
removable from the state court having original jurisdiction. Clearly
the probate court had original jurisdiction in that matter, as had also
the circuit court of La Salle county and this court. Having gone to
trial in the probate court, and the case having been disposed of upon
the merits, Mayer has lost his right to bring the cause to this court.
He is no more a party to the proceeding now than he was at the
time he fîled his objection in the probate court to the allowance of
the claim. The trial in that court was the fuU équivalent of the
words, "any time before the défendant is required by the laws of the
state or rule of the state court * * * to answer or plead." There
could be no removal from the circuit court, after such a trial, even
though the statutes provide for a trial de novo. Craigie v. McArthur,
Fed. Cas. No. 3,341, decided by Judges Nelson and Dillon; Hess v.
Reynolds, 113 U. S. p. 80, 5 Sup. Ct. 377, 28 L. Ed. 927 (arguendo).
The cases seemingly holding to the contrary, so far as I hâve been
able to ascertain, are based upon the theory that the trial body was
not a court of record. Cases cited and turning upon the right of
removal on account of préjudice are not in point. The probate court
pf Illinois is a court of record. The case at bar was tried by a jury.
The motion to remand is granted.
m EE MOT QUONG SHINQ. 641
In re MOT QUONG SHING et at
(District Court, D. Vermont October 6, 1903.)
L Alikws—Chinbsk— Déportation— Habbab CoBPUi — Dbtentioh — AtriHO»-
ITT.
Under Act Cong. Feb. 14. 1903, c. 552, § 7, 32 Stat. 828 [XJ. S. Comp. St.
Supp. 1903, p. 46], placlng jurisdiction of the déportation of aliens in the
Department ot Commerce and Labor, a return to a writ of habeas corpus
by an alleged Chinese alien, showlng tbat défendant was an offlcer ot Im-
migration under control of the commlssioner gênerai in charge of the
port where the alien attempted to enter, by désignation of the Secretary
of Commerce and Labor, and that he held such Chinese person as such
offlcer, sufHciently showed authority for the détention.
I. 8ame— Plack of Birth — Détermination — JnaiSDiCTiON of Execotivb
Under Àct Cong. Feb. 14, 1903, c. 552, S 7, 32 Stat. 828 [U. S. Comp. St
Supp. 1903, p. 40], glvlng the Department of Commerce and Labor juris-
diction of the admission of aliens, and authorizing such department to
prescrlbe rules and régulations for the détermination of the rlghts of
aliens to admission, the executive officers of such department had author-
ity to détermine whether or not a Chinese person seelilng admission had
been born In the United States, and was therefore a citizen entitled to
enter.
3. SAME— RtJLES.
Under Act Cong. Feb. 14, 1903, c. 552, § 7. 32 Stat. 828 [U. S. Comp.
St. Supp. 1903, p. 46], placlng jurisdiction of the admission of aliens In
the Department of Commerce and Labor, such department had authority
to prescrlbe rules of évidence relating to presumptions and burden ot
proof In the détermination of an alien's right to admission.
On Habeas Corpus.
Fuller C Smith, for relators.
James L. Martin, U. S. Atty.
WHEELER, District Judge. The persons detained are of the
Chinese race, lately from China, and are restrained of their Hberty
at the port of Richford, where they sought to enter this country.
The pétition set forth restreint in a détention house by persons act-
ing as officers of the United States, and challenged their authority
and the legaHty of their proceedings. The return of the petitionee,
Weeks, shows that he is an ofificer of immigration, detaining the
men under direction of Officer Schell, whose return, filed by îeave of
court, shows that he is an officer of immigration under control
of the commissioner gênerai in charge of this port by désignation
of the Secretary of Commerce and Labor. This seems to show regu-
lar and sufficient authority, within Act Feb. 14, 1903, c. 552, § 7, 32
Stat. 828 [U. S. Comp. St. Supp. 1903, p. 46], placing jurisdiction in
the Department of Commerce and Labor.
The proofs show that the men came by train, and presented them-
selves for admission, and, when reached, were informed that they
would then be examined as to their right to come in, and that, being
questioned through an interpréter, they said they had been told by
1. Cltlzenship of Chinese, see notes to Gee Fook Slng t. United StatM, i
O. C. A. 212; Lee Slng Far v. United States, 35 C. C. A. 332.
125 F,— 41
^43 ,12^ FEDERAL BHPORTBIt.
their parents th^t they were born in the United States, of which they
had no recollection, and claimed to conle in as native-born citizens.
That such citizen, of whatever race, on arriving at a port of this
country, is entitled to come in, is not questioned or questionable.
The contention now is that when such a claim is made the executive
ofïîcers hâve not authority to pass upon it, and that it must go for
décision, if denied, to court? or judicial ofïîcers on some proper pro-
ceeding, of which this is said to be one. That the législative depart-
ment may exclude any race, or classes of any race, not citizens, from
the country, and identify and return those not entitled to come by
executive as well as judicial officers, seems to be too well settled by
numerous and uniforni décisions of the Suprême Court to require or
warrant citations. And in Chin Bak Kan v. United States, i86 U.
S. 193, 22 Sup. Ct. 891, 46 L. Ed. 1121, Mr. Chief Justice Fuller, for
the court, said, after referring to United States v. Wong Kim Ark,
169 U. S. 649, 18 Sup. Ct. 456, 42 Iv. Ed. 890, where it was held that
Chinese petsons born in the United States are citizens :
"It is Impossible for us to hold that it Is not compétent for Congress to em-
power a tTnitéd States eommissioner to détermine the varions tacts on which
citizenship dépends under that décision."
It seemç equally impossible to hold that, when Congress can com-
mit the exécution of the law, and the décision of questions arising
therein, to the décision of executive ofïicers, it cannot also include
the fact as to place of birth. The judicial powers of a eommissioner
are wholly conferred by act of Congress, and power to décide ques-
tions arising in executive proceedings may as well be conferred upon
executive officers as upon others. Thèse questions as to the place
of birth of thèse applicants arose for décision with other questions
before this officer, and no other way but for him to décide them is
made apparent.
It is claimed that the proceedings of this immigration officer,
Schell, did not so conform to the rights of the applicants that the
détention pursuant thereto was lawful. In the Japanese Immigrant
Case, 189 U. S. 86, 23 Sup. Ct. 611, 47 L. Ed. 721 (at page 100, 189
U. S., page 614, 23 Sup. Ct., 47 L. Éd. 721), Mr. Justice Harlan said:
"But this court bas never hçld, nor must we now be understood as holding,
that administrative oflacers when execnting the provisions of a statute in-
volvlng the llberty of persons, may disregard the fundamental prlnclples that
inhere in 'due process of law,' as understood at the time of the adoption of
the Constitution. One of thèse prlnclples is that no person shall be deprived
of his llberty wlthout opportunlty at some time to be heard before such
officers in respect of the matters upon which that llberty dépends — not neces-
sarily an opportunlty upon a regular, set occasion, and accordiug to the
forms of judicial procédure, but one that will secure the prompt, vlgorous
action contemplated by Congress, and at the same time be appropriate to the
nature of tjbe case upon which such officers are required to act. Therefore
it Is not cbiiipetent for thé Secretary of the Treasury or any executive offi-
cer, at any time withln the year limited by the statute, arbltrarily to cause
an alien who has entered the country, and has become subject in ail re-
spects to its jurisdiction and a part of Its population, although alleged to
be lllegally hère, to be taken into custody and deported without giving hlm
ail opportunlty to be heard upon the questions involvlng hls rlght to be and
remain In the United States. No such arbltrary power can exlst where the
prlnclples Involved In due process of law are recognlzed."
m EE MOT QtrONG SHING. 643
It appears that the immigration officer is governed by Chinese rég-
ulations made by the Department of Commerce and Labor, among
which are :
"Eule 6. Immediately upon the arrivai of Chinese persons at any port men-
tioned in rule 4 it shall be the duty of the officer in charge of the administra-
tion of the Chinese exclusion laws to adopt sultable means to prevent com-
munication with them by any persons other than ofBcials under hls control,
to bave said Chinese persons examined promptly as by law provided, touch-
ing their rights to admission, and to permit those proving such right to land.
"Rule 7. The examlnation prescribed in rule 6 should be separate and
apart from the public, in the présence of government officiais and such wlt-
ness or witnesses only as the examining officer sh^ill designate, and, if, upon
the conclusion thereof, the Chinese applicant for admission is adjudged to
be inadmissible, he should be advised of bis right of appeal, and his counsel
should be permitted, after duly flling notice of appeal, to examine, but net to
make copies of, the évidence upon which the excludlng décision is based."
"Rule 21. The burden of proof in ail cases rests upon Chinese persons claim-
ing the right of admission to, or résidence within, the United States, to estab-
lish such right affirmatively and satisfactorily to the appropriate government
offlcers, and in no case in which the law prescribes the nature of the évidence
to establlsh such right shall other évidence be accepted in lieu thereof, and in
every doubtfui case the benefit of the doubt shall be given by administrative
offlcers to the United States government."
It also appears that in thèse cases the oiificer in charge, with com-
mendable care, informed each applicant that other witnesses would
be heard and sent for, if there were any, and that no claim was made
that there were any.
In the Japanese Immigrant Case, Mr. Justice Harlan further said :
"The traverse to the return made by the immigration inspecter shows upon
îts face that she was before that officer pending the Investigation of her right
to be in the United States, and made answers to questions propounded to her.
It is true that she pleads a want of knowledge of our language, that she did
not understand the nature and import of the questions propounded to her, that
the investigation made was a 'pretended one,' and that she did not at the time
know that the investigation had référence to her being deported from the
country. Thèse considérations cannot justify the intervention of the courts."
Hère the applicants presented themselves for examination for ad-
mission, and were held till, and were présent when, it was had, and
knew what was going on. They came for the examination, and
should hâve come prepared with any évidence they had and wished
to introduce to maintain their claims. That others were kept from
them before or during the examination, or any préjudice to them in
conséquence of the rule, is not shown. They had, so far as appears,
ail the examination they wanted.
The rule of évidence prescribed may put upon the applicants more
than proof to the satisfaction of the officer, and require that beyond
doubt ; but the rules of évidence go with the authority to décide, and
are included in it, and their correctness or their application furnishes
no ground for interférence.
Persons remanded.
641 125 FBIDBÇAL BEFORTEB.
TRBAT T. CITY OF CHICAGO et al.
(Circuit Court, N. D. Illinois, Northern Division. November 2, 1903.)
No. 26,308.
L Municipal Corpokatiohs — Validitt of Spécial Assebsment— Effect of
JODGMBNT UNDEB IlLINOIS StATOTE.
Section 7 of the Illinois local improvement act of 1897 requires tlie
résolution ordering an improvement to include the itemized estimate of
the engineer, and such requirement, under the décision of the Suprême
Court of the state, is jurisdlctional. But section 66 of the same act, as
amended in 1801 (Starr & O. Ann. Sf. Supp. 1902, c. 24, par, 103), pro-
vides that when an application is made for judgment of sale on an in-
Stallment of an assessment payable in installments ail questions afCecting
the jurisdiction of the court to enter the judgment of confirmation and the
validlty of the proceedlngs shall be raised and determined on the first of
Buch applications, and that on an application for judgment of sale on any
subséquent installment no défense, except as to the legaUty of the pend-
Ing proceeding, the amount to be paid, or actual payment, shall be made
or heard. HeM that, construlng such provisions together, the inclusion of
the englneer's itemized estimate In the resolution is made jurlsdictional
only in case the question Is raised on the application for judgment on
the flrst Installment, and that where It is not so raised the judgment in
Buch proceeding is conclusive of the validlty of the assessment
In Equity. On demurrer to bill.
George W. Wilbur, for complainant.
Edgar B. Tolman, for défendant city of Chicago.
KOHLSAAT, District Judge. Complainant files his bill for an
injunction restraining the city from causing certain premises belong-
ing to him to be sold to satisfy the second installment of a spécial
assessment against the same. The first installment was duly paid.
The payment of this second installment has been resisted in the
State courts, Circuit and Suprême, and decided adversely to com-
plainant.
The bill proceeds upon the theory that the state court proceedings
were and are void for want of jurisdiction, for the reason that the
board of local improvements of the city of Chicago failed to include
in its resolution tlae itemized estimate of the engineer, citing the case
of Joseph Bickerdike et al. v. City of Chicago (decided by the Su-
prême Court of Illinois, Oct. 20, 1903, and not yet ofïicially reported)
58 N. E. 161, wherein the court holds, on an appeal taken from the
judgment of the county court of Cook county, 111., imposing a spé-
cial assessment for street improvement, that "the proceedings prior
to the adoption of the ordinance required by the statute are jurisdic-
tional, without which no valid ordinance can be passed, and conse-
quently no valid assessment be made." The court there proceeds to
hold the ordinance in that case invalid for the want of an itemized
engineer's estimate, as is insisted on by complainant in this case.
Défendants demur to the amended bill, and set up section 66 of
the local improvement act of 1897, as amended in 1901, which provides
that:
"Upon the application for judgment of sale upon such assessment or ma-
tured Installments thereof, or the interest thereon, or the Interest accrued on
TRBAT V. CITT OF CHICAGO. 645
installments not yet matured, no défense or objection sball be made or heard
which might hâve been interposed In the proceedlng for the making of such
assessment, or the application for confirmation thereof, and no errors in the
proceeding to conflrm, not alïecting the power of the court to entertaln and
consider the pétition therefor, shall be deemed a défense to the application
hereln provided for. When such application is made for judgment of sale
on an installment only of an assessment payable by installments, ail ques-
tions affeeting the jurisdiction of the court to enter the judgment of con-
firmation and the validity of the proceedings shall be raised and determined
on the first of such applications. On application for judgment of sale on any
subséquent Installment no défense, exeept as to the legality of the pending
proceeding, the amount to be paid, or actual payment, shall be made or
heard. And It shall be no défense to the application for judgment on any
assessment or any installment thereof that the work done under any ordi-
nance for an improvement does not conform to the requirements of such
ordinance, if It shall appear that the sald work bas been accepted by or
under the direction of the board of local improvements. And the voluntary
payment by the owner or his agent of any installment of any assessment
levied on any lot, block, tract or parcel of land, shall be deemed and held in
law to be an assent to the confirmation of the assessment roll, and to be
heM to release and waive any and ail right of such owner to enter objections
to the application for judgment of sale and order for sale." Starr & O. Ann.
St. Supp. 1902, c. 24, par. 103.
Ordinarily a void proceeding cannot be made valid by lâches or
even consent. If it is void, no one is bound by it at any stage there-
of. If said amended section 66 is to be construed to mean that courts
can be by statute deprived of the power to inguire into a jurisdictional
point at any time, the législature must be held to hâve exceeded its
prérogatives.
The courts are an independent arm of the government, and hâve
a constitutional power distinct from that of the other branches of
government in which they are suprême. They cannot be deprived
of the power to déclare void any proceeding which is the resuit of the
assumption of unconstitutional powers by its author.
In the case of Downey et al. v. People, etc. (decided by the Illinois
Suprême Court at its October, 1902, term, but apparently not offi-
cially reported) 68 N. E. 807, section Πis sustained. It would seem
that the term "jurisdiction" is used somewhat loosely in the act. It
will be observed, however, that the jurisdictional clause herein raised
grows out of the statute, and does not présent a constitutional ques-
tion. It was within the power of the state Législature to hâve made
the inclusion in the resolution of the board of a summary statement
of the engineer's estimate of the amount required a basis for the as-
sessment, instead of an itemized statement thereof.
Considering now that said section 66 is a part of the very act
which prescribes the initial step aforesaid, and considering them
both together, it is quite in accord with the rule obtaining in the
construction of statutes to read them as one section, each qualifying
the other. We should then hâve section 7 of the act of 1897 of the
Illinois Législature and amended section 66 thereof so reading as to
provide that the inclusion of the engineer's itemized estimate in the
resolution should not be deemed a prerequisite in such case, unless
raised and determined upon the application for judgment of sale upon
the fîrst installment. If the objection had been raised at that hear-
ing, the ruiing in Bickerdike v. City of Chicago would apply. It was
646 125 FBDESBAL EEFORTEB.
within the power of the Législature to pass such an act. This court
tvill give effect to the whole act. Se construed, there retnains no
groàrid îor questioning the tèrms of the act.
There is no such lack of jurisdiction in the original proceedings
as would take the case out of the ordinary rule of law, which pro-
vides that judgment of a court shall not be attacked collaterally.
The remainin'g point, of want of proper notice, was disposed of in
the State court proceedings.
The demurrer is sustained, and the bill dismissed, for want of
equity.
COENWALL et al. v. J. J. MOORE & CO.
(District Court, N. D. Callfornla. October 29, 1903.)
No. 12,619.
1. SHIPPIN9— CONSTROCTIOIÎ OF ChARTKK— OpTION OF CHAHTEREK TO CANCEL.
A charter party eontalned the following provision: "Captaln to fur-
nlsh charterera a certiflcate f rom charterers' marine surveyor (at San
Francisco) that the vessel is in proper condition for the voyage. Should
the vessel fail to pàss a satisfactory survey thls charter to be void at
charterers' option." HeM, that such provision was for the purpose of de-
terminlng the seaworthiness of the vessel for the voyage in hull and
equipment, and that the charterers could exercise the option given to
cancel the charter only on an adverse report of their surveyor after an
actual survey, which it was incumbent on them to hâve made unless
prevented by the fault of the owners.
3. Samk— Sbawobthinkss of Vbssbl— Duty of Charterbr to Make Survet.
Neither the âge of a vessel, nor the length of time she had been upon
her copper, nor the fact that owlng to her âge Insurance could not be
obtained on the cargo Intended to be shipped by the charterers, estab-
llshes that she was In fact unseaworthy for the voyage, so as to author-
Ize the charterers' surveyor to so cerUfy and entitle the charterers to
cancel the charter, where It provlded for a certiflcate to be made on an
actual survey.
8. Samb— Bbeaoh of Charter— Mbasurb of Damages.
The measure of damages for a total breach of a charter by the char-
terer by refusing to accept the vessel Is the net amount that would bave
been earned by the vessel under the charter, less the net amount earned,
or which migbt with reasonable diligence hâve been earned during the
time required for the maklng of the voyage under the charter.
In Admirai ty. Action for damages for breach of charter.
Monroe & Cornwall, for libelants.
Nathan H. Frank, for respondent.
DE HAVEN, District Judge. This îs a libel in personam to recover
damages from the défendant, a corporation, for the alleged breach
of a charter party by the terms of which the défendant chartered the
whole of the ship Spartan, "with the exception of the cabin and neces-
sary room for the crew and the stowage of provisions, sails, and
cables," for a voyage from San Francisco to Australia; the défend-
ant agreeing to provide and furnish the said vessel with "a. fuU
and complète cargo of Grain, Lumber- ^^Vor other lawful merchan-
COENWALL V. J, J. MOORE & CO. 647
dise." The charter party contains the following, among other, pro-
visions :
"The said vessel shall be tight, stauncb, strong and in every way fltted
and provided for said voyage. ♦ * * Oaptain to furnish Charterers a
certiflcate from Charterers' Marine Surreyor (at San Francisco) that the ves-
sel is in proper condition for the voyage. Should the vessel fail to pass a
satlsfactory survey, this Charter to be void at Charterers' option. Vessel
to dunnage and ballast sutflcient for the proper care and loading of the
aforesaid cargo, and to be stowed under the Captain's supervision and direc-
tion."
A few days after the exécution of the charter, the défendant was
notified by the libelants that the Spartan was ready to take on cargo.
In reply the défendant, on January 24, 1902, in a letter addressed to
the siîip's managing owner, said :
"We beg to notify you that our Surveyor, Captain Perriman Informs us
that the vessel has got conslderably more ballast in her than is necessary
for the freightlng of the cargo which will go in the shlp, consequently she
is not ready to commence receiving cargo under the conditions of the charter-
party. We also understand from Captain Perriman as well as Captain Polite,
master of the ship, that water was found on the 'transom' on her last voy-
age, indicating a leak in the ship and that although the vessel was docUed
to find this leak it was no.t found. In as much as the vessel will carry
perishable cargo it will be necessary for us to hâve a certiflcate that the
vessel is In flrst class order and condition, and in as much as we bave cargo
walting for the ship aud want to commence loading her, we must ask you
to give this Important matter your immédiate attention."
The libelants replied to this on the following day, stating that
there was no more ballast in the ship than in the judgment of her
master was necessary for her safety in carrying such cargo as could
reasonably be offered under the terms of the charter party, but at the
same time they requested a written statement of the cargo to be
loaded, so that it might intelligently be determined by surveyors how
much ballast was required, and added that :
"If the ballast now in her hold is considered by them to be more than
necessary, the surplus shall be taken eut and the ship turned over to your
Company to be loaded in accordance with your cargo statement and the
judgment of the surveyors. It is not true that there is or has been a leak
in the ship; neither is it true that the vessel was docked for the purpose
of flnding a leak."
On January 2y, 1902, the libelants requested the defendant's sur-
veyor to go with two surveyors selected by them and make a survey
of the vessel. This he refused to do, and the surveyors selected by the
libelants, having previously secured from the defendant's clerk an un-
signed pencil mémorandum of the proposed cargo, made a survey, and
certifiée! that in their judgment the vessel was seaworthy and well fît-
ted for the voyage named in the charter, The défendant was informed
of the resuit of this survey, and after some further correspondence b<-
tween the parties, not necessary to be hère set out, the défendant,
on January 29, 1902, gave notice to the libelants that because of
their failure to furnish "a certifîcate from 'Charterers' Marine Surveyor
at San Francisco, that the vessel is in proper condition for her pro-
posed voyage, as provided in the charter-party," the défendant availed
jtseJf of the option contained therein to consider the charter party
648 125 FEIDUUAL BËFOUTEB.
void and to déclare the same accordingly canceled. On the next day
the libelants again made demand upon the defendant's surveyor for
the certificate called for in the charter party, and in making the de-
mand said, "For the purpose of making any examination necessary
to the issuance of sàid certificate herein demanded you are hereby
granted free access to said ship Spartan and to ail her parts." It
may be hère stated that the defendant's surveyor never made any
survey of the vessel, and at the trial testified that he was unable to
do so because of the ballast which was then in the vessel, and that
the master refused to remove the same; but I am unable to accept
this statëinent as true. The letters of the défendant contain no inti-
mation that the survey could not be made until the vessel's ballast
was removed, and it is clear from the évidence that the only contro-
versy about the renioval of ballast was in relation to the amount
which the ship ought to Çarry upon the voyage. The defendant's sur-
veyor did not at any time notify the libelants or the master of the
vessel that he was ready to make a survey when the ballasting in the
ship should be removed, or that it was necessary this should be donc
in order to enable Mm to make the survey; and, placing the most
favorable construction Upon his action, it may be said that his refusai
to make the survey and give the certificate required by the charter
was because of the difïerence in the opinions held by himself and her
master as to the amount of ballast to be carried, and upon consid-
ération also of the vessel's âge and the length of time she had been
upon her copper, making it difïicult, if not impossible, to obtain In-
surance upon her cargo, and the further fact that he had been told
she had sand in her Timbers. My conclusion from the évidence is
that the libelants did nothing to prevent, but on the contrary made
reasonable efforts to secure, the survey contemplated by the charter.
I. In view of the foregoing statement of facts, was the défendant
justified in declaring the charter party canceled ? The provision upon
which the défendant relies for such justification is as follows :
"Captain to (urnlsh Oharterers a certificate from Charterers' Marine Sur-
veyor (at San Francisco) tliat the vessel is in proper condition for tlie voyage.
Should the vessel fall to pass a satlsfactory survey, this Charter to be void
at Charterers' option."
The survey hère referred to is one which was to be made for the
purpose of ascertaining whether the vessel was seaworthy in huU
and equipment when tendered for the réception of cargo under the
charter. The clause was inserted in the charter for the purpose of
providing for the settlement of any dispute which might arise between
the libelants and défendant as to the seaworthy condition of the vessel
in huU and equipment. It was for the benefit of the défendant, and
gave to it the option of declaring the charter void, if after a proper
survey the vessel was not in the judgment of its surveyor deemed sea-
worthy in thèse respects, and if the défendant desired to insist upon
compliance with this stipulation it was incumbent upon it to sélect
its surveyor and cause him to make the survey contemplated. In the
absence of such a survey and the adverse judgment of the surveyor
thereon as to the seaworthiness of the vessel, the défendant had no
right to déclare the charter void, unless the failure to make the survey
COENWALL V. J. J. MOOEE A CO. 649
■was caused by the fault of the libelants. In the case of Herrick v.
Belknap's Estate, 27 Vt. 673, the court, in the opinion delivered by
Redfield, Ch. J., said :
"Thls being a bill brought to obtain payment for work done on the Ver-
mont Central Railroad beyond or aside of the estimâtes of the engineers,
and the contract by whlch the company let the work to Belknap, and also
that by -which he underlet a portion of It to the plalntlfC, contalnlng a pro-
vision in thèse words, 'and the engineer shall be the sole judge of the
quality and quantity of the work, and from this décision there shall be no
appeal,' the recovery can scarcely be clalmed upon any other but one of two
grounds: (1) That the engineers, without the fault of the plaintifC, bave
falled to make an estimate within the falr import of the contract; or (2)
that, having made one, It is se erroneous as not to be binding upon the
parties under the contract. » • * But, this being a peculiar species of
contract, so far as the umpirage is concerned, that being referred to the
agents and servants of one of the contracting parties, persons in the em-
ploy, under the control, and in the pay of that party, it seems from neces-
sary implication to impose upon that party the obligation to employ com-
pétent, upright, tnistworthy persons, in this service, and to see to it that
they did this service in the proper time, and in the proper manner." ^
In Smith v. Boston, Concord & Maryland Railroad, 36 N. H. 458,
it is said :
"So where it is agreed that the work shall be done under the superin-
tendence of an engineer, that he shall measure, etc., there is an implied
agreement on the part of the employer that a suitable engineer shall be
employed, and that he shall do ail that the contract requires to be done by
him in due season, and an action will lie against the party who negiects to
furnish such engineer. * * * And the party who does or should employ
him can take no advantage of any failure on the part of the engineer to do
anything required by the contract."
The case of McMahon v. The New York and Erie R. R. Co., 20 N.
Y. 463, may also be cited as an authority for the same proposition.
That was an action which arose under a contract for the construction
of a railroad, by which ail measurements were to be made and the
amount of labor determined by the defendant's engineer, whose déci-
sion was to be final. Ex parte measurements were made by the
engineer which were not satisfactory to the plaintifif, and he there-
upon requested the défendant to hâve other measurements made, and
this request was refused. The court held that the measurements
made by the engineer at a time when the plaintifï was not présent
were not such as were contemplated by the contract, and that the
plaintiiï had done ail that was incumbent upon him when he requested
that other measurements should be made. In its discussion of the
question the court said :
"This was ail, I think, that it was Incumbent upon the contractor to do.
The engineer was entirely under the control of the company, subject to its
order and removal by its will; and after thé company had absolutely re-
fused to direct him to make an estimate, or to review what he had already
made, it would hâve been useless for the contractor to apply to him, and
I think he was under no obligation to do so. The référée was justifled,
therefore, in considering the amount of the work an open question, to be
determined upon the proof at large."
So hère, it was the duty of the défendant to cause its marine
surveyor to make a survey of the Spartan when the request for such
survey was made by the libelants, and, as it did not do so, the de-
650 125 FEDERAL BEFOBTBB.
fendant Ha A no rightito déclare the charter pàrty cancelèd because of
the failùre! of the Jibelantsi to lumish it with a certificate from such
surveyor that the vessel was in a proper condition , for the voyage.
The Hbelants, in requesting the purvey to be made, did ail they could
reasonably be required to do in the premises, and were not in default.
It is said, however, that the defendant's marine surveyor acted in
good faith in refusing to make the survey, and decHned to give the
required certificate because in his judgment the vesselwas not sea-
worthy, and that by the ternis of the charter party, his judgment
having been honestly exercised, was conclusive as to that fact, and
justified the défendant in declaring the agreement cancelèd. The
answer to this suggestion is that the charter contemplated an actual
survey of the vessel by the defendant's marine surveyor ; that is, an
inspection accompanied by the usual and necessary tests to enable
him to form an intelligent opinion as to her seaworthiness, and with-
out such survey he was not authorized to pronounce the vessel un-
seaworthy and refuse the certificate called for by the charter. He
had no right to act upon mère hearsay as to the condition of the
ship's limbérs. Spencer v. Duplan Silk Co. (C. C.) 112 Fed. 638. Nor
was he justified, without a survey, in refusing the certificate because
of her âge or the length of time she had been upon her copper, nor
by reason of àny arbitrary rule of the Insurance companies not to
insure perishable cargoes carried by wooden vessels of her âge. AU
of the expert witnesses, including the defendant's surveyor, testifîed
that the âge of the vessel and the length of time she had been upon
her métal would not conclusively show that she was not in fact sea-
worthy, and that the actual fact could only be determined by a survey.
It foUows from what has been said that if the Spartan was in fact
seaworthy thè libelants are entitled to recover the actual damages
sustained by th'em because of defendant's refusai to furnish her with
a cargo as provided in the charter. The argument against her sea-
worthiness is based entirely upon the facts that she was to carry a
cargo of grain, that she is a wooden vessel, and at the date of the
charter waS 28 years of âge and had been upon her métal for 8 years ;
and the further fact, shown by the évidence, that Insurance could not
hâve been obtained upon a cargo of grain carried by a wooden vessel
of that âge upon the voyage for which she was chartered. It does
not, however, necessarily fbilow from thèse facts that the Spartan
was not seaworthy with tëspect to the cargo and voyage contem-
plated; and, upon considération Of the évidence of the witnesses who
inspected her and testifîed as to her actual condition, I am satisfied
that she was in fâct seaworthy, and able to perform ail that she was
required tp do by the charter party. : The case \vill be referred to the
commissionef to take and report the testimony in relation to the
damages sustained by the libelants, together with his findings there-
on. In ascertaining the amoûnt of damages the commissioner will
be governed by the rule approved in Leblond v. McNear (D. C.) 104
Fed. 826, and there stated in this language :
"The meàsuré of damages In this class of actions seems to be well settled.
In an action against the charterer of a shlp for a total breach of his con-
tract, the measure of dafflagçp Is the net amount that would bave been
EN BE BOESHOEB. 651
earned by the vessel under the charter sued on, less the net amount earned,
or which might with reasonable diligence hâve been earned, by the vessel
during the time required for the performance of the voyage named in such
eontract of charter. Smith v. McGuire, 3 Hurl. & N. 554; TJtter v. Chap-
man, 38 Cal. 659; Id., 43 Cal. 279; Ashburner v. Balchen, 7 N. Y. 262; Dean
V. Ritter, 18 Mo. 182; Steamship Co. v. Gard (D. C.) 59 Fed. 159, 3 Suth.
Dam. pp. 179-181."
Let a decree be entered in accordance with the foregoing opinion.
In re BOESHORE.
(Circuit Court, E. D. Pennsylvania. October 30, 1903.)
Ko. 14.
1. WiTSESSES— Failtjkb to Obbt Subpœna — Necessitt of TENDEniNG Fee.
A witness is not subject to attachment for contempt for failure to ap-
pear and give testimony in a contested case pending in the Patent Office
In obédience to a subpœna served on him as provided by Rev. St. § 4906
[U. S. Comp. St. 1901, p. 3390], unless his traveiing expenses and vyitness
fee for one day were tendered him at the time of the service of the sub-
pœna, as required by section 4908, or such tender or payment was ex-
pressly or impliedly waived by him; and his failure to object that no
tender was made is not such an implied vs^aiver.
On Rule for Attachment of Witness.
Paul V. Connolly, for petitioner.
C. F. Eggleston, for respondent.
J. B. McPHERSON, District Judge. Under section 4906 of the
Revised Statutes [U. S. Comp. St. 1901, p. 3390] the respondent was
duly subpœnaed to appear as a witness before a notary public in the
city of Philadelphia to testify in a contested interférence proceeding
pending before the Patent Office. He failed to appear, and a rule to
show cause why an attachment should not issue was thereupon grant-
ed. The respondent's answer sets up, among other excuses, that the
process served "did not at said time pay or ofEer to pay to déponent
his car fare or expenses to the hearing referred to, nor did he pay or
tender to déponent a witness fee for so attending, in accordance with
section 4908 of the Revised Statutes of the United States." By this
section it is provided that a witness who does not appear after being
served with a subpœna may be punished as in other like cases, but with
the express direction that "no witness shall be deemed guilty of con-
tempt for disobeying such subpœna, unless his fées and traveiing ex-
penses in going to and returning from, and one day's attendance at,
the place of examination are paid or tendered him at the time of the
service of the subpœna."
It is possible to interpret this section as merely giving the witness
a Personal privilège, which he may waive if he chooses so to do, and
to hold that, if he fails to demand his fées and traveiing expenses, he
does impliedly waive the protection ofïered by the statute. Reasons
of some weight might be given in support of this view, but I do not
feel at liberty to adopt it. Not only are the plain words of the statute
652 1 125 FEDERAL KEPOETER.
more çasily construed to mean that the witness cannot be attached
for conttempt unless the tender prescribed by the statute has been
màde, but the weight of authority also is in favor of this position.
Many cases are referred to in 22 Enc. of Pleading & Practice, at page
1339, and they bear out the statement in the text that "in civil cases
it is requisite, in order to validate the service of a subpœna, to pay
or tender in advance, to the person whose attendance is required, his
lawful fées and expenses." No doubt the witness may expressly
waive payment or tender, or waiver may be implied from his acts, and
in either event he is liable to attachment for contempt in case of his
failure to attend. But mère failure at the time of service to object
that no tender has been made is not sufficient évidence of impHed
waiver. Hurd v. Swan, 4 Denio, 79. See, also, 24 A. & E. Enc. of
Law (ist Ed.) 166, and cases cited in the notes.
In the fédéral courts the précise question now being considered does
not seem to hâve been decided. In re Thomas, l Dill. 420, Fed. Cas.
No. 13,889, decided that, where a witness demanded his fées in ad-
vance, and was not paid, a state statute which relieved the witness
from the obligation to obey the subpœna would be enforced in the
Circuit Court, and the witness would not be attached for failing to
appear. In United States v. Durling, 4 Biss. 509, Fed. Cas. No.
15,010, Judge Drummond gave the foUowing instructions, among
others, to the district attorney, for his guidance in criminal cases :
"Again, where there is a witness resldlng In another district, the process
of this court goes to that district. It Is issued to the marshal o£ that district,
and it is the duty of the person to whom it is addressed, If he has the means,
to travel hère to glve his testimony. If he has not, the proper officer of the
government will furnish him with means. It is not necessary, if he has the
mêans, that the fées should be tendered to him before he is required to obey
the process. An attachment would issue, and the court would punish a man
who could pay his expenses and would not corne because the money was not
tendered. It is only where a man bas not the means of paying his expenses
that it is necessary for the money to be tendered to the witness in order to
niake it incumbent on him to obey the process of the court"
In Norris v. Hassler (C. C.) 23 Fed. 581, after the service of a sub-
pœna, which had included a partial tender of expenses, had been sus-
tained on other grounds, the substance of the instruction just quoted
was approved by Judge Nixon in a civil case arising in the circuit
court, but apparently without adverting to the fact that the rule is dif-
férent in civil cases, and that Judge Drummond was speaking of
criminal cases only. In re Griffen, Fed. Cas. No. 5,810, is more to the
point. That case arose under the bankrupt act of 1867. By gênerai
order 29 it was provided that "in the case of witnesses their fées shall
be tendered or paid at the time of the service of the summons or sub-
pœna, and shall include their traveling expenses to and from the place
at which they may be summoned to attend." This was interpreted by
Judge Blatchford to mean that the fées so to be tendered at the time
of service were the fées for going and returning once, and for one
day's attendance; but he ruled distinctly that thèse fées must be
tendered or paid at the time the subpœna was served. It seems to me,
therefore, that both by the plain language of section 4908 and by the
weight of authority it should be held that a witness summoned to ap-
IN EE KEKBEH. 653
pear under section 4906 îs not subject to attachment for contempt
uniess his fées and expansés were offered to him at the time of serv-
ice.
The rule for an attachment is accordingly discharged at the costs
of the petitioner.
In re KERBER.
(District Court, E. D. Pennsylvania. Oetober 31, 1903.)
No. 1,689.
1 Bankrdptct— Failcbe of Witness to Obet Subpœna— Tender of Pee.
Under Bankr. Act July 1, 1898, c. 541, § 41, 30 Stat. 556 [XJ. S. Comp.
St. 1901, p. 3437], as well as by the gênerai rule In civil cases, a witness
is not subject to attachment for failing to appear and testify before a
référée in obédience to a subpœna uniess his mileage and f ee for one day's
attendance were paid or tendered to him.
2. Samb— Rule for Attachment — Pkoceddrb.
Where a witness fails to attend before a référée In obédience to a sub-
pœna, Bankr. Act, § 41, requires the référée to certlfy the facts to the
Judge, and an application to the court for an attachment in the first in-
stance, without such certificate, is irregular.
In Bankruptcy. On rule for attachment of witness.
Samuel Englander, for trustée.
Abram Peterzell, for witness.
J. B. McPHERSON, District Judge. This is a proceeding to
punish a witness for contempt in not obeying a subpœna to appear be-
fore a référée at a meeting held in this city. When service was made
upon the witness, who also résides in Philadelphia, there was no pay-
ment or tender of expenses and fées, and this is set up as a défense to
the pending rule. I think the défense must prevail. Section 41 of
Bankr. Act July i, 1898, c. 541, 30 Stat. 556 [U. S. Comp. St. 1901, p.
3437] provides, inter alia, "that no person shall be required to attend
as a witness before a référée at a place outside of the state of his rési-
dence, and more than 100 miles from said place of résidence, and only
in case his lawful mileage and fee for one day's attendance shall be
first paid or tendered him.' The gênerai rule in civil cases also re-
quires payment or tender of fées and expenses, as I hâve recently had
occasion to décide in an opinion fîled in the Circuit Court in Boe-
shore's Case (Oct. Term, 1903) 125 Fed. 651. Whether, therefore,
the présent case is governed by section 41 or by the gênerai rule, the
resuit is the same. No tender having been made, no attachment
should issue.
I désire to add that the practice pursued in this case was not correct.
The application for an attachment was made directly to the court,
whereas section 41 provides distinctly that, if any person shall do any
of the acts forbidden by the section, the référée shall certify the facts
to the judge. It is only after this has been done that "the judge
shall thereupon in a summary manner hear the évidence as to the
654 125 FEDERAL EBPORTER.
aots complained of," etc.- There is no certificate hère by the référée,
and the proceeding is therefore irregular.
The rule for an attachment is discharged at the costs of the peti-
tioner.
COX V. STATE BANK OF CHICAGO.
(Circuit Court, N. D. Illinois, N. D. November 2, 1903.)
No. 26,761,
1, Bankrcptct—Libns— Attachment aptbr Fii.ins of Pétition.
A sale of property of a bankrupt under a judgment obtalned In an at-
tachment suit commeneed against hlm after the fiUng of the pétition in
bankruptcy, on which the adjudication was subsequently made, was void
as to the credltor, and the trustée Is entitled to recover the proceeds.
At Law. Action by trustée in bankruptcy. On demurrer to déc-
laration.
William Ritchie, for plaintifï.
Parker & Hagen, for défendant.
KOHLSAAT, District Judge. Plaintifï brings this suit to recover
from défendant the proceeds of certain goods and chattels, choses in
action, and open accounts, alleged to be the property of the bankrupt.
Défendant claims the same by virtue of sale had and garnishee pro-
ceedings, by virtue of certain attachment proceedings and a judg-
ment recovered thereon, which were instituted subséquent to the
fiUng of the pétition in involuntary bankruptcy in the Western Dis-
trict of New York. It further appears that afterwards said bankrupt
was duly adjudged to be a bankrupt, which proceeding is still in full
force and efïect. The déclaration consists of the common counts and
one spécial count. To the common counts défendant pleads. To the
spécial count he demurs. The cause now cornes on to be heard upon
the demurrer.
The spécial count sets out the fîling of the pétition in bankruptcy,
the adjudication, the commencement of defendant's suit subséquent
to the filing of the pétition, the judgment, sale, and receipt of the
proceeds by défendant, and charges that défendant thereby became
indebted to and prOmiséd tû pay said money on request, but that,
being often requested, it has failed and refused so to do. Défendant
insists that plaintifï does not, by the allégations of this count, bring
himself within the terms of the bankruptcy act, Act July i, 1898, c.
541, 30 Stat. 544 [U. S. Comp. St. 1901, p. 3418].
I am of the opinion that the proceeding, so far as it laid hold of the
assets of the bankrupt, even beîore adjudication, was void, and that
plaintifï is entitled to recover on the facts as pleaded in the spécial
plea. Kinmouth y. BraeUtigam, 63 N. J. Eq. 103, 52 Atl. 226.
The demurrer is overruled.
%1. See Bankruptcy, vol. 6, Ceat Dig. § 422.
IN BE HENVIS. l655
In re HENVIS.
(Circuit Court, E. D. Pennsylvanla. October 28, 1903.)
No. 28.
1. CONTEMPT— ALLEGED VIOLATION OP INJUNCTION— TeIAI, OF QUESTION OF Is-
FRINGEMENT OF PaTBNT.
Where, in a proceeding for contempt against a défendant for in-
fringlng a patent In violation of the court's injunction. the question
whether the article sold by défendant is an Infringement Is in dispute
and doubtful, it will not be determlned on ex parte affldavits, but only
after a regular and orderly hearing.
Proceeding for Contempt.
Albert B. Weimer, for pétition for order for contempt.
A. T. Johnson and A. B. Stougliton, for respondent.
J. B. McPHERSON, District Judge. Whether or not the re-
spondent, Henvis, is again infringing the complainant's patents, is a
question that I am not willing to décide upon the affidavits before me.
In substance, the dispute arising upon the ex parte évidence resem-
bles the ordinary controversy where infringement is alleged by a
bill in equity and is denied by the answer. The validity of the com-
plainant's patents has been conclusively determined by the decree
already made, and, upon a former proceeding for contempt, one form
of ventilator that the respondent sold since the entry of the decree
has been adjudged to infringe. The kind of ventilator that is now
under considération, however, differs in some respects from the kind
that has already been before the court, and is averred to conform
strictly to the device of an expired patent that is much earlier than
the patent of the complainant. If this be true, the respondent is not
guilty of contempt, but I do not think that the évidence in support
of this averment is of a quality on which I ought to act. There should
be a regular, orderly hearing, with an opportunity for cross-exam-
ination upon a subject of so much importance.
Accordingly, Jos. C. Fraley is hereby appointed examiner and mas-
ter to hear évidence on the question whether the ventilator now being
made by the respondent infringes the ventilator of the complainant,
and to report the testimony and his findings of fact and of law to the
court at his early convenience. '
65S 125 KB&BBAL BBFOBIi:».
BOARD OF WATER COM'RS OF CITY OF NEW LONDON T. BOBBINS
& POTTER et aL
(Cflrcult Court, D. Connecticut, November 2, 1903.)
No. 534.
L Rbmoval OF Causes— Local Préjudice— Sufficikncy op Showing.
A fédéral court wlU not grant a pétition for removal of a suit. In
whiob a municipal corporation is plaintiff, on the ground of local préju-
dice, based solely on an appréhension of the eflect of such préjudice on
the Jury In case of à jury trial, where the judge of the state court has
power. If justice requlres it, to transfer the cause to another county.
On Pétition for Removal of Suit from the Superior Court of New
London County.
R. P. Freeman, Jr., for petitioner.
Brandegee, Noyés & Brandegee, opposed.
PLATT, District Judge. It is conceded by counsel for the peti-
tioner that they are not worried lest justice might escape them in the
State court on account of préjudice or local influence, if their case
shall be submitted to any of the local judges having jurisdiction. In-
deed, it is not reasonable that in such an event they should worry,
since ail the judges of the superior court are of the highest character,.
and, traveling on circuit, as they do, will be very likely to réside in
a portion of the state farther from the scène of action than the fédérai
judge. It is the. fear of the efifect of local préjudice and influence
upon the jury wliich is the exciting cause of the pétition. In such
case it would seem that Rev. St. § 550, might be invoked by the peti-
tioner. Under that section a judge holding the superior court in New
London county may, if in his opinion the cause of justice requires it,
order the cause, as soon as it has been put to the jury, to be trans-
ferred to the superior court in any other county.
In the circumstances, the moving party will perhaps thank me for
expressing no decided opinion upon the controverted issue which is
before me. It would seeni clear that the state judge, sitting upon the
very ground where the controversy exists, could détermine the mat-
ter very much more satisfaCtorily than I can, at a distance, and with
somewhat meager affidavits to guide me.
* The pétition is denied.
f 1. Préjudice or local Influence as ground for removal of cause to fédéral
court, see note to P. Schwenk & Co. v. Strang, 8 C. C. A. 95.
CARKATT V, O'CALLIGAN. 657
CARRAU V. O'CALLIGAN et al.
(Circuit Court of Appeals, Ninth Circuit. September 14, 1903.)
No. 925.
1. Pkderal Courts— EquiTT Jurisdiotion— Setttng Aside Probate or Will.
A fédéral court of equity is without jurisdiction of a suit to set aside
the probate of a wlll, unless by the law of the state a suit in equity for
the purpose may be maintained in a state court, In which case a similar
suit may be maintained in a fédéral court, where tlie requisite diver-
sity of citlzensliip and otlier jurisdictlonal facts exist.
2. Same— Washington Statute.
By the Constitution and Statutes of Washington the superlor court in
the county of which a décèdent was a résident at the time of his death
is vested wlth probate jurisdiction over his estate, and provision is ex-
pressly made for the contest, within one year, of any will theretofore
admitted to probate, for any cause affecting the validity of the will,
by pétition to the superlor court havlng jurisdiction, in which contest
Issues are required to be made up, tried, and determined In that court;
and it Is further provided that, if no person shall so appear within the
time llmlted, the probate of such will shall be binding. Held, that un-
der such statutes the contest of a wlll is strlctly a probate proceeding,
and the proper forum for Its détermination is that department of the
superlor court havlng jurisdiction of the estate and engaged in Its admin-
istration; that such a proceeding is not a suit between parties within
the gênerai jurisdiction of the superior court, or which can be main-
tained in a fédéral court.
8. Parties— Suit to Establish Heirship.
To a suit to set aside the probate of a will and establish the status of
plaintifCs as heirs of the décèdent, other persons, claiming to be sole
helrs, and therefore adversely to plaIntiflEs, and who bave asserted their
claims by approprlate proceedlngs In the probate court, are Indispensa-
ble parties.
Appeal from the Circuit Court of the United States for the North-
ern Division of the District of Washington.
For opinion below, see Ii6 Fed. 934.
The appellees were complainants in the court below In a suit to which
Terrence O'Brien, as adminlstrator of the estate of John Sullivan, deceased,
and Marie Carrau, were made défendants. In their bill, after alleglng the
complainants to be Brltlsh subjects and the défendants to be citizens of the
United States and résidents of the state of Washington, and the défendant
Terrence O'Brien to be the duly appointed, qualifled, and acting adminls-
trator of the estate of the deceased, Sullivan, they averred : That on the 26th
day of September, 1900, Sullivan dled in the city of Seattle, state of Wash-
ington, intestate, leavlng therein real pcoperty of the value of over $400,000,
and Personal property of the value of more than $20,000. That Sullivan left
surviving him no widow, children, or lineal descendants, nor father, mother,
sister, brother, uncle, aunt, nephew, nièce, nor any granduncle nor grand-
aunt, nor any grandnephew or grandniece, nor any ancestor, lineal or col-
latéral, nor any first cousins other than the complainants, nor any relative
whomsoever as nearly related to him as the complainants. That each of the
complainants Is a first cousin of the deceased, Sullivan, and that they are his
only heirs at law and next of kin. That shortly after SuUivan's death a
spécial adminlstrator of his estate was appointed by the superior court of
King county, Wash., who took charge of the estate until some time In No-
vember, 1900, when the défendant O'Brien was by that court duly appointed
gênerai adminlstrator of the estate. That O'Brien immediately qualifled as
Buch adminlstrator, and entered upon the discharge of his duties as such.
T 1. See Courts, vol. 13, Cent. Dlg. §§ 797, 798.
125 F.— 42
658 125 FEDERAL KEPOBTER.
That the défendant Marie Carrau, and a relative of hers by the name of
Louis Daussat, sliortly; after tUe appointment of tlie spécial administra ter of
the estate of Sullivan^ filed à pétition in the superior court of King county,
wherein (hey àlleged that Sullivan dled in that county without léaving any
will, and selsed of an estate In the county, consisting of real and personal
property, exceedlng in value the sum of $400,000, and claimlng that Sullivan
was Indebted to them In about $35 for board, and as such creditors they
prayed that one I, D. MçOutcheon be appointed administra tor of the estate.
That various other persons, some of -w-hom are named In the bill, flled pétitions
alleglng that Sullivan died seised and possessed of real and personal property
In King eountaf, that he lef t np will, and praying the appointaient of other
persons than' MçOutcheon aàjfidmlnistrator of the estate. That the several
pétitions came on for hearlng before the court, and at such hearing Mç-
Outcheon decJtoed to be appointed administrator, and at the request and in
behalf of Daussat and Marie Carrau asked the appointment of one B. R.
Brierly as such administrator. That upon the hearing of the proofs offered
in support of the various pétillons the superior court of King county appointed
the défendant Terrence O'Brien administrator of the estate, and denied the
prayers of ^all the other pétitions.. That af ter the appointment and qualifica-
tion of O'Briçn as such administrator the défendant Marie Carrau and Louis
Daussat, apdtheir relatives, Augustlne Daussat and Hermance Carrau, com-
bined and cbnfederated together for the purpose of manufacturlng a pre-
tended nuncujatlve -will of Sullivan in favor of Marie Carrau, under which
pretended nupcupative will Marie Carrau isclaiming to be the sole legatee
and devlsee of ail the properi:y of the deceased, Sullivan; and that it is and
has been the Intention of the sald Marie Carrau, Hermance Carrau, Louis
Daussat, and Augustlne Daussat to carry out such conspiracy, and thereby
obtain for themselves air the property of Sullivan by means of false testimony,
and by the manufacture of évidence to support the pretended nuncupative
will. That Sullivan at the time of bis death was a bacbelor, of the Sge of
eo years, and had had only a very short acquaintance with Marie Carrau,
Hermance Carrau, Louis Daussat, and AugUstine Daussat, but that at the
time of hls dèath he was temtorarily lodging at the house of Daussat, at
which house Marie Carrau aïso resided, and at which time she was teaching
Sullivan French, he then contemplating a trlp to France, from which country
he had but recently returned with the intention of revlsltlng it at an early
date. That, after faîllng to procure the appointment ôf the person whom they
had nominated as administrator, the said Louis Daussat and Marie Carrau
began to circulate reporta that Sullivan had made a nuBcupatlve will at 11
o'clock on the night of the 25th dày of September, 1900. That such pretended
nuncupative will had been redu'ced to writing at half paSt 11 o'clock that
night, and had been signed by the said Marie Carrau, Louis Daussat, Au-
gustlne Daussat, and Hermance Carrau as witnesses after the death of Sul-
livan on the 26th day of September, 1900. That on the Sth day of March,
1901, the sald Marie Carrau flled in the superior court of King county, Wash.,
a verifled pétition, TVhereln she, stated that ishe had heard the sald pétition
read, knew the contents thereof, and knew the same to be true, which pétition
alleged: "That sald John SulUvari dled on the 26th day Of September, A. D.
1900, at Seattle, county of King, staté of Washington, aM.yasat the time
of his death of Sound mlnd ànd, dlspo^lûg memory. That' né ïéf t a last will
and testament, to -^it, a nuncUpàtlye Will, That six month's bave not elapsed
since the testamentary words were spoken by décèdent. That said testamen-
tary words, or the substanôe ttiereof, were addressed to IxJuls Daussat, Augus-
tlne Daussat, and Herinance, Carrau at about eleven o'clock p. m. ,of the 25th
dây of Septetobér, 1900, ati;d^ T^ere as fbllows: T want you to rèmember and
witness that I will ail my ptbi)èrty and Personal efCects, worth many thousands
6f dollars, to be the pioney and property of your sister, Marte Carrau. I am
sick, and we know,'.'pot v/h^i ma:y bappen!' That said testamentary words
>'ere thereaftet redùced to ^^l'itïhg, which, said writing aecompanles thls pe-
tltlofi. That such testamelitaiTy Ts^ords were Spoken à»d Sûch nuncupative
will was made at the: titne ôiC the last slckness, and at the dwelling house of
deceased, wheï-ein deceased had resided for inore than ten days Immedlately
preceding his death and the speaking of sail wordç. That said will was made
at or. about the hour of eleveii o'clock p. m. on the ^5th day of September,
CAKBAU V. O'CALLIGAN. 659
1900, the night before decedent's death, and at the time of his îiast sickness,
and while décèdent was In actual contemplation, expectation, and fear of
death, and at the time of pronouncing such testamentary words constituting
such nuncupative will as aforesald tlie décèdent dld bid the three following
named persons, who were then and there présent by and at his request, to
bear wltness that such was his will, to wit, Louis Daussat, Augustine Daussat,
Hermance Carrau. That décèdent had been sick for several days Immediately
preceding the making of said will, and was still sick at said time, and in his
last sickness as aforesaid, and died within twelve hours after said will was
made, published, and declared. That no one was named in said will as the
executor thereof. That décèdent was a bachelor, and left no widow, heirs,
or next of kin, so far as known to your petitioner. That décèdent left Per-
sonal property of the value of fifty tbousand dollars ($50,000), and real estate
in said county of King of the probable value of four hundred and fifty thcu-
sand dollars ($450,000). Wherefore petitioner prays that said will be admitted
to probate. [Signed] Marie Carrau, Proponer and Petitioner."
The Mil further allèges that immediately upon the filing of that pétition a
citation was issued by order of the superlor court of King county, Wash.,
and placed in the hands of the sherifC of that county for service upon the
widow and next of kin of the deceased, Sullivan, and that the sherifï imme-
diately retumed the citation with his return indorsed thereon to the effiect
that he was unable to find such persons or any of them In King county, and
immediately thereupon the superlor court of King county assumed to admit
the pretended nuncupative will to probate, and that said pretended nuncupa-
tive will now stands as legally probated in the records of the superlor court
of King county, state of Washington; that the said superior court, in assum-
Ing to probate the said nuncupative will, acted wholly without jurisdiction
in the premises; that it was without jurisdiction to hear any évidence or to
take any steps for the probate of such nuncupative will wherein the estate
bequeathed exceeded the value of $200; that the said superior court was
also without jurisdiction for the reason that no légal citation had been issued
out of the court, and because 10 days had not elapsed between the flling of the
pretended will and the hearlng of the pretended proof ofCered in its support;
that under the laws of the state of Washington a nuncupative will is invaUd
where the estate bequeathed exceeds the value of $200, and that a nuncu-
pative will, even If valld, cannot dispose of real estate; that the said Marie
Carrau bas filed a pétition In the superior court of King county, Wash.,
wherein she prays that the whole of the estate of the deceased, Sullivan, be
dlstributed to her; and It Is alleged upon the information and belief of the
complalnants that the said court will, on the 21st day of June, 1901, make
and enter a decree of distribution dlstributlng the whole of the estate to said
Marie Carrau upon her executing a bond for the payment of her proportion
of the indebtedness of the estate; that the estate is very slightly Indebted,
except in the sum of $60,000 to the United States Mortgage & Trust Company,
secured by mortgage upon the property known as the "Sullivan Block" in
Seattle, which, with the land upon which it is erected, is of the value of
upwards of $300,000, and that the administrator of the estate, unless re-
stralned by the court below, will surrender to said Marie Carrau ail of the
property of the said estate, who will appropriate the same to her own use
and beneflt, Including the rents, issues, and profits of the real estate, amount-
ing to $25,000 a year, ail of which will be iost to the complalnants because
of the insolvency of the défendant Marie Carrau.
The prayer of the blll is, among other things, for a decree adjudging the
pretended nuncupative will null and vold; that the complalnants are the only
heirs at law of the deceased, Sullivan, and entitled to recelve the whole of his
estate, and that the défendant Terrence O'Brien, as administrator of the
estate, be enjolned from turning over any of the property to the défendant
Marie Carrau, or to any other person or persons than the complalnants.
The answer of the défendant Terrence O'Brien, administrator of the estate,
is to the efCect that he has no knowledge concerning any of the matters stated
in the blll, and that he has no Interest in the controversy except such as he,
as administrator, is by law required to hâve.
The answer of Marie Carrau, among other things, dénies any relationshSp
of elther of the complainants with the deceased, Sullivan, admlts the relation-
660 125 FEDERAL BEPOBTËB.
ship as allégea of the défendant Marie Carrau, Louis Daussat, Augustine
Daussat, and Hermance Carrau, but dénies that they or elther of them com-
blned or confederated together for ttie purpose of making a pretended nun-
cupatlve ■wiU of the deceased Sullivan In favor of the défendant Marie Carrau.
The answer of thls défendant puts in issue ail of the averments of the bill
In respect to' fraud and conspiracy, and sets up that Sullivan was engaged
to be marrled to her, and that they were to hâve been married on the Ist
day of Ootober, 1900; that Sullivan did make and publish the nuncupative
will in question, by vt-hlch he devised to her ail of his property, which will
■was duly admltted to probate by the probate court of KIng county, Wash.;
dénies that either the défendant Marie Oarrau or Louis Daussat ever sought
the appointment of any one as admlnistrator of the estate of the deceased,
or ever circulated the reports alleged In the bill, and allèges that immediately
af ter the death of Sullivan the défendant Marie Carrau inf ormed "her spiritual
adviser" that Sullivan did make and publish an oral will devising and grant-
ing to her ail of his property, and that she never attempted to coneeal the
fact of the making and publlshing of sueh a wlll; tjiat she caused to be con-
sulted a regular practicing attorney in Seattle in respect to the valldity of
such WiU, and was by him advised that an oral wlll was not valld under the
laws of the state of Washington; that It was not until several weeks there-
af ter that she was advised of the fact that the law of that state did authorize
the making of a verbal wlll, and that the will so alleged by her to be made
by the deceased was valid, and that the same devised his entire estate to
her. The answer of the défendant Marie Carrau also dénies that the superior
court of King county, Wash., acted wholly or at ail without jurisdiction in
probating the alleged nuncupative will, but, on the contrary, allèges that It
had and has the exclusive jurisdiction In the premises. The answer of this
défendant also sets up lack of jurisdiction In the court below over the subject-
matter of the présent suit, and dénies that under the laws of the state of
Washington a nuncupative will Is Invalld in respect to Its attempted dispo-
sition of real property, or is invalld where the estate exceeds the value of
$200, but allèges that such a will, duly proved and probated, devises, under
the laws of that state, botti real and Personal property to any amount in
value, by vlrtue of a statute of the state reading as follows: "No nuncupative
will shall be good when the estate bequeathed exceeds the value of two hunr
dred dollars, unlesS the same be proved by two witnesses who were présent
at the making thereof, and it be proven that the testator at the time of pro-
nounclng the same did bid some person présent to bear wltness that such was
his will, or to that eflect, and such nuncupative will was made at the time of
the last siekness and at the dwelling housc of the deceased, or where he had
been residing for the space of ten days or more, except where such person
was taken sick from home and died before his return." 1 Ballinger's Ann.
Codes & St. § 4605. The answer of the défendant Marie Carrau further sets
forth the varlous steps taken In the superior court of King county, Wash.,
sltting as a court of probate in the matfer of the estate of the deceased, Sulli-
van, includlng the averment: "That a large number of persons hâve filed
in re estate of John Sullivan, deceased, in the superior court of the state of
Washington for King county their verlfled claims claiming and alleging eaqh
of them to be the sole heir of said John Sullivan, deceased, as follows, to wit:
Eugène TImothy Sullivan, residing at Olympia, AVashington, in person on
his own behalf, on September 3, 1901. Mary Sullivan, Butte, Montana, by
Peter Breen, Alexander Mackel, and James A. Bradford, her attomeys, on
March 12, 1901. Katherine Riordan, Mary Rlordan, and Margaret McGrath
née Margaret Riordan, Cork, Ireland, by John B. Ault, June 19, 1901. John
Sullivan and Mary Sullivan, residing in Cork, Ireland, by Roberts & Leehey
and J. P. Gleason, their attorheys, April 3, 1901. J«remiah Sullivan, James
Sullivan, Margaret Mahoney, Catherine Sweeney (spinster), .John Sweeney,
Patrick Sweeney, Daniel Sweeney, and Michael Sweeney, residing in Ireland,
by Wilshire & Kenaga, their attomeys." The answer of the défendant Marie
Carrau also sets up that prlor to the commencement of the présent suit the
complainants hèrein did "file their verified pétition in equity, and appearlng
by Piles, Donworth & Howe and C. H. Farrell, their attomeys, who are also
complalnants' solicitors bere, contesting the nuncupative will in the complaint
and defendant's answer deséribed, and whicB^ pétition was duly filed in the
OAKRAU V. O'CALLIGAN. 6fil
fiuperior court of fhe state of Washington for King county, being No. 32,664,
and entitled 'In the matter of the Estate of John Sullivan, Deeeased. Johanna
Calliglian and Edward Corcoran, Petltioners, vs. Terrence O'Brien, as Admin-
istrator of the Estate of John Sullivan, Deeeased, and Murie Carrau, Re-
epondents,' and caused to be issued a citation therein, under the seal of said
Buperior court for King county, Washington, to the respondents therein, being
the défendants herein, and caused said citation to be regularly served on re-
spondents therein and thèse défendants on the same day; and that this de-
fendant and said administrator hâve each appeared In said action, resisting
said eontest; and said action, so as aforesaid, contesting the validity of said
will, was pending at the time of the bringing of this action, and is still
pendlng, in said superior court of King county, Washington, undetermined.
And that the f ollovi^ing named persons liave aiso flled pétitions in re the estate
of John Sullivan, deeeased, in the superior court of the state of Washington
for King county, to eontest the validity of said will, to wit: Catherine Kior-
dan, Mary Riordan, and Margaret McGrath, née Margaret Riordan, iiled June
20, 1901, by their attorney, .lohn B. Ault, and which are still pending in said
court. The state of Washington, by its attorney gênerai, filed the 20th day
of June, 1901, and which is still pending in said court. Mary Sullivan, by
James E. Bradford, her attorney, filed July 2, 1901, which is still pending in
said court. And that each of said petltioners hâve caused citations to issue
and be served upon said O'Brien, as administrator, and this answering de-
fendant as such legatee, under said will; and that each of said pétitions
so as aforesaid contesting the validity of said nuncupatlve will are still
pending undetermined in the superior court of the state of Washington for
King county; and that this answering défendant in each of said actions con-
testing the validity of said will is defending said will and her rights there-
under."
The complainants filed a replication to the answer of the défendant Marie
Carrau, évidence was taken upon the issues made, the cause was thereafter
argued and submitted upon the pleadings and briefs, on considération of
which the court below "adjudged and decreed as follows, to wlt:
"(1) That John Sullivan, aged about sixty (60) years, late of the city of
Seattle, King county, state of Washington, died in said city on the 26th day
of September, 1900, intestate, the owner of personal property and real estate
situated in said county, including the property known as the 'Sullivan Build-
ing,' and leaving no issue, nor any descendant, nor wife, nor fatlier, nor
mother, nor sister, nor brother, nor unele, nor aunt, nor granduncle, nor grand-
aunt, nor ancestor, lineal or collatéral, nor any person of nearer kin than
first cousin, and never having married, but leaving survlving him the com-
plainant Hannah O'Callaghan, otherwise known as Johanna Callaghan, of
Cork, Ireland. his flrst cousin, and one of his next of kin, a lawful ehild of
bis mother's deeeased sister, Bridget Callaghan; and aiso leaving surviving
hina his iîrst cousin and one of his next of kin in equal degree with said
Johanna Callaghan, the other complainant, Edward Corcoran, otherwise
known as Ned Corcoran, of Dublin, Ireland, a lawful ehild of Margaret Cor-
coran, a deeeased sister of the mother of said John Sullivan.
"(2) It is further ordered, adjudged, and decreed that on November 19, 1900,
the défendant Terrence O'Brien, a citizen of the United States and of the
state of Washington, was, by the superior court of the state of Washington
for King county, in the matter of the estate of John Sullivan, deeeased, num-
bered in said court 3,664, duly appointed as administrator of the estate of
said John Sullivan, deeeased, and ever sinee lus said appolntment be bas been
and now is the duly qualified and acting administrator of said estate.
"(3) It is further ordered, adjudged, and decreed that the alleged nuncupa-
tive will claimed by the défendant Marie Carrau, a citizen of the United
States and of the state of Washington, to hâve been made by the said .John
Sullivan on the 25th day of September, 1900, at about eleven o'clock p. m., tn
the followlng words, to wit: '1 want you to remember and witness that I
will ail my property and personal effects, worth many thousands of dollars.
to be the money and property of your sister, Marie Carrau. I am sick, and
we know not what might happen'— was never made by said John Sullivan,
nor did the said .lohn Sullivan speak said words, or any of them, or any
words of such import, nor did he make any will whatever.
662 125 FBDBBAli BBPOBTBB.
"(4) It la further ordered, adjudged, and decreed that the superlor court of
tbe Btate of Washington for KIng county never acqulred jurisdiction to pro-
bate sald allégea nuncupatlve wlU. Sald court never made any lawful order
for the Issuance of a citation, nor was any lawful citation ever Issued, nor
was any notice of any proceedlng to probate sald alleged will ever given to
or had by any one, nor dld sald court ever acquire jurisdiction to bear any
évidence for the probate of sald alleged will, but sald court acted wholly
wlthout Jurisdiction In the matter 6f the probate of sald alleged will, anl
the certlflcate of probate of sald alleged will granted by sald court on the
8th day of March, 1901, and the decree of sald cburt purportlng to hâve been
rendered and entered on sald 8th day of March, 1901, admitting said alleged
will to probate as the last wUl and testament of said John Sullivan, deceased,
were made and rendered Wholly wlthout jurisdiction, and said proceedings
and ail proceedings in the matter In said superlor court numbered 3,664, en-
tltled 'In the matter of the Estate of John Sullivan, Deceased,' in so far as they
relate to the alleged probate of sald alleged nuncupatlve will, are null and
vold, and of no force and efCect.
"(5) It is further ordered, adjudged, and decreed that the complainant»
Johanna Callaghan and Edward Corcoran were at the time of the commence-
ment of thls action and now are aliens, subjects of the King of Great Britaln
and Ireland, and flrst cousins and next of kin of said John Sullivan, deceased,
and are entltled to share equally In the assets of the estate of said John Sul-
livan, deceased, as hls flrst cousins and next of kin, and the share of each
of said complainants In sald estate exceeds, and at the tlme of the commence-
ment of thls suit exceeded, the sum and value of two thousand dollars
($2,000), exclusive of Interest and costs, and the value of said estate bas at
ail times exceeded and now exceeds the sum of three hundred thousand dollars
($300,000), exclusive of interest and costs, and the défendant Terrence O'Brien,
as adminlStrator of the estate of said John Sullivan, deceased, Is dlrected to
recognlze the rlght of each of sald complainants to share in sald estate as
a flrst cousin of sald deceased and as one of the next of kin of sald deceased,
John Sullivan.
"(6) It is further ordered, adjudged, and decreed that the défendant Marie
Carrau, and ail pensons claimlng under her or representing her in any manner
whatever, are hereby perpetually restralned and enjoined from setting up or
asserting in any manner whatsoever any claim, rlght, or tltle to or Interest
In the estate of sald John Sullivan, deceased, or in any part thereof, under
said alleged nuncupatlve will, and under the alleged probate thereof, or under
elther thereof, and from setting up, asserting, or in any manner whatsoever
maklng any claim whatsoever under sald alleged nuncupatlve will and the
alleged probate thereof, or elther thereof, In any court or elsewhere, except
In a court having appellate Jurisdiction to review thls decree.
"(7) It Is further ordered, adjudged, and decreed that the complainants re-
cover from the défendant Marie Carrau their costs and disbursements In this
suit sustalned, the same to be taxed by the clerk of this court."
J. P. Houser, J. W. Robinson, and Lorenzo S. B. Sawyer, for ap-
pellant.
Samuel H. Piles, George Donworth, James B. Howe, Piles, Don-
worth & Howe, and C. H. Farrell, for appellees.
Before GILBERT, ROSS, and MORROW, Circuit Judges.
ROSS, Circuit Judge, after stating the case as above, delivered the
opinion of the court.
We are of the opinion that the court below was without jurisdic-
tion of the subject-matter of the suit, and, further, that ail necessary
parties were not before the court, some of whom, if made parties,
would hâve ousted the court of jurisdiction. On both of thèse
grounds we think the court below should hâve dismissed the bill at
the complainants' cost.
CARKAtI V. O'CALLIGAN. 663
In the Case of Broderick's Will, 21 Wall. 503, 509, 22 L. Ed. 599,
the Suprême Court declared it to be "undoubtedly the gênerai rule,
established both in England and this country, that a court of equity
will not entertain jurisdiction of a bill to set aside a will or the pro-
bate thereof." And the court added :
"Whatever may hâve been the original ground of thls rule (perhaps some-
thlng In the peculiar constitution of the English courts), the most satisfactory
ground for its continued prevalence is that the constitution of a succession
to a deceased person's estate partakes in some degree of the nature of a pro-
ceeding in rem, in which ail persons in the world who bave any interest are
deemed parties, and are concluded as upon res judicata by the décision of the
court having jurisdiction. The public interest requires that the estâtes of
deceased persons, being deprived of a master, and subject to ail manner of
claims, should at once devolve to a new and compétent ownership; and, con-
sequently, that there should be some convenient jurisdiction and mode of pro-
ceeding by which this dévolution may be effected with least chance of injus-
tice and fraud; and that the resuit attained should be firm and perpétuai.
The courts invested with this jurisdiction should hâve ample powers both
of process and investigation, and sufflcient opportunity should be given to
check and revise proceedings tainted with mistake, fraud, or illegality. Thèse
objeets are generally accomplished by the constitution and powers which are
given to the probate courts, and the modes provided for reviewiug their pro-
ceedings. And one of the principal reasous assigned by the equity courts for
not entertalning bills on questions of probate is that the probate courts them-
selves hâve ail the powers and machinery necessary to give fuU and adéquate
relief."
But wherever, by the law obtaining in a state, customary or statu-
tory, suits in equity may be maintained in the courts of such state to
set aside the probate of a will, similar suits may be maintained by
original process in a fédéral court, where the requisite diverse citizen-
ship and other requisite conditions exist. Thus, in the case of Rich-
ardson et al. v. Green et al., so much relied upon by counsel for the
appellees (61 Fed. 423, 9 C. C, A. 565), decided in this court by
Judges Knowles and McKenna, the latter now an associate justice
of the Suprême Court, and which was a suit brought in the Circuit
Court of the United States for the District of Oregon for the pur-
pose, in part, of obtaining a decree annulling the probate of a cer-
tain will that had been theretofore probated in one of the county
courts of that state on the ground that the probated will was a
forgery, this court afifirmed the decree of the lower court which can-
celed the will; thus sustaining the jurisdiction of the fédéral courts
in the matter. But it did so for the reason, as plainly appears from
the opinions of the judges deciding the case, that it was found that
while, under the laws of Oregon, the county courts of that state werc
given exclusive jurisdiction in the first instance to take proof of wills,
there was no provision of the Oregon law "to warrant any contest
upon the vaHdity of a will at the time the same was being probated,"
but authority in any one interested in the estate to attack the will
by an independent suit at any time after its probate. This court,
having found that such a remedy existed in the Oregon courts, very
properly held that it could be exércised by the United States Cir-
cuit Court for that state, the requisite diverse citizenship and other
requisite conditions existing. But the laws of the state of Wash-
ington in respect to the probate of wills and their contest are quite
664 125 FEDERAL KEPOBTEB.
différent. By section 6 of article 4 of the Constitution of that state
the superîor courts of the state are given original jurisdiction "oi
ail matters of probate," as well as of ail cases in equity and of ail
cases at law not specially excepted. And by a statute of the state it
is provided that:
"The superior courts In the exercise of thelr Jurisdiction In matters of pro-
bate shall hâve power:
"(1) To take proof of wills and to grant. letters testamentary and of adminis-
tration; • • •
"(2) To settle the estâtes of deceased persons. and the accounts of executors,
admlnlstratprs, and guardians;
"(3) To ailow or reject clalms against the estâtes of deceased persons, as
hereinafter provided;
* • * •« • • • « • *•
"(5) To award process and cause to come before them ail persons whom
they may deem it necessary to summon, whether parties or wltnesses, or who,
as executors, admlnlstrators, or guardians, or otherwise, shall be entrusted
with or in any way accountable for any property belonging to any miner,
orphan, or person of unsound mind, or estate of any deceased person;
"(6) To order and cause to be Issued allwrlts whleh may be necessary ta
the exercise of their jurisdiction." 2 HlH's Ann. St. & Codes of Washington,
§ 845.
By section 851 of the same statutes it is provided that:
"Wills shall be proved and letters testamentary or of administration shall
be granted:
"(1) In the county of which deceased was a résident or had his place of
abode at the time of his death.
"(2) In the county in which he may bave dled, leavlng estate thereln and
not being a résident of the state.
"(3) In the county in which any part of his estate may be, he having dieil
out of the state, and not having been a résident thereof at the time of his
death,"
Varions provisions îoUow concerning the production of and péti-
tion for the probate of wills, and among them section 861, which
provides that:
"Applications for the probate of a will or for letters testamentary, may be
made to the judge of the superior court and he may also at any time issue ail
necessary orders and process to enforce the production of any will."
By section 862 of the same statutes it is provided that :
"When any will ts exhlblted to be proven the court may Immediately recelve
the proof and grant a certlficate of probate, or If such will be rejected, issue
a certlficate of rejectlon."
Section 867 is as follows:
"AU the testimony adduced In support of the will shall be reduced to wrlt-
Ing, signed by the wltnesses and certifled by the Judge of the court."
And the next section provides for the recordation, in a book to
be kept for that purpose, of ail wills admitted to probate.
Section 872 of the same statutes is as follows :
"If any person Interested in any will shall appear within one year after
the probate or rejection thereof, and by pétition to the superior court having
Jurisdiction, contest the valldity of said will, or pray to hâve the will proven
which bas been rejected, he shall file a pétition containing his objections and
«ceptions to sald will or to the rejection thereof. Issues shall be made up,
tried, and determlned In said court respectlng the competéncy of the deceased
to make a last will and testament, or respectlng the exécution by the deceased
OAKKAU V. O'CALLIGAN. 665
et such last will and testament under restralnt or undue Influence or fraudu-
lent représentations, or for any otlier cause affiecting the validity of such wlU."
The next section (873) provides that:
"ITpon the filing of the pétition referred to in the next precedlng section
a citation shall be issued to the executors who hâve talcen upon them the
exécution of the will or to the administrator wlth the will anuexed, and to
ail legatees named in the will reslding in the state or to their guardians if
any of them are minors, or to their Personal représentatives if any of them
are dead, requiring them to appear before the court on a day therein speeified,
to show cause why the pétition should not be granted."
By section 874 it is declared that:
"If no person shall appear withln the time aforesaid, the probate or re-
jection of such will shall be binding, save to Infants, married women, persons
absent from the United States or of unsound mind, a period of one year after
their respective disabilities are removed."
By section 876 it is provided that :
"If, upon the trial of said issue, it shall be decided that the will is for any
reason invalid or that it is not sufficiently proved to bave been the last wlU
«f the testator, the will and the probate thereof shall be annuUed and re-
voked."
It is thus seen that by the statutes of the state of Washington pro-
vision is expressly made for the contest, within a stated time, of any
will theretofore admitted to probate, for any cause afïecting the va-
lidity of the will, by pétition to the superior court having jurisdiction,
in which contest issues are required to be made up, tried, and de-
termined in that court, with a provision to the effect that, if no person
shall so appear within the time limited, the probate of such will shall
be binding. And such we understand to be the efïect of the décision
of the Suprême Court of Washington in the case of State ex rel.
Stratton, Attorney General, v. Tallman, Judge of the Superior Court,
65 Pac. 545, concerning this very estate of Sullivan. It appears from
the opinion of the court in that case that the Attorney General of the
state filed a motion in the superior court having jurisdiction of the
estate in question "praying for the vacation of the order admitting
the will to probate, and to set aside ail the proceedings leading up to
the probate of the will, upon the grounds that the court acquired no
jurisdiction to hear any évidence in support of the will; because no
citation was issued as required by law, because the citation was issued
on the day it bears date and at the time the will was presented to the
court, and immediately returned by the sherifï without making any
effort to find any of the heirs of deceased, or any person interested in
the estate; and because deceased never made or attempted to pub-
lish and déclare the will." The probate court having declined to con-
sider or décide the motion on the ground that the state could not
properly appear in the proceedings, the Attorney General applied to
the Suprême Court of the state for a mandate directing the probate
court to consider and détermine the motion, and in denying the writ
that court said:
"The extraordinary writ will not be issued if relator has a plain, speedy,
and adéquate remedy at law. Relator urges that under subdivision 8, § 4620,
1 BaUinger's Ann. Codes & St., the state is interested in testing the validity
of the will, because, in the event of the establishment of intestacy and upon
the failure of heirs the estate escheats to the state. The effect of the order
66§ 125 FBDBBAL BEIPORTEB.
admitting a wlll to probate, either wrltten or nuncupatlve, Is declared in sec-
tion 6108, 2 Balilnger's Ann." Codes & St:, 'as effectuai In ail cases as the
original would be if produced and proven,' and sucb eflect by section 6112
is declared blnding upon ail persons if Its valldity sliall not be contested
within one year after the probate or rejection of the will. Assuming that the
State fiiay liave such contingent interest in the estate as to hâve the real
truth of thé existence and valldity of the wlll determlned, it appears there is
a plaln procédure, whlch is speedy and adéquate, pointed out In section 6110,
Id., by whlch issues may properly be made up and tried and determlned re-
specting ail questions aflEectlng the regularlty of the exécution or of the val-
ldity of the wlll, and the superlor court entertalnlng such a suit may fully
protect such rights In the estate by such stay of proceedlngs in the procédure
in probate as may be necessary or effective. The conclusion, therefore, is
that the approprlate procédure is deslgnated in section 6110, supra, and there
is no necesslty shown for a mandate from thls court." 65 Pac. 546.
It is true that the court, in speaking of the contest authorized by
section 6iio, BalUnger's Ann. Codes & St., uses the Word "suit,"
which was manifestly an inapt expression ; but that the court did not
thereby mean that such contest should be by an independent suit in
a department of the superior court of the state not charged with the
administration of the estate is very clearly shown by its express déc-
laration to the effect that the appropriate procédure is designated in
section 6iio of the state statutes, which in terms déclares that such
contest shall be initiated "by pétition to the superior court having
jurisdiction" — that is to say, to the superior court having jurisdiction
of the estate-^in which the required issues shall be made up, tried,
and determlned, and which court, having such jurisdiction, may direct
"such stay of proceedings in the procédure in probate as may be nec-
essary." This, we think, is the plain meaning of the décision of the
Suprême Court of the state in the case of State ex rel. Stratton, At-
torney General, v. Tallman, Judge, supra. That court surely did not
mean to hold that one department of the superior court of the state
could interfère with the due proceedings of a co-ordinate branch of
the same court in the matlier' of an estate of which it acquired the
first, and, indeed, the exclusive, jurisdiction, by the filing therein of a
pétition for the probate of an instrument alleged to be the will of one
dying within its jurisdiction, and alleged to hâve left real and Per-
sonal property therein.
Subséquent to the above décision of the Suprême Court of the state
of Washington the Attorney General of the state moved the superior
court that was administering the estate of the deceased, Sullivan, for
an order directing citation to issue as prayed in his pétition for the
contest of said alleged will, which the probate court denied on the
ground "that the state of Washington has no right at this time to
make said pétition contesting said will and file the same, or appear
in said matter, and is not a proper party to appear in said probate
proceeding to contest said will, or for any purpose whatever."
Thereupon the Attorney General, on behalf of the state, again applied
to the Suprême Court of the state for a writ of mandate to compej
the issuance of such citation. In denying the writ on the ground that
the petitioner had la remedy at law by appeal from the action of the
probate court, the Suprême Court of Washington said:
"A number of questions are discussed in the brlefs of the respective eounsel
relating to the power of the Attorney General to appear in behalf of the state
CAKEAU V. O'CALLIGAN. 667
in such a proceeding as that Instituted in the superlor court, and also as to
the right of the state to appear by any one in sucii a proceeding. It is con-
tended by respondent tliat the right ot the state to assert control of property
alleged to hâve escheated is net an active, but a passive, right, and that
while the proper probate court is engaged in determining the légal disposi-
tion to be made of the property the state has no right to interfère, but that
the assertion of the state's clalm becomes active when it has been lawfuUy
determined that there are neither heirs nor legatees. The examlnation of thèse
questions would involve extended discussion, and it is unuecessary to jiass
upon them hère, for the reason that we think the relator has a remedy at law
by appeal." State ex rel. Stratton, Attorney General, v. Tallman, Judge, 69
Pac. 1101.
Hère again the Suprême Court of Washington clearly indicates
that the proper court, under the statutes of the state, in which to
contest the vahdity of the will in question, is that department of the
superior court exercising probate jurisdiction and having control of
the estate in question ; for it would hardly hâve held that the relator
had a remedy at law by appeal from the ruling of that court if there
was no jurisdiction of his contest in the court in which he was pro-
ceeding. "The powers of the superior court in respect to its probate
jurisdiction," said the same court in Re Alfstad's Estate, 27 Wash.
175, 182, 67 Pac. 593, "are the same as they would be if it were in
fact a separate probate court. Proceedings in probate matters, in
actions in equity, and at common law are distinct, and should not be
intermingled, except in cases specially authorized by law." It is true
that in the subséquent cases of Browder v. Phinney, 70 Pac. 264, and
In re Murphy's Estate, 70 Pac. 107, the Suprême Court of Wash-
ington said :
"In thls state vye bave no probate court, properly speaklng, as distinguished
from the court that entertains iurisdlction of other matters. The court of
gênerai jurisdiction also hears and détermines probate matters. Matters per-
taining to probate are referred to what is called 'probate' procédure, as dis-
tinguished from what is denominated 'civil' or 'criminal' procédure. But
■when the court, slttlng in a probate proceeding, discovers in a pétition the
statement of facts which forms the basls of a controversy, we see no reason
why It may not settle the issues thereunder when an appearance has been
made thereto, and then proceed to try it in a proper manner, as any other
civil action. The court may requlre the proceeding to be separately docketed,
if, when the Issues are formed, it appears to be such as should be thus dock-
eted. Whether a citation should hâve issued on the strength of this pétition
or not, it is nevertheless true that appellant responded to the citation, and ap-
peared generally by demurrer to the pétition, and asked its dlsmissal simply
on the ground that the court could not hear it as a probate proceeding. We
thlnk it was not necessary to sustain the demurrer and dismiss the proceed-
ing on that ground. But under our libéral practice as to the form of actions
the pétition could be treated as in the nature of a complalnt. The issues
could be framed thereunder, and the cause tried without requiring another
statement of the same facts under some other form or name. If it developed
that it was not properly a probate proceeding, it would not be treated as
such."
In the case at bar the contest of the will is strictly a probate pro-
ceeding, and the proper forum for its détermination is, as we think
the Suprême Court of Washington indicated in the two cases above
cited relating to this very estate, that department of the superior
court having jurisdiction of the estate, and actually engaged in its
administration.
668 125 FEDERAL BEFOBTEB.
We corlcur in the opinion expressed by the Suprême Court of
California in the matter of Joseph's Estate, 50 Pac. 768, that a péti-
tion to probate a will is the beginning of a spécial proceeding, and
that "the order admitting the will to probate is not final so long as
proceedings may be taken (under the statute) to revoke the probate.
In ail subséquent stages the contest is but a part of the proceeding
to probate the will, and is not a new and distinct proceeding. The
subject-matter is the same, and the ultimate issue, to wit, whether
the will in question should stand as probated, is the same." In our
opinion, there is nothing in the case of Gaines v. Fuentes et al., 92 U.
S. 10, 23 L. Ed. 524, to sustain the jurisdiction of the fédéral court
in the présent suit. That case came before the Suprême Court of the
United States on writ of error to the Suprême Court of the state of
Louisiana. The action was brought in the Second District court of
the parish of Orléans, which, under the laws of Louisiana, was in-
vested with jurisdiction over the estâtes of deceased persons, and of
appointments necessary in the course of their administration. In
form it was an action to annul an alleged will of one Daniel Clark,
the father of the plaintiflf in error in the case, and to recall the decree
of the court by which it was probated. The complaint, or pétition,
as it was called, set forth that on the i8th of January, 1855, the
plaintiflf in error applied to the district court of the parish of Orléans
for the probate of the alleged will, and that by decree of the Suprême
Court of the state the alleged will was recos:nized as the last will of
the deceased, Clark, and was ordered to be recorded as such ; that
this decree of probate was obtained ex parte, and by its terms au-
thorized any person at any time, should he désire to do so, to contest
the will and its probate in a direct action, or as a means of défense
by way of answer or exception, whenever the will should be set up
as a muniment of title ; that the plaintifif in error subsequently com-
menced several suits against the petitioners in the Circuit Court of
the United States to recover sundry tracts of land and properties of
great value, situated in the parish of Orléans and elsewhere, in which
they were interested, setting up the alleged will as probated as a
muniment of title, and claiming under the same as instituted heir of
the testator; and that the petitioners were unable to contest the
validity of the alleged will so long as the decree of probate remained
unrecalled. The petitioners then proceeded to set forth the grounds
upon which they asked for a revocation of the will, and the recalling
of the decree of probate; thèse being substantially the falsity and
insufiSciency of the testimony upon which the will was admitted to
probate, and the status of the plaintiff in error, incapacitating her to
inherit or take by last will from the décèdent. A citation having been
issued upon the pétition, and served upon the plaintiflf in error, she
applied, in proper form, with a tender of the necessary bond, for
removal of the cause to the Circuit Court of the United States for
the District of Louisiana, under section 12 of the judiciary act of
1789 (Act Sept. 24, 1789, c. 20, I Stat. 79), on the ground that she
was a citizen of New York and the petitioners were citizens of Louisi-
ana. The court denied the application, for the alleged reason that,
as she had made herself a party to the proceedings in the court rela-
669
tive to the settlement of Clark's succession by appearing for the pro-
bate of the will, she could not avoid the jurisdiction when the attempt
was made to set aside and annul the order of probate which she had
obtained. The court, however, proceeded to say, in its opinion, that
the fédéral court could not take jurisdiction of a controversy having
for its object the annulment of a decree probating a will. The plain-
tiflf in error then applied for the removal of the action on another
ground, which was also denied, on the ground that the fédéral court
could not take jurisdiction of the subject-matter of the controversy.
Other parties having intervened, the applications were renewed, and
again denied. An answer was then filed by the plaintiflr in error,
denying generally the allégations of the pétition except as to the
probate of the will, and interposing a plea of prescription. Subse-
quently a further plea was fîled to the efifect that the several matters
alleged as to the status of the plaintifï in error had been the subject
of judicial inquiry in the fédéral courts, and had been there adjudged
in her favor. Upon the hearing a decree was entered annulling the
■ivill and revoking its probate. The judgment of the Suprême Court
of the state afifiirming this decree was reversed on writ of error on
the ground that the case should bave been transferred from the par-
ish court of Orléans to the Circuit Court of the United States, and
in giving that judgment the Suprême Court of the United States
held that, while the action was in form to annul the alleged will of
Daniel Clark, and to recall the decree by which it was probated, it
could not be treated as properly instituted for the revocation of the
probate, but should be and was treated as brought against the dev-
isee by strangers to the estate to annul the will as a muniœent of
title, and to restrain the enforcement of the decree by which its
validity was established, so far as it aflfects their property, for the rea-
son that the petitioners were not heirs of Clark, nor legatees, nor
next of kin, and did not ask to be substituted in place of the plaintiff
in error. "It is," said the court, "in fact an action between parties ;
and the question for détermination is whether the fédéral court can
take jurisdiction of an action brought for the object mentioned be-
tween citizens of différent states upon its removal from a state
court." The court held (92 U. S. 20, 23 L. Ed. 524) that :
"The suit In the parîsh court is not a proceeding to establish a will, but to
annul It as a muniment of title, and to llmit the opération of the decree ad-
raitting it to probate. It is In ail essential partieulars a suit for équitable
relief — to cancel an Instrument alleged to be void, and to restrain the en-
forcement of a decree alleged to hâve been obtained upon false and insuffl-
cient testimony. There are no separate equity courts in Louisiana, and suits
for spécial relief of the nature hère sought are not there designated suits in
equity. But they are none the less essentially such suits; and If, by the law
obtaining in the state, customary or statutory, they can be maintained in a
state court, wlintever désignation that court may bear, we think iDey may
be maintained by original process in a fédéral court, where the parties are
on the one side citizens of Louisiana and on the other citizens of other states."
Not only was there no statute of Louisiana like that of the state
of Washington, requiring the contest of a wil! admitted to probate
to be initiated and prosecuted in the court having jurisdiction of the
estate and charged with its administration, but it appears from the
670 125 FEDERAL REPOETBE.
statement of the case of Gaines v. Fuentes that the decree of pro-
bate there sought to be annulled was not only ex parte, but that by
its very terms any person was authorized to contest the will, and its
probate in a direct action.
The case of Byers v. McAiiley, 149 U. S. 608, 13 Sup. Ct. 906, 37
L. Ed. 867, involved the estate of Mary McxA.uley, deceased, who died
seised of real estate in the city of Pittsburg, Pa., leaving also a large
amount of personal property. As respects the latter, she died intes-
tate, but she left the following instrument, written and signed by her :
"By request of my dear brother my house on Duquesne Way is to be sold
at my death and tbe proceeds to be dlvided between 'The Home for the
Frlendless,' and 'The Home for Protestant Destitute Women.' "
That instrument was admitted to probate on the I2th of January,
1886, by the register of Allegheny county, Pa., as the will of Mary
McAuley, and letters of administration cum testamento annexe upon
her estate were issued to Alexander M. Byers. Byers proceeded with
the administration of the estate, and on January 29, 1887, he fîled in
the register's office an account showing his receipts and expen-
ditures, and what balance he had in his hands for distribution, amount-
ing to a large sum of money. The account of Byers as administra-
tor with the will annexed was examined and allowed by the register,
and was presented for approval to the orphans' court of Allegheny
county, and was by that court on March 7, 1887, approved and con-
firmed, and, no exceptions thereto having been filed, the confirma-
tion became absolute. Thereupon, in pursuance of statutory direc-
tions, this confirmed account was put upon the audit list of the or-
phans' court for distribution of the balance shown to be in the admin-
istràtor's hands, and the court fixed March 29, 1887, as the day to
hear the case. The day before the hearing thus fixed, a bill in equity
was filed in the Circuit Court of the United States for the Western
District of Pennsylvania, by two citizens of Ohio, against the admin-
istrator, Byers, and other parties claiming to be interested in the
estate, including the two corporations named in the probated instru-
ment. The bill set forth the death of Mary McAuley; that there
were two classes of claimants to the estate, to wit, the first and sec-
ond cousins of the décèdent; that the so-called will was null and
void; and that there was a large amount of personal estate in the
hands of the administrator, etc. The prayer was that the will and
the probate be declared void, and of nô effect ; that the administra-
tor be enjoined from disposing of the real estate, and from collecting
the rents therefrom, and that some suitable person be appointed to
take charge of it until partition ; that a partition of it be had and
made to and among the varions parties in interest, and that the de-
fendant Byers be directed to make à full, ju.st, and truë account of
ail assets in his hands; that an account be taken of the decedent's
debts and funeral expenèes, and the surplus distributed among the
plaintifï and other parties entitled thereto ; and for gênerai relief.
To this bill the administrator, Byers, filed a plea setting up the pro-
ceedings in the orphans' court, which plea was overruled by the Cir-
cuit Court. The case was then put at issue by answer and replica-
tion, and resulted in a final decree by the Circuit Court to the efifect
OARKATJ V. O'CALLIGAS. 671
that the real estate left by the décèdent be distributed equally be-
tween the Home for the Friendless and the Home for Aged Protes-
tant Women, and that the personal estate of the décèdent be distrib-
uted among the 13 first cousins of the décèdent, to the exclusion of
her second cousins.
The Suprême Court held that the Circuit Court erred in talcing
any action or making any decree looking to the mère administra-
tion of the estate, or attempting to adjudicate the rights of citizens
of the State as between themselves, but that, as it appeared that the
debts of the estate had been paid, and the estate was ready for dis-
tribution, but that no adjudication liad been made as to tlie distribu-
tees, "in that exigency the Circuit Court might entertain jurisdiction
in favor of ail citizens of other states, to détermine and award their
shares in the estate. Further than that it was not at liberty to go."
149 U. S. 620, 13 Sup. Ct. 911, 37 L. Ed. 867.
But certainly, in order to make such détermination, it is essential
that ail adverse claimants be made parties. In the case of Byers
V. McAuley it does not appear that any one interested in the estate
was absent. There is in the case no suggestion of the absence of
any necessary or proper party, and no question of that nature was
presented or considered. In the case at bar, however, there were
persons not made parties to the suit who claimed to be the sole and
exclusive heirs of the deceased, and who, if made parties, would,
on the ground of citizenship, oust the fédéral court of any jurisdic-
tion in the premises. If any of those claims be well founded, it
would, of course, resuit that the complainants in the court below are
without any right. Those claimants were, therefore, essential par-
ties to the controversy concerning the heirship in question, and we
think counsel for the appellees altogether mistaken in saying that
there is anything to the contrary in Byers v. McAuley, or in the
case of Payne v. Hook, 7 Wall. 425, 19 L. Ed. 260. The latter was
a case, as stated by the Suprême Court in Byers v. McAuley, "of a bill
filed by one of the distributees of an estate against the administrator
and the sureties on his officiai bond, to obtain her distributive share
in the estate of the décèdent.. Plaintiiï was a citizen of Virginia, and
the défendant a citizen of Missouri, and an administrator appointed by
the probate court of one of its counties. Suit was brought in the Cir-
cuit Court of the United States for the District of Missouri. The
charge in the bill was gross misconduct on the part of the administra-
tor, and false settlement with the probate court ; and that he had, by
fraudulent misrepresentations, obtained a settlement with plaintiff
for a sum less than she was entitled to. A demurrer to the bill was
sustained in the court below, but this court held that the bill was
sufficient, and that the demurrer was improperly sustained. In other
words, the ruling was that the plaintiiï, a citizen of another state,
could apply to the fédéral courts to enforce her claim against an
administrator arising out of his wrongful administration of the es-
tate." To the objection that the other distributees were not made
parties, tlje court said (7 Wall. 431, 19 h. Ed. 260):
"It iB undoubtedly true that ail persons materlally Interested In the subject-
matter of a suit sbould be made parties to it; but this rule, like ail gênerai
672 126 FEDERAL BËFOBTEIC.
ruies, being faunded In convenlence, wlll yleld whenever it Is necessary that
it should yleld In order to accompllsh the çnds of justice. It wlll yield if the
court Is able to proceed to à decree and do justice to the parties before It
■wltbotit Injufy to absent persbns, equally interésted in the litlgatlon, btlt who
cannot convenlently be made parties to the suit. The neces'Slty for the re-
laxation of the ruie is more especially apparent In the courts of the United
States, where, oftentimes, the enforcement of the rUle would oust them of
their Jurisdlçtlon, and déprive parties entitled to the interposition of a court
of equity of any remedjf whatever. The présent case affords an ample illus-
tration of this necessity. The complainant sues as one of the next of kin,
and names the other distrlbutees, who hâve the same common interest, with-
out stating of what partlcular state they are cltlzens. It is falr to présume,
in the' absence of any averments to the contrary, that they are citizens of
Missouri. If so, they could not be jolned as plaintlfCs, for that would take
away the jurisdlction of the court; and why make them défendants, when
the controversy is not wlth them, but the administra tor and his sureties? It
can never be indispensable to make défendants of those against whom noth-
Ing Is alleged and from whom no relief is asked. A court of equity adapts
its decrees to the necesslties of each case, and, should the présent suit
terminate in a decree against the défendants, it is easy to do substantial
justice to ail the parties In interest, and prevent a raultlpllcity of suits, by
allowlng the other diàtrlbutees, either through a référence to a master, or
by some other proper proceeding, to come in and share in the beneflt of the
litlgatlon," '
It is plain that what is there said by the Suprême Court is no jus-
tification whatever for dispensing with parties whose asserted inter-
est is directly opposed to that of the complainants, for the establish-
ment of any right in the latter takes just that much from the absent
claimants.
Without référence to the merits of the suit, concerning which we
cannot properly indicate any views, it results that the judgment must
be, and hereby is, reversed, and the cause remanded to the court be-
low, with directions to dismiss the bill at the complainants' cost.
KBNNEY et al. v. BLAKB.
(Carcult Court of Appeals, Nlnth Circuit. September 14, 1903.)
No. 908.
. Sbambk — Statotk Rboulatino Contkacts— Construction and Scopb.
The provision of section 24, Act Dec. 21, 1898 (30 Stat. 763, e. 28 [U,
S. Comp. St. 1901, p. 3080]), entitled "An act to amend the laws relatlng
to American seamen for, the protection of such seamen and to promote
commerce," whlch exprèssly makes Its requirements as to the shipping
of seamen applicable "as well to foreign vessels as to vessels of the
United States," provided there Is no treaty whlch confllets, is withln the
power of Congress, and Is valid and effective; and the requirements of
the act apply to contracts made by seamen in ports of the United States
for service on foreign vessels.
. Bame— Intamdjtt of Contraot— Violation dp Statutb.
Under Rev. St. § 4523 [U. S. Comp. St. 1901, p. S075], which provides
that "ail sblpments of seamen made contrary to the provisions of any
act of Congress shall be void; and any seaman so shlpped may leave the
service at any tlme, • , * *" a contract for service on a British ship
made In an American iJort, by whlch the seaman was pald wages in
advance, In violation of Act Dec. 21, 1898 (30 Stat. 755, 763, c. 28 [U. S.
i 2. See Seamen, vol. 43, Cent Dlg, S§ 121, 122.
KENNET V. BLAKE. 673
Comp. St. 1901, p. 3080]), Is vold, and the seaman may leave the service
at any tlme, and recover full wages for the tlme served, wlthout déduc-
tion on account of the advance.
8. Abmibalty— Revibw on Appkal— Denial dp Rkhbaring.
The denial of a rnotion by respondent for a rehearing in an admiralty
suit, to permit the introduction of new évidence, is not ground for re-
versai of the decree, where respondent did not support his motion vcith
a showlng of vehat the évidence would be, nor présent it to the appellate
court, as might hâve been done under the admiralty rules.
Appeal from the District Court of the United States for the West-
ern Division of the District of Washington.
For opinion below, see 117 Fed. 557.
The libelant, Michael Blake, an American citizen, brought this suit In the
District Court for the District of Washington against the British shlp Troop,
her tackle, apparel, and furniture, to recover the sum of $198, alleged to be
due the libelant as vj-ages. It was alleged in the libel "that on the 15th day
of July, 1901, at Philadelphia, state of Pennsylvania, libelant was duly hired
by the said A. F. Kenney, the master of said vessel, as second mate on
board of her, at the agreed compensation of thirty dollars per month, and
that in pursuance thereof libelant duly entered in the services of said vessel,
then and there, in the capacity as second mate on board of her, and duly
performed ail of his duties as such second mate on board of her until the
lOth day of March, 1902, when libelant, with the consent of said master,
left said vessel." The appellent A. F. Kenney appeared and claimed the
vessel, and in his answer alleged that at the time the libelant joined the ves-
sel he signed the usual and customary shipping articles, a copy of which
articles were attached to the answer, marked "Exhibit A," and made a part
thereof. The shipping articles described the voyage as "from Philadelphia
to Fusan, China, thence if required to any port or places within the limits
of 75 degrees north and 65 degrees south latitude, trading three years* voy-
age to end on the arrivai of the vessel at a port of discharge on the east
C'oast of the United States north of Hatteras, TJnited Klngdom, or the con-
tinent of Europe between the Elbe and Brest, with liberty to call for or-
ciers." It appears that the articles contained the foUowing entry respect-
ing the libelant: "Michael Blake, âge 45; nationality, Mass., Fall River;
home address. Fall River, Massachusetts, TJ. S. A.; shlp in which he last
served. 'Lynfleld;' date and place of slgnlng this agreement, Philadelphia,
sixteenth day, seventh month, 1901; capacity, second mate; amount of wages
per calendar month, $30; amount of advance or monthly allotment, $30, one
month's payment." The payment of the advance of $30 to the libelant ap-
pears upon the articles as follows: "Michael Blake, Mass., Fall River, Mass.,
TJ. S. A. Philadelphia, 2 mate $30. One payment, $30." The answer of the
claimant alleged that libelant left the vessel without any good cause or
reason therefor, and wlthout the consent of the master and contrary to his
wishes; that by reason of the Ilbelant's having so left the vessel, he for-
telted whatever wages may hâve been coming to him at the time he left
the vessel. In the course of the testimony in the case the libelant, on cross-
examination, was interrogated by proctor for claimant eonceming certain
déductions from his wages made by the master of the vessel. Among other
things he was asked, "Didn't you get an advance of $30?" His answer
was, "Yes, sir." The decree of the court below was in favor of the libel-
ant for the sum of $193. The claimant of the vessel and the sureties on the
bond for the release of the vessel hâve appealed.
J. M. Ashton and W. L. Sachse, for appellants.
A. W. Buddress, for appellee.
Before GILBERT, ROSS, and MORROW, Circuit Judges.
MORROW, Circuit Judge (after stating the facts as above). The
act of Congress entitled "An act to amend the laws relating to Ameri-
125 F.— 43
874^ 125 FEDBBAt REPORTER.
can seawen, for the protection of such seamen aijjd ioipromote com-
merce,?' passed December 21, 1898 (30 Stat. 755, 763, c. 28), provides,
in section 24 [U. S. Comp. St. 1901, p. 3080], as foUows:
"That It shall be, and la hereby, made unlawful In any case to pay any
Beaniàli 'wàges lii' advahce of the tlme when he bas actually eamed the
same, or to pày such advance ■wages to any other person. Any person pay-
Ing such advance wages shall be deèmed guilty of a mlsdemeanor, and upon
«invietlon shall be punlshed by a fine not less than four tlmes the amount
of the wages so advanced, and may àlso be imprisoned for a perlod not ex-
ceeding six months, at the discrétion pf the court. The payment of such ad-
vance wages shall In no case, exceptîng as herein provided, absolve the ves-
sel or the master or the owner thereof from full payment of wages after the
same shall hâve been actually earned, and shall be no défense to a libel, suit,
or action for the recovery of such wages. * • • That it shall be lawful
for any seamah engagea In a vessel bound from a port on the Atlantic to a
port on the Pacific or Vice versa, or in a vessel engaged in forelgn trade,
except trade between the United States and the Dominion of Canada or
Newfoundland or the West Indies or the Republic of Mexico, to stipulate In
hls shipptng agreement for an allotment of an amount, to be flxed by régu-
lation bf thé commlssloner of navigation, with the approval of the Secretary
of the Treasury, not exceeding one month's wages, to an original creditor in
liquidation of any just debt for board or clothing whlch he may liave con-
tracted prior to engagemëiit. * ♦ ♦ That thls section Shall apply as well
to foreign vessels as to vessels of the tjnlted States; and any master, owner,
consignée or agent of any foreign veSsel who bas violated Its provisions, shall
be llable tq the same penalty that the master, owner.^or agent of a vessel of
the TJnited States would be for a simllar violation: provided, that treaties
In force between the United States and foreign nations do not conflict."
The court below held, under this statute, that the contract under
which the libelant shipped on board the vessel was void, by reason of
the payment of advance wages to the libelant ; that he had the right
to leave the vessel atany time, and was entitled to a decree for the
full amount of wages earned, without déduction of the amount paid in
advance; that other payments made to him, and the fines and sub-
traction of wages for the days when he was ofif duty without leave
previous to the arrivai of the sliip at Tacoma, as shown by the ship's
log, amounting to the total sum of $41, should be dèducted. A decree
was accordingly entered in favor of the libelant for the sum of $193,
with interest and costs. 117 Fed. 557.
The identical question involved in this case was before the Suprême
Court of the United States in the récent case of Patterson v. The
Eudora, 190 U. S. 169, 23 Sup. Gt. 821, 47 L. Ed. 1002. It was there
held that the act of December 21, 1898, was applicable to seamen ship-
ping in a port of the United States on a foreign vessel, and that the
statute was valid. On the authority of that case, the decree of the
court below, holding the contract void, must be aiîflrmed.
After the District Court had rendered its décision in favor of the
libelant, proctors for çlaiïrtant moved the court for a rehearing, upon
the statement that claimant was taken by surprise in the argument
made by proctor for libelant that the contract under which libelant
joined the vessel was void on account of the advance payment. It
was further stated that the libel presented no issue upon that question,
and that, had such an issue been presented, claimant would hâve pro-
duced the allotment note, showing that such an advance was in pay-
ment of an original creditor of libelant in liquidation of a just debt
PACET V. m'kinnet, 675
for board or clothing, which libelant had contracted to pay prior to
signing the articles when joining the ship. There was also a motion
to take testimony in support of the latter statement, but there is noth-
ing in the record to show that the court would hâve been justified in
granting either of thèse motions. It is unnecessary to discuss the
grounds for a rehearing based upon the surprise occasioned by the
argument of proctor for libelant on the trial of the case that the con-
tract was void. The fact appears to be that the case was tried in the
court below on behalf of the claimant upon the theory that the rights
and obligations of the parties under the contract were governed by the
provisions of the British merchants shipping act of 1894, and not by
the act of Congress of 1898, and this theory has been very strongly
urged upon this court by appellant. But as before stated, the Su-
prême Court has disposed of this question in the Eudora Case, and it
is therefore not open to further discussion.
The claim that the libel did' not présent the issue of a void con-
tract on account of the payment of advance wages cannot be sus-
tained. The libel clearly foreshadowed that issue when it departed
from the usual form of libel for wages, and omitted ail référence to the
signing of shipping articles by the libelant. The claim that, had such
an issue been presented, it would hâve been met by showing that the
allotment was an advance under the provisions of the act of Congress,
should hâve been supported by an afBdavit showing what the testi-
mony would hâve been in that behalf. The claimant having omitted
to make that showing in the court below, it was still open to him to
bring this testimony to the attention of this court, under the admiralty
rules relating to new testimony in the appellate court. Having omit-
ted thèse opportunities to présent his défense, he cannot now urge
them as a ground for reversing the decree of the District Court. Be-
sides, no exception appears to hâve been taken to the rulings of the
court in this respect, and no proper foundation laid for the review of
the action of the court on appeal.
The decree of the District Court is afErmed.
PAOEY V. McKINNEY.
(Circuit Court of Appeals, Ninth Circuit. September 14, 1903.)
No. 862.
1. CoNTiNUANOE— Absence of Witnesses— Want os" Due Diligence.
Where the complaint, ■whicli had been on file for six months, alleged
a contract made with défendant through his agents, and at any time
thereafter défendant might hâve obtalned adisclosure of the names of
such agents, if he did not linow them, It was not an abuse of discrétion
to refuse his application for a contlnuance to enable him to obtain the
testimony of such agents.
9. Appeal— Review — Immatebial Deeects in Pleading.
A judgment will not be reversed by an appellate court for the mère
purpose of striking out a portion of the complaint, or correcting soma
other technical defect in a pleading, when it is not shown that the sub-
stance of the pleading in question would be materlally changea thereby.
676 125 FEDERAL KEPOKTEB,
B. EjBCTMENT— JSUFPICIENCT OF COMPLAINT.
A complalnt In ejectment whlch allèges an oral contract for the sale of
the property by plaintiff to défendant, and that, in pursuance thereof,
défendant entered Into possession, and ousted and ejected the plaintifC
from the promises, sufficiently allèges a dellvery of possession, under the
Alaska statute (Code Civ. Proc. § 75, 31 Stat. 344) requiring pleadings to
be liberally construed.
4 Evidence— Memobahdcm op Contract.
An unsigned writlng, wUeh plaintiff testified was prepared by defend-
ant's agent at the tlme of the making of an oral contract for a sale of
property to défendant, embodylng the terms of the contract, js admissible
in évidence as a mémorandum tending to prove such terms, although not
in Itself évidence of the contract.
In Error to the District Court of the United States for the Sec-
ond Division of the District of Alaska.
The défendant in error brought this action In ejectment agalnst the plain-
tiff in error and others in the District Court of Alaska, Second Division, on
.Tune 24, 1901, for the recovery of the possession of a certain lot of land in
Nome, Alaska. The lot Is described as follows: Commencing at a point in
the south Une of what is designated as Front street, in the town of Nome,
District of Alaska, at the northeast corner of that certain lot or parcel of
land now covered and occupied by the grocery store of G. H. McPheron;
thence, at right angles to said Front street, and in a southerly direction, 80
feet, to a stake; thence, at right angles, and in an easterly direction, and
parallel to said Front street, 44 feet; thence, at right angles, and in a north-
erly direction, toward said Front street, 56 feet, to a stake; thence, at right
angles, and in a westerly direction, and paraUel to said Front street, 40 feet,
to a stake; thence, at right angles, and toward the said Front street, and
in a northerly direction, 24 feet, to the south Une of said Front street; thence,
at right angles, and in a westerly direction, along the south Une of said
Front street, 4 feet, to point of beginning. It is alleged In the second
amended complalnt that on the 18th day of December, 1899, the premises
in question were unoccupied, unappropriated, and unsurveyed public lands
of the United States, in the town of Nome, Alaska; that »n that date the
plaintiff (the défendant In error) went upon said public domain and appro-
priated a certain described portion thereof; that he improved the same, re-
slded thereon, and became the owner in fee of said premises as agalnst ail
and every person or persons, saving and except the United States of Amer-
ica, and became the owner of the right of possession thereof. In the orig-
inal complaint it was alleged that thereafter, on the 15th day of June, 1900,
and while the plaintiff was the owner of said premises, and the owner of the
right of possession of said -premises, plaintiff entered into an agreement wlth
the agents and représentatives of défendants, whereby and by the terms of
which said agreement plaintiff agreed to sell to the défendants, and the de-
fendants agreed to buy the premises from the plaintiff, for a price not men-
tioned. In the flrst amended complaint it was alleged that the agreement
was oral, and the price is stated. In the second amended complaint the
names of the agents and représentatives of the défendants are given, and
the transaction fully described. It is alleged that, while such owner and
in the possession of the said premises, the plaintiff entered into an oral
agreement with G. W. DIckenson, George Waller, and Ira Ranke, who were
acting as agents and représentatives of the défendants (one of whom is the
plaintiff In error), whereby .thèse parties agreed to buy the said premises for
the défendants, and to pay therefor the sum of $3,325, of which amount $500
was to be paid In cash, and the remairilng sum in monthly installments of
$400 each; that said oral agreement Was reduced to writlng. In duplicate;
that the said agents of the défendants did not sign the same, but agreed to
send a copy thereof to Seattle, to be personally signed by the défendant;
that $500 in cash was then and there paid to the plaintiff by the said agents
IT 4. See Evidence, vol. 20, Cent. Dig. § 1486.
PACET V. m'kINNET. 677
of défendants, and the plalntlff dellvered the possession of sald premlses to
the sald agents of défendants, In pursuance of the said agreement, except
a small tract on the southwesterly portion thereof, about twenty feet square.
It is aUeged that the défendants hâve not paid any further sum on account
of the purchase priée of the said lot, although payment thereof has been often
demanded; that défendants hâve repudiated and denied the agreement en-
tered into between the plaintiff and the représentatives and agents of the de-
fendants, in pursuance of which agreement the défendants, thelr agents and
représentatives, hâve entered into the possession thereof, and ousted and
ejected the plaintifC therefrom. It is further alleged that the défendants nn-
la-wfully and vrrongfully withheld the possession of the promises from the
plaintiff, and now are unlawfully and wrongfully withholding the possession
thereof from the plaintifC, and claiming the same adversely to the plaintiff.
The alleged agreement is attached to the complaint as an exhibit, and reads
as follows:
"This agreement made and entered into this 20th day of June, A. D. 1900,
by and between the United States Mercantile Company, an association, com-
posed of J. G. Paeey and others, doing business at Nome, in the District of
Alaska, and David J. McKinney of the same place, witnesseth:
"That subject to the foUowing terms and conditions, the United States Mer-
cantile Company agrées to purchase, and David J. McKinney agrées to sell
to said Company ail bis Interest, right and title to the following described
parcel of land situated and being in the town of Nome, In the said District,
to vcit:
"A lot bounded on the east by the lot of Clark and Berkman, and on the
west by the lot of Stauf and King, and running forty-four (44) feet along
the south side of Front street and eighty feet deep.
"The said United States Mercantile Company is to pay to said McKinney
for said described lot the sum of three thousand three hundred and twenty-
five dollars ($3,325) in the follovïring manner: Five hundred dollars ($500) in
cash at or before the exécution of this instrument, the receipt whereof is
hereby acknowledged by sald McKinney and the further sum of four hundred
($400) dollars monthly upon the day of each and every month until the
balance is fully paid.
"It is duly agreed and understood between the parties hereto that the lot
herein bargained to be sold shall remain and be in the possession of said
ÎIcKinney and the title shall not be passed to said United States Mercantile
Company until the purchase price of three thousand three hundred and
twenty-five dollars, $3,325, is fully paid as hereinbefore set forth and in the
case of the default In any of the deferred payments herein agreed to be paid,
then and in that event, at the option of the said McKinney, this contract may
be declared canceled, null and void, and the payments made upon same may
be forfeited to said McKinney as liquidated damages.
"AU rents of tenants upon the said lot are to be paid to said McKinney until
the full amount of the purchase price is paid.
"Upon the completion of the payment of the $3,325.00 herein agreed to be
paid, the said McKinney will convey to said United States Mercantile Com-
pany, by bill of sale, deed or other proper conveyance, the property herein
described and contracted to be sold.
"Time is the essence of this contract and ail the terms are binding upon
the hoirs, executors, administrators and assigns of the parties hereto.
"Witness our hands and seal this day of , 1900, A. D."
The défendant Paeey (plaintiff in error) denied generally the allégations of
the complaint, and, afflrmatively answering, alleged that the entire right to
title and possession of the promises in dispute was in him, by reason of the
location, staking, and continued occupancy of the same by him and his
grantors, and the érection of valuable improvements thereon.
It appears from the testimony that in 1899 one Cowells staked a lot in the
town of Nome, Alaska, having a frontage of 40 feet on Front street, with a
depth of 24 feet, and started to bulld a cabin on the lot, but, being disabled,
was obliged to get the assistance of McKinney, the défendant in error. Mc-
Kinney completed the cabin and built a fonce around the lot, and agreed with
Cowells that, when the latter returned to the States, he (McKinney) would
678 125 FBDBKÀL ÉEPOETER.
hold the property for Cowells, understandlng that It had been located for
some one else— preaumably the United StWes Mercantile Company. Later,
McKlnney staked the adjoinlng land descrlbed in the complalnt; thus making,
wlth the original lot^ a lot havlng total dimensions of 44 by 80 feet. It was
shown that Paeey was the sole person constltuting the flrm of United States
Mercantile Company; that In the sprlng of 1900 he sent three employés to
Nome, hamely, Dlckenson, Ranke, and Waller, to represent him In différent
capacltles, but princlpally In conducting a store to be bullt npon the lot In
question. McKinney Was In possession of the entire lot when thèse employés
arrived at Nome with lumber, etc., for the purpose of putting up a store
building. McKlnney démanded payment for his services in holding the lot
of Cowells, and for his posSessory right to the adjoining property, before any
building ehould be erected. Hanke, one of the employés of the plaintifC In
error, paid McKlnney $500, and, according to his testimony, represented that
any further claim must be submitted to his principal, Pacey. McKinney
clalms that at this time a verbal agreement was made between the three
employés of Pacey and himself that he was to be paid $3,325 for the portion
of the lot which he had personally staked, and that the $500 received was on
account of such sale; that the terms of this agreement were embodied in a
written mémorandum prepared by Waller, which was to be transmitted to
Pacey for his signature. Pacey's agents then entered and erected a building
upon both portions of the land. Pacey and Ranke were présent at the trial,
and testify that they knew nothing of the written mémorandum in question
until this action was brought. Ranke testifled that the $500 was paid in
order that they migbt not be delayed in the érection of the building, and that
any further claim was to be submitted to Pacey.
The trial of the case resulted in a verdict for the défendant In error, and
judgment was entered therfeon, granting to him the possession of the prem-
ises descrlbed in the complalnt, and $100 as damages. From this judgment
an appeal bas been taken to this court.
Page, McCutchen, Harding & Knight, Chas. S. Johnson, P. C.
Sullivan, Alfred J. Daly, and Samuel Knight, for plaintifï in error.
Campbell, Metson & Campbell and Thomas H. Breeze, for défend-
ant in error.
Before GILBERT, ROSS, and MORROW, Circuit Judges.
MORROW, Circuit Judge (aftèr stating the facts as above). The
first two assignments of error relate to the refusai of the court to
grant continuances of the cause. The first continuance was asked
on the loth day of December, 1901, when the cause was set for hear-
ing, upon the ground that material and necessary witnesses were
absent, whose testimony could not be procured before the following
July term of court. An afHdavit was fîled by the plaintifï in error,
stating the facts to which the absent witnesses would testify. The
défendant in error admitted that the witnesses would so testify, and
the court then refused the motion for a continuance. The plaintifï
in error was not prejudiced by this action of the court. The second
or supplementary motion for a continuance was made on the i2th day
of December, 1902, and was also based on the absence of material
and necessary witnesses, other than those mentioned in the first
affidavit on motion for continuance. In the affidavit of the plaintifï
in error in support of this supplementary motion, it was stated that
G. W. Dkkenson and George Waller "are persons with whom, to-
gether with Ira Ranke, the plaintifï herein claims to hâve made an
oral agreement for the sale of the premises" in question ; that afïïant
did not know of the materiality or necessity of the testimony of said
PACET V. m'kinnet. 679
witnesses, or either of them, until he was served with plaintiff's sec-
ond amended complaint on the preceding day; that as the witnesses
resided, respectively, in Seattle and Tacoma, Washington, and as
there were no means of communication with them at that season,
their testimony could not be obtained. It was alleged that by said
witnesses the affiant expected to prove that neither of said witnesses
had authority to enter into the oral agreement set up in the com-
plaint, on behalf of the plaintifï in error, and that neither of them
did make such an agreement with the défendant in error. It was
further alleged that the plaintifï in error was unable to prove the
facts by any other witnesses. The original complaint had alleged
that the agreement for the sale of the premises was between the de-
fendant in error and the agents and représentatives of the plaintifï
in error. If the latter did not know who thèse alleged agents and
représentatives were, he shotild hâve taken proper steps to find ont.
The complaint had been filed nearly six months when the case was
called for trial. The summons was served upon the plaintifï in error
June 24, 1901. At any time after his appearance he might hâve ob-
tained the déposition of the défendant in error (Code Civ. Proc.
Alaska, § 644 [Act June 6, 1900, c. 786, 31 Stat. 434]), and hâve
ascertained the names of the alleged agents and représentatives of
the plaintifï in error, and ail the facts necessary to prépare for the
défense, or he might hâve demurred to the complaint within the time
provided by law, and secured, as he afterwards did, the information
contained in the amended complaint, and, so being informed, hâve
secured the évidence of the absent witnesses in time for the trial.
Failing to use due diligence in obtaining information as to the names
of the parties alleged in the complaint to be his agents and repré-
sentatives, he was not entitled to a continuance of the case to obtain
their évidence. Moreover, it appears that the testimony of the ab-
sent witnesses was merely corroborative of the witness Ranke, who
was présent and testifîed, and that of the plaintiff in error, who was a
witness in his own behalf. The refusai of a continuance upon this
showing, and under the circumstances, does not appear to hâve been
an abuse of discrétion on the part of the court. Cox v. Hart, 145
U. S. 376, 380, 12 Sup. Ct. 962, 36 L. Ed. 741 ; Isaacs v. United
States, 159 U. S. 487, 489, 16 Sup. Ct. 51, 40 L. Ed. 229.
With respect to the objections made to certain portions of the
pleadings and the court's rulings thereon, this court will not reverse
a judgment for the mère purpose of striking out some portion of
the complaint, or correcting some other technical defect in a plead-
ing, when it is not shown that the substance of the pleading in ques-
tion would hâve been materially altered thereby.
It is contended by the plaintifï in error that the second amended
complaint does not state facts suiïïcient to constitute a cause of ac-
tion, and that the demurrer should hâve been sustained for the rea-
son, among others, that there is no allégation in the complaint that
possession of the premises was ever delivered to the plaintifï in error,
or to his authorized représentatives or agents. It is alleged that
there was an agreement to sell the premises described in the com-
plaint to the plaintifï in error, and that he agreed to buy for a speci-
680 125 FEDERAL EKPOETEB.
fied sum, and that in pursuance of this agreement the "défendants,
their agents and représentatives, had entered into the possession
thereof, and ousted and ejected the plaintiff from said premises."
This would seem to be a sufficiently direct allégation that the posses-
sion of the premises was delivered to the plaintiff in error, or to his
authorized représentative or agent. In any event, the defect of form
is cured by section 75 of the Alaska Code of Civil Procédure (31
Stat. 344), which provides that "pleadings must be liberally con-
strued. In the construction of a pleading for the purpose of deter-
mining its effect, its allégations shall be liberally construed with the
view of substantial justice between the parties."
The action of the court in allowing the mémorandum of the oral
agreement, alleged by the défendant in error to hâve been made, to
be introduced in évidence, is assigned as error. This mémorandum
was attached to the complaint as an exhibit, and was introduced in
évidence during the course of the trial, in connection with the testi-
mony of the défendant in error, as showing the oral agreement which
he claimed was made between himself and the agents of the plaintiff
in error. The court ruled that the writing might be received in évi-
dence, as one of the circumstances tending to connect the parties in
their possession, or change of possession, of the lot in question, and
for that purpose only. It was but a part of the évidence introduced
in support of the claim of the défendant in error that an oral agree-
ment existed, and was subject to be disproved in the same manner
as the oral testimony of the défendant in error. The court instructed
the jury that the writing, never having been signed, was not évidence
itself of an agreement, and the jury was correctly instructed as to
its légal effect; that it was introduced only as a mémorandum tend-
ing to show the terms of an oral agreement, but, the writing never
having been signed, it was not évidence itself of any contract.
With respect to some of the objections raised by the plaintiff in
error to the proceedings in the court below, it is sufificient to say
that they are not assigned as error, and they are not sufficiently plain
and prejudicial to justify this court in reversing the judgment.
The judgment of the District Court is afiîrmed.
EBNER et al. v. HBID.
(Circuit Court of Appeals, NintB Circuit September 14, 1903.)
Ko. 888.
1. Attachmbnts— Rbdblitkby Bond— Validitt.
HIU's Ann. Laws Or. 1892, g 159, provldes that, whenever the de-
fendant In attachment bas appeared In the action, he may apply for an
order to discharge the attachment on the exécution of an undertaliing
mentioned In section 160, which authorlzes such discharge on the exécu-
tion of a bond "to the effect that the sureties •will pay to plaintiff the
amount of the judgment that may be recoverçd agalnst the défendant In
the action." . HeM, that a bond by which the sureties undertook and prom-
ised, in case plaintiff recovered a Judgment in the action, that the défend-
ant would, on demand, pay to plaintlffs the amount of said judgment.
EBNER V. HEID. 6S1
together wlth the eosta and dlsbursements of the action, -was a substantlal
compliance wlth the statute, and was enforceable as a statutory bond.
8. BamE— CONSIDEKATION.
Where a bond to release an attaehment was under seal, and recited as
a considération the release of ail the property attached, and the discharge
of the attaehment, It was based on a suflBcient considération to render it
enforceable as a common-Iaw obligation.
8. SAMB— DBIilVBRT.
Where the bond for the release of an attaehment was approved by the
United States district judge, and was filed with the papers in the case
In the ofiSce of the clerk of the court, and the order discharging the at-
taehment recited that it was based on the notice of motion and motion,
on ail the records filed in the cause, and on the exécution of a good and
sufficient undertaking, such order was conclusive évidence of the deUv-
ery of the undertaking to the court, and its acceptance by the court as a
delivery bond. ,
4 Same— Demand.
Where, in an action on a redellvery bond in attaehment, after judg-
ment for plaintiff, it appeared that ail of the defendant's property had
been sold on exécution under the judgment, and had been purchased by
plaintiff, and that the défendant was Insolvent, and had no property
within the district under the jurisdiction of the court, and that he had re-
sisted plaintiff's collection of the Judgment, and had obtained an injunc-
fion restralning further proceedings by plaintiff, such proceedings
amounted to a demand for the payment of the judgment, and défend
ant's insolvency rendered a further demand unnecessary.
5. Redklivert Bond— SnPERSEDEAs— Mbuger of Liabiliït.
Where a supersedeas bond was given pending a wrlt of error In an ac-
tion in which a redellvery bond had been given, and it was subsequently
determined that the appellate court had no jurisdiction of the writ of er-
ror, the liabllity of the sureties on the attaehment bond was not merged in
the supersedeas bond.
In Error to the District Court of the United States for the First
Division of the District of Alaska.
This was an action brought by the défendant in error agalnst the plaintlffs
in error and certain other persons in the District Court of Alaska, Division
No. 1, on the 23d day of April, 1901, to recover the sum of $1,416.18, wlth
interest and costs, on an undertaking given upon the discharge of an attaeh-
ment of the property of the principal therein named in an action commenced
in the District Court of Alaska in April, 1895. A jury was expressly waived
by the parties, and the court entered a judgment in favor of the défendant
in error for the full amount claimed, upon which judgment a writ of error
was sued ont to this court. The trial court found as facts that on June 10,
1895, an attaehment issued ont of the United States District Court for the
District of Alaska against the property of one Willis Thorp, in an action
commenced by one Bonnifield and John G. Heid, the défendant In error
herein, to recover the sum of $7,231.25 from Thorp; that Thorp applied to
the court for a discharge of the attaehment, offering a written undertaking
executed by the plaintlffs in error herein, which undertaking was approved
and accepted by the court, and the property released from the attaehment;
that thereafter judgment was recovered in said action by Bonnifield and
Heid for $7,264.80; that thereafter, on August 30, 1900, on the mandate of
the United States Suprême Court against said Thorp, the District Court en-
tered its further judgment, adjudging that the former judgment be carried
into full force and effect against Thorp, together with costs and charges;
that Heid (défendant in error) owned and was entitled to two-ninths of said
judgment, namely, the sum of $1,616.18; that $200 bas been paid on account
of said sum by reason of a purchase by Heid at an exécution sale under
said judgment of ail the property of Thorp within the jurisdiction of the
court; that Bonnifield was not, and had not been for more than three years
prior to the commencement of this action, a résident of the District ot
682 125 FEDERAL RBPOBTEB.
Alaska; tliat Bonnlfleld, though at one timè a cojudgiiientcreditor with Held,
took a poalHoii Inlmicàl tb Held, and satlsfied Us part 6t ïbe Judgment ob-
talned by himself and Held agalnst Thorp, wlthoùt the consent of Held;
tbat Thorp and thé bther défendants (plaîntifif s in error herein) had not
pald to Held hls share of Sald judgment; that at and before the entry of the
tlnal judgment on August 30, 1900, Thorp was insolvent, and had no prop-
erty In the District of Alaska out of whlch Held's part of the judgment
could be satlsfied; that at one tlme Thorp and some of the défendants sued
out an injunctlon enjoinlng Held from collectlng hls part of sald judgment,
but that on December 10, 1900, the Injunctlon was vacated, and the cause
whereln the same was sued out was dlsmlssed; that in Aprll, 1901, Held
demanded of the défendants (plalntlfls In error) payment of hls part of
sald judgment; that they refused to pay the same, and there was then due
and owlng to Held from such défendants the sum of $1,416.18, with Interest
and costs. As conclusions of law from thèse facts, the court found that
Heid was excused from maklng a further demand upon Thorp to pay hls
part of the judgment, other than the levy of exécution made on the prop-
erty of Thorp, by reason of the Insolvency of Thorp, and by reason of his
havlng sued out the injunctlon agalnst Held, thus showlng a détermination
not to pay, had a demand been made, and that Heid was entitled to a judg-
ment agalnst Ebner, Valentlne, Young, Olds, and Behrends for the amount
of the former judgment recovered, wlth Interest and costs.
Robert A. Friedrich, John R. Winn, and R. W. Jennings, for plain-
tilïs in error.
Alfred Sutro, for défendant in error.
Before GILBERT, ROSS, and MORROW, Circuit Judges.
MORROW, Circuit Judge (after stating the facts as above). The
act of Congress entitled "An act providing a civil government for
Alaska," approved May 17, 1884 (23 Stat. 24, 25, c. 53), provides in
section 7 ''that the gtenerâl laws of the state of Oregon now in force
are hereby declared to be the law in said district, so far as the same
may be applicable and not in confiict with the provisions of this act
or the laws of the United States." The civil laws of Ôregon were
in force in Alaska under this act until the passage of the act of Con-
gress approved June 6, 1900, entitled "An act making further provi-
sion for a civil government for Alaska, and for other purposes." 31
Stat. 321, c. 786. The Code of Civil Procédure of the State of Ore-
gon provides, in title 15 of chapter i (Hill's Ann. Laws 1892, §§ 144-
172), for attachment proCeedings under which the .plaintifiE in an
action upon a contract may hâve the property of the défendant at-
taçhed as security for the satisfaction of any judgment that may be
recovered, unless the défendant give security to pay such judgment.
Section 157 of the Code (HiH's Ann. Laws 1892, § 159) provides that
whenever the défendant has ^ppeared in the action he may apply,
upon notice to the plaintiflf, to the court or judge where the action
is pending, or to the clerk of such court, for an order to discharge
the attachment upon the exécution of the undertaking mentioned
in section 1 58 (Hill's Ann. Laws 1892, § 160). That section pro-
vides:
•tJpon such àppUcàtlori, the défendant shall dellver to the court or judge
tb whom the .application Is made an undertaking esecutéd by one or more
suretles • • • to the efifect that the.suretles will pay to the plalntlfE the
amount of the Judgment that may be recovered agalnst the défendant in the
action." ■'
EBKEE V. HEID. 683
It îs contended by the plaintiffs in error that the undertaking does
not conform to the language of the statute, and is therefore not a
statutory obligation ; that it was not sealed and delivered, and is not,
therefore, a common-law obligation. The undertaking does not
follow strictly the langtiage of the statute, but it was plainly intended
to be in compliance with its ternis. No form of undertaking is pre-
scribed, but it is required to be "to the efïect" that the sureties will
pay to the plaintifif the amount of the judgment that niay be recovered
against the défendant in the action. The undertaking recites that :
"We, the undersigned, • * ♦ in considération of tlie preraises and in
considération of the release from attachment of ail the property attached as
above mentioned, and the discharge of said attachment, do hereby jolntly
and severally undertake and promise that in case said plaintiffs recover judg-
ment in said action, the défendant will, on demand, pay to the said plain-
tiffs the amount of said judgment, together with the costs and disburse-
ments of this action."
This was a substantial compliance with the statute, and, "in ef-
fect," assumed the obligation therein provided. It is true, the agree-
ment was that the défendant would, on demand, pay the judgment,
if one was recovered in the action, but that is the équivalent of an
agreement to pay the judgment if one was recovered against the de-
fendant.
The undertaking appears also to be valid as a common-law obliga-
tion. As set forth in the record now before the court, it is under
seal, and recites as a considération the release from attachment of ail
the property attached, and the discharge of the attachm.ent. This
was a sufficient considération for the undertaking. Palmer v. Vance,
13 Cal. 553; Bunneman v. Wagner, i6 Or. 433, 18 Pac. 841, 8 Am.
St. Rep. 306. The undertaking was approved by the United States
district judge, and was filed with the papers in the case in the office
of the clerk of the court. The discharge of the attachment was by
the order of the court, in which it was recited that the order was
"upon the notice of motion and motion filed and served by défend-
ant, and upon ail the records filed in this cause," and upon exécu-
tion of a good and sufficient undertaking. This is the conclusive
évidence of the delivery of the undertaking to the court, and its ac-
ceptance by the court as a delivery bond for the release of the at-
tached property.
The objection that no demand has been made upon Thorp, the
défendant in the attachment suit, for the payment of the judgment,
is answered by the finding of the court, sustained by évidence in the
record, that an exécution was issued upon the judgment, and a levy
made upon the property of the défendant Thorp to satisfy the share
of the judgment belonging to the défendant Heid, amounting to
$1,616.18; that upon the exécution sale under this judgment, and
pursuant to the levy, ail the property of Thorp in the District of
Alaska was sold and purchased by the plaintifif Heid for $200, leaving
the sum of $1,416.18 due on the judgment; that before the com-
mencement of this action, and at or before the entry of the final
judgment on August 30, 1900, the défendant Thorp was insolvent,
and had no property in the District of Alaska; that at the date of
684 125 FEDERAL KEPOKÏER.
the finding Thorp was still insolvent, and had no property in the
District of Alaska, and under the jurisdiction of the court, out o£
which the plaintifif's part of the judgment could be satisfied; that
Thorp resisted Heid in the collection of the judgment, and obtained
an injunction from the court enjoining Heid from further proceed-
ing in the action, and from suing out exécution against the sure-
ties of Thorp. Thèse proceédings amounted to a demand upon
Thorp for the payment of the judgment, and his insolvency rendered
any further or other demand useless.
The claim that the liability of the sureties on the attachment bond
was superseded and became merged in the supersedeas bond upon
writ of error to the Circuit Court of Appeals cannot be sustained.
The question of the jurisdiction of the Court of Appeals in that case
was raised and certified to the Suprême Court of the United States,
and that court answered the question in the négative. Thorp v. Bon-
nifield, i68 U. S. 703, 18 Sup. Ct. 947, 42 L. Ed. 121 1. Thereupon
this court dismissed the writ of error. Thorp v. Bonnifield, 83 Fed.
1022, 27 C. C. A. 686. The Circuit Court of Appeals being without
jurisdiction in the case, the supersedeas bond upon writ of error
could not take the place of an undertaking upon attachment, and
there is nothing -in the statute giving a bond on writ of error the
force and effect of an undertaking upon the discharge of an attach-
ment. CoUins V. Burns, 16 Colo. 7, 26 Pac. 145.
The judgment of the District Court is affirmed.
FARRELL v. SBCURITY MUT. LIFE INS. CO.
(Circuit Court of Appeals, Second Circuit. August 11, 1903.)
No. 167.
1. Insurance — Application — Statbmbnts— Warranties.
Where an application for life Insurance stipulated that the answers to
the questions in the application should be warranties, and that, if the an-
swers were untrue In any respect, the pollcy should be void, the Insured
warranted the literal truth of his answers, and a false statement pur-
porting to be a complète answer to a question authorized the forfaiture
of a pollcy Issued on the falth thereof.
2. Same— DuTY OF Insurbd.
Where there was doubt as to the meaning of a question asked In an
application for life Insurance as to whether insured had been an "inmate"
of a hospital, and the application provided that his answers should be
treated as warranties, it was insured's duty to make a fuU, true, and
complète statement of the facts, or to state that he did not know whether
he had been such an inmate or not,
& Same— Inmate of Hospital.
Where Insured stated that he had never been an "inmate" of a hos-
pital in an application for life Insurance providing that his answers
should be treated as warranties, and his physician testtfled that prior to
the application he had sent insured to a hospital simply to "get go«'
bed and board," and that the physician could give him better care and
under more satisfactory circumstances at the hospital than he could re-
celve at another house, and that he made the entry of deceased's malady
■ T 1. See Insurance, vol. 28, Cent. Dig. H 560, 562, 565.
FAREELL V. SECURITÏ MUT. LIFE INS. CO. 685
as rheumatism merely to qualify him to be entered at the hospltal, such
facts showed that Insured had been an "inmate" of a hospltal, and there-
fore constituted a breaeh of warranty.
In Error to the Circuit Court of the United States for the District
of Connecticut.
This cause cornes to this court upon a writ of error by plaintifï
in the court below to review a judgment entered for défendant in the
United States Circuit Court for the District of Connecticut upon a
verdict rendered by direction of the court.
W. F. Kenney and Théo. M. Maltbie, for plaintifï in error.
F. W. Jenkins and Chas. E. Gross, for défendant in error.
Before WALLACE, LACOMBE, and TOWNSEND, Circuit
Judges.
TOWNSEND, Circuit Judge. The plaintifï herein is the assignée
of, and beneficiary designated under, a policy of insurance for $5,000
issued by défendant to William H. Taylor on October 21, 1899. The
portions of the application for insurance signed by the insured which
are material to the questions involved herein are as follows :
"I agrée, that I wlll abstaln from the habituai use of opium or other
nareotics, and that this agreement, together with the answers and explana-
tions given to the above varions questions, Inclusive of those propounded
by the médical examiner, and the written and printed statements to him
made, shall form the exclusive and only basis of the agreement between
me and the Security Mutual Life Insurance Company. That each and everj
statement and answer made by me, as aforesaid, is material to the risk.
and I warrant each and every of said statements and answers, whether
written by my own hand or not, to be full, complète and true, and if any
statement or answer made as aforesaid is not full and complète, or is un-
true in any respect, then the Policy of Insurance issued hereon shall be
null and vold. That should I fail to pay any of the premiums on or before
the day on which the same shall fall due, or fail to comply with any of
the tenus of this agreement, or of any Policy issued hereon, in that event
said Policy shall beeome null and void, and ail moneys which shall hâve
been paid shall be forfeited to the said Company for its sole use and bene-
flt. That the proofs of death required shall be made upon the blank forms
furnished by the Company, and shall include ail Information required thereby.
That ail provisions of law forbidding any physician who bas or shall hâve
attended me from disclosing any and ail information which he acquired by
such attendance together with any such provisions affecting the uses which
shall be made of this application or any part thereof, and ail provisions of
law in conflict with or varying the terms of this agreement and the policj'
applied for, are hereby expressly waived. That the Policy hereby applied
for shall not be in force unless actually delivered to and aecepted by me
durlng my lifetime and while in good health, and the flrst premium due
thereon actually received by said Comjjany. No answer or statement made
to, or information possessed by any agent, médical examiner or other per-
son, shall be admissible in évidence against this Company, or binding «pon
It, unless actually written in this application over the signature of the ap-
Ijlicant.
"Dated at Hartford, this 16th day of Oct., 1899.
"William H. Taylor."
"Part II.
"B. Glve the name and résidence of your médical adviser, or famlly
physician. Ans. Dr. Miller, Jacksonville, Fia.
"C. How long since were you last attended by a physician, or consulted
one? Ans. Not since childhood, If at ail.
686 125 FBDEItAL EEPOIlïKi:,
"D. For what dIfQculty or dlsease? Ans. None that he bas any remem-
brance of , * * *
"3. Occupation and Environment.
"E. Hâve you ever changea résidence or traveled on account of your
health? Ans. Ko. ♦ * •
"6. B:ealth Record.
"Hâve you ever been affected with any of the foUowing named dlseases or
conditions? (Answer 'Yeé' or 'No' to each question.)
"Malaria. No. How many attaeks. . Disorder of liver. No. Rheu-
matlsm. No. Goût. No.v Syphilis. No. Dlsease of Brain or Spiué. No. Sé-
vère Headache. No. Vertigo. No. Loss of Consciousness. No. Convulsions.
No. Paralysls. No. Nervous Exhâustlon. No. Apoplexy. No. Asthma. No.
Spitting of Blood. No. Bronchitis. No, Chronic Hoarseness. No. Chronlc
Cough. No. Shortness of Breatb. No. Falntlng Spells. No. Pleurisy, or any
chest or lung dlsease. No. Pain in Région of Heart. No. Dyspepsia or In-
digestion. No. Ohronlc Biarrhea. No. Billary Colic. No. Jaundice. No. Dia-
bètes. No. Rénal Colle. No. Gravel or Calculus. No. Immoderate flovF of
Urine. No. Difflcult or tedious Urination. No. Sunstroke. No. Fistula,
Anal. No. Bleeding Piles, No. Varicose Veins. No. Appendicitls. No. Pal-
pitation of Heart. No. Drôpsy. No. Swelling of Feet or Face. No. Swelling
of Glands. No. Cancer or Tumor. No. Chronic TJlcer or Abscess. No. Dis-
charges from the Ear. Noi ..Dlflaculty in Swallowing. No. Yellow Fever. No.
"The date, duration and severlty of each dlsease answered afflrmatively
muet be fully described. (See Note III. Médical Report.) » * »
"7. CUnlcal Hlstory.
"(Détail In brlef upon the followlng form, the clinlcal hlstory of any affec-
tion experienced by the subjeet, as per his answers foregolng.)
"Never bas had a physlclan to care for him that he remembered. » * •
"E. Hâve you ever been an inmate of any Inflrmary, Sanitarium, Institu-
tion, Asylum or Hospitalî Ans. No. * • *
"9. Habits.
"A. What Î8 your practlce as regards the use of splrlts, wines, malt, llq-
uors or other alcohoUc beyerage? (See Note IV. Médical Report.) Ans.
Klnd: Béer. Amount: About 4 glasses. How often: Per week. * • *
"l bereby déclare: That I bave reviewed and understand ail of the above
questions and answers thereto, and they are hereby made part of my applica-
tion for Insurance In the Seçurlty Mutual Life Insurance Company, and I
hereby -wairrant sald ansvfers, and each of tbem, as written, to bè full, com-
plète and tçue; that I am the person described above and In part I of this
application slgned by me, and that each of the questions In Part I and II
of my application was ans^vered in wrltlng before I slgned the same. Also,
that I am free from any and ail dlseases, slcknesses, aliments and complaints,
oxcept as above stated. That I will conform to and be governed by the ex-
Istlng By-Laws of the Company, and the same as they may be hereafter
amended.
"Dated at Hartford, thIs 14th day of Oet, 1899.
"William H. Taylor."
On May 14, 1900, the însured died. The remote cause of death, as
stated by his attending physician, was "phthisis pulmonalis, cough,
expectoration, fever, pleuritic pains, cold perspiration, rapid respira-
tion," etc.
This action was brought to recover said sum of $5,000 in the su-
perior court for Hartford county, in the state of Connecticut, and
was duly removed by défendant to the Circuit Court of the United
States for the District of Connecticut. On the trial of the cause
there was tfiuch évidence tending to show that several of the answers
contained in the application were untrue, in that deceased had for
years been in the habit of drinking varions intoxicating beverages,
had had malaria, had been crîppled by rheumatism, had spent his
winters in the south on account of his health, and that in 1895 he
TAERELL V. SECXJRITT MUT. LIFE INS. CO. 687
was dangerously ill with double pneumonia, pleurisy, and bronchitis,
and was then attended by a physician, and that subsequently he was
attended at intervais during a period of four years by another physi-
cian. There was also uncontradicted évidence that in July, 1899,
the deceased was admitted to a hospital, where he remained for
from one to two weeks. At the close of the testimony, counsel for
défendant requested the court to direct a verdict in its favor, on the
ground that the statements in the application for the policy were
warranties; that the testimony showed that certain of said state-
ments, which were specifically called to the attention of the court,
were false; and that, therefore, by the terms of said contract, said
policy was null and void. The court, in its charge, declined to dis-
cuss the évidence as to the various grounds stated in said motion,
but ruied that the statements in said application were warranties,
and instructed the jury as follows:
"It Is my opinion, after earefuUy considering the matter, that the évidence
does show that Mr. Taylor was for some little time, just shortly prior to the
issue of this policy, an Inmate of the St. Francis' Hospital; and It seems to
me, under my view of the law with référence to that matter, that it is my
duty to Instruct you to return your verdict for the défendant."
In the view which we take as to the correctness of the charge of
the court on this ground, it is unnecessary to consider the other dé-
fenses, which, when analyzed, lead to the same conclusion. The
exceptions challenge the rulings that the answers in said application
were warranties, and that the évidence showed that deceased was an
inmate of the hospital, and the direction of a verdict for défendant.
That under such a contract of Insurance the answers to the ques-
tions in the application are warranties, upon the literal truth of which
the validity of the policy dépends, was decided by this court in Brady
V. United Life Insurance Association, 60 Fed. 727, 9 C. C. A. 252.
And where, as in this case, the answer of the applicant purports to be
a complète answer to the question, a policy issued on the faith of
such apphcation is avoided by any substantial misstatement or omis-
sion in said answer. But the burden of plaintifï's contention appears
to be that the word "inmate" is equivocal or ambiguous, and that,
therefore, the question whether deceased was an "inmate" of a hos-
pital was a mixed question of law and fact, and should hâve been
submitted to the jury in the light of the surrounding circumstances,
in order that they might détermine the intent of the parties and the
construction to be put upon the contract in view thereof. The per-
tinent reply to this contention is that, if there was any doubt as to the
meaning of this question, it was open to the insured either to leave
it unanswered or to answer it by a "full, true, and complète" state-
ment of the facts, or by a statement that he did not know whether
he had been such an inmate or not. But, irrespective of this sug-
gestion, an examination of the record dispels ail uncertainty as to the
falsity of the answer in any view of the meaning of the question. It
appears from the testimony of the plaintiff himself that he took de-
ceased to St. Francis' Hospital at the suggestion of a physician, and
from the uncontradicted testimony of said physician, Dr. Sullivan,
who was plaintifiE's witness, that at the request of plaintifï he visited
688 125 FEDERAL BEPOBTEB.
deceased, professionally, and suggested his removal to the hospital;
tbat he went to the hospital, and examined deceased for 20 minutes
to half an hour very carefully; that deceased was accepted at the
hospital as Ijis private patient, and was a patient at and inmate of
the hospital during one or two weeks. It was proved that the hos-
pital was a chartered institution, with wards and nurses, was under
the charge of a physician, and was maintained by public contribu-
tions. The hospital record was produced and showed that deceased
was admitted in the médical class, that his physician was the said
Dr. Sullivan, that his disease was diagnosed as rheumatism, and that
the charge for his treatment was $7, which was paid. The only évi-
dence relied on to modify the conclusions necessarily drawn from the
foregoing uncontradicted facts consists in the testimony of Dr. Sul-
livan. On his direct examination he stated as follows:
"Q. What was done with Mr. Taylor after your visitî A. I think, at my
suggestion to Mr. Farrell — I told him that, under the conditions the Brower
House was In, that It would Improve his environments, and be much more
comfortable and pleasantiy sltuated, If he would go out to St. Francis' Hos-
pital, with which I was allîed. Q. Tou told him that you would give him
more convenience, and he would be under better environment at the hos-
pital than he would get in the Brower House? A. Yes. St. Francis' Hos-
pital bad not been opened long; there were but few patients there; and it
would be quite inexpensive for him to stay there a short time."
He further testified on direct examination that he found nothing
the matter with deceased, and that he made the entry of rheumatism
in ordef to qualify the patient to be entered at the hospital. On
cross-examination he testified that he ordered the removal of de-
ceased to the hospital because "I could give him better care, and
under more satisfactory circumstances, at St. Francis' Hospital, than
he would receive at the Brower House." He explained that by bet-
ter care he meant "better environment" — under better conditions —
and that by "better conditions" he meant : "Well, if he touched a
button, he could hâve a servant come to his room any time day or
night ; or if he wanted a change of blankets, or a hot drink — any
want could be attended to at once," and that he sent deceased theie
"simply to put him where he could get good bed and board."
"Inmate" is defîned as follows :
"One who llves in the same house or apartment with another; a fellow^
lodger; esp. one of the occupants of an asylum, hospital, or prison; by exten-
sion, one who occuples or.lodges in any place or dwelling." Webster.
"One who le a mate or associa te In the occupancy of a place; hence, an In-
dweller; an associated lodger or Inhabitant; as the inmate of a dwelling house,.
factory, hospital, or prison." Century.
There is nothing to show that the word "inmate" was used or un-
derstood in said application in any sensé other than its ordinary
sensé as thus defined. The presumption therefore is against any
différent or technical use.
But, even if the question could be considered, as contended by
plaintiff, as an inquiry whether plaintiff had been admitted to the
hospital for médical treatment for disease, the uncontradicted évi-
dence as to the circumstances under which the deceased w?" taken
there under advice of a physician as his patient, and the character
FAKBELL V. SECURITY MUT. LIFE INS. 00. 689
of his occupancy, satisfies this requirement. And in view of the
positive statements of the physician as to said facts the court would
net hâve been justified in submitting the case to the jury on the
theory of ambiguity or uncertainty because the witness said he sent
deceased there simply "to get good bed and board." If this state-
ment be not rejected as either palpably untrue or an unjustifiable
conclusion of the witness, it must be so interpreted as to apply to the
case of a patient who required the sort of treatment impHed by bet
ter conditions, environment, and service. In the modem treatment
of disease, especially of such a character as that from which the life
insured died some eight months after he left said hospital, nothing
further would hâve been necessarily helpful toward improvement
even in the case of an inmate for a long period. Therefore there was
not even a scintilla of évidence of ambiguity or contradiction to jus-
tify the court in submitting the case to the jury.
The cases cited by plaintiff on this point do not support his con-
tention. In Chinnery v. Industrial Company, 15 App. Div. 515, 44
N. Y. Supp. 581, the inquiry was, "Has said life ever been under
treatment in any hospital, asylum, or other institution?" The an-
swer was "No." This does not appear to hâve been a warranty, but
a représentation, and the court held that the removal of a cinder
from the eye of the insured at a hospital was not "being under treat-
ment," within the meaning of the policy, at least so as to be material
to her gênerai health.
In Mutual Benefit Life Insurance Company v. Wise, 34 Md. 583,
there was this inquiry and answer in the application: "Q. Has the
party been, or is he now, employed in any military or naval service?
A. No." The fact was that he had been a chaplain in the Confed-
erate Army. The court held that it should hâve been left to the jury
to détermine whether a chaplain in the army is in the military service,
and, if so, whether insured was ever employed in such service. The
appellate court, therefore sustained the refusai of the court to charge
that the jury should find for the défendant if it should find that Mr.
Wise was a chaplain in the Confederate Army in the year 1862.
But there was no évidence that a chaplain is or is not in the military
service, and none to show that Mr. Wise was ever actually employed
in said service.
The other cases cited by plaintiflf merely state the gênerai rule of
construction in cases of ambiguity. But, as we hâve already seen,
there was no uncertainty in the terms of this contract. The ques-
tion and answer were direct, the facts were fully within the knowl-
edge of deceased, and were positively and untruly stated by him.
The judgment is affirmed, with costs.
125 F.-
690 125 FBDBBiL KBPORTEB.
GRAVES r. SANDBRS et al.
(Circuit Court of Appeals, Ninth Circuit September 14, 1903.)
No, 904.
1. Àttornbt and Client— Charactbr of Services— Measure of Compensa
TiON— Amount InvoijVed— Evidence.
Where attorneys were employée by défendant, wtio was a prospective
purchaser of a mine, to render services, both professlonal and nonpro-
i f esslonal, In examining the articles of Incorporation ; of the corporate
flwner of tlie mine, and also to pass on the value of the mine, etc., the
admission of évidence in an action for the reasonable value of such
services as to the value of the ïûlne, the value of its production, and
the value of the capital stock of the corporation, was bot error, especially
In View of a charge that it could be considered only for the purpose of
determining the amount InvolVed in the transaction, and the results ob-
tained to détermine the nature of the responsiblllty assumed by plain-
tlfCs, and the reasonable value of their services.
3.- Same— New Trial— Rbviéw.
The déniai of a motion for a new trial by the Circuit Court cannot be
revlewed by the Circuit Court of Appeals.
In Error to the Circuit' Court of the United States for the District
of Montana.
For opinion below, see 105 Fed. 849.
This Is an action to recover the sum of $25,000 for and on acCount of advice
given and professlonal services rendered by the défendants in error as attor-
neys at law, and for other services by them rendered, at the alleged spécial
Instance &nd request of the plaintiff In error, In and about examining, ascer-
tainlng, and reportlng the title to, and the quality, character, and value of
a quartz mine In Montana, The action was commenced in the District
Court of the First Judlclal District of the state of Montana, in and for the
county of Lewis and Clarke, but, upon pétition of the plaintifC in error (de-
fendant below), was removed to the Circuit Court of the United States,
Ninth Circuit, District of Montana,- by reason of the diverse dtizenship of
the parties. The plalntlfï';Jn error 'entered a gênerai déniai of the alléga-
tions of the complaint. Evidence was Introduced on behalf of the défend-
ants in error (plaintifCs below), but none in behalf of the plaintifC In error.
The trial resulted in a verdict in favor of the défendants in error in the sum
of $4,000, and judgment was entered accordingly. To reverse this Judgment,
a writ of error was sued out to this court.
E. B. Howell and Clayberg & Gunn, for plaintifif in error.
J. A. Walsh and W. F. Sanders, for défendants in error.
Before GILBERT, RÛSS, and MORROW, Circuit Judges.
MORRO W, Circuit Judgfe. Thé assignments of error relate to
the admission of certain testimony, the refusai to give certain request-
ed instructions to the jury, anji the refusai to grant a new trial. The
testimony in question related to the value of the services rendered
by the défendants in error, consisting of professional services as at-
torneys and counselors at law, and other services rendered in and
about examining, ascertaining, and reporting the title to, and the
quality, character, and value of, a certain quartz mine situated in
Jcfiferson county. Mont., known as the "Ruby Mine," and mill con-
nected therewith, and the condition of the property, and its value.
GKAVES V. SAîJDEBS. 691
production, contents, and promise, with a view to the loaning of
money on, and the purchase by the plaintifï in error of, the stock of
the Gold Mountain Mining Company, the owner of the mine and mill.
It is contended by the plaintifï in error that the services upon
which recovery is sought were not légal or professional in their
nature, and that the principles of law applicable to the détermination
of the reasonableness of attorneys' compensation do not govern
hère; that no considération should be given to the value of the
property involved, or the profit reaUzed or loss sufïered by the plain-
tifï in error, but merely to the worth of the services rendered, inde-
pendent of other considérations. The testimony on behalf of the
défendants in error tended to show that the services rendered by
them were worth $5,000, but it was not claimed that ail the services
rendered were strictly of a professional character.
It appears further from the testimony on behalf of the défendants
in error that on July 30, 1897, the plaintifï in error, without any pre-
vious arrangements with or notice to the défendants in error, tele-
graphedfrom New York to the défendants in error, at Helena, Mont.,
where they were engaged in business as attorneys at law, asking
information about one Hewitt and his mines at a certain locality in
Montana. This information was sent by telegram and letter, and,
in accordance with télégraphie directions from the plaintifï in error,
the défendants in error selected one James E. Sites, described as a
"practical, honest miner," to visit the mining property in question
and examine it, and they thereafter transmitted his report to the
plaintifï in error. It appears that the plaintifï in error became finan-
cially interested in the property, and in August and September of
the same year telegraphed the défendants in error for further in-
formation, and asking that the same man who had previously ex-
amined the property should make further reports of its then condi-
tion; that such reports were made to the défendants in error, and
by them put into shape and transmitted to the plaintifï in error. It
does not appear that any further services were rendered after Sep-
tember. In the correspondence and telegrams which passed be-
tween the parties, and are introduced in évidence, no mention is made
of fées or compensation for services. The bills of Sites, who ex-
arained the property, are in évidence; and it is testified that they
were paid by the défendants in error, and the amounts collected by
them from the plaintifï in error. One of the défendants in error,
at least, appears to hâve been a friend of the plaintifï in error, but it
is not apparent from the correspondence whether the services re-
quested were because of the friendship existing, or because profes-
sional services were required. It is testified that one of the de-
fendants in error went to the ofSce of the Secretary of State and ex-
amined the articles of incorporation of the mining company whose
stock the plaintifï in error was purchasing, but, other than this,
the services rendered seem to hâve consisted of the obtaining of in-
formation from persons familiar with the mine, the sending of a
man to examine the mine, and in preparing and transmitting his
reports. The plaintifï in error invested some $15,000 in the mine,
according to the testimony, for which he received 150,000 shares.
692 125 FEDERAL HErORTEB.
and there is some testimony to the effect that he afterwards pur-
chased 50,000 shares in addition; raaking 200,000 shares of the
300,000 shares of the capital stock of the company. The reports
sent to him by the défendants in error were favorable in character,
and it is apparent from the correspondence that the plaintifï in error
relied upon the information received from the défendants in error,
and expected them to look out for his interests in the matter. Tes-
timony was introduced to the effect that at one time, after the plain-
tifï in error had purchased this stock, ofïers were made for it of
from $1 to $1.50 per share. Whether he sold any of his stock or
not, or whether he made or lost on the entire transaction, is not
shown, although, according to the testimony, the stock had little, if
any, value at the time of the trial. The plaintifï in error does not
deny that the défendants in error rendered the services stated, but
he contends that they are entitled to merely the reasonable worth
of the services, independent of any considération of the value of the
property involved, or the benefît resulting to the principal or em-
ployer, The ruie governing cases of this character is stated very
clearly by Mr. Justice Field in Forsyth v. Doolittle, 120 U. S. 73,
74, 7 Sûp. Ct. 408, 30 h. Ed. 586. In that case an attorney sued to
recover compensation for his services, not only as an attorney in
defending a foreclosure suit, but for his services in negotiating a
sale of property. The court held that évidence of the value of the
property involved was admissible, and, with regard to compensation
for the services rendered, said :
"The services for which compensation Is sougbt were not only those re-
quired of attorneys and counselors at law, but were also those of negotlators
seeking to accomplish the resuit desired, by consultation with proposed pur-
chasers, and présentation to them of the advantages to be derlved from the
property, présent and prospective. Varied' as were the légal services of the
plaintiffs, It is plain from the testimony that those rendered by negotia-
tlon and consultation, and présentation of the uses to which the property
could be applied, were far more effective and Important. This fact neee^-
sarily had a controlllng welght In estimatlng the value of the services. It
is difficult to apply to such services any flxed standard by which they can
be measured, and their value detérmined, as can be done with référence to
services purely professional. There Is a tact and slilll and a happy man-
ner with some persons, which render them successfui as negotlators, whlle
others, of equal learning, attainments, and Intellectual ability, fait for the
want of those quallties. The compensation to be made In such cases is,
by the ordlnary judgment Of business men, measured by the results ob-
tained. It is not limited by the time occupied or the labor bestowed. It Is
from overlooking the différence in the rule by which compensation is meas-
ured In such cases, and that in cases where the services are strictly of a
professional nature, that several objections are urged for reversai of the
judgment recovered." :
The court below in the présent case instructed the jury that testi-
mony relative to the value of the mine, the value of its production,
and the value of the capital stock of the mining company, could be
considered only for the purpose of determining the amount involved
in the transaction, and the results dbtained, to détermine the nature
of responsibility assumed by the défendants in error, and the reason-
able value of their services. Under the rule above announced by
the Suprême Court, there was no error in admitting the testimony
LA VIN V. LE FEVEB. 693
objected to, especially with the explanation as to its weight con-
tained in the instruction.
Further error is specified in the refusai of the court to give cer-
tain instructions requested by the plaintiff in error. Without going
into détail, we are of the opinion that the instructions given covered
the matter of the refused instructions, and in quite as favorable a
form to the plaintifï in error as to the défendants in error.
With regard to the error assignée! in the refusai of the court to
grant a new trial "because the damages are excessive, and the ver-
dict appears to hâve been rendered under the influence of passion
and préjudice," it is sufficient to say that a motion for a new trial
cannot be reviewed by this court. N. P. Ry. Co. v. Charless, 51
Fed. 562, 2 C. C. A. 380; G. N. Ry. Co. v. McLaughlin, 70 Fed.
669, 676, 677, 17 C. C. A. 330; Sun Printing & Publishing Ass'n
V. Schenck, 98 Fed. 925, 40 C. C. A. 163; Laber v. Cooper, 7 Wall.
565, 19 L. Ed. 151; Railroad Co. v. Winter's Adm'r, 143 U. S. 60,
70, 12 Sup. Ct. 356, 36 L. Ed. 71 ; City of Lincoln v. Power, 151 U.
S. 436, 14 Sup. Ct. 387, 38 L. Ed. 224.
There being no error apparent in the action of the court upon the
trial, and no showing that the procédure was not in every respect
regular, whatever may be the opinion of the appellate court as to the
amount of the verdict, it must affirm the judgment.
LAVIN, Immigrant Inspecter, et al. v. LE FEVRE et al.
(Circuit Court of Appeals, Ninth Circuit. November 2, 1903.)
No. 948.
1. Aliens— Déportation— Question por Court.
"Whether the executive offlcers of the government, in deporting an alien
emigrant, are proceedlng accordlng to law, is a judicial question, which
may be Inquired into on habeas corpus.
2. Samb — To What Codntry Dbported.
Under Act March 3, 1891, c. 551, §§ 10, 11, 26 Stat. 1086 [U. S. Comp.
St. 1901, p. 1299], providing that ail aliens uniawfully comlng into the
country shall, if practicable, be immediately sent back on the vessel by
which they were brought in, and that any alien uniawfully coming into
the country may be returned as provided by law at any time wlthin a
year thereafter, where alien emigrants uniawfully came into the coun-
try from France, are then temporarily absent in British Columbia, and
return within a year from their arrivai from France, they are properly
deported to France.
Appeal from the Circuit Court of the United States for the North-
ern Division of the District of Washington.
Habeas corpus proceedings were instituted by counsel on behalf of the ap-
pellees In the superior court of the state of Washington for King county, al-
leging their illégal détention at Seattle by the appellant Sister Superior M.
Vngelique, of the House of the Good Shepherd; said détention being by au-
thority and request of the appellant James P. La vin, United States immigrant
inspector. After the service of the writ of habeas corpus upon the sister
superior, the appellants petitioned the United States Circuit Court for the Dis-
trict of Washington, Northern Division, for the removal of the proceedings to
694 125 FEDERAL REPORTER.
the Circuit Court. Thereupon a writ oi certlorari'was Issusd to the state court,
and the proceedlngs removed to the fédéral court. Thereaftér the appellants
made a retum and answer to the pétition for habeas corpus, showing: That
the appellant James P. Lavin was a revenue ofllcer and Immigrant inspecter
for the collection district of Pi:^et Sound. That the appellees were natives
of thé Republic of France. That the appellant Lavin had theretofore, in the
discharge of his duties as such offlcer, removed the appellees from the steam-
ship Rosalie upon its arrivai at Seattle from Victoria, British Golumbia, from
whlch port they had been brought to Seattle. That said removal was for the
purpose of Investigating whether they were immigrants properly entitled
to enter the United States. That a board of spécial inquiry V7as convened,
consisting of the Treasury and revenue offlcers, in accordance with the law
and the régulations of the Treasury Department, to détermine the eliglbillty
of the appellees to land in the United States. That upon such investigation
It had been found and determined that appellees had, within one year prier
thereto, been imported into the United States at the port of New York from
France for the purpose of prostitution. That it had been further found and
determined that each of them was a pauper, and lilcely to become a public
charge. That it had been further found that, Immediately prior to thelr
having bèen taken from such vessel for such purpose by the appellant Lavin,
they had left the United States and gone to Victoria, British Columbia, from
which place they were returning to the United States when so taken and re-
moved from said vessel. That upon such flndings it had been determined and
concluded by said board that the appellees were not lawfully entitled to be
In or enter the United States, and that they should be deported and re-
tumed to the eountry to which they belonged, and from whence they came.
Thereaftér the facts and flndings of said board of spécial inquiry were for-
warded to the Secretary of the Treasury for the purpose of having the ques-
tion of the eountry and port to which the appellees should be deported and
retumed determined by said Secretary. That whlle said question was pending
before the Secretary of the Treasury the court made an order and judgment
flnding the facts and causes of détention of the appellees by the appellants
as set forth in the return, and flnding further that the only action warranted
by the government and its oflacers, upon the facts found, was the déportation
and return of the appellees to Victoria, British Columbia, at the expense of
the steamer bringing them to this eountry, and thereupon the court entered
an order and judgment accordingly. Thereaftér the Secretary of the Treasury
issued his warrant directing the appellant James P. Lavin, immigrant in-
specter, to arrest the appellees and remove them to the port of New York for
déportation to France. Upon the receipt of said warrant the appellants made
a Supplemental return showing the fact of the issuance of such warrant,
and petitloned the court to modlfy its order and judgment by striking ont so
much thereof as requlred the appellant to return the appellees to the steam-
ship that brought them to Seattle, "to be by said vessel at its own expense
retumed to Victoria, British Columbia," leaving the appellant Lavin free to
carry Into effect the warrant of the Secretary of the Treasury. Upon a hear-
ing upon thIs supplemental retum and pétition, the court found that the ap-
pellees had only been temporarily removed from the steamer bringing them
to Victoria, for the purpose of examination as to their fltness as immigrants
by the Treasury officiais, and that the only action warranted under the law
was the refusai to the appellees of the rlght to land in this eountry, and the
only eountry to which they could be lawfully returned upon the refusai of the
right to land was the eountry from which they had come Immediately prior
to such rejection, to wit, to British Columbia. The court found that the ap-
pellees, not having landed in this eountry, and not having been found hère,
were not subject to déportation by warrant of the Secretary of the Treasury
to the eountry to which they belonged, and from which they originally came,
to wit, France. The court thereupon denied the pétition for a rehearing and
roodiflcation of the judgment, and ordered and directed the appellant James
P. Lavin, Immigrant Inspecter, to carry Into efCect the original order and judg-
ment of this court. From thèse orders and judgments the présent appeal Is
prosecuted by the United States attorney for and In behalf of the immigrant
Inspecter and the sister superlor of the House of the Good Shepherd.
LAVIN V. LE FEVRE. 695
Jesse A. Frye, U. S. Atty., and Edward E. Cushman, Asst. U. S.
Atty., for appellants.
H. C. Gill, H. B. Hoyt, and H. S. Frye, for appellees.
Before GILBERT, ROSS, and MORROW, Circuit Judges.
MORROW, Circuit Judge (after stating the facts as above). Tiie
errors relied upon by the appellants are, first, that the question of
the déportation of the appellees was within the judgment and the
jurisdiction of the Secretary of the Treasury, and not within the ju-
risdiction of the Circuit Court; second, that after assuming juris-
diction the court erred in determining, contrary to the détermina-
tion of the Secretary of the Treasury, that the appellees should be
returned to British Columbia, and not to France.
The court below found the cause of the détention of the appellees
to be as set forth in the return of the appellants to the writ of ha-
beas corpus. This return showed that the executive officers of the
government had, upon investigation, determined that the appellees
were alien immigrants, and belonged to a class of persons excluded
by law from coming to the United States ; that upon such investiga-
tion it was found and determined that said immigrants had witkin
one year prior thereto been imported into the United States at the
port of New York from France for the purposes of prostitution;
that each of them was liable to become a public charge ; that imme-
diately prior to being taken from the vessel that brought them to
Seattle they had left the United States and gone to Victoria, from
which place they were returning to the United States.
The déportation of alien immigrants of the class to which appel-
lees belong is provided for in sections lo and ii of the act of March
3, 1891 (26 Stat. 1086, c. 551 [U. S. Comp. St. 1901, p. 1299]), as
follows :
"That ail aliens who tnay unlawfully come to the United States shall, if
practicable, be immediately sent back on the vessel by which they were
brought in. The cost of their maintenance while on land, as well as the es-
pense of the return of such aliens, shall be borne by the owner or owners of
the vessel on which such aliens came."
"That any alien who shall corne into the United States in violation of law
may be returned as by law provided, at any time within one year thereafter,
at the expense of the person or persons, vessel, transportation company, or
corporation bringing such alien Into the United States, and if that cannot be
done, then at the expense of the United States."
The supplemental return of the immigrant inspecter shows that
the Secretary of the Treasury had issued his warrant directing the
immigrant inspecter to arrest the appellees and remove them to the
port of New York for déportation to France. It has been repeatedly
held that the executive officers of the government hâve exclusive
jurisdiction to détermine the right of an alien immigrant to land
and come into the United States. Nishimura Ekiu v. United States,
142 U. S. 651, 660, 12 Sup. Ct. 336, 35 L. Ed. 1146; Lem Moon Sing
v. United States, 158 U. S. 538, 15 Sup. Ct. 967, 39 L. Ed. 1082;
Fok Yung Yo v. United States, 185 U. S. 296, 305, 22 Sup. Ct. 686,
46 L. Ed. 917; The Japanese Immigrant Case, 189 U. S. 86, 23
Sup. Ct. 611, 47 L. Ed. 721. It is equally clear that thèse ofïicers
696 125 FEDERAL RBPOttTEK.
have Jurîsdîction to carry theïr judgment into exécution in the man-
ner provided by law. United States v. Yamasaka, loo Fed. 404, 40
C. C. A. 454. But whether, in deporting an alien immigrant, they
are proceeding according to law, is a judicial question, and may be
inquired into by the court upon writ of habeas corpus. The court
below had jurisdiction, therefore, upon the supplemental return of
the immigrant inspector, to inquire into the legaHty ôf the warrant
of déportation ; but we think the finding of the court, that the facts
and causes of détention of the appellees were as set forth in the re-
turn, disposed of the question. If the appellees were alien immi-
grants who had been imported into the port of New York from
France within one 3^ear, and their absence from the United States
just prior to their arrivai at Seattle was only temporary, as the find-
mg of facts indicates, then their déportation to France would appear
to be, under the circumstances, according to law.
The judgment of the Circuit Court is modified, with instructions
to vacate its order of déportation, discharge the writ of habeas cor-
pus, and remand the appellees to the custody of the immigrant in-
spector.
CAMPBELIi T. H. HACKFBLD & CO., Limited.
(Circuit Court of Appeals, Nlnth Circuit October 26, 1903.)
No. 942.
1. ADMiRAtTT JcRiSDicTioiî— Action for Tort— Locaiitt of Injurt.
The fact of locallty alone does not give a court of admiralty jurisdlc^
tlon of an action for a tort «ommltted on the high seas or navigable wa-
ters, but it must further appear that the tort was maritime In character,
having some relation to a vessel or Its owners.
3. Same— Action aqainst Stbvedore bt Employé.
An action agalnst a contracting stevedore by an employé to recover
for Personal Injuries snstalned while dlscharging a vessel, through the
alleged négligence of défendant or hls other employés, is not within the
admiralty jurisdiction, where no fault Is chaised agalnst the vessel, her
owners, offlcers, or crew.
Appeal from the District Court of the United States for the Dis-
trict of Hawaii.
J. J. Dunne and Gill & Farley (R. W. Breckone, of counsel), for
appellant.
Kinney, McClanahan & Bigelow, for appellee.
Before GILBERT and ROSS, Circuit Judges, and HAWLEY,
District Judge.
ROSS, Circuit Judge. This cause cornes hère on appeal from a
decree of the District Court for the District of Hawaii sustaining
an exception of the appellee to the jurisdiction of the court over
the parties or the cause of action stated in the libel, and dismissing
the libel, without préjudice, for want of jurisdiction.
The libelant was a stevedore, and the libelee a corporation engaged
in the business of loading and unloading vessels at Honolulu. The
libel shows that in pursuance of its business the libelee on the 26th
CAMPBELL V. H. HAGKFELD il CO. 697
day of July, 1902, undertook to unioad a cargo of coal from the Nor-
wegian bark Aeolus, then anchored in navigable waters of the port
of Honolulu, and that the libelant was one of the libelee's employés
engaged in that work ; that while so engaged in the hold of the ves-
sel the libelant was, by reason of the carelessness of the libelee and
of other of its employés, severely injured, for which injury he asked
damages. Net only does the libel fail to allège anything against
the ship, its owner, ofScers, or crew, but it affirmatively allèges "that
the persons who were engaged in the unloading of said bark Aeolus
were ail employés of said défendant, and not members of the crew,
or employés of said bark Aeolus, and not fellow servants of any
capacity with any of the employés of said bark Aeolus."
Instances are numerous in which stevedores hâve maintained libels
for injuries sustained by reason of détective machinery or appliances
of the ship, or by reason of the négligence of its owner or of some
of its ofHcers or crew. Many of such cases are referred to in The
Anaces, 93 Fed. 240, 34 C. C. A. 558, and in the briefs of counsel
in the présent case. But no case has been cited, and it is asserted
by counsel that no case can be found, where a stevedore was allowed
to maintain in a court of admiralty an action for damages, against
the stevedore who employed him, for injuries sustained by reason
of the négligence of the head stevedore, or of one or more of his
other employés. The mère fact that no such case can be found in
the books tends strongly to show that they are outside the acknowl-
edged limit of admiralty cognizance over marine torts, for it would
be little short of absurd to suppose that there hâve not been hun-
dreds and hundreds of instances where stevedores hâve been injured
in their work through the négligence of the contracting stevedore
or of some of his employés. The Plymouth, 3 Wall. 20, 37, 18 L.
Ed. 125 ; The Queen v. Judge of the City of London Court, Q. B.
Div. vol. 28, 1892, pp. 273-298.
The fundamental principle underlying ail cases of tort, as well as
contract, is that, to bring a case within the jurisdiction of a court of
admiralty, maritime relations of some sort must exist, for the all-
sufficient reason that the admiralty does not concern itself with non-
maritime afïairs. Iri concluding his great opinion in the case of De
Lovio v. Boit et al., 2 Gall. 398, 474, Fed. Cas. No. 3,776, Judge
Story said:
"On the whole, I am, wlthout the slightest hésitation, ready to pronounee
that the délégation of cognizance of 'ail civil cases of admiralty and mari-
time jurisdiction' to the courts of the United States comprehends ail maritime
contracts, torts, and injuries. The latter branch is necessarily bounded by
locality. The former extends over ail contracts, wheresoever they may be
made or executed, or whatsoever may be the form of the stipulations, which
relate to the navigation, business, or commerce of the sea."
Torts, as well as contracts, not maritime, are outside of admiralty
cognizance.
It is quite true that in many of the décisions of the Suprême Court,
as well as of the Circuit Courts of Appeals and of the Circuit and
District Courts, the broad statement is made that in cases of tort
the sole test of jurisdiction is locality; and that fact is made the
698 125 FEDERAL REPORTER.
basis pf a criticism of the décision of the court below in the présent
case, found in the Harvard Law Review for January, 1903 (16 Harv.
L,a\y Rev. 210, 211), in which it is said that that décision—
"Infringes a rule which origlnated lu the very nature of admiralty juris-
dlction, and whieU has been satisf actory In Its practlcal opération. Thls
test has b'een ail but unlversally regarded as the sole one. See The Ply-
mouth, supra. The single authority to the contrary is the somewhat ob-
scurely stated dictum of a text-wrlter. Benedict, supra, 308. The principal
case seems, then, at variance wlth the splrit of the previous cases, even
though reconcilable with the points actua;lly declded. Not only would the
adoption of Its doctrine unsettle a rule Which has long been assumed to be
law, but It would lûake the question of Jurlsdlctlcn over torts subject to the
difficulty which so often perplexes cases of contract, namely, the necessity
of decidlng in each case what is a maritime relation. The décision in the
principal case seems, therefore, unfortunate, *s Increasing complication and
uncertalnty in the law, Wlthout, apparently, securing any practlcal gain to
compensate for thèse disadvantages."
It is expressly admitted in this article that "in every instance
which bas been found, however, a maritime relation such as is re-
quired by the court" below, has in fact existed.
It is a cardinal rule that the language of every court must be con-
strued with référence to the case made for décision, and should not
be extended so as to embrace cases that could hardly hâve been
within its contemplation when using the language. Take, for in-
stance, the expression of the Suprême Court in the case of The
Plymouth, supra, in respect to the point in question, where it is said,
"Every species of tort, how'ever occurring, and whether on board a
vessel or not, if upon the high seas or navigable waters, is of ad-
miralty cognizance." That language is quite as broad as, if not
broader than, that used by any other court in any of the cases upon
the subject, and, taken literally, would include within the jurisdiction
of the admiralty court a very celebrated case that arose on the Bay
of San Francisco in the year 1870, when A. P. Crittenden, a dis-
tinguished lawyer of California, was shot by Laura D. Fair on board
the ferry steamer El Capitan, while making one of her trips from the
Oakland Mole to her slip at San Francisco. But we think it would
surprise the Suprême Court to be told that by saying, as it did in
the Plymouth Case, that "every species of tort, however occurring,
and whether on board a vessel or not, if upon the high seas or nav-
igable waters, is of admiralty cognizance," it in efïect decided that
such a tort as Mrs. Fair committed on Crittenden fell within ad-
rniralty cognizance. If the language of the courts to the efïect that
locality is the sole test of admiralty jurisdiction in cases of tort
is to be given the broad interprétation contended for by the appel-
lant and by the Law Review referred to, then every case of bat-
tery committed by one passenger on another on board any ship
anchored in navigable waters at any port or wharf is within the ju-
risdiction of the court having admiralty jurisdiction over the place.
Such an interprétation is, in our opinion, whoUy inadmissible, and
such conséquences very clearly show the danger of losing sight, in
construing the language of a court, of the case about which it is
speaking. In The Plymouth, for example, the case the court had
for décision was one for damage done wholly on land, but in which
CAMPBELL V. H. HACKFELD & CO. 699
the cause of damage originated on water within the admiralty ju-
risdiction of the trial court. There fiâmes from a steam propeller
anchored in the Chicago river set fire to some packing houses on
land, and for the damage thus done it was sought to maintain a suit
in the admiralty court. One of the arguments in favor of the ju-
risdiction was that the vessel which communicated the fire to the
buildings was a maritime instrument or agent, and hence charac-
terized the nature of the tort, and made of it a maritime tort. The
court held that to be a misapprehension, and it was in answer to that
contention that it said, "The jurisdiction of the admiralty over mari-
time torts does not dépend upon the fact that the injury was inflicted
by the vessel, but upon the locality — ^the high seas or navigable wa-
ters — ^where it occurred," and immediately added the clause here-
tofore quoted: "Every species of tort, however occurring, and
whether on board a vessel or not, if uoon the high seas or naviga-
ble waters, is of admiralty cognizance."
In this connection, we quote a few paragraphs from the opinion
of Lord Esher, Master of the Rolls, delivered in a late case in
England (hereinafter further referred to), where it was sought to
maintain in a court of admiralty an action in personam against a
pilot in respect of a collision between two ships on the high seas,
caused by his négligence:
"It is said ttiat there is a décision of Dr. Lustiington in favor of ttie juris-
diction, and (merely to show the danger of taking words from a judgment
without looking further) I will at once grapple wlth it. In The Sarah, Lush.
549, Dr. Lushington said at page 550: 'The court has original jurisdiction,
because the matter complained of is a tort committed on the high seas.'
There, it is said, is a déclaration by Dr. Lushington that he had jurisdiction
over aU torts committed on the high seas. That case was decided in 1862;
but if we turn to the earlier case of The Ida, Lush. 6, in which the subject-
njatter was the willful cutting of a barli adrift, whereby she capsized a
barge which contained cargo, Dr. Lushington says at page 9: 'Tlie court,
however, is stlll further indisposed to exercise jurisdiction on account of the
poculiar nature of the act for which the plaintlffs are now trylng to render
the défendants ship liable. The court, it must be remembered, has never
exercised a gênerai jurisdiction over damage, but over causes of collision
only.' Therefore, by what he said in The Sarah, Lush. 549, he really did
not mean every tort committed on the high seas, but only wrongful col-
lisions; and he limited hlmself in The Ida, Lush. 6, by saying, in effect,
that the jurisdiction of the admiralty had never extended to ail torts on the
high seas." The Queen y. The Judge of the City of London Court, Queen's
Bench Division, vol. 28, 1892, pp. 273, 292.
In the case of Insurance Co. v. Dunham, Il Wall, i, 20 L. Ed.
90, the Suprême Court pointed out that it had frequently been de-
cided by that court — ■
"That the admiralty and maritime jurisdiction of the United States is not
limited either by the restraining statutes or the judicial prohibitions of Eng-
land, but is to be interpreted by a more enlarged view of its essential nature
and objects, and wlth référence to analogous jurisdictions in other countrlea
constituting the maritime commercial world, as well as to that of England."
And as to contracta (the case then before the court) said :
"The English rule, which concèdes jurisdiction, wlth a few exceptions,
only to contracts made upon the sea, and to be executed thereon (making
locality the test), is entirely inadmissible, and that the true criterion Is the
700 125 FEDERAL REPORTER.
nature and subject-matter of the contract, as whether It was a maritime
contract, havlng référence to maritime service or maritime transactions."
The locality test was there discarded as to contracts, because, as
the jurisdiction conferred on the United States courts "compre-
hends ail maritime contracts, torts, and injuries," the true criterion
in the case then before the court was, not the place where the con-
tract was made, but the nature and subject-matter of the contract — •
that is to say, whether it had référence to maritime service or mari-
time transactions.
In the case of torts, locality remains the test, for the manifest
reason that, to give an admiralty court jurisdiction, they must oc-
cur in a place where the law maritime prevails. But this is by no
means saying that a tort or injury in no way connected with any
vessel, or its owner, ofificers, or crew, although occurring in such a
place or territory, is for that reason within the jurisdiction of the
admiralty. On the contrary, it is, as has been seen, only of maritime
contracts, maritime torts, and maritime injuries of which the United
States courts are given admiralty jurisdiction. Thèse views are not
in conflict with any décision brought to our notice, or that we hâve
been able to find. They are not only, in our opinion, based on sound
reason, but also fînd support in Benedict's Admiralty (3d Ed.) § 308,
where that learned writer says:
"Cases of torts on the Ugh seas, superaltum mare, hâve always been held,
even In Bngland, to be within the Jurisdiction of admiralty. And the juris-
diction In such cases has usually been held to dépend upon locality, em-
bracing only civil torts and injuries donc on the sea, or on waters of the
sea where the tlde ebbs and flows. It dépends upon the place where the
cause of action arlses, and that place must be the waters which are subject
to the admiralty Jurisdiction. It may, however, be doubted whether the
civil Jurisdiction, In such cases of torts, does not dépend upon the relation
of the parties to a ship or vessel, embracing only those tortious violations
of maritime right and duty which occur in vessels, to which the admiralty
Jurisdiction, in cases of contracts, applles. If one of several landsmen bath-
ing in the sea should assault or imprison or rob another, it has not been
held hère that the admiralty would hâve Jurisdiction of the action for the
tort."
In the case of The Queen v. The Judge of the City of London
Court, supra, which is a very much strpnger case in favor of the juris-
diction claimed than is the case at bar. Lord Esher, M. R., in con-
sidering on what, under the English law, does the jurisdiction of the
admiralty court dépend, said:
"It does not dépend merely on the fact that something has taken place on
the high seas. That it happened there is, no doubt, Irrespective of statute,
a necessary condition for thé Juriedlctlon of the admiralty court; but there
is the further question, what is the subject-matter of that which has hap-
pened on the high seas? It Is not everything which takes place on the high
seas which is within the Jurisdiction of the admiralty court. A third con-
sidération Is, with regard to whom Is the Jurisdiction asserted? You hâve
to consider three thlngs— the locaUty, thé subject-matter of complaint, and
the person with regard to whom the complaint Is made. You must con-
sider ail thèse thlngs in determining whether the admiralty court has juris-
diction."
The opinion of his lordship in the case cited is a very lucid and
instructive one, and will well repay perusal.
SALIXG V. BOLANDEK. 701
We are of opinion that the ruling of the court below was right,
that it is not in conflict with any previous décision of which we are
aware, and that it in no way tends to unsettle any rule of admiralty,
or to introduce into that branch of the law any complication or
uncertainty.
The judgment is affirmed.
SALING V. BOLANDER.
(Circuit Court of Appeals, Ninth Circuit. September 21, 1903.)
No. 937.
1. Life Insurance— Application for Chakgr of Benepiciaries.
An application for change of beneficiaries in a life policy, merely slgned
by part of the beneficiaries before death of insured, can liave no eflfect.
2, Samb — Rblinqoishmbnt op Rights— Want of Considération.
Though it Is the intention of beneficiaries in a life policy by delivery of
an instrument to the administra tor after death of insured to évidence
relinquishment of thelr rights, it being without considération, they may
revolse it.
8. Pleading — Ai-leging Intention of Instrument.
It wlll not avail one setting out an instrument, which is plainly
an application by beneficiaries to change the beneficiaries, to allège that it
was intended as an assignment, though such allégation Is not denied.
4. Bill of Exceptions— Evidence— Prbsumption on Appeal.
In the absence of proof in the bill of exceptions that It contalned ail
the évidence, it will be presumed on appeal that there was évidence to
sustaln the raling below that exécution of an assignment was authorized,
the bill purporting to contain only the évidence to which any objection
was taken by défendant.
6. Rbplevin — Damages for Détention.
Plaintiff in replevin for life pollcies may reeover damages for their dé-
tention after they are delivered to the marshal under the writ, defend-
ant's contlnued maintenance of his défense and inslstence of his right
thereto preventing plaintiff from recovering of the Insurance company
tlll the end of the litigation.
6. Samb — Rate op Interest.
The rate of interest being lowered by statute pending a replevin suit,
the successful plaintiff will reeover as damages Interest measured by the
old rate up to the tlme of the change, and by the lower rate thereafter.
In Error to the Circuit Court of the United States for the District
of Oregon.
Thls is an action In replevin, brought by the défendant In error against
the plaintifC In error to reeover the possession of two Insurance policies is-
eued by the Mutual Life Insurance Company of New York upon the life of
Henry N. Bolander. The policies were issued In September, 1884, for $2,040
and $2,170, respectively. By their terms, upon the death of the insured
the policies were payable to his wife, Anna M. Bolander, for her sole use,
if livlng, and. If not llving, to such of the children of her body as should
be livlng at the time of her death. She died July 28, 1897, leavlng sur-
vlving her eight children, who became the beneficiaries under the policies.
The insured survived her death one month, and died Intestate August 28,
1897. In the interval between the death of Anna M. Bolander and the death
of the Insured, for the purpose of surrenderlng the policies and obtaining
% 4. Exclusion of évidence from bill of exceptions, see note to Ladd t. Min-
ing Ce, 14 C. C. A. 248.
702 125 FBDEKAIi REPORTER.
instead thereof new poUcies payable to Henry N. Bolander, the Insured,
"hls executors, administrators, or assigns," a written application to the In-
surance Company was prepared for the signatures of the children, containing
a request for such change, and a covenant that ail the statements made in
tbe original application ftiid déclaration for the policîes of Insurance were
full, complète, and true, and were to be made the basis of the contract be-
tween them and the company for the new policies solicited. Seven of the
children signed this application before the death of Henry N. Bolander, but
one of them did not sign it until September 16, 1897, and Henry N. Bolander
never signed it. The application was not presented by the beneficiaries to
the Insurance company, and it was never acted upon by the company. No
new policies were issued. In October, 1897, the couuty court of Multnomah
county, Or., a court of probate, appointed the plaintifC in error administrator
ol the esta te of Henry N. Bolander, deceased. He obtained from some of
the children of Anna M. Bolander and the Intestate possession of the poli-
cies, together with other papers and personal effects of the deceased, and,
in opposition to the wishes of the beneficiaries, included them in his in-
ventory of the property of the esta te which he flled in the probate court,
and he caused the policies to be appraised as a part of the estate. On
August 28, 1898, the défendant in error, having obtained from ail the other
beneficiaries a transfer of their rights and Interests under the policies, de-
manded of the plalntifC^ in error the possession of the policies; but the latter
refused to surrender the same, contending that as administrator he was
entitled to their possession and the proceeds thereof as property of the estate.
The défendant in error then presented to the probate court his pétition,
praying for an order requiring the administrator to show cause why his in-
veutory should not be corrected by eliminating the policies theref rom. In
answer to that pétition the administrator set forth the défenses that are
pleaded in his answer to the action of replevin which is now before the
court, and alleged the exécution by the beneficiaries of the application and
request to the insurance company to change the policies, and averred that
the same was made with the knowledge and consent of the insurance com-
pany, and was intended for and was an assignment of ail the interest of
the persons who signed the same to the said Henry N. Bolander, his execu-
tors, administrators, and assigns; and that after the death of the insured
the said application and request was delivered by the beneficiaries to the
administrator, and that he, as such administrator, had delivered the same
to the insurance company; and that after the death of the Insured three
of the beneficiaries, at the request of tlie administrator, had, by an instru-
iiient in writing, confirmed the said application so made to said insurance
company, and in said instrument had directed the insurance company to
pay ail moneys due under said policies to the administrator. The plaintifC
in error further alleged that the policies of insurance which were so orig-
Inally issued on the life of Henry N. Bolander were found among his Per-
sonal efCects after his death, and were delivered to said administrator by
some of the beneficiaries, and that the administrator had received the same
in good faith as property belonglng to the estate, and had llsted the same
in the inveutory of property of said estate, and that a large number of
claims had been filed agalnst the Gstate, for the payment of which there
was not sufficient property ontside of the policies of insurance. After a
hearing upon the issues so made, the probate court made an order in accord-
ance with the prayer of the pétition. The administrator appealed therefrom
to the State circuit court, and that court afilrmed the decree of the probate
court. The défendant In érror having Ih the meantime begun the présent
action in replevin, the plaintifC In error Interposed thereto a plea in abate-
ment, alleging the pendency of the said proceedings in the state courts, and
alleglng that the said policies werè In the custody of said state courts for
^he purpose of administration, which purpose could not be interfered wrlth
by the said action of replevin. A demUrrer to the plea was overniled, and
thereupon the action In replevin was held in abeyance until the détermina-
tion of the litigatlon in the state courts. The plaintiff in error appealed
from the decree of the state circuit court to the Suprême Court of Oregon.
That court reversed the decree of the lower court, and remanded the cause,
SALING V. BOLANDEB. 703
with Instruction to dlsmlss the pétition of thé défendant In erxor in the
probate court on tiie ground that that court was concluded by the Inventorj
of the administrator, and had no power to order that the policies be elim-
inated therefrom, or to adjudicate the title thereto as between diverse clalm-
ants; the court holding that, as against the administrator, the défendant
in error must lltigate hls rlght to the policies in a court of gênerai juris-
diction. Re Bolander's Estate, 38 Or. 490, 63 Pac. 689. After that décision
was rendered, Issue was jolned on the plea In abatement in the présent
action, and the plea was overruled. Thereupon the plaintiff in error answer-
ed, settlng up in défense of the action the matters which constltuted hls
défense to the pétition in the probate court. A demurrer was sustained to
those portions of the answer which pleaded as an affirmative défense the
exécution of the written application for a change of the policies, and averred
that it was Intended as an assignment, and that It was dellvered by the
bcneflciaries to the plaintiff in error as administrator, and was by hlm de-
llvered to the Insurance company; that four of the eight helrs named were
not children of the Insured, but were chlldren of Anna M. Bolander by a
former husband; that clalms had been filed against the estate for the pay-
ment of which there was no property outslde of the policies of Insurance.
The ruling of the court sustalning the demurrer, and its rulings concerning
the admission of testimony taken for and in behalf of the défendant in error,
and the déniai of the motion of plaintiff in error that the jury be instructed
to return a verdict for the défendant in the action are assigned as error.
Milton W. Smith, for plaintiff in error.
Bauer & Greene, for défendant in error.
Before GILBERT, ROSS, and MORROW. Circuit Judges.
GILBERT, Circuit Judge, after stating the case as above, deliv-
ered the opinion of the court.
It is contended that the court erred in sustaining the demurrer to
that portion of the answer which alleged that the written application
for the change of the policies was intended as an assignment of the
interests of the beneficiaries to Henry N. Bolander, his executors,
administrators, and assigns, and was delivered after the death of the
insured to the administrator, and was by him delivered to the Insur-
ance company. It is not alleged or claimed that the insured himself
joined in the application, or that it was ever delivered to him, or that
ail the beneficiaries signed the same before his death. The instru-
ment on its face is not ambiguous, and it requires no interprétation
and no extraneous évidence as to its intent. It is a simple request
and application for a change in beneficiaries of the policies. After
the death of Bolander, the application could hâve no efficacy for the
purpose for which it was originally intended, or for any purpose.
If, indeed, it was the intention of the beneficiaries, by subsequently
delivering this instrument to the administrator, to évidence their re-
linquishment of their rights as beneficiaries, it was an act done with-
out considération of any kind, and it was subject to their revocation
at any time thereafter. The plaintifï in error insists that because he
has pleaded, and it is not denied by the défendant in error, that the
instrument was intended as an assignment, it must necessarily operate
as such. But the plaintiff in error cannot impute to the instrument
an intention which is not fairly deducible from its terms, and he can-
not assert that an instrument which on its face is not as assignment
was intended as such. The intention is found in the instrument.
It is true that the intention of an instrument may, as between the
70i 125 FBDBRAL BEFOBTKB.
parties thereto, by virtue of an accompanying agreement, be shown
to be other than its terms import. Thus a deed absolute on its face
may be shown to hâve been intended as a mortgage. But it would
not be enough in such a case fdr the grantor to allège that he in-
tended that the deed should operatç as a mortgage. So in this case
it is of no avail for the plaintiflf in error to say that this instrument,
the meaning whereof is plain upon its face, was intended by those
who signed it to hâve a meaning différent from what its plain words
import. It is unimportant that the défendant in error took no issue
upon the averment of the answer that the written application was in-
tended as an assignment. By failing to reply to the answer, he ad-
mitted only the facts which were well pleaded. To set forth the
written instrument in the answer, and then to plead that it was in-
tended to hâve a meaning différent from what it purports to be, is to
profïer averments which the instrument itself contradicts, and which
the court will disregard. Dillon v. Barnard, 21 Wall. 437, 22 L,.
Ed. 673.
It is contended that the défendant in error failed to show that at the
commencement of the action the interests of ail the beneficiaries in
both the policies had been assigned to him, and that the court erred
in admitting in évidence the assignment from one of the beneficiaries,
which purported to hâve been executed on her behalf by her attorney
in fact. The power of attorney which appears in the bill of excep-
tions describes the policies and recites the death of the insured, and
gives power to the agent and attorney in fact in thèse words : "For
me and in my name and for my use and benefit to ask, demand, sue
for, and receive of and from the said insurance company ail moneys
to which I am or may be entitled as one of the surviving children of
said Anna M. Bolander under the policies of insurance above de-
scribed, and upon receipt thereof by, or the payment thereof to, my
said attorney, to make, exécute, and deliver a gênerai release or dis-
charge for the same." We need not discuss the question whether
the power thus given is sufHciently broad to sustain an assignment
to the défendant in error for the purpose of collecting the amounts
due under the policies, for the reason that the bill of exceptions does
not purport to contain ail of the évidence. It contains only the évi-
dence offered at the trial "concerning the assignment to the plain-
tifîf or his ownership of the insurance policies in controversy to which
any objection was taken by the défendant." For aught that appears
to the contrary in the bill of exceptions, other évidence may hâve
been offered to which no objection was taken by the défendant show-
ing the authority of the attorney in fact to exécute the assignment, or
showing that before the commencement of the action the beneficiary
ratified the action of her attorney in fact, and that both the policies
were duly assigned to the défendant in error. In the absence from the
bill of exceptions of proof to the contrary, .it will be presumed that
such was the fact. The burden is upon the plaintiff in error to show
affirmatively that the trial court erred in its ruling. City of Mil-
waukee v. Shailer & Schniglau Co., 91 Fed. 726, 34 C. C. A. (£;
Collier v. United States, 173 U. S. 79, 82, 19 Sup. Ct. 330, 43 L.
Ed. 621 ; United States v. Patrick, 73 Fed. 800, 20 C. C. A. 11, 18;
MUEEAT V. BENDEB. 705
Lincoln Savings Bank v. Allen, 82 Fed. 148, 27 C. C. A. 87; Yates
V. United States, 90 Fed. 57, 32 C. C. A. 507; Union Pacific Ry.
Co. V. Harris, 63 Fed. 800, 12 C. C. A. 599.
It is assigned as error that the court entered judgment in favor of
the défendant in error for the recovery of damages measured by
the interest on the amount of the poHcies from August 28, 1898, at
the rate of 8 per cent, par annum. The assignment does not specify
wherein the error of the judgment entry consisted, but it is now said
that it was error, first, for the reason that the poHcies were deHvered
to the marshal under the writ of replevin on July 2, 1901, and there
could be no damages for their détention after that date ; and, second,
that the rate of interest on such demands, in the absence of an
agreement between the parties, was changed by the statute of Ore-
gon on October 14, 1898, from 8 per cent, to 6 per cent. Laws
1898, p. 15. The attention of the trial court was not directed to
this alleged error.
We find no merit in the contention that there could be no dam-
ages after the date of the surrender of the pohcies to the marshal.
The conduct of the plaintiff in error in continuing to maintain his
défense and in insisting on his right, as administrator, to possess the
policies, and to receive the amounts payable thereunder, operated
as a barrier to the payment of the policies by the Insurance Com-
pany to the défendant in error until the end of the litigation.
We think, however, that the judgment should be modified by re-
ducing the interest to 6 per cent, from the date of the change in
the interest law. With that modification, the judgment of the Cir-
cuit Court is affirmed, with costs to the défendant in error.
STORBAY V. BBNDER.
(Circuit Court of Appeals, Ninth Circuit. September 14, 1903.)
No. 836.
1 FiXTUREs— Theateb Furkishings— Attachment to B01LD1NG BY Stock-
HoLDEB op Corporation Ownee.
Where the owner of a majorlty of tlie stoclî of an opéra house company
■whicli owned the land on which an opéra house was situated, for hla
own benefit as a stocliholder and wlthout any agreement with the Com-
pany, placed certain Personal property In the building, consisting of
chairs, stage appliances, drop curtain, etc., ail of which were annexed
to the building and were essential to its use for the purpose for which
it was built and adapted, such articles beeame fixtures, which passed to
an exécution purchaser of the realty as a part thereof.
Appeal from the Circuit Court of the United States for the District
of Montana.
See 109 Fed. 585, 48 C. C. A. 555 ; Ii6 Fed. 813, 54 C. C. A. 317.
In Murray v. Bender, 109 Fed. 585, 48 C. C. A. 555, this court had before
it nearly ail of the facts involved In this case. The decree of the lower court
in this case was also before this court In Klng v. Bender, 116 Fed. 813, 54
O. 0. A. 317, and the judgment of this court on that appeal has disposed of
one of the questions involved in the présent appeal. A statement of the facta
In this case appears to be necessary to a clear understanding of the law of
125 F.— 45
706 125 FEDERAL KEPORTEE.
the case, as established by the préviens Judgment o£ thls court, and the re-
njalning questions to be determined on thls appeal.
In the year 1888 the Grand Opéra House Company, a Gorporation, was the
owner of certain real prpperty In the clty of Bntte, in the then territory ôf
Montana. On Séptember 29, 1888, 'the corporation cohveyed the premises to
one John Magulre, taMng from ,him a note secured by a mortgage for the
purchase priée, amountlng to $17,000. After the exécution, delivery, and re-
cording of this mortgage, Maguire- undertook the érection of au opéra house
upon the mortgagëd premises. In the construction qf thls building Maguire
Incurred considérable Indebtednesé for labor performed and materials fur-
nished for the building, resultlng in the création of liens upon the property
under the statute of theistate. Thèse liens were In due course of proceed-
Ings f oreclosed by a dperee dated Japuary 27, 1890, and the property sold
thereunder on the 19th day of May, 1890. On Aprll 10, 1891, the appellant,
Murray, who was the last of several redemptioners from such foreclosure
sale, became invested with the tltle to the property by sheriff's deed. On
May 29, 1891, the Opéra House Company commenced an action for the fore-
closure of Its mortgage upon the property, executed by Maguire In 1888. In
thls action Murray was màdea party défendant, and In a decree entered on
March 12, 1895, It was adjudged that the mortgage lien upoh the land was
superior to the tltle of MSarray, but, as to the building, Murray's title was
adjudged; to, bave priorlty over the mortgage lien. It was further adjudged
and decréed'that Murray might at any time after the sale of the premises,
and before the expiration Of the perlod for rédemption as provlded by law,
remove from the said premises the building and improvementé' thereon; but,
if he should fall to do so -wlthin the tlme prescribed, then the building and
Improvements should beçome a part and portion of sald lots, and, after the
tlme for reinoval speclfled In the decree, Murray should bave no right to re-
move sald improvements, or any of them. This decree was affirmed by the
Suprême Court of the state on appeal. Opera-House Co. v. Maguire, 14 Mont.
558, 37 Pac. 607. The premises were sold, pursuant to the decree, on April
18, 1896, and were purch^sed by the Grand Opéra House Company. ïhe
right to redeem from thls sale expired under the law of the state on October
18, 1896, but prlor to that time negotlatlons were had between Murray and
the Grand Opéra House Company for either a purchase or sale that would
vest the ownership of the entlre property In one of the parties. But the
negotlations failed, and Murray proceeded to remove the chairs, scenery, and
other furnlture from the building, and the building from the lot. The chairs,
scenery, and other furnlture were removed to a warehouse, and when Murray
had torn down the front end of the building It was suggested to him that
he could buy a controlllhg Interest in the stock of the Opéra House Com-
pany, which would be much better than removing the building, as the build-
ing was of brick. MPrray thereupon bpught 1,000 or 1,100 shares of the stock
of the corporation, whlch gave him the controlling interest in it. He then
suspended the removal of the building, and proceédéd to reconstruct it.
When the building was réconstructed/^ Murray had the chairs, scenery, and
other furnlture remôved to the opëra hotise. This removal was completed
by December 3, 1896, and on Decembèr 10, 1896, the opéra house was opened
to the public.
On December 3, 1896, John O'Rourkè commenced an action against the
Grand Opéra House Company, Jolnlng in his complaint two causes of action,
one upon the bromissory note of the corporation foi' $762, the other for $585,
claimed by O'Eourke to hâve been paid out by him for the corporation. On
the same day, under wrlt of attachment Issued in sald cause, for both causes
of action, the property of the Opéra House Company was âttached. The cor-
poration appeared and answered the complaint, not controverting the flrst
cause of action, but denying the f acts alleged as to the second. On Séptember
16, 1897, judgment was rendered for Ô'Rourke on the first cause of action,
and the case contlnued pending as to the other. Upon the judgment so made
and entered an exécution yras issued, and upon December 27, 1897, the ât-
tached property was sold by the sbeçlff to Silas F. King. On December 3,
1896, the same day on which O'Roprke's action was begun, John O. Bender,
the appellee In the présent case, began an action against the corporation
upon three causes of action, aggrégating $700, and on the same day attach-
MURRAT V. BENDER. 707
ment was issued upon his complaint, and thereupon the property of the Opéra
House Company was attached, subject to the attachment o£ O'Bourke. The
appellee obtained judgment in his action on May 21, 1898. On Deeember 3,
1896, John F. Forbis also began an action against the corporation to reeover
$500. On the same day he also caused a writ of attachment to issue and the
same property to be attached. His attachment was subséquent to those of
O'Rourke and the appellee. On May 21, 1898, Forbis obtained a judgment
against the Opéra House Company in his action. On Deeember 27, 1898, 12
months after the sale to King, O'Rourke, claiming to hâve a right of rédemp-
tion upon his attachment still subslsting for his controverted cause of action,
whieh continued pending after judgment had been entered upon his flrst
cause of action, tendered to King the amount of the purchase money which
the latter had paid, together with the statutory interest thereon, for the pur-
pose of redeeming the property. On the same day the appellee served upon
the sheriff of the proper county his notice of rédemption, and under his said
notice paid to the sheriff, for O'Rourke, the amount of money which O'Rourke
had tendered to King, together with the amount which O'Rourke claimed to
hâve been secured by his attachment. The appellee, then, as agent and at-
torney for O'Rourke, recelpted to the sheriff for the money which he had
tendered for O'Rourke, and as the agent for O'Rourke recelved the same.
Thèse rédemptions were made within one year f rom the date of the sale
under exécution, that being the time allowed by the Montana law for ré-
demption from exécution sales. On January 10, 1809, and within the 60 days
allowed by law to redeem from a redemptioner, Forbis, upon his judgment,
redeemed from the rédemption made by O'Rourke and the appellee. On
January 19, 1899, notwithstanding thèse rédemptions, the sherifl: executed to
the appellant, as purchaser under the O'Rourke judgment, a deed to the
premises in controversy. On February 25, 1899, Forbis conveyed back to the
appellee ail rights which he acquired under his rédemption. On April 4, 1899,
J. O. Eender instituted a suit against King and McFarland in the Circuit
Court of the United States for the District of Montana, praying that the
latter be declared trustées for hlm as to ail rights acquired under the sherifC's
deed. The answer of the défendants denled that O'Bourke, at the time when
he attempted to redeem said property, was a creditor of the corporation
having a lien against the property subséquent to that upon which the same
was sold, or that under said attachment lien he redeemed the property from
sale, ând denled that the attachment lien of the appellee was subséquent to
the judgment and attachment of O'Rourke, and denied that the appellee,
under his judgment, redeemed said property from the sale to King, or from
the rédemption attempted to be made by O'Rourke, and denied that the at-
tachment of Forbis was subséquent to the lien on which the property was
sold on exécution, and denied that Forbis redeemed from said sale or from
said attempted rédemption. The défendant McFarland alleged that he was
in possession of the property under a lease from, and that he was paying
rent to, the Grand Opéra House Company. The decree of the lower court
was in favor of Bender, and King appealed. On appeal, this court affirmed
the Judgment of the lower court, and found ail the facts in favor of Bender,
decreeing him to be the owner of the real property, and that King held the
same in trust for him. King v. Bender, 116 Fed. 813, 54 0. C. A. 317.
In this suit the lower court appointed a receiver, who took possession of
the property and coUected the rents from February 1, 1900. Murray had re-
celved thèse rents up to this time, and Insisted that he should still collect
them, and also claimed to be the owner of the seats, flxtures, scenery, etc.,
in the opéra house, claiming this property as personalty and not a part of
the realty; whereupon the court ordered that Murray be made a party to
this suit. On September 23, 1899, the complainant, Bender, filed an amended
bill, making James A. Murray and the Grand Opéra House Company de-
fendants. In this bill Bender alleged the facts hereinbefore recited, and
further alleged that the défendant Murray claimed the chairs, stage scenery,
and other fixtures in the opéra house, but that the same were annexed to the
realty and necessary for the use of the property, and that the same were
devoted to such use when the attachments were made on Deeember 3, 1896.
The bill recited that McFarland, one of the défendants, obtained his posses-
sion of the property under a written lease executed by the Opéra House
708 125 fbdebaIj bbpokïee.
Company on November 1, 18^, thrOugh and from the défendant James A.
Murray, aiid that the property which Murray then claimed as hla Individual
property was leased and flescrlbed as the property of the Opéra House Com-
pany; that since Bender notlfled McFarland that he (Bender) was the owner
of such property, McFàrland had paid of the rents to the Grand Opéra House
Company a sum In éxcess of $6,000, and that Murray, through and from the
Opéra House Company, had reeelved the whole of sald sum, and unjustly
held the same from complainant; that Murray and the Opéra House Com-
pany held the rents. Issues, and profits In trust for complainant.
In the answer to the amended bill Murray admltted the materlal matters
of record set up In the blll. but alleged that certain property in the opéra
house, conslstlng of chairs, scenery, lamps, etc., was personal in its character,
and belonged to him; alleged that McFarland was the tenant in possession
of the opéra house, and denied that the chairs and scenery were flxturés or
annexed to the realty or necessary to Its use, and denied that the Grand
Opéra House Company ever was the owner of such chairs, scenery, etc. ;
denied that McFarland procured the lease on the property through hlm, but
admltted that McFarland had paid certain rents under said lease to the Opéra
House Company, the exact amount being at the time unknowu to the de-
fendant; denied that he had received from the Opéra House Company the
whole of sald sums so paid, or that he unjustly or ât ail held the same from
the complainant, or that he knew that the Opéra House Company was net
entltled to sald rents from sald property. He then alleged that since 1898
he had been the owner and in possession of the personal property in the
opéra house, conslstlng of chairs, scenery, etc., saving and excepting a few
certain pièces of scenery; that McFarland never had any possession of such
property except as the lessee of Murray; and that McFarland agreed to pay
him rent theref or.
The decree of the court below, entered on the 4th day of September, 1901,
adjudged that the complainant, John O. Bender, was the rightful owner and
entltled to hâve and possess certain premlses descrlbed In the blll of com-
plaint as the property of the Grand Opéra House Company, together with
the tenements, heredltaments, and appurtenances theréunto belonglng or in
any wlse appertalning thereto, includlng the stage flxturés and appllances
attached to the stage, the drop curtaln attached thereto, and the chairs at-
tached and fastened to the floor by screws and nalls, but not Includlng the
scenery In the said house, nor the pianos thereln, nor the loose and unat-
tached chairs. It was also adjudged that the complainant was entltled to
the rents, issues, and profits of the said property from and after the llth
day of March, 1899, the day that Bender was entltled to the sherifC's deed,
to the Ist day of February. 1900, when the recelver took possession of the
property, and that the défendant James A. Murray aceount for and pay over
to the complainant the rents. Issues, and profits of the said promises, with
légal Interest thereon from' the time the same were withheld, and that said
aceount be referred to the master In chancery, who should take évidence
thereon and state said aceount, and report to the court said évidence and bis
conclusions thereon. In pursuance of thls référence the master in chancery
took évidence upon the question of rents, issues, and profits due from the
défendant James A. Murray to the complainant, John O. Bender, and there-
upon found that the défendant James A. Murray had received, from the llth
day of March, 1899, to the Ist day of February, 1900, $480 for each month
of sald period of 10 months and 18 days, to wlt, the sum of $5,120, and that
the complainant, John O. Bender, was entltled to reçoive from the défendant
James A. Murray, under the decree, the said sum of $5,120, and interest, as
particularly specifled in the flndings, from the time thereln mentloued to the
day of judgment thereln. The report of the master and bis flndings were re-
turned and flled and entered in the oflace of the clerk of the court on the
9th day of December, 1901, and, no exceptions havlng been filed thereto by
either party within ohe mbnth thereafter, the report stood conflrmed on the
next rule day, as provlded in equlty rule No. 83. Upon thls conflrmed report
of the master, the court entered a further decree on the 20th day of March,
1902, adjudging that the complainant, John O. Bender, bave and recover of
the défendant James A. Murray the sum of $6,191.80, being the amount
found due by the said master in chancery, together with légal Interest at the
MTJERAY V. BENDEB. 709
rate of 8 per cent, per annum upon the several amounts and for the several
dates set forth In said report, as aseertalned and computed to the date of the
entry of the decree.
Prom thèse two decrees the défendant James A. Murray bas appealed to
this court, assigning as error: First, the action of the court In adjudging
that the complainant, J. O. Bender, was the rlghtful owner and entitled to
the possession of the premises described In the oomplalnt as the property
of the Grand Opéra House Company, Including the stage fixtures and ap-
pliances attached to the stage, the drop curtain, and the chairs mentioned in
the decree, and in not determining that they helonged to the défendant;
second, the action of the court In determining and adjudging that the com-
plainant was entitled to the rents, issues, and profits of the property de-
scribed therein, from and after the llth day of March, 1899, and until the
time when the recelver recelved the rents, issues, and profits, to wlt, the Ist
day of Fehruary, 1900.
J. C. Campbell, W. H. Metson, L. S. B. Sawyer, T. H. Breeze,
John J. McHatton, and John W. Cotter, for appellant.
Crittenden Thornton, L. O. Evans, and John F. Forbis, for ap-
pellee.
Before GILBERT, ROSS, and MORROW, Circuit Judges.
MORROW, Circuit Judge, after stating the foregoing facts, de-
livered the opinion of the court.
It is again contended on this appeal that the court below was in er-
ror in holding that Bender was entitled to redeem from the exécu-
tion sale to King, and from the rédemption made by O'Rourke. This
part of the decree of the Circuit Court was before this court in King
V. Bender, Ii6 Fed. 813, 54 C. C. A. 317, and the decree was there
affirmed. This affirmance has become the law of the case, not only
by the final judgment of this court, but by the décision of the Su-
prême Court of the United States, refusing to grant a writ of cer-
tiorari to review that judgment. 187 U. S. 643, 23 Sup. Ct. 843, 47
L. Ed. 346. This question is therefore not open to review on this ap-
peal.
Whether the property awarded to Bender by the decree of the court
below included personal property owned by the appellant, dépends
upon the question whether the articles in controversy, consisting of
stage fixtures, appliances adapted to the stage, drop curtain, and
chairs, had, by being annexed or affixed to the property, become ac-
cessory to and part and parcel of it. This is mainly a question of
fact, depending upon the character of the articles, and the use and
purpose for which they were placed in position ; and, this fact having
been determined by the court below, its finding will receive careful
considération, and will not be disturbed unless it clearly appears that
the finding was not justifîed by the évidence.
The court found, in its opinion, that the building erected upon the
land redeemed by Bender was erected, constructed, and used as an
opéra house from the very beginning, and that it was being used
for that purpose at the time of the decree ; that it was suitable for
and adapted to such purpose, and could not well be used for other
purposes without considérable changes and altérations in its interior
arrangement and condition as it then stood and was being used;
that it contained a stage and stage fixtures and appHances to facili-
tate the expeditious handling of scenery during theatrical perforn*-
710 125 FEDHEAL BBPOETBJB.
ances;, that it contained a large amount of theatriçal scenery, a drop
•ffurtain, afeo a number of opéra chairs and seats attached to the
floor by means of screws and nails. The court also found that the
scenery in controversy was attached to the stage only as needed,
and waé capable of beiiig moved without injury to the stage and stage
fixtures or to itself, and for the most part was lodged and stored in
certain storerooms in the basement of the building. This scenery,
together with the pianos in the building, and the loose, unattached
chairs, were found not to be fixtures, and by the decree were awarded
to the appellant, and are therefore not involved in this appeal. The
court also found that Murray's claim to title tô the articles in contro-
versy wàs derived from his rédemption from the decree entered in
the proceedings instituted for the purpose of foreclosing the me-
chanics' liens upon the property ;, that this rédemption was made for
the purpose of protecting a small judgment which had been assigned
to hîm. The court found further that there was a disclaimer of own-
ership of the chairs on the part of the Opéra House Company, and a
déclaration by the company that Murray wâs the owner thereof, and
that a resolution of the board of trustées or directors of the company
allowed Murray a moîlthly rental for the chairs. But the court also
found that this was ail done at a time when Murray, by purchase
or otherwise, hadobtairied control of a majority of the stock of the
company ; that he elected a majority of the trustées or directors of
the company; that the trustées, acting at the time the resolution was
adopted, were ail of them in some way identified with Murray's in-
terest, and subject to his contres! ; that none of the minority stock-
holders of the corporation were présent or represented in the trans-
action, and that their rights did not appear to hâve been considered
or deemed worthy of considération. The court found further that a
lease of this property was executed by and in the hame of the Opéra
House Company to one MacFarland r that this lease was executed
by Murray, who was cognizant of the fact that the Opéra House Com-
[ ny was being held out to MacFarland as the owner of the property ;
that Murray stood by and helped tô clothe the Opéra Hôuse Com-
pany with the apparent oWnership and title of this property to a
stranger to the title. The court also found that the opéra house
would havé been incomplète as an opéra house without chairs, and
that those chairs, or similar chairs, were absolutely necessary in its
usé and occupation for tlieatrical performances, ànd that said chairs,
affixed as they were, were a part of the building itself, and passed to
King under his deed to the promises; that the stage and stage
fixtures and drop cuftain attached thereto were also fixtures.
The fîndings of the court are supported by the évidence. Upon
thé examination of Mufray with regard to the agreement or under-
standing under which hé was to be repaid for his expenditures, he
testifîed that he was tè bé repaid from the net proceeds of the busi-
ness of thé building; that the accoitnt was carrîed on în the name of
the Opéra House Con!ipany; that hè controlled the whole thing, and,
when there was enough mOnëy on hand to pay him, he' had it placed to
his crédit; that with respect to the property in controversy, after it
was removed from the opéra hotise building he had it hauled back.
MUKKAT V. BENDEE. 711
and at that time there was no agreement or ynderstanding between
himself and the Opéra House Company, or its officers, with référ-
ence to the future use of the property, but that afterwards he did hâve
such an understanding ; that, being the principal owner of the stock
of the Opéra House Company, he had the property put back to
benefit himself, and to get back the money he had expended in the
construction of the building; that without that or some other fur-
niture the house would hâve been valueless ; it could not hâve been
run as a playhouse without furniture ; that when he replaced the fur-
niture in the opéra house, he had no agreement with the managers
of the Opéra House Company until the first meeting of the new
board in January, 1897, when he had a tacit understanding that he
was to be paid after he got his money back ; that prior to that time
it was ail under his ôwri control, and there was nobqdy to consult;
he managed the opéra house, and owned the house and furniture.
Maguire, who was familiar with the transaction, testified that the
agreement with Murray was that he should furnish the money and
fix up the house again, and repay himself from the receipts ; and,
when that money was paid, the furniture was to be paid for at so
much a month. But it appears from the évidence that it was not
until June 28, 1899, that the board of trustées of the Opéra House
Company adopted a resolution declaring Murray the owner of the
furniture, scenery, etc., and allowing him a rental therefor.
From this testimony it appears that Murray detached the furniture
from the opéra house as personal property, and afterwards, becoming
the owner of the majority of the stock of the corporation owning the
realty, he replaced the furniture in the opéra house for his own bene-
fit, and completed the building for thepurpose for which it was to
be devoted, but without any agreement with the corporation itself
at that time that the furniture vv'as to remain as personal property.
There can be no doubt that, upon gênerai principles of law, such an
annexation of personal property is to be treated as of a permanent
nature. New York Life Ins. Co. v. Allison, 107 Fed. 179, 182, 46
C. C. A. 229. In Ewell on Fixtures, p. 57, the law is stated as fol-
lows :
"It has been often held that a building or other annexation placed upon
the land of another without his préviens consent, and without any con-
tra et with him, express or implled, that it may remain the property of the
builder as a personal ehattel, becomes a part of the realty, and may not be
removed by the party erecting It, or his vendee, as against tlie owner of
the soil; and the doctrine holds as well with respect to joint owners as to
Etrangers. One joint tenant or tenant in coiûmon cannot erect buildings or
make improvements on the common property without the consent of the
rest, and then claim to hold until reimbursed the proportion of the money
expended."
This principle is clearly applicable by analogy to a case where the
owner of a majority of the shares of stock of a corporation, for his
own benefit and advantage as a stockholder, annexes personal chat-
tels to real property owned by such corporation. The absence of a
previous agreement in such a case that the property was to remain
the personal ehattel of the party making the annexation is évidence
of a légal intention that the property was to be regarded as a fixture.
7|.2, 125 FEDERAL REPORTEE.
Vfhich iiiust prevaîl pve^ tjie secret intention that the property wâs to
remain separaté an<i removable. ;
The resolution qf the trustées of the Opéra House Company on
June 28, 1899, declaring that the property belonged to Murray, and
allowing hira a rental therefor, cannot be considered as évidence of
any great value in faivor of Murray. That évidence shows that the
trustées of the cojtiporation were acting in the interest of Murray,
who held a majority çf the stock, The resolution was therefore noth-
ing more, practically, than a déclaration by his représentatives in
interest. Moreover, the adoption of the resolution was more than a
year after title to the property had become vested in Bender, and
more than two months ^fter the commencement of this suit. It is
therefore open to the .suspicion that it was passed by the trustées
for the purpose of supporting Murray's claim to title.
The court below found that Murray had received the rents, issues,
and profits of the property from March ïi, 1899, to February i, 1900,
with full knowledge and notice of Bender's rights in the premises,
and by the decree Murray was required to make restitution thereof
and pay the same, with légal interest. There is no question but that
Murray received the rer}t of the premises from McFarland, the trus-
tée, during the time mentioned, and, upon the évidence establish-
ing this fact, the decree of September 4, 1901, was entered, and
the matter referred to the master to state an account. Upon this
référence évidence was ofïered for the purpose of showing that the
rent so received by Murray was paid over to the Opéra House Com-
pany. But, objection being made to the évidence, it was excluded
by the master, and e^fception taken; but the exception was not
brought to the attention of the court below, as provided by the ruies
of the court, and the final decree of March 20, 1902, was entered,
following the decree of September 4, 1901, and adjudging Murray
liable therefor. We are of opinion that, having determined that Ben-
der's title to the property is valid, it follows, upon the record before
the court, that he is entitled to the rents, issues, and profits derived
therefrom, as determined by the decree of the court below.
The decree of the Circuit Court is therefore afïirmed.
THE CHICAGO.
THE OITY OF AUGUSTA.
(Circuit Court of Appeals, Second Circuit July 25, 1903.)
No. 165.
1 Coi.LisroiT— Steam Vbssbls Crossing— Dutt of Pbivileged VesseIi.
The privlleged one of two crpsslng steam vessels bas a rlght to rely
on the performance by the othfir of her duty to keep out of the way so
long as It Is possible for her to do so, at least in the absence of some
distinct Indication that she Is abput to fail in such duty; and, so long
as such rlght continues, It is the duty of the priyileged vessel to main-
tain her course and speed, uniess In extremis.
2. Same — Contribotokt Fâclt.
A collision occurred at nlght, on the Hudson river, about 200 feet ofC
the New York piers, between the steamship Augusta, passing up from
THE CHICAGO. 713
the sea, and the ferryboat Chicago, crossIng from Jersey City. The
Chicago was clearly and grossly In fault, for falllng to see the Augusta
until the latter was wlthln 500 feet of the point of collision, and for then
attempting to cross ahead in violation of the rules, when she might hâve
kept ont of the way by starboardlng and reverslng. HeM, that under
the settled rule that, In such cases, contributory fault on the part of the
privileged vessel must be clearly shown, the Augusta could not be held
in fault for going at a speed of 8 miles an hour, whlch she kept until
within 50O feet of the point of collision, when she stopped her engines,
It belng her duty, as the privileged vessel, to malntaln her speed; nor
for not reversing until immediately before collision, which. If an error,
was one in extremis; nor because of her neamess to the piers, which did
not prevent the Chicago from keeping eut of the way, nor in any way
contribute to the collision.
Appeal from the District Court of the United States for the South-
ern District of New York.
For opinion below, see 102 Fed. 991.
This cause cornes hère upon an appeal by the Océan Steam^ip
Company from a final decree of the District Court, Southern District
of New York, which held both vessels in fault for a collision between
the steam ferryboat Chicago and the steamship City of Augusta.
Herbert Barry and Julian T. Davies, for appellant. I,
Henry G. Ward, Le Roy S. Gove, Henry E. Datter, and Amos H.
Stevens, for appellees. .
Before LACOMBE, TOWNSEND, and COXE, Circuit Judges.
LACOMBE, Circuit Judge. On October 31, 1899, the ferryboat
Chicago left her slip at Jersey City at 12 47 a. m., bound for the up-
per slip at the foot of Cortland street, New York. The night was
dark and overcast, the atmosphère free from fog or haze, the wind
was from the northeast, and the tide at the last of the ebb, but still
running strong. She followed her usual course, heading across the
river for Starin's Pier, just above her slip, intending when near the
pier to head down and pass in close to the lower corner. The Fan-
wood, a ferryboat of the Central Railroad of New Jersey, was at
the same time crossing the river below the Chicago. She started two
or three minutes earlier, but had further to run. Her slip adjoined
the Chicago's slip on the south. The Chicago proceeded on her
course at her usual speed ; her captain hearing no signais from any-
body, and seeing no vessel to be avoided, until he perceived the Fan-
wood stopping about abreast of him and swinging to port. There-
after, for the first time, he perceived the city of Augusta — her hull,
masthead light, and red light — coming straight up the river at a
speed which he estimated at about 12 miles an hour. He testified
that the City of Augusta at that time was 400 feet below him, was
about 150 feet ofif the Une of the piers, and her course 250 feet east of
the Chicago. She was on his starboard hand, and was the privileged
vessel. The statutory provisions applicable at the time are found
in Act Cong. June 7, 1897, c. 4, 30 Stat. ici, 102 [U. S. Comp. St.
1901, pp. 2883, 2884] '■
"Art. 19. When two steam vessels are crossing, so as to Involve rlsk of col-
lision, the vessel which has the other on her own starboard side shall keep
out of the way of the other."
7M 125 vaimnATi bbportbb
■"Artat ^P]lea.:b;!A!i^ of thèse imîes, one of two vesaels Is te Keep ont of
tbe •«^«y.the otherM^ull fee^ hçr ooHPBB and speed. ,i -
"Art. 22. lEveçy vessel whioh 1» «Ureeted by thèse niles to keep out of tho
way oî anottier, vessel, shall, }f thieticircumstances of tbe case admit, avold
crosslng ahead of the-other.
"Art. 23. Eyery steam vçssel •whleh te directed by thèse roles to keep out of
the way of another vessel shall, on approachlng her, slacken her speed or
stop oç reverse." , ;, , i
"Art. 27. In obeylngand construing thèse ruies due regard shall be had to
ail dangers of navigation and ^oUl^ion, and to any spécial clreumstances
whlch may render a- dèparture f rom the above raies necessary In order to
ayold Immédiate flanger." ;
"Art. 29. Nothlng in thèse rules shall exonerate any vessel, or the owner,
master or erew th'ereof, from the conséquences of any neglect to carry lights
or signais, or of any neglect to keep a proper lookout, or of the neglect of
any précaution vrhich may be requlredby the ordinary practice of seamen
or by the spécial clreumstances of the case."
The inspectors' rttles in force were:
"Kule2. When steamers are approachlng each other In, an oblique direc-
tion, as shù'ttrn In the dlagram Of the fourth and flfth situations, so as to In-
volve rlsk of collision, the vessel which bas the other on hér own starboard
side shall keep out of the way of the other, whlch latter shall keep her
course and speed; the steam vessel having the other on her starboard side
Indicating by one blast OJf hër whistle her Intention to direct her course to
starboard, and two blasts if dlrecting her course to port, to whlch the other
shall promptly respond; but the giving and answering signais by a vessel
requlred tp keep her course shall not vary the duties and obligations of the
resoectiveivessels. •
"BulèS. If when steam vessels are approachlng each other, either vessel
f ails tp understand the course or intention of the other,' from any cause, the
vessel s6 In doubt shall Immediately signify, the same by giving several short
and rapid blasts, not less than four, of the steam whistle; and, If the vessels
shall hâve approached withln half a niilè Of each other, both shall be Imme-
diately slowed to a speed barely sufflcient for steerageway untll the proper
signais are.given, answered, and understood, or until the vessels shall hâve
passed each other."
"Hule6. The signais, by the blowlng of. the whistle, shall be given and
answered by pllots. In complianCe Wlth thèse rules, not only when meeting
head and head, or nearly so, but at ail times when passing or meeting at a
distance wlthin half a mile of each other, and whether passing to the star^
board or port."
It will be noted that nile 2 had not at the time been modified, as
it subsequently was, by requiring the burdened vessel to direct her
course tb starboard. In the situation in which he found himself, the
duty of the master of the Chicago was plain. If too close to swing.
to starboard when the ebb might set him down upon the Augusta,
he should at once hâve sotinded one blast, hâve put his helm hard to
starboard, stopped, and reVersed. Had he done so, with a boat which
swings as sharply and checks herself as quickly as the ordinary paddle-
wheel ferryboat, he would hâve laid the Chicago, as the master of
the Fanwbdd laid that .vessel, in safety alongside the course of the
City of Aiigustà, and, as the latter moved on, he could hâve passed
«nder her steth, Instead of that, as soon as he saw the Augusta he
sounded a two'bîast signal, gave a jingle bell to his engine room to
increase speed, and dashed straight ahead in an effort to pass in front
of the bow of the rapidly approaching steamer. Such navigation
wâs not bhly côhtrary to the articles^ but was utterly reckless, iWhen
THE CHICAGO. Î15
he actually sighted the steamer, the master of tlie Chicago had not
yet passed beyond the point at which it was possible for him to swing
off to port ; andj if he was so close to it that the nervousness in-
duced by appréhension of danger obscured his judgment, his own ves-
sel's navigation was the direct cause thereof. A careful lookout
would hâve seen the City of Augusta much earlier — probably before
the Chicago was halfway across the river — and would hâve thus re-
vealed the fact that a privileged vessel was moving northward across
her course. Moreover, irrespective of any lookout's report, the at-
tention of the master of the Chicago was challenged by the stopping
and the swing up river of the Fanwood, which warned him that the
latter boat had encountered something in her navigation which called
for maneuvers as of a burdened vessel by one crossing from west to
east. Clearly the Chicago was in fault — grossly in fault — for the
collision. Her counsel conceded her fault in the District Court, and
concèdes it hère. The only question presented by the appeal is as
to the navigation of the City of Augusta. Some of the findings of
fact of the District Court — e. g., speed of Augusta, distance from
pier line, etc., are disputed by appellant — but her navigation will be
considered on the basis of the narrative given in the following ex-
cerpts from the opinion of the District Judge:
"The City of Augusta * • ♦ was a single-screw propeller, about 302
feet long by 40 feet beam. The ferryboat was 203 feet by 65 feet beam.
* • • The City of Augusta, after a détention of 11 minutes at quarantine,
left there at 12:14 a. m., and was abreast of Castle Garden at 12:45. * * *
Above Castle Garden her speed was probably about 10 knots. Her master
estimâtes her distance from shore at Castle Garden at about 900 feet. It is
his practice, as he testées, to give the order to slow on reaehing Castle
Garden; but on this occasion, observing the Central ferryboat Fanwood
coming across from her Jersey slip, • ♦ • and approaching her slip at
Liberty street, he continued on without slowing in order to pass ahead of
her, giving to the Fanwood several signais of one whistle, indicating that he
would pass ahead. The Fanwood, he says, answered his third signal
* • * [The master of the Fanwood dld not hear the earlier signais, and
the testimony from ail sides indicates that the wind probably interfered with
the transmission of signais], * » * tumed up the river, and allowed him
to pass her about 200 feet distant, off Pier 8, whereupon he gave the order
to slow. About a minute afterwards, as he says, he obServed the Chicago
approaching her slip, and gave her successlvely, as he testlfles, at least three
separate signais of one whistle, and kept on, intending to pass ahead of her
as he had passed the Fanwood. He heard no signal or answer, as he testifles,
from the Chicago, though the Chicago gave him two whistles at about the
same time. The pllot of the Fanwood testifles that he heard only one of
thèse signais from the Augusta, followed by an immédiate alarm, to which
the Chicago within one or two seconds replled with a signal of two blasts.
• * * [Whether or not the master of the Fanwood understood a rapid
succession of the Augusta's single whistles to be an alarm, his testimony in-
dicates that the Augusta saw the Chicago, and signaled her more than once,
before the latter blew the two whistle signal which her master says he gave
immediately on slghting the Augusta.] * • * The master of the Augusta
says that after his signais to the Chicago he gave the order to stop his engine,
but no order to reverse untll his stem was wlthin about 25 feet of her.
• • • The Augusta, when she signaled and slowed, was not over 500 feet
below the place of collision. * * • When the Chicago was two-thirds
past the Augusta, she was struck at about right angles by the latter' s stem."
This court has repeatedly held, follovring the Suprême Court, that
a vessel which is primarily in fault for a collision cannot shift its con-
716 125 FHDEÎBAL EEFOKTEB.
séquences în part upon the other vessel without dear proof of the
contributing négligence or fault of the latter. Her own négligence
sufïiciently accounts for the disaster. The reckless navigation of the
burdened vessel in this case calls for the application of our comments
in The Transfer No. 8, 96 Fed. 253, 37 C."C. A. 462:
"The fault of the Waterman Is sô glarlrig, and Its conséquences precipitated
a situation involving sueh difflculties, that we are not Inclined to be severely
crltical of the maneuvers by which the Transfer undertook to escape from it."
The District Court held the Augusta in fault (a) for running at
unduly high speed ; (b) for navigating too close to the pier Une ; (c)
for not keeping a proper lookout ; (d) for not sooner reversing. The
first three of thèse assignments may be considered together. It is
argued by the appellant that 10 knots an hour was not excessive at
Castle Garden, and that, at that moment becoming involved in naviga-
tion with the Fanwood, the rules forbade the Augusta to reduce
speed ; that the Chicago was sighted by the Augusta long before the
District Court finds that she was ; and advances other propositions
which need not be discussed. The steamer's speed, her proximity to
the piers, and the circumstance that she evidenced her observation
of the Chicago by a signal only after the Fanwood had checked and
swung, were not such contributing faults as will relieve the vessel
primarily in fault. When the Augusta started up from Castle Gar-
den, her master carefully scanned the east shore with his glasses,
and saw that every ferry, slip was free from boats whose exit his ap-
proach might interfère with. The boats eastward-bound, and as to
which the Augusta was privileged, could with perfect ease, and with-
out interfering with making their slips, hâve checked their course
and let her pass, whether she was 200 feet or 600 feet from the pier
line; and her speed being observed, as well as her course, and the
rules giving assurance that both would be kept, such boats would
hâve had no difficulty whatever in avoiding her. If it be said that a
speed of 8 knots would hâve failed to bring her to the point of inter-
section before the Chicago cleared it, it may be replied that a speed
of 12 knots wo;ild hâve carried her beyond that point before the
Chicago reached it. While the Fanwood was the nearest boat, while
signais were being interchanged with her, and efïorts made to secure
such navi^tion as woùld not resuit in a collision, the navigator of
the Augusta could not be expected. to do more than observe the
Chicago, and see that she did not get so close to the danger line as
to be unable to conform her navigation to the rules, and thus leave
him the clear course he was eiititled to receive from her as a burdened
vessel, so sooii a,s hè'bhowW be disengaged from the Fanwood. If
frôm thetime the Chicago left herjersey slip until the moment her
master sighted the Augusta passing the Fanwood, she had been con-
stantly under the most çaréful scrutiny of the nàvigators of the Au-
gusta, it is not apparent tjtiat under tbe rules the latter could properly
hâve done bl'hèrwise rtHan they did. The Chicago was a burdened
vessel on an intersecting course, drâwîng constantly nearer to the
course of the privileged vessel. She was approaching, it is true, with-
out giving notice: by signal of what she proposed to do ; but, while the
THE CHICAGO. 717
Fanwood and Augusta were exchanging notifications of intent, it
might well be expected tiiat the Cliicago would refrain from inter-
jecting her own blasts. And she had not yet approached so close
to the course of the Augusta as to warrant the latter in disobeying
the twenty-first article. It was pointed out in The Britannia, 153
U. S. 138, 14 Sup. Ct. 795, 38 L. Ed. 660, that the navigators of priv-
ileged vessels should not be too quick in assuming that burdened
vessels are not going to yield to them, although their behavior may
be erratic. The case at bar is closely parallel to that of The Dela-
ware, 161 U. S. 466, 16 Sup. Ct. 516, 40 L. Ed. 771, where the Talis-
man was held free from fault, although she twice sounded signal
blasts, and then an alarm, none of which were answered, "but did not
change her helm or reduce her speed before collision." "Spécial
circumstances" will sometimes render a departure from the rules nec-
essary, but unless the navigator of a privileged vessel acts on the as-
sumption that both vessels are going to obev; the rules, until he is ad-
vised to the contrary, his nervous vacillation will often precipitate
the catastrophe the rules were devise d to avoid. In the case last
cited the court, after pointing out that the vessels were on crossing
courses, and not meeting end on, or nearly so, when a change of
course by both might be required, most forcibly indicates what should
be donc:
"That the primary duty of the privileged vessel is to keep her course Is
beyond ail controversy. [As the rule bas been amended since, she Is under
an equal duty to keep her speed.] The divergence between the authorities
beglns at the point where the master of the preferred steamer suspects that
the obligated steamer is about to fail in her duty to avoid her. The v^elght
of English, and perhaps of American, authorlty, is to the effect that, if the
master of the preferred steamer bas any reason to believe that the other
will not take measures to keep out of her way, he may treat this as a
'spécial circumstance' rendering a departure from the rules necessary to
avoid immédiate danger. Some even go so far as to hold it the duty of the
preferred vessel to stop and reverse whcn a continuance upon her course
involves an apparent danger of collision. Upon the other hand, other authori-
ties hold that the master of the preferred steamer ought not to be embar-
rassod by doubts as to his duty, and, unless the two vessels be In extremis,
he is bound to hold to his course and speed. The cases of The Britannia, 15:?
U. S. 130, 14 Sup. Ct. 795, 38 L. Ed. 660, and The Northfield, 154 U. S. 629,
14 Sup. Ct. 1184, 24 L. Ed. 680, must be regarded as settling the law that
the preferred steamer will not be held in fault for maintaining her course
and speed, so long as it is possible for the other to avoid her by porting, at
least in the absence of some distinct indication that she is about to fail in
her duty. If the master of the preferred steamer were at liberty to speculate
upon the possibility or even the probabiUty of the approaching steamer fail-
ing to do her duty and keep out of his way, the certainty that the former
will hold his course, upon which the latter has a right to rely, and whlch
it is "the very object of the rule to insure, would give place to doubts on the
part of the master of the obligated steamer as to whether he would do so or
not, and produce a timidity and feebleness on the part of both which would
bring about more collisions than it would prevent."
We do not understand that this clear exposition of the duty of a
privileged steamer has since been qualified by the Suprême Court,
The New York, 175 U. S. 187, 20 Sup. Ct. 67,, 44 L. Ed. 126, is
cited ; but that steamer was advised by signais, which the court held
she was conspicuously in fault for not hearing, that the Conemaugh
was about to navigate so as to involve risk of collision, should the
718 125 FEDIÏÏIAL BEIFOBÏEB.
New York keep her course and speed. In The Albert Dumois, 177
U. S. 240, 20 Sup. Ct. 595, 44 L. Ed. 751, the vessels were meeting
end on, or nearly so ; and a change of course of the Dumois, evi-
denced by the shifting of lightà, was observable to the Argo, and no-
tice to her that the former was not going to starboard, but, on the
contrary, was swingîng to port across her bows.
The Chicago was seen from the Augusta when leaving her Jer-
sey slip, and again when halfway across the river. Assuming that
she was not observed from: the Chicaço while the latter was engaged
with the Fanwood, we are unable to find in that circumstance a con-
tributing fault, because the navigation of the Augusta was the same
as it should hâve been had the Chicago been observed. As was said
before, as soon as the Fanwood swung to one side the Augusta slow-
ed, and almost immediately afterwards again sighted the Chicago,
and blew her signais (although under no, obligation to do so), which
were not answered. The distance between the Chicago and the
course of the Augusta had then grown short, but still it was possible
for the burdened vessel to hâve done as the Fanwood did. There is
évidence that, under reversed angines and a hard astarboard wheel,
such a boat could change direction almost eight points without fore-
reaching more than a length and a half. We are of the opinion that
it was not fault on the part of the Augusta to hold her course and
speed so long as that possibility existed, in the absente of some defi-
nite intimation by signal or action that the Chicago was going to
fail in her duty. That notification came in the two-blast whistle and
the increase of speed. The Augusta did not hear the signal, but, ap-
parently at the same time it was blown, stopped her engines. The
District Court found her in fault because she did not reverse — found
that, had she done so, the Chicago would hâve cleared'her by a few
feet. This may or may not be sp. It is close calculation after the
event, and we are to deal with the situation as it confronted the mas-
ter of the Augusta at the time. He says that he did not reverse be-
cause, the Augusta having a single, right-handed screw, the action
of the screw in reversing would tend to throw her to starboard, and
the réduction in speed would aid the Chicago less than the change
in course would imperil her. If this were an error in judgment, we
think it was an error in extremis, when the navigator was called upon
to deal in a few seconds with a perilous situation suddenly produced
by the glaring fault of a vessel which had theretofore given no notifi-
cation that she was about to violate an express rule of navigation,
and that the case is on' ail fours with The Delaware, supra.
For thèse reasons, the decree is reversed, and cause remitted, with
instructions to decree in conformity with this opinion.
LOTJISVILLE & N. E. CO. V. 8UMMEES. 71*
LOUISVILLE & N. E. CO. v. SUMMERS.
(Circuit Court of Appeals, Sixth Circuit November 3, 1903.)
No. 1,195.
1 Actions— Consolidation— Writs op Erkor.
Where two separate actions dependlng on the same facts were Con-
solidated and tried together for convenience only, but the verdicts and
judgments were separate, it was improper to include both tn a single
writ of error.
8. Railroads— Injubiks at Cbossing — Lookins and Listkning — Question for
Jury.
In an action for death at a railway higliway crossing, wbetber décé-
dants were guilty of contributory négligence in failing to stop and look
a second time before crossing the track held a question for the jury.
8. Same— Contributory Négligence— Effect-Statuths— Direction of Ver-
dict.
Where a state statute provided that the contributory négligence of a
person injured while crossing a railroad track should not preclude a re-
covery, but should be taken in mitigation of damages, and the jury might
bave found under the évidence that défendant railroad company in such
case was at fault, it was not error for the court to refuse to direct a
gênerai verdict for défendant.
4. Death— Peconiary Benefit — Déclaration.
In an action for wrongful death it was not necessary that the décla-
ration should allège that decedents' beneficiaries, for whom the action
was brought, had theretofore received any peeuniary benefit from de-
ceased, since they were entitled to reeover if they would hâve been
likely to bave received benefit from his continued existence.
6. Same— Tbial— Instructions — Référence to Decided Cases — Ebtoppel
TO Objbct.
Where counsel for both parties read decided cases to the jury for the
purpose of showing how courts had applied the law to slmilar cases,
they could not object that the court, as a part of its charge, referred to
a case he had previously tried merely as an illustration of the rules and
principles he was enunciating,
6. Same— Evidence.
Where, in an action for injuries at a railroad crossing, it was clearly
proven and admitted by counsel for défendant that decedents stopped
to look and listen at a certain place before attempting to cross the tracks,
the erroneous admission of évidence that decedents had made previous
trips across the track on the day of the accident, and on such previous
trips had stopped, looked, and listened, was harmless.
7. Same — New Thial— Grounds— Revibw.
Where, in an action for négligence, the trial court entertained a motion
for a new trial on the ground that the damages awarded by the jury
were excessive, and considered the reasons urged in support thereof, his
estlmate of the weight and sulEciency of such reasons is not reviewable.
In Error to the Circuit Court, of the United States for the Middle
District of Tennessee.
This is a Consolidated cause which includes two actions brought by the
défendant in error as the administrator of the estâtes, respectively, of his
two brothers, Thomas J. Summers and Kobert H. Summers, against the rail-
road company, to reeover damages resulting from an accident which caused
the death of both of them, and which, it was alleged, was occasioned by the
négligence of the railroad company. The pleadings and the facts in the two
actions being identical, they were, by order of the court, Consolidated, and
T 2. See Railroads, vol. 41, Cent. Dig. § 1173.
720 125 FEDBÉAL REPORTER.
trled as one. Separate verdicts and judgments for the plaintlflf were ren-
dered. The wrlt of error is single, and brings up both judgments under the
titles of e^ph, and the assignments of error reach both the Jadgments.
John B. Keeble, for plaintiff in error.
Jordan Stokes, for défendant in error.
Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.
SEVERENS, Circuit Judg'e. At the hearing of this cause our at-
tention was attracted to the circumstance that, although it was pro-
posed to review two separate judgments, only one writ of error was
sued out and one assignment of errors filed. Technically this was
irregular, as the consolidation of the causes in the court below was
only for Convenience in trying them. The verdict and judgments
were separate, as they should hâve been, and had no dependence upon
one another, and no relation, except that they rested upon a similar,
and to some extent a common, record. But the défendant in error
makes no objection on that account, and we conclude we may waive
the irregularity, as was done by the Suprême Court in similar cir-
cumstances in Brown v. Spoflford, 95 U. S. 474, 24 L. Ed. 508.
The accident in which the deceased brothers lost their lives oc-
curred at a crossing of the railroad by a highway in the village or
"town" of Hendersonville, Tenn. ; the railroad running from north-
east to Southwest, and the highway almost due north and south. It
happened on an afternoon in January, 1902. The decedents were
riding south on the highway on a wagon drawn by two horses driven
by one of the brothers ; the other, riding on the side of the bed of
the wagon, facéd the west. At a point 50 or 60 yards north of the
track, they stopped, and seemed to be looking and listening for trains
which might be passing on the railroad. They then resumed their
course, and did not again stop before the accident. They lirst crossed
a side track lying 10 or 12 feet north of the main track and parallel
therewith, and then, as their wagon was moving over the main track,.
they were struck by an engine bringing a caboose in train from the
northeast at the speed of 35 miles an hour, and were instantly killed,
The engine was an extra, not running on the regular time schedule.
On the side track east of the crossing was standing a long train of
cars, which, with the dépôt buildings^ obscured to some extent trains
moving on the main track for a distance of about 600 feet, at which:
point the track turns to the left, and runs through a eut, further ob-
scuring the track and trains upon it, from the place where the de-
cedents stopped, as above mentioned. But there was testimony
tending to show that the tops of cars moving on the main track could
be seen over those standing on the side track from where the brothers
stopped and looked and listened for approaching trains, and, by in-
ference, the~~lsmokestack of the engine also.
There îs a statute in Tennessee which alters the common-law ruie
in respect to the eflfect of contributôry négligence of the plaintiff
by prescribing that it shall not absolutely preclude recovery, but shall
be taken in mitigation of damages. It was contended for the rail-
road Company that the decedents were so clearly négligent in not;
LOXJISVILLE & N. R. CO. V. SUMMERS. 721
again stopping to look and listen before attempting to' cross the
main track that the court ought to hâve taken that question from
the jury, and not to hâve assumed it to hâve been fairly open in in-
structing them. A long and very thorough analysis of the testimony
and comparison thereof with the facts of many adjudged cases is
made by learned counsel for the plaintifï in error in support of this
contention. But we think that, conceding the gênerai rule of the
duty to stop and look and hsten, it is not, as an entirety, applicable to
ail circumstances ; nor is there any more definite statement of the
measure of time, or the intensity and particularity of the attention
which must be given, than that the caution a reasonably prudent man
would give, in the circumstances, must be exercised. Nor can the
distance from the track at which the précaution is to be taken be fixed
by any more definite test, It might hâve been thought by the jury
that the decedents took such reasonable précaution in stopping
when they did to look and listen, and were justified in being satis-
fîed, by what they observed, that the passage was clear of danger.
There was évidence that the place where the deceased parties stopped
•was better than any other, unless, perhaps, very close to the track,
for observing the condition of things on the railroad in the direction
from which danger might be apprehended, and that their means of
observation there were sufficient to excuse them from again stopping
for the same purpose. And the jury might also hâve thought that
the degree of caution which they were bound to exercise was in some
measure afïected by their supposition that the railroad company would
observe its duty, in that locality, of blowing the whistle or ringing
the bell of the engine in running through the town. We do not
mean to say that such a supposition may be absolutely relied upon
as an excuse for not taking due précaution, but it would seem to be
an élément to be taken into account in considering the reasonable-
ness of the conduct of the decedents, and that the railroad company
ought not to complain thereof.
There was a request that the court should direct a gênerai verdict
for the défendant, which the court denied. The défendant excepted.
But, as we shall hereafter indicate, it cannot be successfully con-
tended that the jury might not hâve found the défendant at fault,
and the controversy was reduced, under the statute above referred
to upon the efifect of contributory négligence, to a question of dam-
ages, and the court could not hâve charged that the plaintifï was
not entitled to a verdict for any amount.
At the close of the judge's charge to the jury the record states that
the defendant's counsel requested the court to give the jury certain
spécial instructions, which the court refused, to which action of the
court in refusing the said instructions counsel for défendant then and
there severally excepted. The exceptions taken by the plaintifï in
error to the refusai of requests for instructions and to instructions
given furnish the ground for 25 assignments of error. Some of thèse
assignments hâve been dropped in the brief and argument. We hâve
given attentive considération to those which are still insisted upon,
but shall discuss only those which seem to us to materially concern
125 F.— 48
722 , 125 FBDjBEAL EHPQETBE.
thé merjts of the casç. Thé following direction was requested by
the défendant :
"In regard to the case of J. M. Summers, adminlstrator of Robert Smn-
mers, y&B are Instructed that, in vlew of the fact that the deelaratlon In this
case does npt allège any peeunlary damage to the plalntiff, and does not set
forth thàt the beneflciarles for whose beneflt thls suit wàs brought, had ever
receivéd àny pecunlàry beneflt from the decéased, the plaintiff can recorer
only nominal damages in thls case in case you should flnd for the plaintiff."
The request was refused, and, as we think, properly. It was not
necessary to allège in the déclaration that, the beneficiaries had there-
tofore irecelved any pecuniary benefît from the decéased. The mate-
rial question was whether they would hâve been Hkely to hâve re-
ceivéd any if his life had not been eut short. The accident happened,
as above stated, in the town of ïîendersonville. A statute of Tennes-
see (Shannon's Code, §1574,, subsecs. 3, 4) prescribed the duty of the
raiiroad Company in running'its trains in such places as follows:
"(3) on approachlng a city or town the bell or whistle shall be sounded
when the train is at a distance of one mile, and at short Intervais until It
reaches its dépôt or station; and on leaving a town or city, the bel! or whistle
shall be sounded when the train starts, and at intervais until it bas left the
corporate limita.
"(4) Eyery raiiroad company shall keep the engineer, fireman or some
other pepson upon the locomotive, always upon the lookout ahead, and when
any perSon, ànimar or obstnictlbn- âppears upon the road, thé alarm whistle
shall be sounded, the brakes put down, and every possible means employed
to st<® the train and prevent an accident"
And section 1575 declared that:
"Every raiiroad company that fails to observe thèse précautions or cause
them to be observed by its agents and servants, shall be responsible for ail
damages to persons or property occasioned by or resulting from any accident
or collision that may occur."
And the question of fault on the part, 6f the défendant was tried
by the test as to whether it had complied with thesé provisions of the
law. There was évidence tending to pi'ove that there was no sound-
ing of the wHistlé or bell, such as requiréd ,by subsection 3, especially
the requirement that it shall be at short intervais, and there was also
évidence tending tô provë that no propèr lookout ahéad was kept on
the engine as requiréd by sùbsection 4. We afe not, of course, to
be understoôd as decidihg that the facts,were so. But we are con-
strained to thiiife that the évidence was such as that the court could
not properly tate the question from the jury. It would serve no use-
ful purpose to détail the testiihony. The circumstancés of cases dif-
fer so much that précédents are about as likely tô embarrass as to
aid the solution 6f such questions. The court chârged the jury in
clear and unmistakable lahguage that, if the défendant complied with
thbse réquirements, the plaintiff could not recover, thus élimina ting
from the case ail question of the right of plaintiff to recover upon
common ]a.W grounds.
The assignment of error which has exercised us most is one which
is directed to â part of the jûdgé's charge in which he referred to a
case which he had tried iil anOther jurisdiction (the case of Grand
Trunk R, R. Co, v. Ives, 144 U. S. 408, 12 Sup. Ct. 679, 36 L. Ed.
LOUISVILLE & N. E, CO. V. 8UMMEES. 723
485, as we suppose), the détails of which he récit ed, as well as the
verdict of the jury, and his ruling thereon, which was aiïirmed by
the Suprême Court of the United States. This was donc in a way
which possibly indicated a précèdent for them, although the judge
stated to the jury that it was an illustration merely of the rules and
principles he was laying down for them. If this were ail, we should
be disposed to say there was error in thus, perhaps, leading the jury
away from their own duty to the acceptance of a whoUy irrelevant
précèdent. But we discover in the bill of exceptions that the counsel
for the respective parties had paved the way for such a practice by
themselves reading decided cases to the jury to show how the courts
applied the law to such cases, and counsel for défendant had read in
particular a case which showed how the court had dealt with certain
facts involving the duty "to stop and hsten" in coming upon a rail-
road, and held that upon the facts the plaintiff was not entitled to re-
cover. Northern Pac. R. R. Ce. v. Freeman, 174 U. S. 379, 19 Sup.
Ct. 763, 43 L. Ed. 1014. And the judge referring to that and the
case he had himself instanced, said:
"The two cases are not ail In conflict wlth each other, but the circum-
stances were différent. And It Is the circumstances of a particular case,
and of this case that Is before you, by which you are to judge. I hâve givea
you the two cases so that you can see how the courts deal with them."
In thèse circumstances, we are inclined to overrule the exception.
Another thing which seems somewhat serious is this : The de-
cedents were that day drawing sand from the south over the railroad
to the north, and had made previous trips. The plaintiff was allowed,
against objection, to prove that on the previous trips the decedents
had stopped and looked and listened before crossing the railroad.
It was offered and admitted as corroborating the évidence of wit-
nesses who testified to the stopping just before the accident by show-
ing that the deceased brothers were accustomed to use care. We
hâve no doubt this testimony was irrelevant, and improperly received.
But we think the error was harmless. The fact that the decedents
did stop to look and Hsten, and at the place above mentioned, before
crossing the track at the time of the accident, was clearly proven,
and not disputed, as counsel for plaintiff in error conceded upon the
argument. The only question raised hère upon this subject is wheth-
er the decedents should hâve stopped after they got by the obstruc-
tions to their sight, and just before coming upon the track, when
they got in range, to look up the track to the northeastward.
It is also assigned as error that the judge refused to "set aside
the verdicts because they were contrary to the prépondérance of the
évidence." It has been often said by this court that it will not review
the action of the lower court in its disposition of a motion for a new
trial or other matters addressed to its discrétion. But we hâve held
that for a refusai to exercise its discrétion upon a motion of which
it should take cognizance, a writ of error will lie. The ground on
which this assignment of error is supported in argument is that the
court would not consider, for instance, the reasons urged for mitiga-
tion of damages. But the fact remains that the court did entertain
724 125 FBDBEAli EBPOBTBK.
the motion, and did consider the question whether the damages were
excessive. There is nothing to show that it did not consider the rea-
sons urged for thinking the jury had not done its duty in respect of
mitigating them. In denying the motion the learned judge said, upon
this subject, that he could not say whether the jury had given due
attention to his instruction that the damages should be mitigated, if
they found the decedents had been guilty of contri^utory négligence ;
and in respect to the measure of damages he said that he would not
allow a recovery so excessive as to shock the intelligence, the con-
science, of the court. We cannot enter upon an estimate of the
weight which the trial judge should hâve given to the reasons urged
for or against the motion. To do so would be to say, in efïect, that
the décision of such motions is open to review — a proposition directly
contrary to what we hâve repeatedly held and is everywhere the rule
in fédéral courts.
There are some minor questions involved in the larger ones which
we hâve considered. We hâve looked into them, but hâve not found
them grave enough to require independent discussion. What we
hâve said covers ail that are material.
The court correctly charged the jury upon ail the pertinent ques-
tions of law with much fullness and particularity, and many of the
requests of the défendant for instructions, the refusai of which is
complained of, were in substance given to the jury. Others we hâve
already considered.
Perceiving no serious error, we conclude that the judgment should
be afifirmed.
ANVIL GOLD MIN. CO. v. HOXSIE et al.
(Circuit Court of Appeals, Ninth Circuit. September 14, 1903.)
No. 900.
1, Attaohmbnt— Action on Bond— Conclusivenbss of Judgmbnt in Originai,
Action.
In an action on an attachaient bond given under Alaska Code, § 137,
conditioned, as thereln provided, for the payment of "ail costs that may
be adjudged to the défendant and ail damages he may sustain by rea-
Bon of the attachment if the aame be wrongful or without suffleient
cause," a judgment in favor of the défendant In the attachment suit
Is conclusive that the attachment was without suffleient cause, and of
the liabillty of the obligors upon the bond.
2. Same— Effect of Givinq Bond to Relbase Attachment— Estoppel.
A défendant In an attachment suit under the Alaska Code, who gives
the undertaking provided for by section 150 for the release of the at-
tachment, Is not thereby estopped to maintain an action on the at-
tachment bond to recover hls costs and the damages he may hâve sus-
tained by reason of the attachment, if It Is flnally determined that
plalntlff had no cause of action, although he may be held to hâve waived
Irregularities or defects In the attachment proceedings.
8. Same — Action on Bond^Defensks.
Where the complaint In an action to recover damages for wrongful
attachment allèges that plaintifiC lost the use of the attached property
for a stated timé, allégations in the answer setttng up the proceedings
In the attachment suit, showing that plaintiff procured tho release of the
ANVIL GOLD MIN, CO. V. HOXSIE. 725
property shortly after it was seized, while not stating a complète défense,
are relevant and materlal on the question of damages, and not subject
to demurrer,
4. Samb.
In an action on an attachment bond to recover costs and actual dam-
ages for the payment of which the bond is conditioned, the good faith
of the plaintlfC in the attachment suit and the sureties on the bond is
immaterial, and constitutes no défense.
In Error to the District Court of the United States for the Second
Division of the District of Alaska.
On the 18th day of Septcmber, 1900, one Carrie B. Lee brought suit in
the District Court for the District of Alaska, Second Division, against tlie
Anvil Gold Mining Company, a corporation, upon an alleged implied con-
tract for the direct payment of money, to recover the sum of $923, together
with costs. PlalntifiE applied to the clerk of the court for a vtrit of at-
tachment against the property of the défendant, and thereupon, and on the
same day, C. E. Hoxsie and Robert Lyng executed, and on the 19th day of
September, 1900, filed with the clerk of the court in that action, an under-
taking for writ of attachment, under the provisions of section 137 of the
Alaska Code of Civil Procédure (Act June 6, 1900, c. 786, 30 Stat. 354).
The undertaking provided that if the défendant should recover judgment in
«5aid action the plaintifC would pay ail costs awarded to the défendant, and
ail damages which it might sustain by reason ot the attachment, not ex-
ceeding the sum of $1,200. Upon the application and undertaking being flled,
the clerk of the court issued a writ of attachment directed to the marshal
of the district and division, requiring the marshal to attach and safely keep
sufiicient property of the défendant to satisfy the demand ot the plaintifC.
In pursuance of the writ of attachment the marshal, on the 19th day of Sep-
tember, 1900, executed said writ by attaching the schooner Seven Sisters,
her sails. tackle, apparel, and furniture. On the llth day of October, 1900,
the Anvil Gold Mining Company, the défendant in the action, made appli-
cation to the court, under section 149 of the Code of Civil Procédure, for
an order releasing the writ of attachment, and for that purpose flled with
the clerk of the court an undertaking, under section 1.50 of the same Code,
for the release of the attached property. Thereupon the court made an
order that the attachment be discharged, and pursuant to such order the
attachment was released and discliarged, and such further proceedings were
had that on the IGth day of May, 1901, the défendant recovered a judg-
ment against the plaintiff for the sum of $39 and the costs in said action,
Thereupon the Anvil Gold Mining Company, the défendant in that action,
brought the présent suit against C. B. Hoxsie and Robert Lyng, the sureties
on the attachment bond given by the plaintilf in tlie former action, to re-
cover the sum of $1,200, the pénal amount of the bond.
It is alleged In the amended complaint that at the tlme of the issuing of
the attachment the plaintiff was the owner of the schooner Seven Sisters.
lier tackle, sails, apparel, and furniture, then lying at Port Satety, in said
district; that the marshal, pursuant to the said writ of attachment, levied
upon, attached, and took possession of the said schooner, her sails, tackle.
apparel, and furniture, and thereby the plaintiff lost the use, earnlngs, and
profits of the same from the said 19th day of September, 1900, to the
day of .Tune, 1903, and the said schooner was compelled to remain in the
Ice during the winter of 1900-1901, being thereby greatly injured, ail to
plaintifC's damage in the Sum of $2,000. It is alleged that the attachment
was wrongful and without sufiicient cause. It Is also alleged that the
plaintifC, on the 16th day of May, 1901, recovered iudgment against Carrie
B. Lee, in the attachment suit, In the sum of $39 and costs of suit.
The défendants, answerlng the amended complaint, deny that the atta,ch-
ment was wrongful or without sufflcient cause; deny any knowledge or in-
formation as to whether the plaintiff was the owner of the schooner Sev-
en Sistei;s, her tackle, sails, apparel, and furniture; and deny that the
1 4. See Attachment, vol. 5, Cent. Dig. § 1241.
726 125 FEDERAIi REPORTEE.
plalnttff suffered damage In the sum of $2,000, or any other sum. And for
a fnrtlier and separate answer and défense the défendants recite the com-
mencement of an action against the AnvU Gold Mining Company by Oarrie
B. Lee; the Issulng of an attachment therein on the 18th day of September,
1900; and the levy of the attachment iipon the sald schooner, the property of
the AnTîl Gold Mining Company, on the 19th day of September, 1900. It is
also alleged that npon a HUfflcient Undertaking belng filed by the company on
the llth day of October, 190O, the attached property was turned' over to the
Company, and the attachment discharged. It Is alleged, as a further and
separate défense to the action, that Carrie B. Lee, the plaintiff In the attach-
ment suit, and the défendants In thls action, were advised by counsel that the
plaintiff In the attachment suit had a good, sufiacient, and meritorious cause
of action, and, being so advised, the défendants signed the undertaking set
forth in the complaint, acting in good faith, and in an honest belief that the
plaintiff in the attachment suit had a good, sufflcient, and meritorious cause
of action against the Anvll Gold M^iplng Company, and not for the purpose of
harasslng, annoylng, and damaging the said mining company in any wise. It
is also alleged, for a further and separate défense to the action, that the said
Arnfll Gold Mining Company, the défendant in the attachment suit, filed an
undertaking with the clerk of the court for the release of sald attachment,
the sureties In said undertaking obllgating ttiemselves that In considération
of the release of said attachment they would pay to the plaintiff In that ac-
tion the amount of whateyer judgment mlght be recovered by her in said ac-
tion, together with costs and disbursements, and thereupon the attachment
was discharged, and It is alleged that thereby the défendant mining company
(plaintiff hereln) waived ail rights of action on the undertaking set forth in
the amended complaint herein. To each of thèse several, further, and separ-
ate défenses plaintiff herein demurred, on the ground that they did not con-
stitute a défense to the action. The court overruled the demurrer to thèse
further and separate défenses, holding that they were sufflcient, and the
plaintiff eleetlng not to reply to the answer, but to stand on the demurrer,
judgment was entered against the plaintiff. The plaintiff thereupon brought
the case to this court upon writ of error.
Keller & Fuller, F. E. Puller, and George D. Campbell, for plaintiff
in error.
W. T. Hume, for défendants in error.
Before GILBERT, ROSS, and MORROW, Circuit Judges.
MORROW, Circuit Judge, after stating the facts in the foregoing
language, delivered the opinion of the court.
The Alaska Code of Civil Procédure provides, in chapter 14 (Act
June 6, 1900, c, 786, 30 Stat. 353), for an attachment proceeding. Sec-
tion 13s provides when plaintiff may hâve defendant's property at-
tached. Section 136 provides that the writ of attachment shall be is-
sued by the clerk of the cotirt in which the action is pending whenever
the plaintiff, or any one in his behalf, shall make and file an affidavit
showing certain particulars concerning defendant's indebtedness, the
absence of security, and that the attachment is not sought nor the
action prosecuted to hinder, delay, or defraud any créditer of the de-
fendant. Section 137 provides as follows :
"Upon flUng the affldavlt with the clerk, the plaintiff shall be entitled to
hâve the writ Issued as soon thereafter as he shall file with the clerk hls
undertaking, with one or more sureties, in a sum not léss than one hundred
dollars, and éijual to the amount for which the plaintiff demands Judgment,
and to the effect that the plaintiff will pay ail costs that may be adjudged
to the défendant, and ail damages that he may sustain by reason of the at-
tachment, If the same be wrongfui or without sufflcient cause, not exceeding
the sum specifled In the undertaking. With the undertaking the plaintiff
ANTIL GOLD MIN. CO. V. HOXSIE. 727
shall also flle the affldavits of the surettes, from which affidavits it must ap-
pear that such sureties are quallfled, and that taken together they are worth
double the amount of the sum specifled in the undertaking, over ail debts and
liabilitles and property exempt from exécution."
The complaint in the présent case alleged that the attachaient in
the suit of Carrie B. Lee v. The Anvil Gold Mining Company was
wrongful and without sufficient cause. This allégation was denied in
défendants' answer. The judgment in the attachment suit set forth in
the complaint determined that the plaintiff had no cause of action
against the défendant upon the facts stated in the complaint in that
action. What effect did this judgment hâve upon the attachment?
Did it not détermine that the attachment was wrongful and without
sufficient cause ? In other words, can an attachment of the def endant's
property be right and for a sufficient cause when the plaintifï has no
cause of action against the défendant? Can an attachment issued to
secure the satisfaction of a judgment be right and sufficient where
there is no debt upon which a judgment can be entered? We think
not. If the attachment suit terminâtes by a finding in favor of the
défendant on an issue as to the truth of the facts alleged as the ground
for the attachment, then the judgment conclusively establishes that
the attachment was wrongfully obtained ; and the same resuit follows
if, when the attachment was obtained, there was no debt due from the
défendant to the plaintifif. Drake on Attachment (7th Ed.) § 173;
Lockhart v. Woods, 38 Ala. 631 ; Tucker v. Adams, 52 Ala. 254; Steen
V. Ross, 22 Fia. 480; Young v. Broadbent, 23 lowa, 539; Wetherell
V. Sprigley, 43 lowa, 41; Harger v. Spofïord, 46 lowa, 11; Farrar
V. Talley, 68 Tex. 349, 4 S. W. 558.
The basis of the attachment proceeding is a cause of action upon a
contract, express or implied, for the direct payment of money. When
the cause of action fails the attachment fails, and for the reason that it
is without sufficient cause. The obligation of the undertaking upon
attachment is not that the plaintifï will pay ail costs that the défendant
may incur, and ail damages he may sustain by reason of the attach-
ment having been allowed wrongfully, or allowed without sufficient
cause, but it is that the plaintifiE will pay ail costs that may be adjudged
to the défendant, and ail damages that he may sustain by reason of
the attachment, if the same be wrongful or without sufficient cause.
The liability of the undertaking is determined, not upon a separate
issue relating to irregular or defective attachment proceedings, but
upon the issues of the case relating to the cause of action. This in-
terprétation of the statute is made clearer by considering other sec-
tions of the chapter of the Code relating to attachments. Section 151
provides that "the défendant may at any time before judgment, except'
where the cause of attachment and the cause of action are the same,
apply to the court or judge thereof where the action is pending to dis-
charge the attachment in the manner and with the efïect as provided
in sections one hundred and twenty-one and one hundred and twenty-
two for the discharge of a défendant from arrest." Section 121 (chap-
ter 12) provides that "a défendant arrested may, at any time before
judgni.ent, apply on motion to the court or judge thereof in which the
action is pending, upon notice to the plaintiff, to vacate the writ of ar-
728 125 FEDERAL REPORTER.
rest." Section 122 provides : . "If a motion be made upon affidavits or
other proofs on the part of the défendant, but not otherwise.the plain-
tiff may oppose the same by affidavits, or other proofs, in addition to
those upon which the writ was issued. If upon the hearing of such
motion it shall satisfactorily appear that there was not sufHcient cause
to allow the writ, or that there is other godd cause which would entitle
him to be discharged on habeas corpus, the same shall be vacated, or
in case he has given bail the court may discharge the same or reduce
the amount thereof on good cause shown." Under thèse sections of
the Code, the question to be determined upon a motion to vacate the
attachraent prior to the judgment in the case is whether there was
"sufficient cause to allow the writ" or "other good cause" shown en-
titling the défendant to the discharge of the writ. Thèse "causes"
necessarily relate to defects and irregularities apparent on the face
of the proceedings, and not to any question involved in the cause
of action. Bank of Winnemucca v. Mullaney, 29 Or. 268, 45
Pac. 796. It was further held in that case that the statute of Ore-
gon, as it then stood, providing that the writ of attachment might
issue in ail actions for the payment of money without specifying-
any other cause, rendered it unavailable for the discharge of the
writ of attachment in that case, as the cause of attachment and
the cause of action were the same, and within the exception contained
in section 145 of Hill's Code (section' 151, Alaska Code). We now
see the significance of the language of section 137 of the Alaska
Code, requiring that the undertaking on attachment shall be security
for "ail costs that may be adjudged to the défendant, and ail dam-
ages he may sustain by reason of the. attachment, if the same be
wrongful or without suiîicient cause." ït is the final judgment in the
case that is to détermine the liability of the obligors upon the attach-
ment undertaking. But the appellees contend that the appellant, the
défendant in the attachment suit, having given an undertaking for the
release of the attachment uiider section 150 of the Alaska Code, has
waived the right to raise the question whether the attachment was
wrongful or without sufficient cause, or, as stated by the court below>
the défendant waives ail irregularities and defects in the original at-
tachment proceedings, and admits an estoppel in the attachment suit
against the attachment sureties by giving the bail required by the
statute. It may be admitted, for the purposes of this case, that when
the défendant in an attachment suit under the Alaska Code gives the
undertaking provided in section 150, he waives his right to question
mère irregularities and defects apparent upon the face of the original
attachment proceedings; but it does not follow that he admits an
estoppel as against a judgment in the attachment suit,where the cause
of the attachment and the cause of action are the same. The reason
why the défendant in an attachment suit who gives an undertaking for
the release of the attachment may be deemed to hâve waived his right
to question the regularity and correctness of the attachment proceed-
ingfs is because there is no practical method provided for afterwards
determining in the progress of that case the question whether there
were irregularities or defects in such proceedings or not. The only
issues left to be determined, after the release of the attachment, are
ANVIL GOLD MIN. CO. T. HOXSIE. 729
those relating to the cause of action ; and where, as in this case and
under the statute under considération, thèse issues are the same as the .
cause of attachment, they are necessarily determined by the judgment,
and ail other questions ma^ be deemed to hâve been waived. But tliis
waiver extends no further, and there is no implied estoppel beyond
that which appears upon tlie face of the attachment proceedings, and
relating to such proceedings, that will deprive the défendant of the
right to recover ail costs he may hâve incurred and ail damages he
may hâve sustained by reason of the attachment, if it is finally deter-
mined that the plaintiff had no cause of action.
The court below was of the opinion that the Suprême Court of Ore-
gon, in Drake v. Svvorts, 24 Or. 201, 33 Pac. 563, construing provisions
of the Code of Civil Procédure of Oregon which were copied into the
Alaska Code, had practically decided that an undertaking on release of
attachment was a waiver of a right of action on the undertaking given
on procuring the attachment. One of the questions before the court
in that case was whether the exécution and delivery by the plaintifï
(the défendant in the attachment suit) of a redelivery bond, as provid-
ed in section 154 of Hill's Code of Oregon (section 145, Alaska Code),
operated as a discharge of the attachment and a waiver of the right
of action on the undertaking on attachment. The court was of the
opinion that there was a distinction between the efïect of the bail
bond and a redelivery bond ; that the former, being given as seaurity
for the payment of such judgment as might be recovered in the action,
operated to discharge the attachment, and was probably a waiver of
the right of action on the undertaking, but that the latter, being an
engagement to redeliver the attached property or pay the value thereof,
did not dissolve the attachment or withdraw the property from the
opération of the lien thereon, and did not therefore operate as a
waiver of the right of action on the undertaking for the attachment.
The latter question was before the court, the former was not, and'
the statement made concerning the former question was not es-
sential to the décision of the main question. The court, however,
referred to the case of Rachelman v. Skinner, 46 Minn. 196, 48 N.
W. 776, as supporting its views upon the collatéral question. In
that case suit was brought by the défendant in the attachment
proceedings, not against the plaintififs and their sureties on the
attachment bond, but against the plaintififs alone, to recover dam-
ages for the issuance of the attachment against the property of
the défendant alleged to hâve been maliciously sued out by the plain-
tififs. After the attachment had been issued the défendant exe-
cuted the bond provided for by the statute, and procured an or-
der for the discharge of the attachment. Afterwards the défendant
moved to set aside the attachment, upon afïidavit and notice, and this
motion the court granted, and also set aside the bond previously given
by the défendant for the release of the attachment. Upon the trial
of the action to recover damages for the issuance of the attachment,
the court held that the défendant in the attachment proceedings had
waived his objections to the validity of the attachment by giving the
bond and procuring the discharge of the attachment. The case was
accordingly dismissed. On appeal to the Suprême Court of the state
730 125 FEDERAL REPORTER.
the judgment of the lower court vvas affirmed, the appellate court hold-
ing that where an attachment is dîssolved Ijy the action of the de-
fendant without an opportunity to the opposite party in the same pro-
ceeding to test the vaUdity of the Writ of attachment an action for
wrongfuUy procuring the writ to issue could not ordinarily be main-
tained. That décision hàs no application to a case where the original
judgment in the attachment suit détermines the validity of the writ
and the action for damages is upon the undertaking.
The case of Ferguson v. Glidewell, 48 Ark. 195, 2 S. W. 711, is also
cited as sustaining the dictum of the Oregon court in Drake v.
Sworts. That case was a suit against the surety upon thé bond given
by the défendant in the attachment proceedings for the release of an
attachment. When the bond had been given the property was re-
leased. Afterwards the surety on the bond for the felease of the
attachment liled an afiîdavit denying the statements contained in the
afïidavit of the plaintiff upon which the attachment was issued, and
the attachment was diecharged. The bond upon reléase Of attach-
ment was conditioned that the défendant would perform the judg-
ment of the court. The plaintifï obtained a judgment, and then
brought isujt upon the bond given by the défendant to recover the
amount of the judgment. The surety undertook to défend the action
upon the groUnd that the attachment had been discharged. The Su-
prême Court held that the surety was absolutely liable on the under-
taking,, without référence to the question whether the attachment was
rightfully or wrongfuUy issued, and thât the attachment défendant
was precluded by such an uiîdertakihg from controyérting the grounds
of the attachment. If thife décision' -isauthority upon any question
before the court in the présent casej it is that the défendants, as
sureties on the attachment bond, are made absolutely liable on their
undertaking by the judgment in the case. It is certainly not au-
thority for the proposition that the sureties on the attachment bond
are released by the discharge of the attachment. Fox v. Mackenzie
(N. D.) 47 N. W. 386, and McLaughlin v. Wheeler (S. D.) 47 N.
W. 816, simply hold that the défendants in the attachment suit, hav-
ing given the statutory undertaking to discharge the attachment un-
der which the property has been seizéd, Could not afterwards hâve
the attachment dissolved because improvidently issued. The last
case was, however, beforè the Suprême Court upon a rehearing.
McLaughlin v. Wheeler (S. D.) 50 N. W. 834. It appeared that the
motion to dischargé the ' att^^chment in that case was based upon
the ground that the summoné had not been served or published as
required T)y law, and, this fact havitig been found by the court, its
previous opinion was so far modifièd as to hold that, upon failure to
serve or publish summons as proVided : by the statute, défendants
were entîtied as of rîght to the release of the attached property, and
that therefore there was na considération for the undertaking. In
other words, while the surety on a bond for the release of an attach-
ment may not, after givîng such a bond and securing the release of the
attachment, hâve the attachment dissolved because of a mère irregu-
larity in the attachment proceedings, he may nevertheless show that
the attachment proceedings were void. There is no principle of
ANVIL GOLD MIN. CO. V. HOXSIB. 731
waiver or law of estoppel in this case, or in any of thèse cases, that
deprives the défendant in the attachment suit of his right of action
against the plaintiff and the sureties on the attachment bond to re-
cover damages sustained while the attachment is in force, and this
we believe to be the law upon the subject. Cases apparently hold-
ing otherwise will be found, upon examination, to turn upon some
différences in the statutes upon which they are based. The gênerai
rule, and the one appHcable to the présent case, is that the liabiHty
of the sureties on the attachment undertaking is measured by the
conditions contained in that obligation. As said by the Suprême
Court of Alabama in Tucker v. Adams, 52 Ala. 254, 256 :
"An attachment is an extraordinary remedy, prescribed by the statute for
extrême cases, and harsh in its opération. Its levy deprives the party
against whom it issues as completely of the possession of his property as
the levy of final process founded on a final judgment. The nature of the
remedy requlred that the party against whom it issues should hâve a more
ample remedy against Its misuse or abuse than that which the common
law afforded. The injury resultlng from sueh misuse or abuse Is more
direct, and greater in degree, than that which follows the misuse or abuse
of eommon-law process or of ordinary remédies. Thèse do not authorize
the seizure of property, nor do they Involve imputations affeeting more or
less réputation and crédit. Hence the statutes of this state hâve always
required, as a condition précèdent to the suing out of an attachment, bond
with sufflcient security, in a penalty of double the amount of the demand
sued for, conditioned for the payment to the défendant of ail such damages
as he may sustain from the wrongful or vexations suing out of the attach-
ment; * » * the action on the bond for the recovery of damages being
a plenary remedy for ail the injury which could resuit if the cause did not
exist."
The amended complaint allèges that by reason of the attachment
the plaintiff lost the use, earnings, and profits of the property at-
tached from the igth day of September, igoo, to the day of
June, 1901. In the first further and separate ansvver and défense
the défendants set up the entire attachment proceedings, and among
other things allège tha.t on the iith day of October, 1900, in pursu-
ance of an order of court, the marshal released and discharged the
attachment, and turned over and delivered to the plaintiff the prop-
erty attached in the action, and that since that time the property
has not been in the possession of the plaintiff in the attachment suit
or in the possession of the marshal. While thèse proceedings do
not constitute a complète défense to the action, they are relevant and
material to the question of damages, and présent an issue as to the
period of time the property was under attachment. The allégations
of this défense are therefore proper for that purpose. The demtirrer
to this défense was therefore properly overruled.
The second further and separate answer and défense allèges facts
tending to show that the plaintiff in the attachment suit and the sure-
ties on the attachment bond acted in good faith upon the advice of
attorneys in the attachment proceedings, having an honest belief
that the plaintiff in that action had a good and meritorious action
against the défendant in the suit, and that the bond was not given
to harass, annoy, or damage the défendant; If the présent action
had been brought for the misuse or abuse of process, and it had been
alleged that the attachment proceedings had been prosecuted mali-
732 125 FEDBHAL EEPORTEK.
ciously and wîthout probable cause, the facts alleged in thîs défense
would bave been relevant and material upon the question of ex-
emplary damages. But the action is upon the undertaking, to recover
the costs awarded to the défendant in the attachment suit and the
damages which the défendant sustained by reason of the attachment,
limited by the undertaking to the sum of $1,200. The good faith of
the parties in prosecuting the attachment proceedings is therefore
irrelevant and immaterial upon this question. Drake on Attach-
ments, § 174. The demurrer to this défense should hâve been sus-
tained.
The third further and separate défense and answer allèges the giv-
ing of the bond for release of the attachment on October 11, 1900,
in the attachment suit, and allèges that by reason of the fîling of
such undertaking and the release of the attachment the défendant
in that suit (plaintifif in the présent action) waived ail rights on the
undertaking set forth in the amended complaint. We hâve suffi-
ciently discussed this défense, and hâve determined that it cannot be
sustained.
It follows that the judgment of the Circuit Court must be re-
versed, with directions to the court below to sustain the demurrer to
the second and third further and separate défenses, with leave to
the plaintifï to file a reply to the answer.
ELDBR DEMPSTER SHIPPING 00., Lîmtted, v. POTJPPIET.
(Circuit Court of Appealè, Fourth Circuit November 5, 1903.)
No. 495.
1. Admiraltt Jurisdiction— Torts Committed oh Hiqh Seas— Foreisn
Shipb.
A court of admlralty of the United States lias Jurlsdiction of an ac-
tion in personam against the owner of a forelgn sMp to recover for in-
juries sustained by an American passenger on the high seas, iiTespective
of the law of the shlp's flag, the case being governed by the gênerai
maritime law as adminlstered in this country.
2, Shipping— Carriers op Passbnqbrs— Liabilitt for Injdriîîs.
A shlp is not bound to the same strict responsibillty for the safety
of passengers as in the case of goods, but is bound to exercise a high
degree of care, whlle the passenger Is also requlred to exercise rea-
sonable care for his own safety.
8. Same— Assomption dp Risk by Passbngbr— Unnecessart Exposurb to
Danger.
A passenger who voluntarily leaves a place of safety on a ship wîth-
out necessity, and goes to a part of the ship where there Is danger, of
which he has knowledge, or which Is obvious, assumes the increased risk
therefrom, and he cannot recover from the ship or Its owners for an
Injury so recel ved because he was not given warning, which, under such
clrcumstances, was unnecessary.
L Same— Evidence Considbred.
Llbelant was one of three passengers on a freight vessel on which
he had been for some three months. Before making port on the return
voyage, the crew were engaged In tearing down a temporary structure
built on the deck for "the housing of cattle on the outward voyage and
throwing the timbers over the side. After being on the bridge with
the other passengers watching the work for the greater part of a day.
ELDEE DEMPSTER SHIPPING CO. V. POUPPIKT. 733
libelant toward evening went upon the deck and stood near the rail
■wliere the men were at work, and while there he was struck and in-
jured by a long timber which had been shoved over the rail endwise in
the usual manner until it overbalanced, the motion of the ship causing
the upper end to swing forward when the other end struck the water.
EeM, that the proximate cause of the înjury was the aet of libelant him-
self in going without necessity to a place of danger, and that the offl-
cers of the ship were guilty of no négligence which rendered the owners
liable therefor.
Appeal from the District Court of the United States for the East-
ern District of Virginia, at Norfolk.
For opinion below, see 122 Fed. 983.
H. H. Little (Robert M. Hughes, on the brief), for appellant.
Floyd Hughes (F. M. Whitehurst, on the brief), for appellee.
Before SIMONTON, Circuit Judge, and MORRIS and KEL-
LER, District Judges.
SIMONTON, Circuit Judge. This case cornes up on appeal from
the District Court of the United States for the Eastern District of
Virginia, sitting in admiralty. Frank A. Pouppirt filed his libel in
personam in the court below against the Elder Dempster Shipping
Company, Limited, of African House, a corporation created under
the laws of Great Britain and Ireland, on the 2ist February, 1902.
The défendant, being a foreign corporation, could not be found nor
served with process within the district. An attachment was issued
out of the said court on the same day, under which the British steam-
ship Monténégro was attached and taken into custody by the mar-
shal as the property of said respondent. The vessel was released on
bond. Prior to this a libel in rem had been filed against the steam-
ship Monténégro by the same libelant for the same cause of action,
and the steamship released on a similar bond, under a stipulation that,
if the défendant and its sureties are held liable on the bond taken
in attachment, they will not be held liable on the bond taken upon
the libel in rem. The respondent has answered the libel in personam,
and, after excepting to the jurisdiction of the court, traversed the
main allégations of the libel.
The steamship Monténégro was chartered by the respondent, her
owner, to take a cargo of mules from the port of New Orléans to
a port in South Africa. The libelant was engaged to go on the
steamer as a veterinary surgeon by the British government, and went
on the said steamer as a passenger, his expenses to be paid at Cape
Town, South Africa, and from port of arrivai, on his return to the
United States, to Denver, Colo. The ship took the cargo of mules
to South Africa, delivered them, and started on her voyage to New
Orléans for another cargo. When she reached the mouth of the
Mississippi she was met by a telegram instructing her to go to Gai-
veston for a cargo of cotton. She at once, greatly to the disgust and
against the protest of libelant and two others, also veterinary sur-
geons, on the ship, set out for Galveston, libelant and his companions
having in vain sought the means of going ashore at Port Eads,
at the mouth of the Mississippi. In order safely to transport the
mules, the vessel had had stalls and other fîxtures set up in her hold
734 125 FEDERAL REPOETER.
and on the main deck. The structure on the main deck extended
from the bridge to the forecastle, and was covered over with a good
roof ; this roof, in effect, making another deck extending from
the bridge forward. The timbers used in the construction of this
structure were niany of them long and heavy. On the roof of this
structure the passengers and ofificers of the ship could take exercise,
and frequently used it for this purpose. When he was on this voy-
age to Galveston under his new instructions, the master of the
Monténégro began to prépare his ship for a cargo of cotton. To
this end he employed his crew and a gaiig of muleteers, who having
gone with the mules to South Africa, were now returning. Thèse
tore down the partitions and stalls in the hold and dismantled the
structure on the deck. This work of démolition began on the day
after leaving Port Eads; that is, I3th November, 1901, and was
continued ail the next day. Two gangs' were employed, one under
the mate on the starboard side of the ship, and the other under the
boatswain on the port side. The smaller pièces, as they were dis-
engaged, were sent over the side of the ship in a basket. The steam
winch of the ship was used for this purpose. The longer and larger
beams, after being disengaged from their fastenings, were lifted by
the workmen and placed on the rail of the ship and shoved along
until the weight of the part; over the rail counterbalanced that on
the ship. They were then let go, striking the water and falling over-
board. As the vessel was moving through the water at the rate of
eight or ten knots, the ends of the beams, being shoved overboard,
when they struck the water, were driven aft, and that portion of the
beams resting on the rail, which acted as a sort of pivot, were neces-
sarily driven forward. Of course, there was great danger during this
opération to every one on the main deck in proximity to the beams
which were being put overboard. During the morning of the day
on which the working parties were thus dismantling the ship, the
libelant and his companions were on the bridge, watching the opéra-
tion with intetest. They saw very many beams disposed of as above
described, and very great progress was made in the work. The
libelant and the other doctors lived in the cabin at the stern of the
ship occupied by the officers. During the afternoon- the libelant,
after afternoon, tea, went down upon the main deck where this work
was being performed. A very short time afterwards, whilst he was
on that deck in proximity to a large beam, which was in the act of
being discharged over the side of the ship, he was struck a violent
blow on the head by that part of the beam still over the ship, the
other end having struck the water. The lower end of the beam
having beeri suddenly drawn aft, the upper end of the beam was
canted forward. There is conflict in the testimony upon two prin-
cipal points. The libelant denjes that he was \yarned either against
going on tlie deck or whilst upon the deck. He heard a cry imme-
diately hefore he was struck, which he did not understand. Wit-
nesses for respondent say that whenever a beam was thrown in this
way overboard, the gênerai warning had been given by the crew of
"Look out!" and also that the libelant had been specially warned
about going on the main deck where the men were at work. An-
ELDEB DBMPSTEE SBIPPING CO. V. POUPPIRT, 735
other point of contradiction is as to the place in which he was standr
ing when the blow came. On his behalf it is said that he was on the
deck four or five feet from the rail, looking at the ship. The wit-
nesses for the respondent say that when he was on the deck he ran
to the rail whiist the beam was being shoved over it, and watched it
as it fell in the water. Whiist he was leaning over the rail and look-
ing down, the beam slid on the rail and struck him. The court be-
low heard the case upon testimony taken before him and by déposi-
tion, gave a decree for the libelant, ànd 6xed his damages at $12,000.
An appeal was allowed, and the case comes up on many assign-
ments of error. The first two of thèse are error in entertaining ju-
risdiction of the case and error in not holding that the action is gov-
erned by the law of Great Britain, and that therefore Hbelant had
no right of action in admiralty. The other assignments of error go
to the merits ; error in holding that respondent was guilty of négli-
gence; error in holding respondent for damages; error in grant-
ing excessive damages; error in admitting the libelant to say that,
if he had been warned not to go to the scène forward by the captain,
he would hâve obeyed him, but that in fact he had no such warning.
As to the Jurisdiction.
The respondent insista, as the cause of action in this libel orig-
inated on the high seas, on a British ship flying the British fiag, it
must be treated as if it occurred on British soil, solely within the
jurisdiction of the British courts. The appellant admits that many
decided cases sustain the gênerai jurisdiction of our courts in ad-
miralty over cases of tort arising on the high seas on vessels of other
nationahty than ours. But he insists that thèse are cases of colli-
sion where the tort did not occur whôlly on either ship, or contracta
of carriage, or for seamen's wages ; ail of which are communis juris,
and are cognizable by courts of admiralty of ail nations. It must
be borne in mind that the libelant is a citizen of this country, under
his contract to be restored to the country. The Suprême Court of
the United States has established the doctrine that the courts of ad-
miralty of this country can, in their discrétion, take jurisdiction of
cases of tort occurring on the high seas between subjects or citizens
of foreign states; that, if they décline to exercise such jurisdiction,
it is not for a want of authority to do so, but because they deem it
expédient, under the circumstances of the particular case, to do so.
Take a case of foreign seamen suing because of ill treatment. In
such cases the consent of their consul or minister is frequently re-
quired before the court will proceed to entertain jurisdiction, not
on; the ground that it has not jurisdiction, but that, from motives of
convenience or international comity, it will use its discrétion whether
to exercise jurisdiction or not. And where the voyage is ended, or
the seamen hâve been dismissed, or treated with great cruelty, it will
entertain jurisdiction even against the protest of the consul. The
Belgenland, 114 U. S. 363, 364, 5 Sup. Ct. 864, 29 L. Ed. 152. See,
also, for a full discussion of the law Deady, J., in Bernhard v. Creene
et al., 3 Sawyer, 230, Fed. Cas. No. 1,349. If this be the law as to
actions by foreigners against foreigners, a fortiori it is the law as
736 1^5 FSDBBAI^ BUFQBTEB.
between an American citizen and a forçigner. The language of Dr.
Lushingtdn'th The Jbhann Friederich, i W. Rob. 35, quoted in The
Belgfenland, supra, îs proper hère:
"If thèse parties must wait untll the vessel that has done the Injury re-
turn to Its own country, their remedy might be lost altogether, because she
mlght never return; and, If she did, there Is no part of the world to whlch
they mlght not be sent for riedress."
Our admiralty courts certainly take jurîsdiction of collisions on the
high seas occurring between vessels of différent nationalities both
foreign to this country. This not for the reason that in cases of col-
lision a tort did not occur wholly on either ship. In this very case of
The Belgenland, the ship only was found guilty of tort in colliding
with a Norwegian vesseî, and she was niade to pay heavy damages.
Judge Brown, of New York', than whom there is no better authority
in admiralty, in The Brantford City (D. C.) 29 Fed. 383, quotes from
The Belgenland the followïng:
"As to the law whlch should be appUed In cases between parties or ships
of différent nationalities arislng on the high seas, not wlttiln the jurisdictlon
of any nation, there can be no doubt that it must be the gênerai maritime
law, as nndèrstood and admlnistered in the courts of the country in which
the lltigation Is prosecuted."
To this he adds :
"The fact that in most of the cases dted the Iniiu-y arose from collision
is Immaterlal. The gravamen of the action is négligence. On that alone the
action dépends. It is the négligence only that constitutes the tort"
We concur fully in the conclusion of the District Court that juris-
dictlon can be taken in this case.
On the Merits.
Assuming* that the libelant occupied the position of a passenger în
this steamship, and that as to- him the ship was a common carrier,
what was the responsibility of the shipowner to him? In Boyce v.
Anderson, 2 Pet. 150, 7 h. Ed. 379, Chief Justice Marshall, after stat-
ing the doctrine of the common law that a carrier is responsible for
every loss which is not produced by inévitable accident, says that this
doctrine cannot be applied in the case of passengers, living beings,
over whom the carrier cannot hâve the same control as he has over
inanimate matter. He applies this modification of the doctrine to the
carriage of slaves, and says that in that case the carrier was only
liable for ordinary neglect, that being thç law with respect to the car-
riage of passengers. The same distinction was observed and applied
in a similar case of McDonald v. Clark,' 4 McCord, 223, and in the
Alabama case, Williams v. Taylor, 4 Port. 238. In Chicago, etc., Ry.
Co. V. Zernècke, 183 U. S. 587, 22 Sup. Ct. 231, 46 L. Ed. 339, the Su-
prême Court of the United States, discussing the gênerai law on this
subject, says:
"It seemedto the able Judges who decided Coggs v. Bernard [2 Ld. Raym.
909], that on aOcount of the conditions which then surrounded common car-
riers publie policy required responsibility on their part for ail injuries and
losses which occurred from the acts of God or public enemies, and many
years afterwards Chancellor Kent praised the décision of cases which de-
ELDER DEMP8TER SHIPPING OO. V. POUPPIKT. 737
clined to relax the rule to excuse carriers for losses by flre. That rule was
not and bas not been extended by tbe courts to passengers, and Chlef Justice
Marshall, in speaking for this court in Boyce v. Anderson, 2 Pet. 150, 7 L.
Ed. 379, refused to apply the rules to slaves, saylng: 'The law applicable to
common carriers is one of great rigor. Though to the extent to which it has
been carried, and in the cases in which It has been applied, we admit its
necessity and Its policy, we do not think it ought to be carried further, or
applied to new cases. We think it has not been applied to living men, and
that it ought not to be applied to them.' "
In Stokes v. Saltonstall, 13 Pet. 191, 10 L. Ed. 115, the Suprême
Court says :
"It Is certalnly a sound princlple that a contract to carry passengers differs
from a contract to carry goods. For the goods the carrier is answerable at
ail events, except the acts of God and public enemies. But, although he does
not warrant the safety of the passengers at ail evejits, yet hls undertaking
and liability as to them go to this extent: that he, as agent, as in this case he
acted by an agent, shall possess compétent skill, and that, so far as human
care and foresight can go, he wlll transport them safely.'*'
This case quotes 2 Kent, Comm. (i4th Ed.) p. 600:
"The proprletors of a stage coach do not warrant the safety of passengers
In the charaeter of common carriers, and they are not responslble for mère
accidents to the persons of passengers, but only for want of care."
This same principle is illustrated in the common law. A carrier
may be responsible for négligence, but, if the passenger be also nég-
ligent, and his négligence is the proximate cause of the injury, the
carrier cannot be held. The court below, in dealing with this subject,
says :
"In determining the question of fault in bringing about the misfortune,
nothing need be said as to the degree of care required of the respondent
ship, as a carrier of passengers. The law in this regard is too well settled
to need spécial comment at this day further than to say that the highest
degree of care and caution is required, and that the presumption of négligence
is against the carrier where injury is sustained by a passenger."
It seems to us that the learned judge states this proposition too
broadly, and that his doctrine is inconsistent with the opinion of
Chief justice Marshall in Boyce v. Anderson. For the proposition
thus stated by him the learned judge below quotes The New World,
16 How. 469, 14 L. Ed. 1019. In that case the passenger was injured
by the explosion of a boiler on a steamboat racing with another on
the Mississippi river. The case was held to coma within and to be
decided by the thirteenth section of the act of July 7, 1838 (5 Stat.
306), as follows:
"In ail suits and actions against proprletors of steamboats for injury aris-
Ing to persons or property from the bursting of the boiler of any steamboat,
or the collapse of a flue or other dangerous escape of steam, the fact of sucb
bursting, collapse or injurious escape of steam shall be taken as fuU prima
facie évidence sufflcient to charge the défendant or those in his employ with
négligence, until he shall show that no négligence has been committed by
him or those in Us employ."
The other case quoted by him is The City of Panama, loi U. S. 462,
25 L. Ed. 1061. In that case the court says :
"Owners of vessels engaged in carrying passengers assume obligations
Bomewhat différent from those whose vessels are employed as common car-
riers of merchandise. Obligations of the kind in the former case are in some
125 F.— 47
738 125 FEDERAL BHPOETEK.
few respects, less extenslye and more quallfled than In the latter, as the
owners pf the vessel carrytng passengers are not InsurerS of the lives of their
passengers, nor eteû of théir safety, but In most other respects the obligations
açsumed are equally comiprehenslve and eveii more stringent."
In Simmons v. New Bedford, etc., Steamboat Co., 97 Mass. 367, 93
Atn. Dec. 99, the court stated the law thus :
"A, carrier of passengers for hire la not» like a common carrier of goods,
an Insurer agalnst everything but the act of God and public enemies. He
Is not held to take every possible précaution agalnst danger, for to require
that would make him an Insurer to the samc estent as the carrier of goods,
and might oblige him to adopt a course of conduct Inconsistent with economy
and speed esspptial to the proper disposai of hls business. ,But he Is bound
to use the utnîost' caré whlch Is consistent wlth the nature |of and extent of
the business in tvhich he is engaged, In the providing of safe, sufflclent, and
sultàble vehlcies or vessçls and ptheir necessary and appropriate meaus of
transportatlon, as well as Ih the management of the same, and he making
such reasonable arrangements as a prudent man would make to guard agalnst
ail dangers from wha*eyer source arlslng whlch may naturally and aceording
to the usual course of things be expected to occur."
In Ingalls v. Bills, 9 Metc. (Mass.) 7, 43 Am. Dec. 346, the court,
after stating the law with regard to carriers of goods, says:
"But In regard to the carriage of passengers the same princlples of law
hâve not been applled, and for the obvious reason that a great distinction
exists between persons and goods; the piassengers being able to take care of
themselves and of exerclslng that vigilance and foresight in the maintenance
of their rights whlch tbe owners of goods cannot do, who hâve Intrusted them
to others."
So, also, in Tood v. Railway Co., 7 Allen, 207, 83 Am. Dec. 679:
"If passengers yoluntarlly take exposed positions wlth no occasion therefor,
and no inducement thereto caused by the managers of the road, except a baro
llcense by nonlnterference, or express permission of the conductor, they take
the spécial risk of the position on themselves."
And in Hickey v. Railway Co., 14 AUen, 429:
"It Is equally the duty of the passenger to avold ail
unnecessary risks."
See, also, our own case of Kiniball v. Palmer, 80 Fed. 240, 25 C. C.
A. 394, to the saniQ efïect; and in the same volume, Chicago, etc.,
Railway Co. v. Myers, 80 Fed. 361, 25 C. C. A. 486. In this last case
it is said: , ;
"If a passenger of mature âge leaves the place whlch he knows has been
provided for him, and» without any occasion ,for so doing, or to gratify hls
cijrioslty, goes to another, where the, dangers are greater, or places hlmself
in a dangerous attitude, T^hlch he wâs not Intended tô assume, or if he dis-
obeys any reasonable régulation of the carrier, It should be held that he as-
sumes whatever ipcreased risk of Injury is Incurred In so doing."
Keeping in mind this qualification of the broàd language of his
honor the District Judge, let us examine the undisputed facts in this
record. In ail the disputed facts We recognize the force and value of
his conclusions. The libelànt, a man of more than ordinary intelli-
gence and éducation, watched for some hours the opération of dis-
mantling the structures on the ship. He saw and understood the
method used in throwing overboard the larger pièces of timber, and
saw that when they struck the water the end in the water went aft,
and the end on the vessel canted forward on the rail. As he had full
ELDER DEMPSTER SHIPPING CO. V. POUPPIET. 739
opportunity of seeing ail this from his position on the bridge, he must
hâve seen the précautions which the men at work took when the tim-
ber was pushed over the rail into the water. He must also hâve seen
and fully realized the danger attending thèse opérations. He was in
a place of perfect safety on the bridge, and as the work was proceed-
ing rapidly he could easily realize that the necessity for him to remain
in this place of safety would soon cease. He was not confîned on the
bridge. He could move about upon it and take a moderate degree of
exercise on it. The bridge was seven or eight feet wide and the
whole width of the ship in length. After observing for nearly a whole
day what was done and how it was done by the men at work, he left
the bridge, and went down to the scène of opérations. On both sides
of the deck gangs of men were tearing down and moving parts of the
structures and putting them overboard. He went in close proximity
to them. If he did not closely observe them, and keep his attention
alive so as to take précautions when threatened with danger, it was
his own neglect for not doing so. The gangs of men were at the
same work which he had seen them at ail that day. Why did he go
there ? He knew that on the bridge he was safe. He could not avoid
knowing that on the Monténégro, where the work was going on, he
was in more or less danger. There certainly was no necessity for him
to go down upon this deck. He did it voluntarily. If he went there
from curiosity, or to take exercise, or from any other motive, he was
using his right as a reasonable being, but at the same time he as-
sumed the risk, He could only hâve been prevented from doing that
which he did by being shown the danger, which was unnecessary, as
he could himself see it without being told, or by being forcibly ar-
rested, carried back to the cabin, and confined there — a doubtful pro-
ceeding with regard to one not one of the crew. This was not a pas-
senger ship, but a freight ship, on which the libelant had gone from
New Orléans to South Africa in charge of the cargo of mules, and he
was returning on her with full knowledge that the business for which
she was intended was carrying freight. The work which was going on
to remove the temporary fîttings no longer needed was necessary and
proper work on a freight steamer, and there was no concealed danger
connected with it. The libelant was not an inexperienced landsman
freshly come aboard, but had lived aboard the ship for over three
months. He had been watching the work for hours, and must hâve
understood the danger as well as those engaged on it. There were
only three passengers, and they were quite naturally allowed greater
freedom of action than would be allowed on an ordinary passenger
ship. Can it be said that under thèse peculiar and unusual circum-
stances the shipowner owed a duty to the libelant tO warn him of that
which he already knew, and to station a man to pull him out of a
danger from which he, of his own prudence, should hâve retreated?
Unless there was a duty there was no négligence, and unless there
was négligence there can be no recovery. The fact that the beam, one
end of which was in the water down at least 23 feet below the top
of the rail, struck the libelant at ail supports the testimony of the
master, the ship's doctor, the boatswain, and one of the sailors that
the libelant was near the rail, and that he had come from the middle
740 125 FEDERAL REPORTER,
of the deck to the rail to look and see what would happen when the
beam struck the water.
We are constrained to reach a conclusion différent from that of
the coyrt below. In our opinion, the proximate cause of the injury
was the act of the libelant himself. He was in a place in which he had
no occasion to be, certainly no necessity for being. He sufïered the
conséquence of :his own act.
The decree of the court below îs reversed, and the case is re-
manded to that court with instructions to enter a decree dismissing
the libel, with costs. Reversed^
On Pétition for Rehearing.
(November 20, 1903.)
PER CURIAM. This case was ably and exhaustively argued be-
fore us, and has received careful attention. We hâve examined the
pétition of the appellee for a rehearing, which has been presented, and
see no reason for reconsidering our conclusion. The prayer of the
pétition is denied.
Libelant's application for a writ of certiorari from the Suprême
Court denied.
BOYCE V. CONTINENTAL WIRB CO. et al. WOLFB et al. v. BOYOE et al.
AMERICAN STEEL & WIKE CO. OF NEW JERSEY v. WAKE. SAMH
V. WOLPE (two cases). SAMB v. WOLFE et al. (two cases).
(Circuit Court of Appeals, Seventh Circuit October 6, 1903.)
Nos. 965, 966, 967, 968, 970.
L MoRTOAOES— Apfointmekt op Rkcbiveb in FoRECLOsaRE Suit— RiGHT to
Net Income.
When a recelver bas been appolnted In a suit for the foreclosure of a
mortgage on the ground, either admitted or establlshed, of the in-
solvency of the mortgagor and the inadequacy of the security, the équi-
table right of possession and prima facie the right to the net income
derlved from the property is in the mortgagee.
8. Samb— EsTOPPBL— Opposino Ose of Propbrty. ♦
A recelver was appolnted for the manufacturlng plant of a corpora-
tion in a suit to foreclose a mortgage thereon, with the consent of the
mortgagor, on the ground that it was insolvent, and had no other prop-
erty, and that the security was inadéquate. Subsequently certain judg-
ment creditors Intervened and jolned with the mortgagor in a pétition
for an order authorlzing the recelver to operate the plant under an
offer made by a third party. The sole dwner of the mortgage bonds ap-
peared and opposed such order, but the same was made, and the plant
operated thereunder during the term of the receivership. The proceeds
reallzed from the sale of the property left a deficiency due on the mort-
gage debt WeU, that the mortgagee was not estopped to assert its
prier right to the net eamings of the receivership as agalnst the judg-
ment creditors by the fact that it opposed the use of the property by
which such earnings were made, nor were its motives In such opposi-
tion materlal.
f 1. Foreclosure of mortgages in fédéral courts, see note to Seattle, L. S.
& E. Ry. Co. V. Union Trust Co., 24 C. C. A. 523.
See Mortgages, vol. 25, Cent Dlg. § 1384.
BOYCE V. CONTINENTAL WIRE CO. 741
8. Same— Neckssitt of Deficienct Decree.
A deficiency decree, équivalent to a judgment at law, In favor of a
mortgagee after a foreelosure sale of the mortgaged property, is not
essential to entitle the mortgagee to assert the right to the earnings of
the recelvership in the foreelosure suit, which constitute a fund for
distribution by the court in such suit.
Appeals from the Circuit Court of the United States for the South-
ern District of Illinois.
In 1896 the Continental Wire Company made a trust deed of Its manufac-
turing plant to Boyce, trustée, to secure the payment of 125 bonds, of $1,000
each. The trust deed dld not speclflcally pledge the rents and profits, but it
did provide that on default the trustée might take possession.
The indebtedness having become due and remaining unpaid, the trustée
In October, 1898, flled his bill to foreclose, making the Continental Wire Com-
pany sole défendant. The bill showed the Insolvency of the défendant, al-
leged the lack of other property out of which the debt could be collected and
the insufficiency of the trust estate, and prayed for the appointment of a re-
ceiver to take possession of the plant. The défendant appeared, and con-
sented to the appointment of a receiver, and Boyce was thereupon appointed.
He was empowered to collect the rents, issues, and profits of the premises,
but he was not directed nor specifically authorized to operate or contract with
respect to the opération of the plant; and the défendant surrendered posses-
sion to the receiver.
In November, 1899, appellees Ware, Wolfe, and Wolfe, judgment creditors
of the Continental Wire Company, asked leave to Intervene. And thereupon
they joined the Continental Wire Company in a pétition that the court direct
the receiver to operate the plant in accordance with a proposition made by
the Merchants' Wire & Nail Company. That company proposed to furnish
money and material, and to pay the receiver $2,000 a month in addition, if
the receiver would run the mill on such goods and in such manner as the
Company directed, and turn over to it the product. The petitioners repre-
sented that an acceptance of the proposition would benefit ail creditors, and
that if the plant were put lu operative condition it would bring enough on
foreelosure sale to pay the debt secured by the trust deed. Thereupon the
American Steel & Wire Company, appellant, appeared, and showed that it
owned and held ail the bonds, and it objected to the reeeiver's operating the
plant "because (1) said receiver was appointed for the sole purpose of collect-
ing, preserving, and caring for the mortgaged premises; (2) said receiver
has no power under the order of appointment to borrow money wherewith
to operate the property; (3) the court has no power to authorize said receiver
to undertake the opération of said plant, or to conduct the business of manu-
facturing wire or other products, or to borrow money or to ineur any liability
for such purpose, the property In question being charged with no public In-
terest or duty, and the receiver possessing no function other than that of a
custodian of said property; (4) to allow said receiver to operate said plant
or to borrow money for such purpose or to incur any liability on that account
might subject the mortgaged premises to the payment of losses thereby in-
curred, and would endanger the lien of the mortgage, and hazard the se-
curity of your petitloner as holder of said bonds." The court overruled thèse
objections, and ordered the receiver to operate the plant under the directions
of the Merchants' Wire & Nail Company, with the limitation, however, that
the mortgaged property should not be liable in any way for the expense of
opération. Appellant moved to vacate the order, stating as an additional
ground that the opération of the plant would depreciate the value of the wire
nail and barbed wire machines much more than to allow the machinery to
stand idle, and supported the motion by the affldavlt of a mechanical engineer
and patentée of a wire machine. Thls motion was never passed upon. De-
cember 30, 1^9, a decree of foreelosure and sale was entered, adjudging
$148,000 to be due upon appellant's bonds. At the sale, February 6, 1900, the
property was sold for $100,000. The report of sale, showing a balance of
$60,000 due on appellant's bonds after payment of costs and compensation
to the master, the receiver, and solicitors, was confirraed March 15, 1900.
742 125 FHDEBAL KBPOETEB,
Appellant on June 1, 1900, petitidned for the entry of a defleiency deeree, but
the court neVer ruled on It. The recelver continued to opéra te thé plant under
the court's order untll the expiration of the rédemption perlod, and surren-
dered the plant to the purchaser on May 7, 1901. The recelver then had on
hand about $28,000 as the net profit from operating^ the plant. On May 18,
1901, appellant flled Its pétition that the balance In the recelver's hands be
applied on Its defleiency. Appellees Ware, Wolfe, and Wolfe resisted this,
and flled cross-petltlons. By its deeree of June 26, 1902, fi-om whlch thèse
appeals are taken, the court, after allowing certain sums to the recelver and
his soliciter, awarded the balance to appellees Ware, Wolfe, and Wolfe.
Logan Hay and Harry B. Hurd, for appellants.
P. B. Warren, for appellees.
Before JENKINS, GROSSCUP, and BAKER, Circuit Judges.
BAKER, Circuit Judge, after stating the case as above, delivered
the opinion of the court.
The bill was against the mortgagor corporation alone. It ap-
peared and consented to the appointment of a receiver. It thus vir-
tually confessed at the beginning, as it did explicitly in the fore-
closure deeree, its insolvency, the lack of other property, and the in-
suiiSciency of the mortgaged estate to pay appellant's bonds. By
this action, and by voluntarily. turning over the plant to the receiver,
the mortgagor impregnably established, as again,st itself, that at the
time the bill was fîled its right of possession had ceased. And the
facts respecting insolvency, inadequacy of the security, and the nature
of the property would hâve warfanted the court in taking the pos-
session away from the moi'tgagor over its résistance. Kountze v.
Omaha Hôtel Co., 107 U. S. 378, 2 Sup. Ct. 911, 27 h. Ed. 609;
Grant v. Phœnix Life Ins. Co., 121 U. S. 105, 7 Sup. Ct. 841, 30 L.
Ed. 905 ; First National Bank v. Illinois Steel Co., 174 111. 140, 51
N. E. 200.
In the original order of appointment the receiver was authorized
to collect the rents, issues, and profits of the trust estate. But there
were none, for the plant was held and run by the mortgagor until
surrendered to the receiver. If, however, after the suit was pending
and before the receiver was appointed, the mortgagor had leased the
plant, it would hâve been the duty of the receiver under the original
order not only to seize the corpus, but to collect the rents, and, the
insolvency of the mortgagor and the inadequacy of the security being
established, to apply the net income, under the court's direction,
upon the remainder of the mortgage debt.
When the judgment creditors, a year later, came into the case, they
adopted the situation as it then existed. They joined the mortgagor
in asking the court, through its oflficer, the receiver, to operate the
plant. That presented an administrative question for the court to
solve as it thought for the best int.erest of ail the parties. And in
the absence of waiver or estoppèl, the fruits of possession should go
according to priority of right of possession, no matter what party
presented the administrative question. Daniell's Chan. Prac. (6th
Am. Ed.) 1740; Miltenbèrger y. Logansport R. Co., 106 U. S. 286,
I Sup. Ct. 140, 27 h. Ed. 117; Cross v. Will County Nat. Bank, 177
111. 33, 52 N. E. 322 ; Williamson v, Gerlach, 41 Ohio St. 682.
BOTCE V. CONTINENTAL WIBE CO. 743
The Judgment creditors assert that a waiver or an estoppel arose
against appellant by its filing its objections to the pétition for the
opération of the plant. The first two grounds of objection showed
that the receiver could not operate the plant without a further order
from the court. This was recognized as true by the appellees and
the court, and no party has since changed his attitude with respect to
that fact. The third ground raised the question whether, the mort-
gagor being insolvent and the security inadéquate, the court could
lawfully operate a private manufacturing plant over the objection of
the mortgagee whose right of possession had ripened. Surely a
party is not to be penalized for propounding a question of law which
the court thinks is either unsound or irrelevant under the circum-
stances. The fourth urged the court not to imperil the already in-
adéquate security by allowing receiver's certificates or expenses of
opération to become liens ahead of the mortgage. And the court
accordingly limited the order. Thèse objections of appellant did
not create an estoppel in favor of the judgment creditors. Appel-
lant's représentations were made to the court, not to them. They
took no steps relying upon assurances by appellant. And the order
was made despite the objections. Nor did appellant's opposition to
the opération of the plant constitute a waiver of its claim arising
from its priority of right of possession. Appellant said to the court,
in eflfect: "The receiver cannot operate the plant unless the orig-
inal order of appointment is broadened. That should not be donc,
because you hâve no right to run the plant ; but, if you think other-
wise, you ought not to create liens ahead of mine." This was far
from saying: "If you sustain my objections, thèse judgment cred-
itors, of course, will get nothing; but if you overrule them, I, who
equitably am the owner and entitled to the possession of this plant,
agrée that the judgment creditors shall hâve ail that may be made
and I will bear the loss from dépréciation."
Appellees say it was an "open secret" in the court below that ap-
pellant is a "trust," and that its opposition was inspired by its wish to
prevent the product of this plant from coming into compétition with'
its goods. Even if this was established by the record, it would be
irrelevant. A court should act upon the merits of demurrers, mo-
tions, and objections, and not upon the purposes of parties in pre-
senting them.
It is claimed that the judgment creditors made an "équitable levy"
upon the rents, issues, and profits by filing their pétition for the opér-
ation of the plant. When the pétition was filed there was nothing to
seize but the corpus, and it equitably belonged to appellant, and was
already in the hands of the court to be devoted to the payment of ap-
pellant's bonds. The judgment creditors did not file the pétition.
They joined the appellee mortgagor in asking that the plant be
operated. If the mortgagor alone had presented the same facts,
the court, viewing the situation as it did, probably would hâve made
the same order; and then it would scarcely be said that the mort-
gagor should be paid the rents, issues, and profits in préférence to the
mortgagee. How the equities are changed by the joinder of the
judgment creditors, who claim through the mortgagor, is not ap-
744 125 FEDBBAL REPORTEE.
parent to us. And, at ail events, the petitioners did not présent the
issue that they were entîtled to the fruits of possession despite the in-
solvency of the mortgagor and the inadequacy of the trust estate;
but, on the contrary, they explicitly represented to the court that
in their judgment the plahtj if operated, would bring enough to pay
the mortgage debt in full, and leave something over for other cred-
itors. On that basis the order was secured.
Finally, as a technical obstacle to reversai, appellees insist that ap-
pellant can hâve no relief, bècause a deficiency decree was not, and
could not be, entered in its favor. If a deficiency decree could prop-
erly be entered in favor of a bondholder in a suit by the trustée, ap-.
pellant made its motion promptly, and is not to be prejudiced by the
court's passing over the matter and entering an adverse final decree
of distribution. But this is net a case in which it is necessary to
hâve a deficiency decree (équivalent to a judgment at law) under
which by an exécution the marshal may bring outside property into_
court. The fund in controversy was already in court in the very
cause in which ail the contestants were appearing.
The decree is rêver sed, and the cause is remanded, with the di-
rection to award the fund to appellant.
LASSBN V. BAYLISS et al.
(Circuit Court of Appeals, Third Circuit. December 1, 1903.)
No. 15.
1. Beokers— Commissions— Performance of Contbact— Burden of Proof.
Where a broker's employaient contract for the sale of certain land
provided that it should be vold in case of a failure of the agreement of
sale, it was incumbent on the broker, in an action for commissions, to
show that the agreement of sale was performed by the purchasers, or
by some one who took their place under the agreement.
In Error to the Circuit Court of the United States for the Dis-
trict of New Jersey.
Edward Stetson Grifîing, for plaintifï in error.
Addison Ely, for défendants in error.
Before ACHESON, DALLAS and GRAY, Circuit Judges.
•
ACHESON, Circuit Judge. To entitle the plaintifï to recover
his commissions as broker under the written contract of January
13, iQoo, between him and the défendants, it was incumbent upon the
plaintifï to show that the agreement of sale between the défendants
as vendors and Eakins and Dignowity as purchasers of the described
land had been perforined by those purchasers, or by some one who
took their place, under that agreement of sale. The contract for the
commissions hère sued for concludes with the foUowing provision,
namely, "And a failure of said agreement of sale shall make this
agreement void." Now, it affirmatively appeared by the clearest
proof that the agreement of sale between the défendants and Eakins
and Dignowity (evidenced by the articles of agreement dated Jan-
BRIGGS V. CHICAGO A N. W. BT. OO. 745
uary 15, 1900) was not carried out, but failed by reason of the de-
faults of the purchasers, Eakins and Dignowity. The subséquent
transaction between Bayliss and Schuler, on the one side, and Messrs.
Ely, Bell, and McKenzie, on the other side, involved the sale of con-
siderably more land than was embraced in the agreements of Jan-
uary 13 and 15, 1900, and the sale to Ely and his associâtes was
upon terms of purchase materially différent from the terms of the
agreement of January 15, 1900. Certainly the burden of proof was
upon the plaintifï to show either that by the consent of the parties
in interest Ely and his associâtes were substituted as purchasers in
place CI Eakins and Dignowity, and that the agreement with the
latter was carried out in a modified form agreed on by the parties in
interest, or that the transaction with Ely and his associâtes was a
device to defraud the plaintiff out of his commissions. The évidence,
we think, failed to sustain either of thèse propositions. The plain-
tiff's own prooîs were inconclusive, and we are of the opinion that
upon the uncontradicted évidence the court was right in directing a
verdict for the défendants.
Upon an attentive examination we are not convinced that any of
the various assignments of error relating to the rulings of the court
during the progress of the trial should be sustained.
The judgment of the Circuit Court is afïirmed.
BRIGGS V. CHICAGO & N. W. EY. 00.
(Circuit Court of Appeals, Eighth Circuit. October 26, 1903.)
No. 1,868.
1. Mastek and Bervant^Railkoads— Death dp Fireman— Equipment of
Engine— PiLOTs.
Where a raiiroad company necessarily substituted a short or "stub
pilot" In place of a long pllot prevlously used on an engine engagea in
Interstate trafflc. In order to equip the engine with an automatic coupler,
as requlred by Act Cong. March 2, 1893 (27 Stat. 531, c. 196 [U. S. Comp.
St. 1901, p. 3174]), such change dld not constitute actlonable négligence,
thovigh charged to hâve been the cause of the overturnlng of the engine,
and the kilUng of plaintlfC's intestate, who was fireman thereon, in a col-
lision with a bunch of cattle on the track.
2. Samb — Proximatk Caues.
Where, at the tlme of a collision between a passenger train and a bunch
of over 100 cattle on the track, some of which were lylng down, resulting
in the fireman's death, the train was runnlng at the rate of 35 miles per
hour, and, by reason of the darkness, neither the fireman nor the engineer
saw the cattle in tlme to arrest the motion of the train to any considérable
estent before the cattle were struck, the fact that the engine was
equipped with a stub pilot, which was less able to throw cattle from the
track than a long pilot, which had been prevlously taken from the engine,
constltuted no substantial évidence that the use of a stub pilot was the
proximate cause of the fireman's death.
8, Samb— Exclusion op Evidence— Review.
Where a witness was not permitted to answer a question on objection,
and the record did not disclose what answer was expected, the objection
will not be reviewed on appeal.
î 3. See Appeal and Error, vol. 3, Cent. Dlg. S 2905.
746 125 FEDBfeAL REPORTER.
In Erfof to the Circuit Court ôfthe United States foi- the District
of Sôuth Dakota.
T. H. Nul], for plaintiff in erfor.
Coe I. Crawford, for défendant in error.
Before SANBORN, THAYER, and VAN DEVAiSÎTER, Circuit
Judges.
THAYER, Circuit Judge. This is an action for personal injuries
which was brought by Eva L. Briggs, the plaintifï in error, against
the Chicago & Northwestern Railway Company, the défendant in
error, in the Circuit Court of the United States for the District of
South Dakota. The facts, as they were developed at the trial, are
few and simple. The: plaintiflf's huçband was a locomotive fireman
on a passenger engine belonging to the défendant company, which
ran between Huron and Pierre, in the state of South Dakota. On
the night of July 19, 1900, in making the trip from Huron to Pierre,
the engine ran into a herd of over 100 head of cattle; the resuit
being that it was derailed and overturned, and the plaintifï's hus-
band was killed. Shé. brought this action, alleging as a ground of
recovery that the engine in question was not equipped with a suit-
able pilot to throw cattle and horses from the traçktwhen they were
encountered. At the conclusion of plaintifif's évidence, the trial court
directed a verdict for the défendant, and such action on its part is
assigned for error.
The following facts are undisputed : The engine which was over-
turned was a light passenger engine. Originally it had been
equipped with a long pilot (that is, one which projected some dis-
tance ahead of the frame of the engine), but, to comply with the act
of Congreès of March 2, 1893 (27 Stat. 531, c. 196 [U. S. Comp. St.
1901, p. 3174]), requiring common carriers to equip cars used in mov-
ing interstate trafific with couplers coupling automatically by impact,
it became ttecessary to remove the long pilot, and substitute a
shorter or "stub" pilot, as it is termed. The engine could not be
equipped with! an automatic coupler without making this change in
the pilot; The change was eflfected some time in June, 1900, and
the plaintifï's husband continued to serve as a fireman on the engine
from that time forward until he was killed. The stub pilot, at the
time of the accident, was in good order, and in no respect def active
or out of repair. After the passage of the act of Congress above
mentioned, and for at least one or two years prior to the accident,
the défendant Company, had been removing long pilots from its en-
gines, an4 sutstituting stub pilots in lieu thereof, so that automatic
coupling appliances might be attached to the front end of their en-
gines as well as to thé rear end. Indeed, "stub pilots," as they
are termed, such as the engine in question wâs provided with, were
in gênerai use on railroads wherever the Janney automatic coupling
appliances; were used. At the time of the accident the train was run-
ning at the rate of 35 miles per hour. There were over 100 head of
cattle bunched on the track, some of them lying down, and some
standing up; and, dwihg to the darkness of the night, neither the
BRIGGS V. CHICAGO & N. W. ET. CO. 747
plaintiff's husband nor the engineer saw them in time to stop the
train or to arrest its motion to any considérable extent before they
were struck.
On this State of facts, we are of opinion that no error was com-
mitted by the learned trial judge in directing a verdict for the défend-
ant. In the fîrst place, we do not perceive that there was any sub-
stantial évidence from which a jury of 12 reasonable men could hâve
inferred or found that the défendant company was guilty of culpable
négligence; that is to say, of a want of reasonable or ordinary care.
It was its duty, or at least its privilège, to equip its engine, as it did,
with an automatic coupling appliance, which it could only do by
removing the long pilot and substituting a shorter one. The shorter
pilot which it adopted was then in gênerai use on other roads, and
was regarded as a reasonably safe appliance, and at the time of the
accident it was in no wise out of repair. As a gênerai rule, a railroad
company is not required to use upon ail of its cars the safest possible
appliances, or those of the latest and most improved pattern, but is
at liberty to make use of such appliances as are at the time in gên-
erai use on other well-managed railroads, and are of a kind that are
regarded as reasonably safe. Northern Pacific Railraad Company
V. Blake, 11 C. C. A. 93, 63 Fed. 45. In the case in hand it appears
that stub pilots are in gênerai use, and are the only ones that can
be successfully employed when engines are fitted with automatic
couplers. In what respect, then, was the défendant company guilty
of any négligence? Counsel for the plaintifï in error says that he
concèdes that the company was not négligent in leaving its road
unfenced, but he suggests that as the engine in question happened
to be employed at the time in what is termed "open range country,"
where cattle roamed at will, the défendant company was négligent
in removing the long pilot and substituting a shorter one. We can-
not adopt this view. As locomotive engines are liable to be used
on any portion of a railroad, and as they may be needed at any mo-,
ment to handle interstate trafïic, we think that an Interstate carrier
like the défendant company is entitled to hâve ail of its engines
so equipped that they may at any time be used in such service with-
out violation of the act of Congress, and that it cannot be found
guilty of négligence in so doing.
In the second place, we feel disposed to agrée with the views which
were expressed by the lower court when directing a verdict for the
défendant — that there was no substantial évidence tending to show
that the death of the plaintifif's husband was proximately caused
or occasioned by the fact that the engine was not provided with a
long pilot. It is most reasonable to believe that if the engine had
been provided with a long pilot, and had run into a herd of 100
head of cattle asleep on the track, going at a speed of 35 miles an
hour, the resuit would hâve been a derailment and the overthrow
of the engine. That such would not hâve been the resuit if it had
had a long pilot, instead of a short one, seems to us to be mère spéc-
ulation, or, in other words, an inference resting upon no substantial
basis of fact such as will serve to sustain a verdict.
748 125 FEDERAL RKPOKTKR.
Counsel for the plaintiff in error calls our attention to the fact
that he asked one of the plaintifï's witnesses, nattiely, the engineer
of the train, whether, if the engine in question had been equipped
with a long pilot, such as was at first attached to it, it would hâve
cleared the track of cattle standing up when struck; and he com-
plains because the witness was not permitted to answer the question.
We think, however, that if he had been permitted to answer, and
had replied in a manner favorable to the plaintiff, the answer would
bave been a mère guess or surmise on his part, rather than crédible
expert testimony on which the jury could hâve lawfully founded a
verdict in favor of the plaintiff, Such testimony, in our opinion,
would hâve been in the highest degree spéculative and unreliable.
The question, however, was left unanswered, and the fact that the
record fails to disclose in any form what answer the engineer would
hâve given to this question — whether favorable or unfavorable to
the plaintiff — if he had been permitted to answer it, precludes this
court from noticing the alleged error, or reversing the judgment
because the witness was not permitted to answer it, since, to estab-
lish a réversible error in the rejection of évidence, it must be made
to appear afïàrmatively that the excluded évidence was compétent,
and of such materiality and weight that its exclusion has probably
caused injury to the party offering the same. Atchison, Topeka &
Santa Fe RailrOad Co. v. Phipps, 125 Fed. 478 (decided at the prés-
ent term of this court). See, also, Packet Company v. Clough, 20
Wall. 528, 542, 22 L. Ed. 40*5. There is in the case before us no
évidence that the failure to provide the engine in question with a
long pilot, in place of the stub pilot, was the proximate cause of the
injury.
The judgment below must be afïirmed. It is so ordered.
AJAX FOEGE CO. T. PETTIBONE, MULLIKEN & 00. et al.
(Circuit Court of Appeals, Seventh Circuit October 6, 1903.)
No. 962.
1. Patents— Infeingement—Railw AT Switch Rods. ^
The Calvert patent, No. 651,413, for an adjùstable switch rod, con-
Btrued, and, as limited by thé prlor art and the amendment of the claims
In the patent office, held not infrlnged by the devlce shown In the Strom
patent, No. 625,961, qonceding priority of invention to Calvert.
Appeal from the Circuit Court of the United States for the North-
ern Division of the Northern District of Illinois.
James H. Raymond, fdr appellant.
William H. Dyrenfôrth, for appellees.
Before JÊNKINS and BAKER, Circuit Judges, and BUNN, Dis-
trict Judge. , ' !,
BAKER, Circuit Judgë. Appellant unsuccessfuUy sought to hold
appellees for infringemetit of lettérs patent No. 651,413, June 12,
1900, to Calvert, assignoir, for improveiïients iti switch rods.
749
The structure that is exhibited in the drawings and described in
the spécification belongs to a class of appliances for adjusting the
operative length of the tiebar that couples the point rails of a split
switch, and consists of the following éléments in combination: A
rod having an ear thereon extending parallel therewith to form a
jaw ; a circular opening in the ear ; a notch on one side of this open-
ing ; a chair or clip rigidly attached to the point rail and formed to fit
into the jaw of the rod; a circular opening in the part of the chair
that fits into the jaw ; a disk that sits in the circular opening in the
chair ; an eccentric boit hole through this disk ; an extension or
flange to this disk, which extension is circular and concentric with the
boit hole through the disk, has a notched periphery, and fits into the
circular opening in the ear ; a pin to engage any peripheral notch with
the notch in the opening in the ear when they are in register ; and a
pivot boit to lock the chair in the jaw of the rod, which pivot boit
passes through the boit hole in the disk and its extension and through
a boit hole in the lower jaw of the rod. The adjustment of the point
rails of the switch is accomplished by setting the eccentric boit hole
of the disk towards or from the center of the track and locking the
parts in place with the pin and pivot boit.
Calvert not only thought that he was entitled to protection in the
spécifie device, but evidently believed that he was the first to invent
any form of adjustable pivot connection between the rod and the
chair, and, of course, the first to employ an eccentric to make the
pivot connection adjustable; for he stated in the spécification:
First. "My invention, broadly stated, consists of an adjustable pivot con-
nection between the switch rod and the chairs, bracliets, or other devices
secured to the switch rail and Connecting the rod therewith. * * * In
effect, the constructions which I hâve herein illustrated and described afïord
an adjustable or movable pivot connection between the switch rod and the
chair, or, more remotely, between the switch rod and the switch rail, which
feature I consider the broad idea of my invention, however it may be em-
bodied in detailed construction."
Second. "An obvions modification of this means of locking and adjusting
the eccentric, and one so simple as to not require illustration herein, is to
hâve the boit at the part where it passes through the rod or the ear and
the cam polygonal in cross-section, so that the boit wlU be in nonrotative
engagement with the rod or ear, while the cam will be in nonrotative en-
gagement with the boit. Such construction would dispense with the exten-
sion and also the pin and washer."
Third. "It is also obvious that the extension may be formed upon a com-
mon axis with the eccentric and any suitable means provided for preventing
rotation of the eccentric about the axis of the pivot boit, such, for instance,
as by the engagement therewith or with the extension thereon of a suitable
device upon the chair."
On his application, which was filed April 5, 1899, Calvert based nine
claims, as follows:
"(1) An adjustable switch rod comprising a reciprocating rod, a chair se-
cured to the switch rail, and an adjustable pivot connection between said
rod and chair, substantially as described.
"(2) An adjustable switch rod comprising a reciprocating rod, a chair se-
cured to the switch rail, an adjustable pivot connection between said rod
and chair, and means for adjusting said connection and locking the same
in any adjusted position, substantially as described.
"(S) An adjustable switch rod comprising a reciprocating rod, a chair
750 125 FEDBBAL BEPOETEE. ,
secured to the swltch rail, and an adjustable eccentrlc or cam interposed
between and Connecting sald rod ànd chàlr, substantlaHy as described.
"(4) An adjustable swltch rod comprising a reclprocatlng rod, a chair
secured to the switch rail, an adjustable eccentrlc or cam interposed
betweén and Connecting sald rod and chair, and means for adjusting said
eccentrlc Or caa and iocliing the same in any adjusted position, substantially
as described.
"(5) An adjustable swltch rod comprising a reclprocatlng rod, a chair
plvoted thereto and rigidly secured to the switch rail, and an adjustable
eccentrlc or cam Interposed between sald rod and chair for adjusting the
relative positions of sald rod and chair, substantially as described.
"(6) An adjustable swltch rod Comprising a reclprocatlng rod, a chair
plvoted thereto and secured to the swltch rail, an adjustable eccentrlc or
cam interposed between sald rod and chair, and means for adjusting sald
eccentrlc or cam and locl^ing the same in any adjusted position, substantially
as described.
"(7) An adjustable swltch rod comprising a reeiproeating rod having an
ear thereon extendlng parallel therewith, a chair fltting in between said ear
and rod, a pivot boit passUig through said rod, ear, and chair, an eccentrlc
worlslng In an openlng in said ear suri;ounding sald boit, and means for
adjusting sald eccentrlc and locking tîië same in any adjnsted position,
substantially as described.
"(8) An adjustable swltch rod comprising a reclprocatlng rod having an
ear thereon extendlng parallel therewith, a chair fltting in between said
ear and rod, a pivot boit passlng through said rod, ear, and chair, an ec-
centric working in an opening in said ear surrounding said boit, a peripheral-
ly notched extension on sald eccentrlc, and means for engaglng and locking
sald extension and eccentrlc In any adjusted position, substantially as
described.
"(9) An adjustable swltch rod comprising a reclprocatlng rod provided wlth
an ear, a pivot boit passlng through said rod and ear, sald ear belng provid-
ed wlth a clrcular openlng concentrlc wlth sald boit and having a notch
in one slde thereof, of v a chair provided wlth a clrcular opening therein
eccentrlc to sald boit, an eccentrlc working In sald openlng, an extension on
sald eccentrlc working In the openlng In the ear and provided wlth perlpheral
notches and a pin adapted to seat In one of sald notches in the extension
when the same registers wlth the notch In the ear, substantially as de-
scribed."
It will be observed that the first two claims attempt to cover
broadly any form of adjustable pivot connection between the rod
and the chair, and the third to the sixth, inclusive, any kind of ad-
justable eccentric. Thèse six claims were manifestly intended to
secure the "broad ideas" stated in the above given quotations from
the spécification. The seventh, eighth, and ninth claims are pro-
gressively doser descriptions of the device disclosed in the drawings
and spécification; but the seventh and eiçhth are somewhat inaccu-
rate in defining the eccentric as "working in the opening in the ear,"
which is the position occupied by the peripherally notched extension.
The ninth îs more accurate in describing the eccentric as working
in the opening in the chair, and the extension as working in the open-
ing in the ear.
April 22, 1899, the Patent OfBce rejected ail the claims on référ-
ence to "patent No. 543,605, Strom, July 30, 1895 (R'ys, Switch Rods),
which shows an adjustable switch rod, in view of patent No. 386,888,
Lounsbery, July 31, 1888 (Drawbars), which shows the spécifie form
of adjustment of applicant. To substitute the spécifie form of ad-
justment of the latter patent for that of the former would not amount
to invention."
AJÂX FORGE CO. V. PETTIBONE, MULLIKEN & 00. 751
The Strom patent, No. 543,605, shows a construction in which a
chair, formed to fit into the jaw of the rod, is rigidly attached to the
switch rail ; in the chair is a séries of holes in a right line that runs
obliquely to the line of the rail ; and the switch rails are adjusted by
moving the rod along the chair and bolting it at the proper point.
Lounsbery exhibited, for use in Connecting a locomotive to its
tender, "a drawbar provided with an eccentric so arranged as to ren-
der possible the shortening of the connection between the engine and
the tender at will." He used a flat plate formed to fit into the jaws
of the drawheads. In the plate, where it extends into the jaws, is
provided a circular opening. In this opening is seated a disk that
has an eccentric boit hole. The disk has a flange, with a notched
periphery, that rests upon the upper surface of the plate. A pin en-
gages any peripheral notch with a notch in the opening when they
are in register. When the disk, with its eccentric boit hole, has
been locked in the desired position in the plate, the whole is in-
serted into the jaw of the drawhead, and the coupling pin is placed in
the boit holes in the jaw and disk.
The examiner, it will be noted, did not cite either of thèse patents
in déniai of the novelty of Calvert's combination ; but he denied in-
vention to the act of transferring Lounsbery's flanged disk from its
plate to the chair of Strom's switch with its adjustable pivot connec-
tion. From the examiner's point of view, the références were un-
doubtedly destructive of Calvert's first six claims ; and also the sev-
enth, eighth, and ninth, unless Calvert limited himself to différences in
structural détails. The position taken by the Patent Office was a
clear notification to the applicant that his broad claims would not be
allowed, and that the remaining ones were not sufiiciently limited to
différences, if any, in détails of construction.
For nearly a year the applicant remained silent. On April ïi, 1900,
he addressed this communication to the Patent Office :
"Cancel ail of the claims, and substitute instead thereof the following:
"(1) The combination with a switch rail, of an adjustable switch rod
comprising a rod having an ear thereon extending parallel therewlth to
form a jaw, a chair fitting in said jaw and secured to said rail, a pivot boit
passing through said rod and chair, an eccentric working in an opening
in said chair and through which the boit passes, and means for adjusting
said eccentric and locking the same in any adjusted position, said eccentric
being supported by said ear, substantlally as deseribed.
"(2) The combination with a switch rail, of an adjustable switch rod com-
prising a rod having an ear thereon extending parallel therewith to form
a jaw, a chair fltting in said jaw and secured to said rail, a pivot boit
passing through said rod and chair, an eccentric working in an opening
In said chair and through which said boit passes, a peripherally notched ex-
tension on said eccentric working in an opening in said ear, and a pin for
engaging one of the notches in said extension and locking the same and the
eccentric in any adjusted position substantlally as deseribed.
"(3) The combination with a switch rail, of an adjustable switch rod
comprising a rod provided with an ear to form a jaw, a pivot boit passing
through said rod, said ear being provided with a circular opening therein
concentric to said boit and having a notch on one side thereof, a chair secured
to said rail and provided with a circular opening therein, an eccentric work-
ing in said opening and through which the pivot boit passes, an extension on
eaid eccentric working In the ear and provided with peripheral notches and
752 125 FEDERAL BEPOETBB.
a pin adapted to seat In one of sald notches in thé extension wlien tlie sa me
reglstei*^ wlth thé notch in the ear, snbstantially as described.
"The foregoing claims hâve now beèn amended so that they are believed
to avoid the références cited.
"The spécifie form of adjustment of the Lounsbery patent is net the
spécifie form of appllcant's. It will be noted that in the Lounsbery patent
the boit pàssing through the eecentric will be subjected to a shearing strain
tending tO eut the same in two or wear it ht a point between the eecentric
and the part to whîch the, boit is seeuredi In applicant's construction, how-
ever, it will be noted that by reason of the support of the eecentric blocU
in the ear, afforded by thé peripherally notched extension, the pivot boit is
practically entirely relièVed of the shearing strain, no matter what the
adjustment the parts may hâve. This is of spécial importance in a switch
rod wheire the boit is subjected to constant service resulting not so much
from the adjnstment of the switch rod as from the strain due to passlng
trains. Furthermore, the combination of the claims as now called for is not
found in either of the prier patents."
On June 12, 1900, the patent was issued with the three claims
worded as in the above amendment.
Appellees are manufacturing an adjustable switch rod under patent
No. 625,961, May 30, 1899, to Strom, assigner. Briefly, the con-
struction consists in placing the Lounsbery flanged disk in a suitable
opening in Strom's old chair, with this single exception, that, instead
of a movable pin to engage the notched periphery of the flange,
Strom employs a stop stud that is permanently secured to the chair.
In his application, filed Februar^ 11, 1899, nearly two months be-
fore Calvert's, Strom, being the inventer of the device of patent No.
543,605, unlike Calvert, did, not claimi broadly every sort of adjust-
able pivot connection, but, evidently unaware of Lounsbery's patent,
he, like Calvert, thought he was the pioneer in employing an eecentric
to make the pivot connection adjustable. On February 20, 1899, the
officiais of the Patent Office rejected Strom's broad claims for want
of invention, as they did Calvert's two months later and on the same
références. Strom filed amended claims, in each of which a perma-
nently fixed stop stud was made an essential élément; and on this
différence in construction the patent was granted.
The record discloses a sharp dispute between Calvert and Strom as
to priority of invention, but, assuming that Calvert is senior, we find
no infringement.
The only basis for the contention that appellees infringc is found*^
in appellant's reading of claim i of the Calvert patent. Appellant
admits that the phrase "said eecentric being supported by said ear"
describes a mâterial élément of the daim, but. insists that the condi-
tion is fulfilled if the ear afifords any support, in any manner, to the
eecentric. It will be remembered that the only différence between
Lounsbery's construction and Strom's is that Strom used a perma-
nently fixed stop instead of a movable pin to engage the notched
flange of the disk. So far as infringement of Calvert's claim i is
concerned, appellees might as well use Lounsbery's very construction,
for Strom and Lounsbery both lock the disk against rotation in its
seat in the chair^by means of a stop between the chair and the notched
flange of the disk, and then, after inëerting the chair, disk, flange,
and pin between the jaws of the rod, place In position the boit that
AJAX FORGE CO. V. PETTIBONE, MULLIKEN & CO. 753
passes through the jaws of the rod and the disk and flange. The disk
is supported against latéral movement by the edges of the opening
in the chair. The chair, with the disk seated therein, is supported
against up and down movement by the jaws of the rod, and is held in
place within the jaws by the boit. So appellant's insistence that the
Strom device infringes a claim wherein an essential condition is that
the "eccentric (the disk) be supported by the ear (the upper jaw ol
the rod)" comes to this, that appellant is entitled to the exclusive use
of that support which the disk gets from the upper jaw of the rod
when the chair, with the disk seated therein, is inserted between the
jaws and bolted in place. But it is a necessary condition, in every old
and common construction in which a member is held between jaws,
that the upper jaw afïord support to the inserted member. So does
the lower jaw. And, if Calvert had nothing else in mind, he should
hâve omitted the limitation. And that is just what appellant's read-
ing of the claim leads to. When counsel assert that claim i is in-
fringed by a combination "of an adjustable switch rod comprising a
rod having an ear thereon extending parallel therewith to form a jaw,
a chair fîtting in the jaw and secured to the rail, a pivot boit passing
through the rod and chair, an eccentric working in an opening in the
chair and through which the boit passes, and means for adjusting the
eccentric and locking the same in any adjusted position," they elimi-
nate the condition that the eccentric be supported by the ear; and
they do not bring it back into the claim by saying that the support,
which the applicant made an essential élément of the daim, is that
support which unavoidably comes from the présence of the other
éléments. To be given the quality of an essential élément, the sup-
port referred to in the claim must be a support that the applicant de-
vised and added tO' the other éléments. Looking alone to the claim,
in. connection with the spécification, we iïnd that the support Calvert
had in mind was the support given to the eccentric (the fîanged disk)
by the insertion of the flange into the opening in the ear.
When the file wrapper and contents are taken into view, the mean-
ing of the limitation is doubly clear. The Patent Office rejected Cal-
vert's broad claims on the ground that there was no invention in put-
ting Lounsbery's eccentric into Strom's chair. Calvert amended
and distinguished his device by adding the élément of supporting the
eccentric by the ear. If he was in good faith, he desired the Patent
Office to understand that his support was différent from that neces-
sarily afforded the Lounsbery eccentric by the upper jaw of the rod.
There is no doubt that the Patent Office so understood his représenta-
tions. Under thèse circumstances, appellant will not be heard to as-
sert that the Patent Office erred in rejecting Calvert's broad claims,
or that we should give to the claims allowed the meaning of those re-
jected. Roemer v. Pettie, 132 U. S. 313, 10 Sup. Ct. 98, 33 L. Ed.
382 ; Phœnix Caster Ce. v. Spiegel, 133 U. S. 360, 10 Sup. Ct. 409,
33 L. Ed. 663.
Appellant urges that the support referred to in claim i cannot be
the support afïorded by tlie insertion of the flange into the opening
in the ear, because claim 2 covers the flange "working in an opening
125 F.-^8
754 -''' ' 125 FEDERAL REPORTEE.
in the ear/' and art interprétation that makes two daims îdentical is
not permissible. If, in order to hold a patentée to his représentations
to the Patent Office, it wère necessary to read two daims aSbèing the
same, no court should hesitate to do so. But the présence of the
same élément in two or more daims does not prove them to be identi-
cal. In this case, daim 2 calls for notches on the flange and a pin
for engàging one of the notches and locking the eccentric in any de-
sired position. Claim i is broader, and calls for any suitable "means
for adjusting the eccentric and locking it in position"— provided that
the flange (which claim i does not require to be notched) fits into an
opening in the ear.
The décree is afiirmed.
SCHMITT T. NELSON VALVE 00. et al.
(Circuit Court of Appeals, Third Circuit October 30, 1903.)
No.44.
1. Patents— AssiGNMKNT—CONTRAOT— Evidence.
Evidence in a suit to restraln the Infrlngement of a patent examlned,
and held to show that complainant, whlle in défendants employ, made
a contract agreelng to asslgn his patent to défendant In considération
of employaient at a salary progresslvely Increasing for 10 years, but to
tenhlnate on his discharge for cause.
S. Same-^Failurb to Fulfilï. Contract.
The owner of a patent -who agrées to assign it, but in violation of his
agreement refuses to do sp, cannot recover from his intended assignée
for an infrlngement.
Acheson, Circuit Judge, dlsseritlng.
Appeal from the Circuit Court of the United States for the Eastern
District of Pennsylvania.
In Equity.
Hector T. Fenton, for appellant.
George Wharton Pepper, for appellee.
Before ACHESON and GRAY, Circuit Judges, and McPHER-
SON, District Judge,
J. B. McPHERSON,; District Judge. This bill in equity was filed
to prevent the infringement' of letters patent Nô. 675,979, issued to
protect an improvement in valves, but it does not présent the usual
questions. No attack is made in this court upon the validity of the
patent, nor is infringement dfenied, in case the complainant's right
to maintain the suit should be upheld. The principal défenses that
were set upin the court below, and are insisted upon hère, are thèse :
First, the défendant cornpany has an équitable title to the patent,
based upon the complainant's express paroi agreement to assign it,
although he h^^s hitherto failed to carry out his contract; and, sec-
ond, the défendant company is manufacturing the valves described
in the patent under an implied license from the complainant. The
facts established by the testimony are so clearly stated by the learned
8CHMITT V. NELSON VALVE CO. «0»
judge of the Circuit Court that we adopt his findings as our own.
His opinion, which is reported in I2i Fed. 93, is as foUows :
"At the time of making this invention, and for some time prier thereto, the
complainant was the superintendant and actlng draftsman of the Nelson
Valve Company. The need for the Improvement which he devised was
brought to his attention by a représentative of the American Product Com-
pany, a buyer of valves, who explained to him that those which had been
theretofore constructed by the Nelson Company were not satisfactory to the
Product Company. He told him why they were not satisfactory, but did not
tell him how they could be made so. He pointed out their détective opéra-
tion, but proposed no remedy for It. He prompted the invention, but he had
no part in making it It was made solely by the plaintiff, but it was his
connection with the Nelson Company which led him to make it. He bas
testlfled that it was conceived at his home, and that he there made a rough
drawlng of it; and I would not be warranted in whoUy discrediting this tes-
timony, either because he was unable to produce the drawing when the évi-
dence was being taken, or because he had not shown it to Mr. Bonnell, an
offlcer of the Nelson Company, to whom, as bas been argued, he would
naturally hâve exhibited it. On the other hand, there is nothing to impeach
the testimony of Mr. Bonnell to the effect that the construction of the valve
which would meet the requirementa of the Product Company was the sub-
ject of a conversation, at the Nelson Company's works, between himself and
the plaintiff, of the Nelson Company, and Mr. Beaston, of the Product Com-
pany, and that suggestions were then made by both Bonnell and Beaston.
This may ail be true, however, and yet the plaintiff's statement as to the
time and place at which the invention was actually made be consistently ac-
cepted. That he, and he only, in fa et made it, Is, in this case, incontestable;
and there Is no necessary conflict between his assertion that he worked it
out at his home and that of Mr. Bonnell that suggestions were made at the
Nelson Company's works. In accordance, therefore, with the testimony of
both of them, I find the faet to be that the invention was conceived, and was
set forth in a rough drawing, at the résidence of the plaintiff, but that sug-
gestions, not efCecting, in the sensé of the patent law, any substantial change
therein, were made at the works of the Nelson Company, before ail the
mechanical détails of the particular valve to be manufactured for the Product
Company were determined. The plaintiff made the working drawing for this
valve in the company's shop, during working hours, and from the company's
material. This drawing the Product Company approved, and at once ordered
thlrty-two valves. The plaintiff gave it to the Nelson Company's pattem
maker, and had patterns and core boxes made from it, in the company's shop,
from its materials, and by its men, who were paid by it for this work. The
défendants contend that 'there was experimenting with this valve for several
days in the company's shop'; but I do not think that what was really done
bas any légal signiflcance. There was no experimenting by the inventer for
the purpose of perfecting his invention. It was found that certain parts of
the construction should be somewhat modified, and this was done, but with-
out making any change in the original design which, with référence te the
patent law, can be regarded as material. The 'valve spindle' was made
heavier, and a hand hole, for convenlence of access to the Interior, was put
in the casing of the valve; but neither of thèse afCected the integrity of the
deyice. Subsequently valves of the same pattern were made and sold to the
Product Company and to another Company; and up to the time when the
complainant left the employ of the Nelson Company, on January 1, 1902, ail
of said valves were manufactured and sold under his direction, supervision,
and orders, and were, by his direction, marked, 'Nelson Valve Ce, S. & B.,
Pat'd,' as, with référence to a certain earlier patent of Schmitt and Bonnell,
ail the valves theretofore manufactured by the Nelson Company had been
marked. The défendants contend that 'the complainant made no suggestion
that he expected compensation (other than the salary he was drawing) for
the manufacture and sale of the sald valves untll about August, 1901'; but the
complainant disputes this statement, and claims that the évidence shows that
'the first valves were not put out until March, 1901'; that 'Schmitt spoke to
Bonnell on the subject at or about that time'; and that the complainant (who
756 125 FEDERAL EBPOKTEE.
was In the employ of défendant untïï December 21, 1901), 'while permitting
the défendant company to make and' Sell thèse valves during the year 1901,
did so on the promise of défendant'? offlcers that it vrould be made ail right.'
For solution of the question of the fact thus presented, we hâve but the
testlmony of Mr. Sçhmitt upon the one side and of Mr. Bonnell upon the
other. The former testified that he had Informed Mr. Bonnell that he had
applied for a patent some time Iri Màrch; that he told him that he wanted
some compensation for bis invention outside of his salary; that Mr. Bonnell
replied, 'We will make thèse valves and adjust thèse small difflculties after-
wards.' Mr. Bonnell testified that "no conversation of that kind ever took
place'; that 'there never was such a" conversation'; that 'there was notliing
of that klhd said'; and that he 'never had any conversation with Mr. Schmitt
in regard to compensation which he was to receive for the use by the com-
pany of this patent' It is only upon the assumption that such a conversa-
tion may hâve occurred and hâve been forgotten by Mr. Bonnell that the
veraclty of both of thèse witnessescan be sustained, and therefore I deem it
to be ineumbent upon me to adopt that assumption. Accordingly, I find that
Mr. Schmitt did tell Mr. Bonnell that he wanted some compensation for his
invention, and that Mr. Bonnell replied, In substance, 'We will proceed manu-
facturing thèse valves, and will straighten this small difflculty later on.' As
to the time at whlch this occurred, the testimony of Mr. Schmitt was very
vague and Inconclusive. He said that his recollectipn was that it took place
after bis application, which is dated March 12, 1901; that he did not reeollect
whether anything had been dohe In the way of manufacturing thèse valves
at the time; and though, immediately afterwards, he said that 'they had not
manufactured them before,' yet this seemlngly positive statement was in
turn followed by a réitération of his previous avowal that he did not recollect
whether thè Company had or had not manufactured or taken any steps
towards the manufacture of thèse new valves prior to the date of the con-
versation. The flrst order was given on pr about the last day of February,
and the first delivery was made on March 11, 1901; and Bonnellfs testlmony
is that Schmitt never advised him that he had applied for the patent prior
to April or May. I therefore cannot say that the conversation : in question
took place before the Nelson Company had, \ylth Schmitt's knowledge and
assent, sold and dèlivered valves embodying his invention. On the contrary,
the testimony as a whole bas conyiîiced mç, and accordingly I flnd, that
whatever was said by Schmitt on the subject of compensation was said after
some of thèse valves had been ordered, made, and dèlivered; that Bonnell
then Indeflnitely postponed considération ,of the matter; and, that Schmitt
acquiesced In that postponçment, witbout any understanding having been
reached as tO whether he wàs to be epmpensated by raising ; his salary as
prior to the màking of this Inventlpn had several times been doue, or by pay-
Ing him a royalty or license fee. The 'statement made by Schmitt that the
'little difflculty' to which Bonnell had referred was 'royalty' is mère surmise.
There is no évidence to support it, kfxâ • Bonnell testified that nothing was
ever said by him to Schmitt about royalty.
"It is admitted on both sides tbat there was a paroi agreement made be-
tween thesé, parties on October 26,, 1901, but they difCer as to what that
agreement was. The undispnted fa,ctB are that a spécial meeting of the di-
rectors of thg Nelson Valve Company, was held upon October 26, 1901, at
which a majorlty of the board and, Mr. Schmitt himself were présent, and
ât which a paper was drawn up, and signed by ail the dlrectors In attend-
ance, as follo^s:
" 'It is agreed by the Nelson Valve, Company, its successors and assigns,
that the salary of H. J. Schmitt gUall be as f ollows from January 1, 1902,
to June 30,, 1904, at the rate of forty-flve dollars per week, payable weekly,
from June ï, 1904, to December 31, 1906, at the rate of fifty, dollars per
week, payable weekly; from Jaauary 1, 1907, to June 30, 1909, fifty-five dol-
lars per week, payable weekly; from July 1, 1909, to December 31, 1911,
sixty dollars per week, payable weekly, for services to be rendered to the
said Valve. Company, Its successors and assigns,
" 'S. F. Houston.
"'B. W. VVard.
" 'Kussell Bonnell.'
SCHMITT V. NELSON VALVE CO. 757
"An attested copy of this paper was given to Schmitt, and subsequenfiy
he requested a copy under the company's seal, and thls was given to Iiim in
substitution for the attested copy. Schmitt has testifled that at this meeting
ail open questions between him and the company were settled, and, in-
dubitably, the assignment of this patent was then agreed upon. But the
parties disagree as to the terms upon which this was to be done. The de-
fendants insist that the paper of October 26, 1901, contained the entire agree-
ment on the part of the company, and that thereupon the défendant orally
agreed to hâve bis counsel prépare and to exécute an assignment to the
Nelson Company of, Inter alia, the patent in suit. ïbe plaintifC, on the other
hand, contends that his agreement to assign was made 'in considération of a
promise of employment for ten years from the following .Tanuary, 1902, at
an increased salary.' The question, brlefly stated, therefore, is, did Schmitt
agrée to assign in considération of the company's undertaking as set forth
in the writing of October 26, 1901, without the assumption by it of any obliga-
tion to continue him in Its employ, other than such as Is by law attached to
such an undertaking, or was it further and additionally agreed that the
company would absolutely, and under ail contingencies and conditions, re-
tain him in its employment for ten years? The question admits of but one
answer. It is hardly conceivable, I think, that the company would, if asked,
hâve promised that for ten years it would keep Schmitt in its service, no
matter what occasion should arlse to justify a détermination of his connection
with it; and though it is true that the paper of October 26, 1901, did not set
out the agreement of Schmitt, yet to me it seems to be évident that it was
intended to présent the entire agreement on the part of the company, and
that the stipulation on its part which the complainant now asserts was made
would not hâve been omitted from it if in fact It had been made. But prob-
abilities and presumptions need not be dwelt upon, for the weight of the
évidence directly upon the subjeet is unquestionably with the défendants.
Bonnell, Ward, and Houston, ail, in substance, testifled that Schmitt ex-
pressed himself as being satisfled with the paper which they signed, and that
in considération of the promise evidenced by it, and of that alone, he agreed
to assign this patent, and I believe, and therefore find, such to be the fact,
notwithstanding the testimony of Schmitt himself to the contrary. I need
not impute to him conscious and dellberate falsification, but the utmost that
can be fairly saidln his exculpation is that some time after the agreement in
question had been actually made he was led to think that the writing was
not as advantageous to him as it should be, and that, dwelling upon thia
thought, he may bave persuaded himself that an additional oral promise had
been made to him, although the fact was otherwise. At ail events, he re-
fused to assign the patent unless the company would covenant for his em-
ployment for ten years, and this it has declined to do.
"I do not deem it necessary to décide whether or not, at any time prior to
the meeting of October 26, 1901, thé Nelson Company had acquired an im-
plied license to manufacture and sell the invention covered by the patent in
suit, or to détermine whether, in point of fact, the valves which it lias mado
and sold embodied that invention; for. In my opinion, the agreement of Octo-
ber 26, 1901, is, in itself, a sufflcient and full défense to this suit. It can-
celed ail claims (if any) then existing, for it settled ail 'open questions'; and
that by virtue thereof the Nelson Company became the équitable owner of
the patent itself seems to me to be scarcely questionable. Walker on Pat.
§ 274; Dalzell v. Dueber Co., 149 U. S. 320, 13 Sup. Ot. 886, 37 L. Ed. 749.
A complainant who has refused performance of a contract cannot be awarded
relief to which, if he had performed it, he would not hâve been entitled."
Upon the facts thus found, we agrée that the défense of équitable
ownership has been estabUshed. It is no doubt true that the com-
plainant made a contract that in some respects was perhaps unwise.
It would hâve been much more to his interest if the agreement had
provided either that the company would not discharge him for lo
years, or thât his increased compensation should be paid to him
whether he remained in the company's service or not, and it might
758 125 FEDERAL EEPOETEK.
have avoided this dispute if the parties had agreed to put their con-
tract in writing. But neither provision formed part of the paroi
agreement that was madé on OctOber 26, 1901, and if we should now
add thèse terms, or any one of them, to the contract, we should 6e
making a new agreement for the parties — an agreement which they
did not choose to make for themselves. The évidence satisfies us
that when the prolongea discussion of October 26th came to an end
ail open questions between the parties had been settled and deter-
mined, and a defînite agreement had been entered into. What the
complainant was to do appears clearly from the téstimony of several
witnesses. He was to assign to the Company two patents — the pat-
ent in suit, and one other — and was to put at the company's disposi-
tion any similar inventions that he might make while he continued in
their employ. He carried but part of his agreement by assigning
immediately one of the patents, for which the deed had already been
drawn and only needed his signature to be complète. The patent
in suit was to be assigned by an instrument which his counsel was to
prépare, and this should have been a paper in the ordinary form, con-
veying the letters patent directly to the défendant company. In-
stead of such a papçr, however, his counsel prepared, and he sub-
mitted to the company, a writing in the following terms :
"The sald Henry J. Schmîtt being the patentée of a certain valve under
letters patent No. 675,979, and the sald Nelson Valve Company belng manu-
facturera of valves and deslring an asslgnment to them of sald letters patent
of sald Henry J. Schmltt, bargain and agcçe as follows:
"In considération of the assignment of sald letters patent to the sald
Nelson Valve Company, It is agreed that the sald Valve Company shall well
and truly pay to the sald Henry J. Schmltt the sum of forty-flve dollars
($45.00) per week, payable weekly, from January Ist, A. D. 1902, to June
SOth, 1904; and at the rate of flfty dollars ($50.00) per week, payable weekly,
from July Ist, 1904, to December 31st, 1906; and at the rate of flfty-flve
dollars ($65.00) per week, payable weekly, from January Ist, 1907, to June
SOth, 1909; and at the rate of slxty dollars ($60.00) per week, payable weekly,
from July Ist, 1909, to December 81st, 1912.
"But It Is understood and agreed that the sald Henry J. Schmltt shall con-
trltote his services dally to the, sald Nelson Valve Company as superin-
ten&nt of the manufacture of valves, from the first day of January, 1902, to
the thlrty-flrst day of December, 1912, provlded that the sald Nelson Valve
Company désire or have use for sald services, but In the event of the fallure
of sald Nelson Valve Company In this regard, then the sald sums or weekly
payments above mentioned shall be due and payable as a considération for the
assignment of the patent rlghts without regard to services rendered or to be
rendered."
Manifestly, this was not the assignment that he had agreed to
make — ^it does not contain a word that could be construed to pass
the title to the patent — but was an attempt to vary the contract of
October 26th by adding a new provision entirely in the complain-
ant's interest. In the correspondence that followed stress seems to
be laid also upon the fact that the company's resolution, in speaking
of "services to be rendered," did not add "as superintendent" or some
similar phrase, and thus left Schmitt's position (so it is said) at the
company's mercy. We do not see the importance of adding the sug-
gested words. The resolution clearly implied an agreement by the
company to avail itself pf Schmitt's "services" ; in other words, to
SCHMITT V. NELSON VALVE CO. 759
continue him in its employ for lo years, and to pay him a weekly
salary for his work. The company did not bind itself to continue
him as superintendent, but it was certainly bound to accept hi? "serv-
ices" as long as he conducted himself properly and furnished no just
ground for discharge. It would be extraordinary to find in such a
contract a positive agreement to keep a servant in one position for
10 years, and in any event to pay him wages, whether he had been
discharged or not, and even if he had been discharged for abundant
cause ; and, while such an agreement may no doubt be made, its un-
usual character is of itself enough to lend strong support to the de-
fendant's contention that in the présent instance the agreement was
not entered into. If it had been a part of the company's obligation,
it is scarcely conceivable that Schmitt would hâve accepted the re so-
lution without insisting that an omitted provision, that was of so great
importance to him, should be plainly expressed.
The complainant relies with apparent confidence upon Dalzell v.
Dueber Co., 149 U. S. 315, 13 Sup. Ct. 886, 37 L. Ed. 749, as sub-
stantially on ail fours with the case at bar. An examination of the
opinion discloses, however, that the points actually decided were,
first, that an oral agreement for the sale and assignment of the right
to obtain a patent for an invention is not within the statute of frauds,
nor within section 4898 of the Revised Statutes [U. S. Comp. St.
1901, p. 3387], requiring assignments of patents to be in writing,
and may be specifically enforced in equity upon sufficient proof there-
of; and, second, that under the évidence then being considered no
such agreement had been proved by évidence sufficiently clear and
satisfactory to justify a court of equity in making a decree of spécifie
performance. A witness for the Dueber Company had testified that
Dalzell had voluntarily oflfered to bave his invention patented in the
name of the company, with no other motive than to pr event- the work-
men of the Dueber Company from injuring it by communicating the
invention to rival companies, and for no other considération than pay-
ment by the Dueber Company of the expense of obtaining the pat-
ents, and without himself receiving any other considération, benefit,
or reward, and with/mt the company'' s &oen iinding itself for anyfixed
time to pay him the increased wages or to Tceep him %n its service.
The phrase that we bave italicized is obviously what the complainant
relies upon to affect the présent controversy, but it is not âppHcable
to the facts as we hâve found them to be established. The essen-
tial difïerence between the two cases is that, while no contract at ail
was proved there, a contract was proved hère on the part of the com-
pany — it is clearly evidenced by the resolution of October 26th — to
pay to the complainant the increased wages for a fîxed time and to
keep him in the company's service. If he had fulfiUed his part of the
bargain, and had continued to render faithful service to the company,
his place and wages were secure for 10 years ; or, at least, if he harf
been improperly discharged, he would hâve had a good cause of ac-
tion upon the contract, and could hâve recovered compensatory dam-
ages. It is true that the contract did not bind the company to retain
him in its service, even though proper grounds for discharge might
exist; but we see nothing in the language just quoted to require
760 125 FEDERAL RBPOETEB,
js to suppose that the Suprême Court of the United States had such
an unusual provision in mind, and inténded to intimate that uniess
Dalzell had been protected against discharge, even if he should de-
serve it, thé agreement v^ould be too unconscionable to be enforced.
This seems to be the whole case. The dispute is simply a question
of fact, and, having determined the question in favor of the défend-
ants, nothing remains except to add, in the language of the court
belbw : "A complainant whq has refused performance of a contract
cannot be awarded relief to which, if he had performed it, he would
ijot hâve been entitled." If this view of the case be correct, it w^ould
obviously be superfluous tO consider the question of implied license.
The decree is affirmed, with costs to the défendants in érror,
ACHESON, Circuit Judge (dissenting). I dissent from this de-
cree. The Ipaper signed at the meeting of October 26, 1901, by the
three directors of the compàny then présent, namely, Houston, Ward,
and Bpnnell, was an ex parte mémorandum. Manifestly it is incom-
plète. It recites no considération. It does not show any contract.
Indeed, uniess supplemented by oral testimony, the paper would not
be évidence at ail against the corporation. Mr. Bonnell was a wit-
ness for the company, and speaking of wl^at occurred at the meeting
of October 26th, and referring to the paper signed by himself and
the two other directors, he testified thus: "Q. 6. I understand
from you that the whole contract was not put down in writing ? A.
No ; it was not." It is plain to me from ail the évidence that a fur-
ther writing was contemplated. The plaintifï was rightly advised
by counsel that he could not safely rely upon the paper which the
three directors signed. No doubt the writing which the plaintiff
submitted to the company was ppen to criticism, but no spécifie objec-
tion was made to it. Goôd faith required the company to specify
wherein it was objectionable, The company, however, took the ar-
bitrary position that the plaintifï must be content with the incom-
plète ex parte mémorandum of October 26th, and should exécute to
the company an absolute assignment of his letters patent. Had the
plaintifï complied with this unfair demand, he would hâve been left
without any adéquate protection. The plaintifï, in my judgment, was
entitled to some writing embpdyîng the whole contract. The conduct
of the company was so unreasbnable that a court of equity, it seems
to me, would not decree in its favor spécifie performance of the al-
leged oral contract. Yet the efïect of the decree hère is to strip the
plaintifï of his jpatent and giyè it to the défendant without any com-
pensation whatever. The resuit, I think, is inéquitable.
WISCONSIN 0. A. H. 0. CO. V, AMERICAN C. A. C. CO. 761
WISCONSIN COMPRESSED AIR HOUSE CLEANING CO. v. AMERICAN
COMPRESSBD AIR CLEANING CO.*
(Circuit Court of Appeals, Seventh Circuit October 7, 1903.)
No 953.
1. Patents— Infringkment—Carpkt Cleaning Machines.
Tlie Nation patent, No. 521,174, for a duster, adapted to the cleaning
of articles or goods having a nap surface, eovers a machine in wliich a
current of compressed air Is directed at riglit angles against the surface
of the article to be cleaned from a pipe having a nozzle some distance
from such surface and within a hood which envelopes it except for an
opening opposite the outlet to permit the air current to corne into con-
tact with the goods, and terminating at the other extremity in a cloth
sack or strainer wMeh retains the dust while permitting the air to es-
cape. The Thurman carpet renovator, made in accordance with the Thur-
man patents, Nos. 634,042, 663,943, and 665,983, consists of a machine for
cleaning carpets on the floor, in which there is a pipe having an ex-
panded nozzle, the llps of which are substantially in the plane of the bot-
tom of the machine, through which a current of compressed air is forced
at an angle of 45 degrees through the carpet, strlking the floor, and, be-
ing deflected up through the carpet into a hood with a strainer which is
carried in front of the nozzle. Eeld that, in vIew of the prior art, which
disclosed statlonary machines for renovating carpets by the use of com-
pressed air, movable machines for dusting carpets by means of air cur-
rents in connection with hoods and strainers and the open blast nozzle
used for dusting carpets and upholstered articles, the Nation patent was
not for an invention of a primary character, and was not infringed by
the Thurman machine.
Appeal from the Circuit Court of the United States for the Eastern
District of Wisconsin.
This appeal is from a decree enjoining the Wisconsin Company from in-
fringing letters patent No. 521,174, June 12, 1894, to Enoch Nation, assigner,
the property of the American Company
Figure 2 of the drawlngs Is hère reproduced:
The spécification and claims read thua:
"Be it known that I, Enoch Nation, a citizen of the United States, resid-
Ing at Indianapolls, in the county of Marion and state of Indiana, hâve in-
vented certain new and useful improvements in dusters; and I do hereby
déclare the following to be a fuU, clear, and exact description of the inven-
tion, such as will enable others skilled in the art to which It appertains to
make and use the same.
"This invention relates to improvements in mechanism for cleaning car-
pets, velvets, furs and goods of any kind having a nap surface and will be
found specially useful in dusting upholstered goods such as car seats, the
object of the invention belng to utllize compressed air as the active agent in
liberating the foreign particles, and to provide means for straining the dust
•Rehearlng denied November 18, 1003.
762 125 FEDERAL REPORTER.
out of the air and retainlng It whlle allowlng the air to escape after It bas
been used.
"The objecta of thls Invention are accomplished by the mechanism Illus-
trated In the accompanying drawlngs. In which—
"Figure 1 Is a vIew In perspective of my complète duster and showlng the
method of applylng It in dnstlng' a car seat. The condenslng pump and the
chamber for the condensed air are not shown. Flg. 2 is a détail In vertical
section of the device. in which the direction of the air is shown by the ar-
rows. Fig. 3 is a détail showing an under slde vIew of the head of the device
where the air cornes in contact with the goods to be cleaned.
"Slmilar letters refer to like parts throughout the several views of the
drawlngs.
"A Is a metalllc tube which wlll serve the double purpose of an inlet
through wblch the air to opéra te the duster will be conducted to the nozzle*
B, and aq a handle by which the duster wlll be gulded over the material to
be cleaned. This tube may be bent in any deslred shape that vrtll best con-
form to the spécial work to be done, such as belng curved upwardly for a
device for dusting carpetSj instead of belng made stralght as shown in the
drawlngs. ,
"Al is a flexible connection, preferabiy a rubber hose, by means of which
the tube. A, will be placed in communication with an air tank, so as to be
supplied wtth air through the hose from the tank. The air will be condensed
into the reeelver or tank by means of a. pump suitably airanged and con-
nected.
"A2 is a valve In the tube, A, by means of which the supply of air may be
eut ofC or the amount of supply regulated. •
"B Is an expanded nozzle or head tennlnating the outer end of the tube, A,
and is provlded wlth the transverse openlng, b, on Its under slde, arranged
so as to give a direct downward course to; the stream of air that will be al-
lowed to escape through the openlng under heavy pressure. The air thus
liberated and coming vlolently into contact with the nap of the goods to be
cleaned dislodges every partlcle of dust and dlrt, which in dusters of this
class has been simply thrown into the air by the action of the current only
to settle down agaln upon the goods afterward. To obviate thls, which is
one of the principal features of my Invention, I provide the hood, Qfto en-
velop the nozzle on ail sldes, but so arranged as not to interfère wlth the
free passage of the dust ladeû air as it leaves the goods. The hood will be
made of any suitable material— as sbeet métal — and shaped so as to guide
and conduct the current of air wlth its impurltles Into a eloth sack, D. This
cloth sack will act as a stralner by allowing the air to pass through Its
meshes but retardlng the dust and forelgn matter, which wlll not be able
to pass through, and will be accumulated within the sack. As shown in the
drawlngs, the sack is removably secured to the hood by having the contract-
ed portion, c, of the hood, O, projected into the open mouth of the sack and
the sack retained by means of an impinging rubber bahd, d, or by simply
tying the sack upon the hood livlth a cord. When it Is deslred to empty the
accumulated dust, the sack is removed and the contents emptied.
"Having thus fully described my invention, what I claim as new, and wish
to secure by letters patent of the United States, Is:
"(1) The comblnation wlth an air-pump hose or a hose connected with a
tank of compressed air and a nozzle terminatiug sald hose and means for
regulating the escape of air through the nozzle, of a bood enveloping the
nozzle and having an openlng, opposite the outlet in the nozzle through which
the compressed air may be brought into contact with the goods to be cleaned,
and an outlet from the hood terminating in a stralner, by which the impuri-
tles may be deposifed and collected in a body and the air allowed to escape.
"(2) The comblnation of an air-pump hose or a hose connected with a tank
of compressed air and a nozzle terminating sald hose and means for regulat-
ing the escape of air through the nozzle, of a hood enveloping the nozzle and
having an openlng opposite the outlet in the nozzle through which the com-
pressed air may be brought Into contact with the goods to be cleaned, and
having an outlet from the hood terminating in a stralner, sald stralner con-
sisting of a cloth bag removably secured to the discharge outlet of the hood,
substantlally as described and for the purposes specifled."
WISC0N8IN a A. H. 0. CO. V. AMEEIOAN 0. ▲. 0. CO. 703
Before the patent was Issued, Enoch Nation assigned to William B. Na-
tion. On October 15, 1901, "William E. Nation assigned the patent to Frank
J. Matehett, and he, having organized the American Company for the pur-
pose, transferred the patent to that corporation on December 12, 1901, and
thls suit was begun on the 16th of the same month. None of the owners of
the patent In suit ever developed It commercially.
The Wlsconsln Company Is a Ucensee of the General Compreased Air House
Cleaning Company. The latter is located at St. Louis, owns patents Nos.
€34,042, 663,943, and 665,983, dated respectlvely October 3, 1899, December
18, 1900, and January 15, 1901, ail Issued to John S. Thurman, and slnce De-
cember, 1899, has been engaged successfully In making and using carpet
renovators, nnder the Thurman patents. In September, 1900, Matehett, who
organized the American Company 14 months later, procured the organlza-
tion of the Wisconsln Company to use the Thurman carpet renovators, made
ty the General Company. And It was while Matehett was secretary of the
Wlsconsln Company that he picked up the Nation patent and formed the
American Company. The General Company, licensor, defended this suit.
Complainant's expert identified the followlng drawing of the alleged in-
fringing device as being correct In ail essentials:
Hrldenco of the prior art Included exhlblts of the "open blast nozzle"; Brlt-
Ish patents to Lake, No. 676, 1870, to Norris, No. 4,538, 1876, to James, No.
4,931, 1878, to SSrensen, No. 3,134, 1892; United States patents to Miller, No.
288,720, 1883, to McClaln, No. 365,192, 1887, to Warsop, No. 407,309, 1889, to
Ethridge, No. 434,178, 1890; and modlfled machines of the McClaln and Sôr-
ensen patents, made by défendant, and claimed to represent correctly the
essential princlplea respectlvely embodled In those patents.
The open blast nozzle has been in use since 1886. It comprises the com-
blnation of an air-pump hose or a hose connected wlth a tank of compressed
air and a nozzle termlnatlng sald hose, and means (a cock) for regulatlng the
escape of the air through the nozzle. The orifice in the nozzle Is straight,
and is from 10 to 16 Inches one way by i/ioo to i/s2 of an Inch the other.
It Is extensively used by rallroad companles In cleaning cars. The removable
Beats and carpets are taken out of the car and subjected to the blast The
Windows and doors of the car are left open and the blast Is used In blowlng
76é 125 FEDERAL REPORTER.
the dust from the backs of tbe seats, from the window ledges and curtains,
and from the Ventilators along the ceJling. In cleanlng the plush cushlona
thé blast iB UBually held close to or agalnst the surface. In cleanlng ledges
aiid Tentllatprs the blast is effective some feet away.
The speciflcation of the Lake patent states that the "invention consists in
meehahlsm for produeing a draft or Current ofair to take up the dust and
dlrt (from carpets), and carry the fine particles into a porous air chamber
whleh allows the air tù escape whlle the dust is retained therein." In the
machine's base, whicb bears upon the carpet to be cleaned, is an opening
through which the dust is taken by a suction draft created by a fan revolv-
ing in the casing and discharged into a cloth bag f astèned to the outlet of
the casing. The fan is drlVen by means of two puUeys, a band, and a crank
in the hand of the operator.
In Norrlà's spécification it Is said that: "This invention relates to a dust-
romovlng niachlne for carpéted apartmeuts or surfaces, so constructed that
the surface shall not be subject to a rubbing or frlctional action, but be light-
ly but sharply beaten to raise the dust at the same time that a strong cur-
rent of air shall be produced so as to take up and deposit the light dust and
heavier particles of the sweepings in a suitable bag or dust réceptacle at-
tached to the sweeper." A hood, the edges of which bear upon the carpet,
envelops the beating and blowing éléments. Mounted on a horizontal shaft,
revolving withln the hood, are flexible arms, some carrylng beaters and oth-
ers fan blades. Attached to the outlet of the hood is a bag to reçoive the
dust-laden air and retain the dust whlle the air passes out through the meshea
of the cloth. The fan and beaters are drlven as in the Lake patent.
The James patent states that it is an improvement upon the Norrls in cer-
tain particulars, but, as afCecting the présent case, the machines are essen-
tially Identical.
The SSrensen machine was designed primarily for gleaning grain from
flelds, but the spécification asserts that "it may also be used in collecting and
removlng dust and dirt from streets, floors, carpets, and the like." "The ma-
chine opérâtes by forcing an air jet or current through air channels and
through an air-shaft fumished wlth apertures or outlets. The air current
is led through thèse outlets to the ground beneath the lower part of a grain
or dust trunk, the lower end of said trunk passing closely over the surface,
where the particles are lying, the other end belng connected wlth a réser-
voir, into which thé particles are carried by the air jet." In the form most
elaborately described, air jets are thrown against the ground obliquely and
opposite each other so that each aids the other In forcing the particles from
the ground into the trunk or hood. In one form described there is a single
straight jet, thrown against the ground obliquely towards the front of the
trunk; and while, of course, the lower edges of the trunk are "sufflciently
éleva ted to admit of the machine's passing over the ordinary Irregularities
of such surface," the front edge Is provided wlth a "hinged guard, adapted to
drag over the surface to be cleaned." It is also suggested that, "If it be de-
sired to isolate the air current from the extemal air, such protection may to
a certain extent be obtained by applying some elastic bottom linings." The
machine as built for a grain gleaner cannot be taken Into a house. Défend-
ant exhlbited a modified Sorenson machine of the size of the ordinary car-
pet sweeping devlces. As the surface to be cleaned was not irregular, the
front edge of the hood was not hinged, and instead of elastic bottom linings
the edges of the hood were made to rest flatly upon the carpet. For the
''sieve" in the réservoir was substltuted a bag. The air Jet was supplied
from a tank of compressed air. This modifled Sorensen machine performed
ail the service that can be obtained from the device of the Nation patent.
The Miller patent illustrâtes a stationary machine to which the carpet is
taken and cleaned by air jets that are supplied by "a fan or other blower."
The McClaln machine consists of a casing or hood having an opening In
tts under slde.' To the front edge of the casing is attached an adjustable
brush, desighed to loosen the dust or dirt. Within one part of the hood is
a fan that is rota ted by pulléys, a band, and a crank in the hand of the oper-
ator. The air, as compressed by the fan, Is forced through a conduit and dis-
charged against the carpet at an angle of about 45 degrees. As the dust-laden
WISCONSIN C. A. H. C. CO. V. AMERICAN C. A. C. CO. 705
air rises within the bood, It revolves a light drum, the lower edges of whicli
touch the water in a pan. The wet drum Is intended to catch the dust and
deposlt it in the pan. The air finally passes out of small apertures In the
back of the hood, which may strain out dust not caught by the drum. De-
fendant exhibited a modified McClain machine, in which the air current was
taken from a tank of compressed air, and in wliich, to illustrate daim 2 of the
Nation patent, a bag was substituted for the apertures in the hood as the air
strainer. This modified McClain machine performed ail the service that can
be obtained from the device of the Nation patent.
The Warsop patent exhibits a stationary machine for cleaniug carpets
with compressed air. "For this purpose we cause a powerful current of
compressed air, divided elther into a number of small jets or one or more ex-
tended jets or sheets of air, to be thrown onto the carpet or other fabric to
be cleansed and purified in such a manner that the air is forced completely
through the interstices of the carpet or other fabric, and thereby carries with
it the dust or other impurities that may be in the carpet into a réceptacle
made to receive them, and from which they are drawn away by a flue, fan,
or other means. The carpet or fabric during the opération is drawn by hand
or other sultable means over a revolving perforated roller, the curved sur-
face of the roller opening temporarily the interstices of the carpet, and more
freely allowing the dust and impurities to be forced out by a powerful cur-
rent or currents of compressed air from the supply pipe and nozzles or slots
placed immediately over this roller." The perforated roller revolves within
a casing through which the carpet is passed.
The Ethridge patent is for a street-sweeping machine. It discloses a com-
binatlon of "an air-forcing apparatus" ("preferably a blower of any suitable
type") operated by means of a gas engine on the carriage, an air pipe or con-
duit communicating therewith and arrangea to deliver jets or blasts of air
upon the surface to be cleaned in such a manner as to loosen and set in mo-
tion the particles to be removed, a hood or casing over the area on which
the débris Is loosened and agltated by the air blast, an air-exhaustlng appara-
tus to assist In moving the particles from the hood through a passage to a
réceptacle, from which the air is let out through a screen.
The propositions which défendant advances for reversai of the decree may
be summarized thus: (1) Equity will not protect the naked légal right to
use a patented invention. The patentée will be protected only in the actual
commercial use of his device. As Nation and his successors never intro-
duced the device commercially, there is no equity in the case. (2) Matchett,
organizer of both companies, while secretary of défendant bought the Nation
patent, and conveyed it to complainant for the purpose of harassiug défend-
ant. Equity should discountenance this. (3) Noninfringement, (4) Anticipa-
tion. (5) Lack of invention.
Paul Bakewell, for appellant.
E. H. Bottum, for appellee.
Before JENKINS, GROSSCUP, and BAKER, Circuit Judges.
BAKER, Circuit Judge, after making the foregoing statement, de-
livered the opinion of the court.
As the decree will be reversed for other reasons, we deem it un-
necessary hère to agitate the fîrst and .second questions.
I. The respective experts agrée in defining a duster as that which
sweeps dust away from a surface, and a renovator as that which
restores to freshness throughout ; and the distinction is justified by
the lexicographers. Nation classified his device as a "duster," and
Etated that his invention "relates to improvements in mechanism for
cleaning carpets, velvets, furs, and goods of any kind having a nap
surface, and will be found specially useful in dusting upholstered
goods, such as car seats." Referring to the drawing, the specifica-
766 125 FEDERAL REPORTER.
tion says: "B is an expanded nozzle or head terminating, the outer
end of the tube A, and is provided with the transverse opening, b,
on its under side, arranged so as to give a direct downward course
to the stream of air." Thus the air cornes "violently into contact
with the nap of the goods to be cleaned." "The direction of the air
is shown by the arrows" in the drawing. The hood, C, is made "to
envelop the nozzle on ail sides, but so arranged as not to interfère
with the free passage of the dust-laden air as it leaves the goods" and
is conducted into the strainer, "cloth sack, P." Looking to the
drawing and spécification, it seetns clear that Nation had in mind a
mechanism for dusting nap surfaces, consisting of an expanded nozzle
through whose orifice, heîd above the surface, a blast of compressed
air could be directed down upon the nap of the goods to be cleaned;
a hood that completely enveloped the nozzle on ail sides, except that,
to enable the air blast from the inclosed nozzle to be thrown down
against the nap, an opening was made in the bottom of the hood,
directly opposite the orifice of the nozzle, through which opening in
the bottom of the hood the air blast could reach the goods to be
cleaned ; and a strainer to release the air and retain the dust. And
the claims, as we read them, do not purport to cover any broader in-
vention. The oply différence between the two claims is that the gên-
erai strainer of claim i is replaced by the spécifie cloth bag of claim
2. Both claims describe an essential élément as being "a hood en-
veloping the nozzle and having an opening opposite the outlet in the
nozzle through which the compressed air may be brought into contact
with the goods to be cleaned." That is, the hood completely en-
velops the nozzle on ail sides, except that, to eriable the air blast
from the înclosed nozzle to be thrown down against the nap, an open-
ing is made in the bottom of the hood, directly opposite the orifice
of the nozzle, tlirough which opening in the bottom of the hood the
air blast may reach the goods to be cleaned.
Thurman's patents refer to his device as a carpet renovator. It is
designed to renovate carpets without removing them from the floor,
by directing a blast of compressed air into and through the carpet
against the floor at an angle of about 45 degrees, so that the blast re-
bounds from the fîoor and passes at the angle of reflection through
the carpet and into a hood and strainer. Referring to the drawing
of the alleged infringing machine, without detailing other différences
in construction between this and the device of the Nation patent, it
will be noted that the forward lip of the nozzle's orifice rests upon
the carpet and is in the plane of the machine's base. Except for
convenience of manufacture, the nozzle, instead of being cast in one
pièce with the hood, might be made separately and bolted to the outer
wall of the hood. The air is discharged into and through the carpet
outside of the hood, and reaches the hood by reason of being defiected
forward at an angle from the floor, and is aided in this course by the
forward lip's being narrower than the rear lip of the orifice. If
the nozzle, the orifice being in the same location relative to the hood
as now, were directed rearwardly at an angle of 45 degrees, the air,
as the machine moved forward, would escape under the rear Hp, up
WI8C0NSIN 0. A. H. 0. CO. V. AMERICAN 0. A. C. CO. 767
through the carpet, înto the room. As it is, the air escapes under
the forward lip, up through the carpet, into the hood.
The Thurman machine that was put in évidence by the complainant
has the forward lip rounded up so that it is one-sixteenth of an inch
above the plane of the base. But the scratches made upon its surface
show that the forward lip came in close contact with the carpet. And
the complainant's expert testified that there was no différence in prin-
cîple between the machine as exhibited and the machine of the draw-
ing. In this conclusion we agrée. Furthermore, the record shows
that before the trial the licensor, who is defending this suit, was
making his machines so that the forward lip of the orifice was in the
plane of the base.
Nation did not disclose that his air blast would penetrate the car-
pet, strike the floor, and carry up through the carpet the dust on the
fîoor and in the body of the carpet into the hood. His drawing
indicates that the air rebounds from the surface of the goods to be
cleaned. But if his device, without material modifications, could be
made to do the work of the Thurman machine, it would be by a dif-
férent mode of opération. If Nation's air blast pénétrâtes the carpet
and rebounds from the fîoor, it is an incident, and not an essential, of
the device's opération. The air is discharged within the hood. It is
true that the height of the orifice above the plane of the base is left
by Nation to the builder's discrétion. But it is an essential condi-
tion that the orifice be within the hood, and opposite (which cannot
be in the same plane with) the opening in the base through which the
air blast reaches the carpet. In Thurman's machine it is an essen-
tial condition of opération that the air be discharged into and through
the carpet outside of the hood. It reaches the hood only after strik-
ing the floor and passing up through the carpet.
Unless the wording of Nation's claims be ignored, we think the
Thurman machine, in which the nozzle is not enveloped within the
hood, cannot be held to infringe.
It should not be forgotten that the défendant was operating under
later patents, and that the art prior to Nation discloses stationary
machines for renovating carpets by the use of compressed air, mova-
ble machines for dusting carpets by means of air currents in con-
nection with hoods and strainers, and the "open blast nozzle." In
this connection the observation of the Suprême Court in Kokomo
Fence Machine Co. v. Kitselman, 189 U. S. 8, 23, 23 Sup. Ct. 521,
47 L. Ed. 689, is pertinent :
"Conslderîng the complainants and Whitney (patentée of defendant's ma-
chine) as alike havlng Improved on the prier art, the question is whether the
spécifie improvements of the one actlonably invaded the domain of the other.
The presumptlon from the grant of the letters patent is that there was a suh-
stantial différence between the inventions."
2. Respecting anticipation it is true that the combination of élé-
ments in Nation's claims is not found in any one prior device. So
the citations are not effective to disprove the novelty of Nation's
combination. But the modified Sôrensen and McClain machines
would be anticipative, and, in our opinion, it did not require in-
vention to produce thèse modified machines, The modification con-
768 125 PEDBBAt, BBlPORTEE.
sisted in substituting Ihe khown mèans for directîng ah aîr current
from a tank of compressée! aîr upon thé goods to be cleaned for thé
Sôrensen and McClain air currents from blowers. This sélection
among known means, thoùgh increasing the degree of efiîçiency, did
not rise to the dignity bî independént invention. Mast, Foos & Co.
V. Stover Mfg. Co., i'TTV. S. 485, 20 Sup. Ct. 708,; 44 t. Ed. 856;
tumber Co. v. Perkins, 25 Ç. C. A. 613, 80 Fed. 528; Kelly v. Clow,
32 C. C. A. 205, 89 Fed. 297, and cases there collated.
3.1t is évident that the defendant's machine çannôt be brought
within Nation's claims withput giving them the charàcter of a primary
invention of means for using compressed air in conjonction with a
hood and strainer.
The claims comprise the following éléments: (i) An air-pump
hose, or a hose connected with a tank of compressed air ; (2) a nozzle
terminating said hose; (3) means (a valve is the means disclosed)
for regulating the escape 6f ?iir through the nozzle; (4) a hood en-
veloping the nozzle, and having an opening opposite the outlet in the
nozzle, through which (opjening) the compressed air may be brought
into contact with the goods tp be cleaned ; (5) a strainer (generic in
claim I, and the spécifie .cloth bag in claim 2).
We hâve already stated pur conclusion that the fourth élément,
without disregarding the language employed, cannOt be accepted as
a generic description of a hood. But, if the words could properly be
given a generic scope, thé claims vvould be void for want of invention.
The first three éléments are an exact description of the old "open
blast nozzle." The fourth and fifth, if treated generically, cover
the hood and strainer of the old Lake, Norris, and James patents.
Nation, in testifying to his discovery, showed that he was employed
for several years by railfoad companies in cleaning cars, and lised
the "open blast nozzle" for that purpose ; and that one day, a pièce of
burlaps having caught on the nozzle, he observed that the dust was
strained out as the air passed through the fabric. Certainly, Nation
was not, as is now claiméd for him, the discoverer "of the funetion
of air under high pressure as an active agent for thorough cleaning
when the full benefit of the rebound current of air was obtained."
Nation's machine brings together means for performing two func-
tions — the funetion of raising the dust, and the funetion of catching
and holding the dust after it is raised. The two functions are not
interactive ; not even synchro'nous ; but successive. For discharging
the first funetion Nation employed a blast of compressed air, the use
of which for that purpose was old and commonly known. If there
is any différence in getting "the full benefit of the rebound," it lies
in favor of the old "open blast nozzle"; for, to the extent of the
back pressure within the hood and strainer, the blast, discharged
within the hood, is retarded in striking and in rebounding from the
surface from which the dust is to be raised. For discharging the
second funetion Nation employed (on the présent hypothesis of a
generic claim) the old hood and strainer of the English patents.
Certainly he was not the discoverer of the functiOn of the hood and
strainer in catching and holding the dust that has been raised by an
WISCONSIN C A. H. 0. CO. V. AMEEICAN 0. A. 0. OO. 769
air current. So the question îs whether a daim of primary invention
lies for bringing thèse two old devices into a union in which each per-
forais only its old fonction. The authorities answer in the négative.
A cupola furnace being old, and it being old to use a cinder-notch
in a blast furnace, there was no invention in putting a cinder-notch
in a cupola furnace to perform the same function it had in a blast
furnace. Vinton v. Hamilton, 104 U. S. 485, on page 492, 26 L. Ed.
807.
Rice did not prove himself an inventer by combining the return
tlue of a Cornish boiler with the Morey straw-feeding device, which
had been used with a common form of return flue. Heald v. Rice,
104 U. S. 737, on page 755, 26 L. Ed. 910.
It did not require invention to couple an engine, which had there-
tofore been used in turning a windlass, to a capstan, which had there-
tofore been operated with handspikes. Morris v. McMiUin, 112 U.
S. 244, 5 Sup. Ct. 218, 28 L. Ed. 702.
A claim based on combining a relief valve with a steam fîre engine,
when similar relief valves had been used on engines in steamships,
was held to lack invention in Blake v. San Francisco, 113 U. S. 679,
5 Sup. Ct. 692, 28 L. Ed. 1070.
A fîreplace heater was old. A fuel magazine in a base-burning
stove was old. The quality of invention did not inhere in the act of
coupling the fuel magazine to the fireplace heater. Thatcher Heat-
ing Co. V. Burtis, 121 U. S. 286, on page 294, 7 Sup. Ct. 1034, 30
L. Ed. 942.
To âge wine by applying heat being old, there was no invention in
heating it with an apparatus that had never before been used for
this purpose, but had been used for heating other hquids. Dreyfus
V. Searle, 124 U. S. 60, 8 Sup. Ct. 390, 31 L. Ed. 352.
A claim for a process of spreading a known composition on paper
to form a surface, in view of other patents showing that it was old
to coat paper with other substances, was held void, in Underwood v.
Gerber, 149 U. S. 224, 13 Sup. Ct. 854, 37 L. Ed. 710.
In Kokomo Fence Machine Co. v. Kitselman, 189 U. S. 8, 23
Sup. Ct. 521, 47 L. Ed. 689, the question was whether Kitselman had
made a primary invention in producing a portable fence machine that
was capable of weaving a diamond mesh wire fence in the open field.
A prior machine, stationary in a factory, produced diamond mesh
wire fabric for fencing. Another prior machine "walked" along in
the field as it wove a wire and picket fence. "Kitselman converted
the stationary into a portable machine by setting it on end and
mounting it on a truck. * * * Whatever its merits, it was not in
itself primary invention to mount a machine for making diamond
mesh on a truck, and using it in the field as the old machine had been
used to make wire and picket fence. The getting up and walking
was not new, though the machine may hâve gone at a better gait and
made a better fence."
And the cases might be multiplied indefînitely.
The decree is reversed, with the direction to dismiss the bill for
want of equity.
125 K.-^9
77ft ,,)' 125 FERÇRAL EBPORTEB^ . ,^
UNITED STATES MINERAL, WOÔL CO. T. MANVILLE OOVERING 00.
(Circuit Ck)Urt of AppealS, Seventh Circuit. October 6, 1903.)
1. Patents— Pkior Use— Procbss fôb MANDïACTUBiNa Minéral Wooi..
The Rockwell patent, No. 447,860, for processes of manufàcturlng min-
erai woo! by remeltlng hardened slag from a smelting furnace witb
lime, or with lime apd. silica, Is void fpr anticipation by tlie prior public
use of the process by others.
2. SAMB^iNFRlîieKMENTJ
The Rockwell patent. No. 452,733, for a process of manuf aeturing
minerai wool by remelting hardened slag from a smelting furnace with
silica, fteîd not infringed. , . ,,
Appeal from the Circuit Court of the United States for the Eastern
District of'Wisconsin.
See ICI Fed. 145.
Albert G. Welsh and E. W. Frost, for appellant.
Curtîs T. Benedict, for appellee.
Before JENKINS, GROSSCUP, and BAKER, Circuit' Judges.
BAKER, Circuit Judge. Appellant failed in its suit to hold appellee
for infringement of letters patent 447,360, March 3, 1891, and 452,733,
May 19, iSpi.both.issued on applications of Charles H. Rockwell,
assigner, for new and improved processes in the manufacture of min-
erai wooL ■ : • 1.;' ,-:i.
Minerai wool, as a'product, had long been known. It had been
made either by taking molten slag from a blast furnace in a métal car
to the blowing device, where the car Was tapped and a |et of steam or
air convertedthe molten slag into minerai wool, or by fusing lime and
silica-bearing rocks in a cupola, and blowing the stream as it came
from the tâp. In the spécification of the fîrst patent, Rockwell stated
that hardened slag couldnot be remelted and made into minerai wool
without the addition of ;other material, and that he had found by ex-
periment that lime (an alkali) or silica (an acid) or both were suitable.
"Whethèr lime or silica or both Shall bé used dépends upon the nature of
the slag. Thls ean be determined, for one or two inexpensive triais wIU dé-
cide which, and whether both, of the ingrédients named should be used. The
proportion of each ingrédient to be used will also dépend upon the nature
of the slag, to be determined in llke mainer by trial. In ail cases the pro-
portion of lime or silica or -bôth wlll be small. In the use of ordinary slag,
I hâve found the foUowing proportions to produce good ;results, viz.: Slag,
eighty per cent.; llmestone,, ûf teen per cent.; quartz pebbtes (silica), five per
cent. In many cases the slag will be f o.und to , be' so sillclous as to render
the addition of quartz pebbïés or silica unnecessary. but I do not conflue
myself to the proportion nained." 1
In the spécification of the second patent, Rockwell said :
"In practlce, I hâve found that nlnety-flve per cent, of slag and flve per
cent, of silica or silica-bearing stone produces a good resuit, but I do not
Intend to confine myself to the exact proportions , mentloned. The amount of
silica to be used eau be easily ascertained by a f ew inexpensive trials."
XJNITED STATES MINKEAL WOOL CO. V. MANTILLE COVEEING 00. 771
The claims of the first patent are thèse :
"(1) Tbe process of manufacturlng minerai wool, conslstlng of remelting
hardened slag or scoria from a smelting furnace with lime and sillca, or lime
and silica-bearing stone, mlxed In proper proportions, and 'blowlng the same
Into minerai wool, substantially as described. (2) The process of manu-
facturing minerai wool, conslstlng of remelting hardened slag or scoria from
a smelting furnace with lime, or lime-bearing stone, mixed in proper propor-
tions, and converting the same into minerai wool, substantially as described."
Of the second patent:
"In the manufacture of minerai wool, the process conslstlng In meltlng
In a cupola hardened slag or scoria with silica, or silica-bearing stone, mixed
in proper proportions, and converting the same into minerai wool, substan-
tially as described."
It was shown that appellee made minerai wool from a fusion of
hardened slag and dolomite (a stone containing lime and magnesia in
about the ratio of 5 to 4), and occasionally a very little feldspar.
If there was any infringement, it was not of the second patent, which
claims the process of reducing slag with silica alone.
The Circuit Court held the first patent void for want of novelty, in
view of the prior use of the process by others. The évidence satis-
fies us beyond any reasonable doubt, as it did the court below, of the
existence of the foUowing facts : In 1884 Pettigrew was the superin-
tendent, and Gleason the chief engineer, of the Illinois Steel Company's
plant at Joliet. They knew the article, minerai wool, and were using
it as pipe covering in the plant. Instead of continuing to buy it in the
market, they undertook to provide a supply from the refuse of the fur-
naces. They did not use the direct process of blowing the slag as it
came molten from the furnaces, but endeavored to make minerai wool
by remelting hardened slag in a cupola. They found that the product
was too dark, brittle, ând shotted. Pettigrew, Gleason, and others in-
terested in the experiments, knew the use of limestone in fluxing ores.
A Mr. Hay, now dead, suggested that the slag was déficient in lime.
Thereupon they added a limestone (dolomite), and found that they
could produce a good article of white and fibrous minerai wool by the
process of remelting in a cupola hardened slagwith lime, or lime-bear-
ing stone, mixed in proper proportions ; that the proportions depend-
ed upon the nature of the slag, and could be easily determined by test-
ing the fusion from time to time by blowing. A Mr. Kelly, to whom
some samples were sent, testifies that the wool was dark, coarse, and
shotted. Pettigrew and Gleason say that the samples were white and
fibrous. But it is not necessary to discrédit Mr. Kelly's recollection
of the product he saw, to find that at Joliet, in 1884, the process of
remelting hardened slag with limestone in proper proportions was
known. It may be that further expérience in the use of the process
and repeated tests of the fusion were necessary (as the patent itself
indicates) to produce the best product. But there is no doubt that the
process employed would do it. And there is no doubt that Pettigrew
and Gleason, who were familiar with the minerai wool on the market,
finally produced in 1884 about two tons of minerai wool which was
suitable for use and was used in covering the pipes, and was sufficient
to meet the needs of the plant at the time. In 1886, without further
772 125 FEDERAL EEPORTEE.
experiment, and by the use of the same process, they made a further
supply. , ,
At Joliet they remelted hardened slag with limestone (ciaim 2 of
the patent). It is not shown that they added silica or silica-bearing
stone (daim i). But when they remelted the slag, a composition of
the silica of the ore and the limestone flux, and, finding it by test dé-
ficient in lime, put limestone in the cupola, it would not require in-
vention, if they added too much hmestone to a particular charge of
slag, to ofïset the excess by adding a proper amount of silica-bearing
stone.
If the patent is not void for indefîniteness (Cereâline Mfg. Co. v.
Bâtes, lOI Fed. 280, 41 G. C. A. 341 ; Tyler v. Boston, 7 Wall. 327,
19 L. Ed. 93), we think the process was anticipated by the prior use at
Joliet: What Pettigrew and Gleason did was not an abandoned ex-
perimerit. They knew the product they wanted to get. They experi-
mented with hardened slag alohe unsuccessfuUy. They determined
what should be added, and why, and thereupon they succeeded. The
process they discovered in 1884 did not lapse into a lost art. In 1886
. they used it in successful manufacture. Why the Illinois Steel Com-
pany did not hâve them continue is not clear, but they were not the
masters. Nevertheless,, whenever they hâve been called upon since
1884 to explain the process, they hâve donc so. The use was not se-
cret. : Thci process was practiced by Pettigrew and Gleason, and those
who assisted, and was opën to the observation of the employés gen-
erally, and of ail who passed through the plant. We think there was
abundant publicity. Coffin v. Ogden, 18 Wall. 120, 21 L. Ed. 821 ;
Brush V. Condit, 132 U. S. 39, ID Sup. Ct. i, 33 L. Ed. 251 ; Forncrook
v. Root, 127 U. S. 180, 8. Sup. Ct. 1247, 32 L. Ed. 97; Peters v. Ac-
tive Mfg. Co., 129 U. S. 530, 9 Sup. Ct.,389, 32 L. Ed. 738.
The decree is affirmed.
In re LANH.
pistrlet Court, D. Massachusetts. December 26, 1902.)
No. 5,191.
L Bankeuptcy— CoMPOBmoir— Creditors— Failure to Pkovb Claim— Subsb-
QUBNT Allowance— Objection by Bankbupt.
Where a composition ofCered by a bankrupt was accepted, and some of
the credltors falled to daim thelr dividends, the bankrupt was entitled
to object to a preferred clalm of a creditor, omitted from the schedule in
good falth; and not proved within a year after the adjudication, and to
the payment of such claim from the surplus in the hands of the court.
In Bankruptcy.
Eaton, McKnight & Carver, for creditor.
Joslin & Mendum, for bankrupt.
LOWËLL., District Judge. The petîtîoner in this case failed, by
inadvertençe, to prove his claim within a year of the adjudication.
The debt was not on the bankrupt's schedule, but its omission by the
bankrupt was made in good faith, and under the circumstances was
IN EE LANE. 773
almost unavoidable. The bankrupt offered a composition, wliich was
duly accepted, and he made a sufficient deposit. Some of the credit-
ors hâve failed to daim their dividends, and the petitioning créditer
now seeks, against the objection of the bankrupt, to prove his claim,
which is in its nature preferred, and to obtain payment thereof from
the surplus left in the hands of this court. No objection has been
made by other creditors. By the terms of the act proof is barred,
provided the bankrupt has standing in court to raise an objection.
In Re Morton, ii8 Fed. 908, this court said, "The purpose of the
banl<rupt act is the equal and équitable distribution of the bankrupt's
property among his creditors, and the conséquent discharge of the
bankrupt from his obhgations ;" and again, "The bankrupt's property
belongs to his creditors, and not to himself." It may be doubted,
therefore, if the bankrupt can object to the proof and allowance of
a just claim to share in an ordinary distribution in bankruptcy, though
the claim is not proved within a year. In the case of an ordinary
distribution, section 57n (Act July i, 1898, c. 541, 30 Stat. 561 [U. S.
Comp. St. 1901, p. 3444]) may be intended to protect only the other
creditors.
But the question hère presented is not that raised by an attempt to
prove in ordinary bankruptcy proceedings, after the expiration of the
year, as against the sole objection of the bankrupt. The case of
composition is in some respects exceptional. It is a proceeding vol-
untary on both sides, by which the debtor of his own motion ofïers to
pay his creditors a certain percentage of their claims in exchange for
a release from his liabilities. The amount offered may be less or more
than would be realized through distribution in bankruptcy by the
trustée. The creditors may accept this oiïer or they may refuse it.
For the purposes of the composition ail the creditors are treated as
a class, and the will of the majority is enforced upon the minority,
provided the décision of the majority is approved by the court. Ex-
cept for this coercion of the minority, the intervention of the court of
bankruptcy would hardly be necessary. Section 12e (30 Stat. 550 [U.
S. Comp. St. 1901, p. 3427]) provides: "Upon the confirmation of a
composition, the considération shall be distributed as the judge shall
direct, and the case dismissed. Whenever a composition is not con-
firmed, the estate shall be administered in bankruptcy as herein pro-
vided." Composition is thus treated, even in the act, as in some re-
spects outside of bankruptcy. In the ordinary case of distribution by
a trustée, the debtor's whole property, save that which is exempt,
is applicable to the payment of his debts, and belongs to his creditors,
and not to him, until their claims hâve been satisfîed. After adjudica-
tion there is no voluntary ofifer to pay by the bankrupt, and no bar-
gained release by the creditor. The creditor takes ail his debtor's
property whether the debtor likes it or not, and the debtor is released
whether the creditor likes it or not. The bankrupt's rights of property
arise only in the event of a payment of his creditors in full. If a cred-
itor will not prove his claim, the bankrupt does not take that creditor's
share, but it goes to swell the dividends of creditors more diligent.
Section 66 of the act (30 Stat. 564 [U. S. Comp. St. 1901, p. 3448])
has the same purpose, and does not apply to composition. But if
774 125 FBDHEAL EBPORTBR.
the cotapositién îs paid the creditors hâve no further daim upon the
debtor , or his property. In a composition the creditor gets, not his
share of the bankrupt's estate, but what he bargained for, and he has
no right to claim more. If he does not enforce his bargain, his
failure should enure to the bankrupt's benefit, not to the benefit of
another creditor. It follows that a bankrupt may be heard to object
to the allowance in composition of a claim ofifered for proof after the
expiration of a year. True, section 12e, 30 Stat. 550 [U. S. Comp.
St. 1901, p.. 3427], permits the distribution of the deposit in composi-
tion as the judge shall direct ; but that provision does not require the
court to permit the petitioner to prove in this case, and, if the matter
be within the court's discrétion, the court is not disposed to exercise
that discrétion in favor of the petitioner, though it might do so if
the failure of the petitioner to prove were in any way chargeable to
the bankrupt.
The pétition to prove is denied.
UNITED STATES v. CLARK.
(arcult Court, D. Montaila. November 7. 1903.)
No. 157.
1. PtJBLio Lands— Sale beforhi Isscancé of Patent— Bona Fidb Puhchasers.
Where an entryman of public lands sold the land to defendant's ven-
dor after the issuance of the entryman's final certlficate, who there-
after sold the land to défendant before the Issuance of patents, whicU
were subsequently IssUèd to the original entryman, the fact that de-
fendant purchased before the Issuance of the patent did not deprive him
of the rlghts of a bona fide purchaser for value.
3. Samb— Vacation ov Patent— Fraud— Evidence.
A patent for publie lànd will not be set aslde on the ground of fraud
committed ty the patentées, where the proof is only sufficient to raise a
suspicion of fraud not amounting to a conviction.
8. Same.
Facts revlewed, and held Insufflelent to authorize a decree settlng
aside a patent for public lands on the ground of fraud alleged to bave
been committed by the patentées.
In Equity.
Fred. A. Maynard, for the United States.
Walter M. Bickford and T. J. Walsh, for défendant.
KNOWLES, District Judge. In this suit the United States has
filed its bill of complaint praying that certain patents, 82 in number,
under which the défendant, WiUiam A. Clark, claims title to certain
timber lands within the state of Montana, be set aside and annulled,
upon the ground of alleged frauds committed by the patentées named
in said patents in procuring the issue of the same. The patentées
obtained thèse patents for timber lands under Act June 3, 1878, c.
151, 20 Stat. 89, as amended by Act Aug. 4, 1892, c. 375, 27 Stat. 348
[U. S. Comp. St. 1901, p. 1545], and, after having made final proof
î 1. See Public Lands, vol. 41, Cent. Dig. S 368,
UNITED STATES V. CLABK. 775
upon their several entries, and having receïved certificates of pur-
chase from the proper officers of the United States Land Office for
the districts in which their several entries were situated, conveyed the
same to one Robert M. Cobban. The said Cobban conveyed the
same to the défendant, William A. Clark. The défendant, Clark,
fîled an answer to the bill, in which he dénies ail of the material
allégations therein contained, and sets up the défense to the efïect
that he was and is an innocent purchaser of said lands for a valuable
considération and without notice. To this answer the gênerai repli-
cation was filed, and the case was referred, and proofs taken.
The proof discloses the fact that Clark purchased the lands from
Cobban for a valuable considération, before the patents were issued
therefor by the govefnment. It is claimed on the part of the gov-
ernment that on account of this fact Clark could not be a bona fide
purchaser, and was chargeable with notice of certain frauds alleged
to hâve been committed by the patentées. In support of this con-
tention counsel for the government has cited the following authori-
ties : U. S. v. Steenerson et al., 30 Fed. 504, i C. C. A. 552 ; Ameri-
can Mortgage Company of Scotland, Ltd., v. Hopper et al. (C. C.) 56
Fed. 67, afifirmed in 64 Fed. 553, 12 C. C. A. 293; Hawley v. Diller
(C. C.) 75 Fed. 946; Diller v. Hawley, 81 Fed. 651, 26 C. C. A. 514;
Hawley v. Diller, 178 U. S. 476, 20 Sup. Ct. 986, 44 L. Ed. 1157;
U. S. V. Bailey, 17 Land Dec. Dept. Int. 468. In ail of the above-
cited cases no patent had been issued by the government to the entry-
man, and pending such issue of patent, and while the Land Depart-
ment of the government had still fuU jurisdiction over the matter, the
entries were canceled and patents refused. The purchasers from the
entrymen had made their purchase after the issue of certificates of
purchase, but before the issue of patent, and claimed that the Land
Department of the government could not lawfully cancel such entries,
and contended that they stood in the same position as if a patent
had been issued to the entryman. Under the practke of the Land
Department of the United States any allowance of an entry for a pat-
ent can be recalled for sufficient reasons at any time before the actual
issue of the patent therefor, and the entry of the applicant canceled.
Any one purchasing from an entryman who has received his final cer-
tiiîcate of purchase only purchases such interest in the land as the
entryman has, subject to the right of the Land Department of the
government to review its action and refuse to issue the patent. This
is a well-known practice, and often resorted to, and any one pur-
chasing from an entryman who has not obtained a patent must take
notice of the same. Hence a purchaser under such circumstances
is not entitled to the protection accorded an innocent purchaser for
a valuable considération and without notice. That is ail that was
decided by the cases above cited.
In the case at bar the Land Department had made no withdrawai
of its approval of the right of the entrymen to a patent, but, on the
contrary, issued a patent to each of them, which they now hold, and
has converted an otherwise équitable title into a full légal title, and
under the laws of Montana their after-acquired title inured to the
benefit of the défendant, Clark. See section 1512, Civ. Code Mont.
77(5; 125 FBDEBALBBPOETEB.
The jurîsdiction and power of thé Uand Department over thèse en-
tries ceased w^hoUy when the patents iwere issued, and it could not re-
call the same^. lU. S. ëx rel; McBride.v. Cari Schurz, Secretary of the
Department tpf the Interior, 102 U. S. 408, 26 h. Ed. 219. It has
often occurredrthat parties havè purchased land ffom entrynien who
had received . càertificates of purchase of the land sold, and subse-
quently patents , hâve .been issued therefor. In none of thèse cases
has it been cQntended that,the purchaser to whom the title inured"
after issue of the patept was not considered entitled to the rights ac-
corded to a bonaifide -purchaser under the law, if he was without no-
tice of any fraud cominitted by the entryman.. In the case of Colo-
rado Coal & Iron Co., 123 U. S. 3P7, 8 Sup. Ct. 131, 31 L. Ed. 182,
the fact was presented that a' purchase of some of the property a pat-
ent to which was sought to be canceled and annulled had been made
before the patent was issued. Xhis is the statement contained in the
opipion :
"For thèse [entrtes] Hurit sent to Jackson deeds diily executed, attested,
and acknowledged, accompanled by recelver's certiflcates In regular form,
«howiiig that thé party named as grantor was entitled to a patent. Thèse
he was advised by counsel to accept,'and dld accëpt In good faith, as being
équivalent to patents."
That case was presentéd by eminent counsel, and very carefully
considered by the Suprême Court, ai;id no suggestion was made that
a purchaser of lands from an entryman before patent issued was not
to be considered as a bona fide purchaser after such patent was in
fact issued, and thereby his équitable title had hecome merged into
the full légal title. If the doctrine contended for by counsel for
the government in this case should prevail, no purchaser of a title
to government land which has a foundation in a deed executed be-
fore patent issued would be secure, and the insecurity pointed out
that vyould arise in the cases where it is sought to set aside and
cancel patents against bona fide purchasers for alleged fraud on the
part of the entrymen would be ever présent, and could not be ehm-
inated, for the reason that the statute of limitations does not run
against the government. But let it be considered that the défend-
ant, Clark, was bound to take notice of the différent steps taken
by the entrymen in obtaining thèse patents. What would he be re-
quired to take notice of? The records of the Land Office appear
to hâve been in due fornj and cprrect. They were such as induced
the Land Department to issue the proper patents to the entrymen
and entrywomen. I do not thinlc he could be required to be more
astute than the land ofïicers themselves. But suppose he had gone
further, and made inquiry of the varions persons who made the en-
tries, and secured the final certificates of purchase from the proper
ofhcers of the Land Department, and upon inquiry had been told the
same facts as were sworn to in the affidavits of thèse parties at the
time when they made their final proofs and payment, and the same
as was testified to at the hearing before the spécial examiner in this
case? But it cannot be çbnceded that there is any évidence that
shows that Clark was put upon his inquiry as to the sources of his
title. There is absolutely no probf showing or tending to show
0NITED STATES V CLAEK. 777
that Clark hâd any actual knowledge of the frâttds alleged to hâve
been committed by the entry men and women. The évidence shows
conclusively that Cobban was not the agent of Clark in the purchase
of thèse lands. Cobban was the vendor. In setting aside a patent
issued by the government after the title has passed from the patentée
to a third party, the rule laid down in U. S. v. Maxwell Land Grant
Company, 121 U. S. 325, 7 Sup. Ct. 1015, 30 L. Ed. 949, as to the
évidence necessary to authorize a court to do this, should be ob-
served and control the court in a case like this. That rule is as fol-
lows :
"We take the gênerai doctrine to be that when, In a court of equlty, It
is proposée to set aside, to annul, or to correct a written Instrument, for
fraud or mistake in the exécution of the instrument itself, the testimony
on which this is done must be clear, unequivocal, and convincing, and that
it cannot be done upon a bare prépondérance of évidence which leaves the
issue in doubt. If the proposition as thus laid down in the cases cited is
Sound in regard to the ordinary eontracts of private individuals, how mueh
more should it be observed where the attempt is to annul the grants, the
patents, and other solemn évidences of title emanating from the government
of the United States under its officiai seal. In this class of cases the respect
due to a patent, the presumption that ail the preceding steps requlred by
law had been observed before its issue, the Immense importance and neces-
sity of the stability of tltles dépendent upon thèse officiai instruments, de-
mand that the efCort to set them aside, to annul them, or to correct mistakes
in them should only be successful wheu the allégations on which this is
attempted are clearly stated and fully sustalned by proof. It is not to be ad-
mitted that the titles by which so much property in this country and so many
rlghts are held, purportlng to emanate from the authoritative action of the
officers of the government, and, as in this case, under the geai and signature
of the Président of the TJnlted States himself, shall be dépendent upon the
hazard of successful résistance to the whims and caprices of every person
who chooses to attack them in a court of justice; but It should be well
understood that only that class of évidence which commands respect, nnd
that amount of it which produces conviction, shall make such an attempt
successful."
It is not necessary to consider the various contentions in this case
upon the subject of the évidence admitted. Ail of the évidence pre-
sented in the record, whether objected to or not, would not change
the ruling of this court. It should be observed, however, that there
is a great deal of irrelevant testimony presented, and there has been
an indulgence in asking leading questions of the witnesses for the
complainant that is unprecedented. It is claimed that thèse witness-
es were hostile witnesses. There is no appearance, however, of
reluctance on the part of any of the witnesses to testify in the case.
The witnesses were the witnesses of the complainant, and it ought to
hâve been made to appear clearly in the record that thèse witnesses
were hostile. They were not parties to the suit. As to the witness
Griswold, who was certainly a most willing witness for the complain-
ant, the same practice was observed. It does not seem to me that in
considering a case like this, under the rule laid down in the Maxwell
Land Grant Case, supra, his testimony ought to be given any weight.
According to his own admissions, he had willfully, deliberately, and
corruptly swOrn falsely as a witness for some of the entryrnen and
entrywomen who made proofs in the I^and Office. He had also made
an affidavit contradicting his évidence as to the agreement he had
' 778 125i FBDBEAIj' EEPOBTBBi
•mfh Cobîjatt, wliich àgreement h<t iprevibâsly claimed hàd authorîzed
him to make contracts for thé purchase of theitlands with the entry-
men and entryWorrien before tbeir final proofs'were made in the Land
Office. Hîsgeneral réputation for honesty and truthfuluess was at-
-itacked in : court by respectable witnesses, and he did net sufficiently
rebut this évidence. It was 'shown that he had received money from
parties to supfà-ess. évidence concerning the alleged illégal cutting of
timber upon the public domain. It was further shown that he had re-
ceived some kind of assurance from représentatives of the govern-
ment that, should he testify as he had stated to them, he might be
awarded public employmeat, What passed between him and the De-
partment of the Interior upon tbis subject that department claimed as
being privileged, and refused tô divulge. Such a \yitness as this could
hardly furnish proofs dear ànd satisfactory. If we consider the évi-
dence of the entrymen and entrywomen, we find that they positively
and emphatically deny that they had made any contraCts to convey
the lands to Cobban beforé final entry and purchase. While there
may be suspicion that this évidence was not correct, and a supposition
that there must hâve been made some con tract between Cobban and
themseives in regard to this Matterv it must be borne in mind that
thèse witnesses were witness,es produced by complainant, and, except
where the witness Grîswold testified otherwise, no évidence was intro-
duced to contradict this, and the court is called upon by the complain-
ant to find from its suspicion or supposition that there was such a
contract. Cobban himçèlf testified that he knew the law, and knew
that such à contract was in violation thereof, and thathe was careful
to make no such contract whatever; and, again, Cobban was a wit-
ness for the Complainant.
Considéring ail of this évidence, it wpuld seem thàt stronger cases
for the setting aside of a patent for fraûd on the part of the entryman
were presented in the cases of Colorado Coal & Iron Co. v. U. S.,
123 U. S. 307, 8 Sup..Ct. 131, 31 Lr. Ed.' 182; U. S. v. Budd, 144 U. S.
154, 12 Sup. Ct. 575, 36 L. Éd.^84; and U. S. v. Détroit Timber &
Lumber Co. et al. (C. C.) 124 Fed. '39?- Considéring the rule as to
évidence nècessary to estàblish fraud m such cases as this, and the
rulings of the courts in the above cases, I am constrained to the view
that it is riot establiâhed that the entrymen and entrywomen and
Cobban committed the frauds charged in the bill.
For the above reasons the bill must be dismissed.
UNITBD STATES T. BEAVEHS.
(District Court, S. D. New York. October 24, 1903.)
l. UkitbD States CoMMissioNKES— Powbes as Magistràtbs— Issuance of Bub-
PŒNASi
TJnder Rey. St. § 1014 [U. S. Comp. St. 1901, p. 716], which authorlzes
Xlnited, States commlssloners to act as examining and commltting magis-
trates In crinilnal cases in any stàte "agreeably to the usual mode of
process àgalnst offenders in sucb state," à commlssioner in New York,
sltting as a magistrate, bas power to Issue subpcenas for witnesses, crim-
TINITED 8TATE8 V BEAVEBS. 770
Inal magîstrates of the state belng glven such power by statute; but un-
der Code Or. Proc. N, Y. § 618, which în effect provides that no person
shall be obliged to attend as a witness out of the county of Us résidence
upon a subpœna issued by a maglstrate, unless on an order indorsed
thereon by a court or judge on a showing made, a commissioner bas no
power to compel the attendance of a witness by a subpœna issued by
him at the instance of a défendant, and served outslde of the county
where the hearing talces place, unless an order therefor is obtained from
a fédéral court or judge in conformity to the state practice.
2. Same— Pdnishmbnt op Witness for Contempt.
By the weight of fédéral authority, a United States commissioner Is
held to be an offlcer of the court which appointed him, and without power
to nunish for contempt In proceedings before him, such power being in the
court
On Motion to Punish for Contempt.
Morgan & Seabury, for the motion.
Thomas Ives Chatfîeld, opposed.
HOLT, District Judge. Thèse are motions to punish William J.
Youngs, the United States district attorney for the Eastern Dis-
trict of New York, and Miss Amy Wren, a stenographer in his office,
for contempt for failure to obey subpœnas.
The défendant, George W. Beavers, was indicted by the fédéral
grand jury in the Eastern District of New York, and a warrant is-
sued there for his arrest, but he was not found in that district. There-
upon an application for his arrest and removal was made before
Samuel M. Hitchcock, Esq., a United States commissioner for the
Southern District of New York, and the commissioner issued a war-
rant to the marshal for the Southern district of New York, under
which the défendant was arrested and brought before the commis-
sioner. He demanded an examination, and in the course of the ex-
amination applied to the commissioner to issue, and the commis-
sioner thereupon did issue, two subpœnas to each of the persons
William J. Youngs and Miss Amy Wren. One of thèse subpœnas
was a gênerai subpœna to appear and testify; the other was a sub-
pœna duces tecum, requiring the person subpœnaed to produce cer-
tain contracts and documents, which apparently constituted évi-
dence relating to the charge on which the indictment was based.
Thèse subpœnas were sîgned and sealed by the commissioner, and
countersigned by the defendant's attorneys, but they were not issued
or countersigned by a judge or by the clerk of this court. They
were served upon Mr. Youngs and Miss Wren in Brooklyn, in the
Eastern District of New York, and hâve not been served in the
Southern District. They did not obey the subpœnas, and this motion
is made to punish them for contempt in neglecting to obey them.
United States commissioners were originally authorized to be ap-
pointed by the United States Circuit Courts for the purpose of taking
oaths and acknowledgments. Their powers were subsequently in-
creased by various statutes and ruies of court. By section 1014 of
the Revised Statutes [U. S. Comp. St. 1901, p. 716], they are author-
ized to act as examining and committing magistrates in criminal cases
in any state "agreeably to the usual mode of process against oflfenders
in such state." There is no United States statute expressly author-
780 ,125 FEDERAL EBPORTEB. ■
izing a United States commissioner, when sitting as a criminal magis-
trate, to issue subpœnaS for witnesses; but it bas always been the
universal practîçe for commissioners to issue subpœnas, and the
United States Statutes impliedly recoghize that witnesses are to be
subpœnaed before commissioners by regulating the fées of witnesses
to be taxed against the United States in any criminal case before a
commissioner (Rev. St. U. S. § 981 [U. S. Comp. St. 1901, p. 705]),
and by authorizing the commissioner to take the recognizances of the
witnesses before him for their appearance to testify in the case (Rev.
St. U. S. § 1014). The power of a commissioner, when sitting as a
criminal magistrate, to issUe subpœnas, has sometimes been thought
to be a power inhérent in his office, independent of statute; for al-
though he is not strictly a court of the United States (Todd v. United
States, 158 U. S. 278, 15 Sup. Ct. 889, 39 L,. Ed. 982) he discharges
judicial functions of grave importance, and in doing so has no divid-
ed responsibility with any other officer of the government, and is
not subject to any other's, control (United States y. Schumann, 2
Abb. U. S, 523, Fed. Cas. No. 16,235; Ex parte Kane, 3 Blatchf. i,
Fed. Cas. No. 7,597; United States v. Jones, 134 U. S. 483, 10 Sup.
Ct. 615,33 h. Ed. 1007; United, States v. Ewing, 140 U. S. 142, 11
Sup. Gt. 743, 35 L. Ed. 388). I think, however, that the true basis
of his power to issue subpœnas is contained in the provision of sec-
tion 1014 that the proceedings sh^ll be agreeably to the usual mode
of process against qfifenders in the state in which the arrest is made.
The adoption by Çongress of state laws regulating procédure and
practice in the United States courts is not unusual; as, for instance,
in the well-known sections providiiïg that, the practice at common
law in United States courts shall be governed by the state law regu-
lating practice at common law in the state courts (Rev. St. U. S. §
721 [U. S. Coinp. St. igoit, p. :58,i]), and that.any offense committed
in a place _!under thé jurisdiction of .the United States, which is not
eixpressly prphibited byia United States statute, may be prosecuted
and receive the same punishment as thç Jaws of the state provide
for sych offense when tommittcd^within the jurisdiction of the state
(Rev. St. U.;,S. § 5391-, [U. S. Çonip. St. 1901, p; 3651]). As a
criminal magistrate in this state ,,has the power; to issue subpœnas
(Code Cr. Proc. N. Xt §§' 607, 608),; a United States commissioner,
having power to act asacoipmitting magistrate: "agreeably to the
usual mode of process .against pfïenders in such state," has, it seems
to me, by the, exprès^, provision of section 1014, authority to issue
subpœnas., ,-,' ,,,. .. ,..,•; ' .::,,
As there is.rno United ^tatesçtajiute specifîcally authorizing a
United States, commissit^nier to issue iSubpœnas/ so there is no United
States statute specifîcally authorizing .a commissioner or any court
tp punish any, person for, disobeying asubpœna issued by: a commis-
sioner. Qf course, hoiwever, unless,§uch autharity r©sts somewhëre,
the power qf a,,Uj^ited States commissioner to hold a judicial inves-
tigation is prâçticâlly at ■ th^ merey of the witiîesses summoned. It
would seeniat ^fsf view that if the copiniissioner has power to issue
a subpœna he has power to punish; for contgrapt a person who dis-
obeys it. The,' gênerai ruie is that any court or person having au-
UNITED STATES V. BEAVEES. 781
thority to discharge judicial functions has inhérent power to punish
persons guilty of contempt, unless such pQwer is specifically lodged
elsewhere. Such a power is a necessary incident of the authority,
and essential to the proper discharge of it. Moreover, the provision
in the statute which has been already referred to, that a United
States commissioner sitting as a criminal magistrate shall proceed
agreeably to the usual mode of process against ofïenders in such
State, would seem to authorize a commissioner sitting in this state
to punish a person guihy of contempt, inasmuch as a criminal magis-
trate in this State has such power. Code Cr. Proc. N. Y. § 619. But
I think that the weight of authority is to the effect that a commis-
sioner has no power to punish for contempt, but that such powei
exists in the court which appoints the commissioner. Ex parte Per-
kins (C. C.) 29 Fed. 900; In re Perkins (D. C.) 100 Fed. 950. The
doctrine of thèse cases appears to be that a United States commis-
sioner is an officer of the court which appoints him, so far as the
power to punish for contempt is concerned, and that any person
guilty of a contempt in proceedings before a commissioner is guilty
of a contempt of the court. No authority has been called to my
attention in which the action of a commissioner in punishing a wit-
ness for contempt has been upheld, and I think that I am bound to
foUow the authority of the cases cited, and to hold that this court has
the power and the duty to punish persons who are guilty of contempt
in refusing to obey subpœnas issued by one of the United States com-
missioners appointed, by this court.
The question, therefore, which remains is, were Mr. Youngs and
Miss Wren guilty of contempt in not obeying thèse subpœnas which
were served upon them. One of the grounds upon which they de-
clined to obey the subpœnas was that a commissioner's subpœna
cannot be served outside the district for which he was appointed.
Upon this question again there is no United States statute prescrib-
ing the limit within which a commissioner's subpœna may be served.
It is argued that there can be no presumption that the jurisdiction
of the coinmissioner extends in any respect outside of his district,
and that, therefore, no jurisdiction was obtained by the service of the
subpœnas in the Eastern District I think, however, that the sàme
provision, which already has been quoted several times, that the pro-
ceedings should be agreeably to the usual mode of process against
oiïenders in the state, applies. This makes it necessary to see what
jurisdiction a criminal magistrate in this state has to issue subpœnas.
A criminal magistrate in this state is authorized to, "issue subpœnas,
subscribed by him, for witnesses within the state, éither on behalf of
the people or of the défendant." Code Cr. Proc. N. Y. § 608. In
respect, however, to the service of a subpœna out of the county where
the magistrate sits, the Code of Criminal Procédure contains the
following provisions, in section 618:
"A person served with a subpœna, issued by any offlcer of any court of
record of this state, a district attôrney or a county clerlî, n}ust attend in
obédience to the subpœna, at the time and place and before the court therein
named, within any county of this state. No person is obliged to attend as
a witness upon a subpœna, issued by any person or court other than a judge
of a court of record, a court of record, a district attôrney, or a county clerk,
782 125 FEDBEAL EEPOBTEB.
out of the connty where the witiless résides or is served with ttie subpœna,
unless the county Judge of the county where sueh subpœna is returnable, a
justice of the Suprême Court, or a court of record, upon an affldaTît of the
prosecutor or district attorney, or of the défendant or hls counsel, stating
that he believes that the evidenae of the witness Is material, and his at-
tendance at the trial or examlnatiOn necessary, shall indorse on the subpœna
an order for the attendance of the wltuess."
In my opinion, this section régulâtes the power of a United States
commissioner to issue subpœnas in criminal cases. The effect of it,
if my view is correct, is that the United States district attorney may
issue a subpœna in a criminal case pending before a United States
commissioner, which may be served anywhere in the state ; but that
if a subpœna is issued by a commissioner on the application of a de-
fendant, and it is served outside the county where the hearing takes
place, the person served is not obliged to attend, unless this court
shall indorse on the subpœna or make an order for the attendance of
the witness, upon such an afïidavit as is provided in section 6i8. I
think that Congress intended to make, and did make, the practice be-
fore a United States commissioner substantially similàr to the prac-
tice before a state criminal magistrate, and that as the state has
guarded against the possible abuse of summoning witnesses a long
distance from their homes by irresponsible défendants, by providing
that that shall not be donc without the previous authority of the court,
the same practice should be followed in a proceeding before the
United States commissioner. The subpœnas in this case wrere not
ordered or authorized by this court, and I think, therefore, that Mr.
Youngs and Miss Wren were not obliged to attend as witnesses
under such subpœnas.
This conclusion makes it unnecessary to discuss the other ques-
tions argued. If the view is not correct that the jurisdiction of a
United States commissioner is to be determined by the statutes of
the state fixing the jurisdiction of state criminal magistrates, the re-
suit, it seems to me, must be the same. The alternative must be
either that a United States commissioner has no jurisdiction outside
of his own district, or that there is no power anywhere to punish
for a disobedience of a subpœna issued by a commissioner. The
whole subject is obscure and difficult under the statutes and décisions,
and should be regulated by a simple statute. But it seems to me
that, in any point of view, this motion must be denied.
HEUBLHIN et al. v. ADAMS et al.
(Circuit Court, D. Massachusetts. November 9, 1903.)
No. 1,465.
1. Tbade-MaBK— "Club" Cocktails— Propbiktt of Désignation.
The word "Club," as applied to a Brand of cocktails, is not a term of
description, but an application of a common word to a commercial article
In an arbitrary or fan<dful sensé to indicate origln or ownershlp, and Is
consequéntly appropriât» as a trade-mark.
1 1. Arbitrary, descriptlTe, or flptitipus character of trade-marks and trade-
aames, see noté to Searle & Heretb Co. t, Warner, 50 C. G. A. 323.
HETJBLEIN V. ADAM9. 783
9l Bamé— Priob Appropriation— Sufficibncy of Evidettcb.
In 1892 complaiiiants adopted, and bave since used, the term "Club
Cocktails" as a distingulshing trade-name for their bottled cocktails.
About 1892, and perhaps earller, a limlted quantlty of bottled cocktails
was put on the market under the name of "Outing Club Cocktails," but
thèse goods made Uttle or no Impression on the trade, and the use of the
name was in the nature of an experiment, and was transitory and in-
conslderable. In 1898 the manufacturer of the "Outing Club Cocktails"
caused to be Inserted in Mida's Eegister a label on which those words
appeared, wlth the statement, "Used since 1S94." Eeld, that the évidence
did not establlsh any commercial use of tbe word "Club," as applied to
cocktails, sufflcient to show an appropriation thereof as a trade-name
prlor to complainants' adoption thereof.
8. Bame— Unfaik Compétition.
In 1892 complainants began the use of the phrase "Club Cocktails" as
the distingulshing trade-mark for their goods. Several years later the
défendants began selling bottled cocktails under the name "Boston Cock-
tails," and In 1900 adding the word "Club," calling their product since
that tlme "Boston Club Cocktails." Complainants bullt up an extenslve
trade In "Club Cocktails," both In thls country and abroad, and their
goods recelved a universal trade récognition, and completely occupied the
market. Défendants' reason for Incorporatlng the word "Club" in the
name of their product was that they heard some other dealer was uslng
their original désignation. On two occasions défendants fiUed orders for
"Club Cocktails" by furnishing their own goods. There is no slmilarity
between the label and the slze and color of the bottles used by the re-
spective parties. EeM, that the défendants' adoption of the word "Club"
constituted unfalr compétition entltling complainants to an Injunction,
In Equity.
Hiram R. Mills and N. L. Frothingham, for complainants.
John Lowell and Jesse C. Ivy, for défendants.
COLT, Circuit Judge. This is a bill for infringement of a trade-
mark and to restrain unfair compétition in trade. The material facts
disclosed by the proofs may be summarized as follows : Since 1892
the complainants hâve adopted "Club Cocktails" as the distingulsh-
ing trade-name for the cocktails which they put up in bottles and sell
to the trade. Several years later the défendants began putting up
and selling bottled cocktails under the name "Boston Cocktails."
In 1900, however, they added to this name the word "Club," and
since that time they hâve called their product "Boston Club Cock-
tails." "Club Cocktails" was registered in the Patent Office by the
complainants as their trade-mark on June 23, 1896, upon an applica-
tion filed October 5, 1893. Thèse words were also registered and
published as complainants' trade-mai;k in the recognized trade publi-
cation known as "Mida's Register." THe complainants hâve built up
an extensive trade in "Club Cocktails," not only in this country, but
in most of the foreign markets of the world. They hâve spent over
$125,000 in advertising, and their business has grown to be of large
value. Their use of this trade-name since its adoption in 1892 has
been continuons, uniform, and notorious. It has been substantially
an uninterrupted and exclusive use. The complainants' goods hâve
received a universal trade récognition, and, in a broad commercial
f 3. Unfalr compétition, sée notes to Scheuer v, MuUer, 20 C. G. A. 165;
liare v. Harper & Bros., 30 C. C. A. 376.
784 125 FBDSmAL BEPORTEH.
sensé, hâve compîetelydccupied the market. "Club Cocktails" mean
in the "tirade only the cocktails made by the complainants. It is. true
that about 1892, and pér'haps earliér, there were put upon the market
iiji limited quantities bottled cocktails under the name of "Outing
Club Cocktails." Thèse goods, however, may be said to hâve made
lîttle or ho impression ttpoîi the trade.' The usé oî this name seems
to hâve been in the nattire of an experiment, and it was at most tran-
sitory and inconsiderable.
While the form and appearance of défendants' labels and the size
and colQr of their bottles are unlike the complainants', it appears that
the distinguishing feature by which complainants' cocktails are com-
mercially known résides in, the word "Club," and not in the dress of
the gdods. Thèse goods are advertised in newspapers, periodicals,
and booklets simply as "Club Cocktails." They are ordered under
this name by dealers and consuiners, and they appeâi- under this
name on current wine lists, both of jnerchants and others. In other
words, complainants' cocktails are identifîed, recognized, and known
in the tradé and by the public solely bythe word "Club."
The only reason which défendants give for incorporating the word
"Club" into the name of their cocktails is that they heard some other
dealer in Boston was using the name "Boston Cocktails," and they
intended by this change to avoid confusion in the trade. At the
same time they say that "Club," as applied to cocktails, was in com-
mon commercial use. It also appears that upon two occasions the
défendants filled orders, one by letter and the other verbal, for "Cl:ib
Cocktails," by furnishing their own goods ; and in one of thèse in-
stances it was stated by the clerk in their employ that their goods
were the only "Club Cocktails" on the market.
. The complainants contend, first, that they hâve a technical trade-
mark or, trade-name in "Club Cocktails"; and, second, if they hâve
not ah exclusive property in thèse words, that théir use by the de-
fendants is an unfair interférence with their trade, and calculated to
deceive the public. Upon full considération it seems to me that the
term "Club Cocktails," as applied to a commercial article in the form
of bottled cocktails, may be rightfully appropriated as a trade-mark.
Thèse words respond to ail the tests of a vaHd trade-mark. They
are not a geographical name, nor a personal name, nor are they de-
scriptive within the meaning of the trade-mark law. "Club," in this
connectiohj i.s the application of a common word to a commercial ar-
ticle in an arbitrary or fanciful sensé, to indicate origin or ownership.
When applied to liquors, cocktails, or other articles, "Club" may be
suggestive of excellence or quality, but this does not make it descrip-
tive within the law. Many trade-marks are suggestive of quality.
Noris thé uise of "Club" in this connection descriptive in the sensé
that it âesigqates an article made by a social organization known as
a club. i.Such use is no more descriptjve than "Club Skates," "Club
Guns," or "Club Saddles" would be descriptive. ' Social clubs are not
engaged ,ih the business of putting bottkd cocktails on the market,
àny niore than athletic clubs are engaged in the manufacture and sale
of skates, ,guns, or saddles. To render "Club" descriptive in this
sensé, there must be added the name of a particular club, as, for in-
HEUBLEIN V. ADAM8. 785
stance, Manhattan, Somerset, Hartford; and no such organization
could properly apply the word "Club" to its own manufacture or
product as an article of commerce without the addition of its own
spécifie name. Because a common word like "Club" may become
descriptive when used in combination with a particular name, and
because others may hâve a right to use it when so combined, does
not render it, in my opinion, incapable of appropriation as a trade-
mark. I see no reason, therefore, why "Club Cocktails" may not
be appropriated as a trade-name, since the words are not descriptive,
since they are used in a purely arbitrary sensé, and since they were
originally adopted to indicate the origin or ownership of the com-
mercial article to which they are applied.
Upon. the question of the first appropriation of "Club Cocktails"
as a trade-name, I find that the use of this name in connection with
"Outing Club Cocktails" was so transitory, spasmodic, and incon-i
siderable, as contrasted with the long-continued, notorious, and uni-
versally recognized use by the complainants, that the case at bar
clearly falls within the doctrine laid down by the Circuit Court of
Appeals for this circuit in the case of Levy v. Waitt, 6i Fed. 1008,
10 C. C. A. 227, 25 L. R. A. 190. The complainants adopted "Club
Cocktails" as the distinguishing mark for their goods in September
or October, 1892. In 1898 — five years later — the Otis S. Neale
Company, of Boston, caused to be inserted in Mida's Register a label
on which appears the words "Outing Club Cocktails," with the ac-
companying statement, "Used since 1894." This published notice to
the world that the use of "Outing Club Cocktails" began in 1894
i-aises a strong presumption against any intention to appropriate this
name at an earher date. It may be that a few bottled cocktails hav-
ing this brand were put up at an earlier date, but I do not think the
évidence establishes any commercial use of this name sufficient to
overcome the date deliberately fixed in Mida's Register.
The essential nature of ail trade-mark suits is the same, whether
they rest upon infringement or upon unfair compétition. At the
foundation of the law Hes the rule that every person should so use his
own property as not to injure the property of another. The essence
of the wrong consists in the sale of the goods of one person as those
of another, thereby misleading the public and injuring the business
of another. It is only when this false représentation is directly or
indirectly made that a court of equity will grant relief. Canal Com-
pany V. Clark, 13 Wall. 311, 20 L. Ed. 581; Paul on Trade-Marks,
§ 7, p. 34. Every trade-mark case is based upon fraud, actual or
constructive. In technical trade-mark cases fraud is presumed, while
in cases of unfair compétition the plaintiff must prove a fraudulent in-
tention, or show facts or circumstances from which it may reasonably
be inferred. Paul on Trade-Marks, § 210. The proofs essential to
make out a case of unfair compétition dépend upon the nature of the
ttade-mark. Where the mark is in the form of a label, it is necessary
to show such a simulation of it as would be likely to mislead the
public. Where the mark is in the form of a trade-name, and con-
sumers hâve come to recognize the particular goods by that name,
125 F.— 50
786 125 ï'ÈBËEÀL KBPORTEB.
rather thânby their dress, then the différence in the label or wrap-
pings becôttiès immaterial.
Turnirtg tô the case at bar^I find that the complainants' goods are
bcmght attd soid under the trade-nàmë "Club Cocktails."' The word
"Club" isakind of catcli-woi'd by wHch thèse goods are known in
the trade and among consumers; consequently the différence in the
défendants' labels and the size and color of the bottles they use is
unimportant, and does not tôuch the real issue in the case. Again,
the défendants' are not a club, and the reasons which they give for
adopting this word, after the Complainants' goods had acquired a wide
réputation on the market, are inconsistent and unsatisfactory. As-
suming, however, that the Word was innocently adopted by the de-
fendants, it still remains true that the effect of such adoption must be,
upon ail the facts and circumstances disclosed in the proofs, to de-
ceive the public and to, injure a rival manufacturer. The évidence
specifically shows that in two instances, upon an order given for
"Club Cocktails," the défendants supplied their own article. Inde-
pendently, therefore, of the question whether the complainants hâve
a technical trade-mark in "Club Cocktails," I am of the opinion that
the défendants should be restrâined from the use of the word "Club"
as a distinguishing mark for their cocktails, upon the ground of un-
fair compétition in trade.
Decree for complainants.
THE MTJSSBLORAa
(District Court, N, D. Callfomla. Octqber 9, 1903.)
No. 12.145.
1. Shippinq— Damage to Cahçk)— Ûlaim dp Impropek Stqwage.
Where a shlp during the voyage encountered storrûS of such violence
as to reasonably account fot the opening of her deck seams and the
consequeat damage to ber .cargo from water, the burden of proof resta
upon the cargo owner to establlsh a claim made by hlm that Improper
stowage of the cargo cansed or contributed to the strain on the vessel's
deck and the resultlng irijiiry thèreto.
8. SAMB— CaBB RBQUIRKD in StOWAGB.
A shlp is bound to the- exercise of reasonable care and skill only In
the stowage of cargo, andto render her llable for damage to cargo on
the ground that she was ûnseaworthy by reason of improper stowage it
must be pjhown that the maniieï of stowage was such as would not
hâve beeri approved at thé tlme by a steVedoi-e or master of ordlnary
skill and judgment, knowlng the voyage to be made^ aild the weather
and sea conditions which the vessel mlght reasonably be expeeted to
èncounter.
8. Samk— Négligent FAiiiURB to Proteot Cargo— Habtee Act.
A shlp boùnd frôm Antwerp to San EYancisco wlth a cargo of cément
1 1 encountered such rotigh weather In attempting to round Cape Horn, and
i was subjected to such fitraiV.pthat her deck seams openedand a part
of the cargo was damaged, by water. She finally abandoned the attempt,
and completed the voyagé by Way of Cape Good Hope and Australia.
When She chaBged her co'drse she was within 60 miles of the Falklahd
, 1 . — __ (4^ , , ,
11. Statutory exemption: rOf shipowners from llability, see note to Nord-
Deutscher Lloyd v. Insurance Co., 49 C. C. A. 11.
THE MUSSELCRAG. 7S7
Islands, but dld not put in for repairs, and before she reached Australia
the cargo suffered further damage by reason of the open seams. Held,
that the failure of the master to seek a port and repalr the deck before
starting back was not a fault or errer in navigation or in the manage-
ment of the vessel, wlthin section S of the Harter act, but simply a
failure to use proper eare for the protection of the cargo, which ren-
dered the ship llable for the resulting damage.
4. Samb— Mkasurb of Damages— Damage Resulting onlt in Part fkom
Fault of Ship.
Where it appears that the greater part of the damage to a cargo re-
sulted from sea périls for which the ship is not liable, but further dam-
age oecurred through the négligence of the master in faillng to put into
port to make repairs, it would be inéquitable to hold the ship llable for
the entire damage, although it cannot be separated, and the loss should
be divided.
In Admiralty. Action to recover for damage to cargo.
Nathan H. Frank, for libelant.
Page, McCutchen, Harding & Knight, for respondent.
DE HAVEN, District Judge. This libel was filed against the ship
Musselcrag to recover for alleged damage to a cargo of cernent,
shipped on that vessel at Antwerp for carriage to the port of San
Francisco. The cargo consisted of 3,278 tons of cément, and of this
2,350 tons were stowed in the lower hold and 928 tons betvireen-decks.
The cément was damaged by reason of water, which came through the
seams of the deck, and it is claimed by the libelant that the opening
of the seams and the conséquent damage to the cargo was the resuit
either in whole or in part of improper stowage, in this, that the cargo
was not properly distributed, that toc much weight was placed in the
lower hold, which made the ship so stifï that she would not roll easily,
and caused her in a rough sea to right herself quickly with a jerk
or sudden lurch, the efïect of which was to place so great a strain
upon the deck that its seams were opened. In short, the contention
of the libelant is that the ship was rendered unseaworthy by the im-
proper manner in which her cargo was laden. When she left Ant-
werp the vessel was sound in hull and properly equipped, and the évi-
dence shows that in attempting to round Cape Horn she met with
storms of extraordinary severity and of several days' duration, during
which she labored and strained to such an extent that the seams in
her deck were opened and the deck almost continuously flooded with
water, making it necessary, in the judgment of the master, to raise
some of the cargo from the lower hold and stow it between-decks,
in order to ease the ship; and about two weeks after this was done
50 tons of cernent were taken from the lower hold and jettisoned.
By reason of adverse winds and the violence of the storms thus en-
countered, the ship was compelled to abandon the attempt to pass
around Cape Horn, and she changed her course and came to San
Francisco by way of the Cape of Good Hope and Australia.
By the terms of the bill of lading the ship was not to be responsible
for any loss or damage which the cargo might sustain by reason of
périls of the sea. The question of fact, therefore, to be decided, is
whether the damage for which the libelant sues was occasioned by
périls of the sea or by improper or négligent stowage, causing the
788 125 FEDERAL EfepdKTEK.
vessel tQ labor and straîh more than she otherwise would hâve done,
and thus contributing to the openirig of the deck seams. Upon this
question there is a decided conflict in the évidence. Upon the one
side three wîtnesses, one a compétent $tevedore and two master mari-
ners, gave it as their opinion that in its stowage the cargo was not
properly distributed; that there were about 150 tons too miich put
into the lower hold ; and that the efïect of thus stowing a heavy,
compact cargo, Hke that of cément, caused the ship to rolï more
heavily and increased: the strain upon her decks. Upon the other
hand, the master of the ship, a seaman of long expérience, 'testified
that the cargo was laden under his gênerai supervision, and was in
his judgment properly distributed; that the ship did not give évi-
dence of unusual straining until the severe weather was encountered ;
and this évidence is corroborated by the second mate, and also finds
some support in the testimony given by two of the stevedores who as-
sisted in loading the ship.
It having been shown that the vessel encountered storms of such
violence as to reasonably account for the opening of the seams in her
decks and the conséquent damage to her cargo, the burden of proof
is upon the libelant to éstablish the fact of improper stowage, con-
tributing to the strain upon the vessel's deck and the resulting injury
thereto. Thé Neptune, 6 Blatchf. 193, Fed. Cas. No. 10,118; The
Polynesia (D. C.) 30 Féd. 210 ; The Fern Holme (D. C.) 24 Fed.
502; The Burswell (P. G.) 13 Fed. 904; Clark v. Barnwell, 12 How.
280, 13 Tv. Ed. 985; Muddle V. Stride, 9 Carr. & Payne, 380. It
is not deeméd necessai'y to analyze the testimony, or to discuss the
reasons which were givén by the expert witnesses in support of the
opinions expfessed by them. It will be sufificient to say that, after
careful Considération of ail the évidence, I hâve rçached the conclu-
sion that it is not sufficient to éstablish the fact of improper stowage.
Stowage, with a view to the proper trim pi the yessel and the ease
with which it will be able.to carry its cargo when at sea, is a matter
which calls for the judgiiieiit of those under whose supervision it is
done. The carrier is only required to, exercise reasonable care and
skill in stowing cargo, and the mère fact that if it hadbeen differently
distributed the ship would hâve beeri more easy does not necessarily
show that the cargo was negligently stowed, that is,,stowed in such
a manner as wbuld not hâve been ^pproved at the time by a steve-
dore or master of ordiriary skjll and, judgiiient, knowing the voyage
upon which.the Vesser was a.bout to sail, and the weather and sea
conditions which she might reasoiiably be expected to encounter.
In order to éstablish suçh négligence as is claimed hère, the dis-
proportion between the amount sto\ved in the lower hpld and that
placed betwee'n-decks ihuçt be so great as to warrant the conclusion
that reasonable jùdgrnent was not used in loading the vessel, and I:
am not satisfieà frorh thç évidence that such great disproportion ex-
isted' in thi^ çàse." / ^ /' , . '', ■ ; ,; .; :: ;
2. It is furthter ciàirhed b^ the libelant that the ship is liable be-
cause of the fâilure of the ,;i\aster to repair her damage at the Falk-
land Islands, instèâd of proceèding to AustraHa with the decks in the
condition in which they were when the attempt to round Cape Horn
THE MXJSSELCRAG. 789
was abandoned. The évidence certâinly shows that the injury which
the vessel's decks sufifered before sailing for Austraha was so severe
as to render them unseaworthy with respect to the protection of the
cargo, and during the voyage to Sydney the vessel encountered
weather so rough that her decks were often filled with water, from
which cause the cargo received additional damage. When the mastcr
of the Musse] crag started for Austraha he was within 60 miles of the
Falkland Islands, and it seems to me that in the then condition of
the ship he ought, in the exercise of a reasonable judgment, to hâve
sought that port for the purpose of making repairs, and in not doing
so he failed to use that care for the protection of his cargo from
further damage which was incumbent upon him. For this negh-
gence and breach of the contract of afïreightment the ship is liable.
The Niagara v. Cordes, 21 How. 7, 16 L. Ed. 41. It is argued upon
the part of the claimants that, assuming this action of the master to
hâve been neghgent, it was a fault or error in navigation or in the
management of the vessel, for which the vessel is not responsible
under section 3 of the Harter act (Act Feb. 13, 1893, c. 105, 27 Stat.
445 [U. S. Comp. St. 1901, p. 2946]) ; but this was not a fault or error
in navigation or in the management of the vessel, but simply the
failure of the master to use proper care for the protection of the cargo
in his custody.
3. The question relating to the measure of damages is more diffi-
cult. It is certain that part, and probably the greater part, of the
whole damage which the cargo sustained on the voyage between Ant-
werp and San Francisco, was occasioned by périls of the sea before
the vessel changed her course at Cape Horn and sailed for Austraha ;
but just how much damage was received by the cargo before such
change of course, and how much was sustained between Cape Horn
and Australia, cannot be separately stated from the évidence. The
libelant insists that, because this, séparation cannot be made, the ship
should be held responsible for the entire damage, as well that oc-
casioned without its fàult as that which was caused by the négligence
of the master in not going to the Falkland Islands for repairs. There
is some language used by Judge Hoffman in the case of Speyer v.
The Mary Belle Roberts, 2 Sawy. i, Fed. Cas. No. 13,240, cited by
the libelants, which seems to support this proposition; but, in. my
opinion, the more équitable rule to be applied in this case is to divide
the damages. Under this rule it is reasonably certain that the ship
will be required to respond for ail of the damage occasioned by its
fault, and the libelant has no right to insist upon more than this. In
the case of The Shand (D. C.) 16 Fed. 570, it was said :
"In the case of tlie Mary Belle Kob^rts, where the loss from. se»' péril, if
any, was comparatively small, it was just to hold the carrier answerable
for the whole, unless he could show how much was to be deducted on ac-
count of the minor cause as to which he might claim exemption. But, if
the gênerai circumstances of the case show that the loss has probably arisen
as much from the act or cause attributable to the one party as from that
attributable to the other, there would be no justice In imposing the whole
loss upon one simply because he could not sépara te and distinguish the
exact amount arising from his own fault, and the rule adopted by Sprague,
.7., is, in such a case, obviously the juster one."
790 125 FEDERAL REPORTER.
The rule referred to in the above qootation was announced by
Sprague, J., in Snow v. Carruth, i Spr. 324, Fed. Cas. No. 13,144,
as follows:
"I am satisfled that the great loss In thls case (above the necessary leak-
age) was partly attrlbutable to the négligence of the carrier, and partly to
the négligence or mlsfortune of the shlpper or consignée, and that it is not
practicablfi to ascertain for how much of the loss the one party or the
other is In fact responsible. I am thereforé obligea to adopt some arbitra ry
rule in detenûining the amount to be allowed the respondents. An analogy
may be fonnd in the rule adopted by courts of admiralty in cases of col-
lision, -when both parties are in fault. In sueb cases the aggregate amount
of the damages Is divided equally between the parties."
The case of The Young America (D. C.) 26 Fed. 174, is precisely in
point. The Young America was a tug, and a canal boat which it had
in tow was stranded, and after having been abandoned by the tug
became almost a total loss. The tug was sued by the owner of the
canal boat for the damages thence resulting. The court found that
the stranding was not caused by the tug's négligence, but that the
tug was in fault in leaving the canal boat without any one in charge
of it, and that by reason of such abandonment the damage to the canal
boat had been increased. It was held that the damages should be
divided, the court saying :
"The nature of the case is such that it seems clearly impossible to dé-
termine wlth any approximation to exactness how much of the whole loss
Is attrlbutable to the original stranding, and How much to the subséquent
want of protection. The beat that can be done under such circumstances
Is to dlvlde the damages, fts was done In thé case of Snow v. Carruth, 1
Spr. 324, Fed. Cas. No. 13,144."
It is not deemed necessary to further discuss the questions arising
in this case. My conclusion is that the libelant is not entitled to re-
cover for the cargo which was jettisoned, but is entitled to recover
one-half of the damage sustained by the remaining cargo, with in-
terest from the date of the filing of the libel and costs of suit, and the
case will be referred for the purpose of ascertaining and reporting
such damages. Let sucSh a decree be entered.
INTERNATIONAL KEGISTER 00. v. RBCORDING FARB REGISTER 00.
et al.
(Circuit Court, D. Connecticut October 30, 1903.)
No. 1,121.
1. CoNTBMPT— Violation of Injunction.
Whether or not a prellminary Injunction, restraining défendants from
fiUng a certain class of orders or contracte, applied to a particular con-
tract, Md, under the circumstances of the case, to be a question which
the court would not détermine on a motion to punlsh défendants for con-
tempt, but onljr after a hearlng on the merlts.
In Equity. On mption to punish défendants for contempt.
Walter Carroll Low, for plaintiff.
White, Daggett & Tilson, for défendants.
INTERNATIONAL REGISTER CO. V. EECOEDING F. KEGISTEK CO. 791
PLATT, District Judge. On April 21, 1903, the défendants were
restrained from doing varions things, and, among others, from "fiU-
ing or attemping to fill any of the orders or contracts of the New
Haven Car Register Company," and aiso from "using any and ail
information in référence to the business of the New Haven Car Reg-
ister Company obtained by the défendants, or any of them, while in
its employ, and which information could only hâve been obtained by
the confidential relationship existing by such employment." The
défendants sought to dissolve the injunction, and, after a protracted
hearing, I refused, on the çth day of May, 1903, to dissolve or modify
the injunction in any material respect, on condition that the plaintiff
file a bond of $5,000, which the plaintifï did.
The trouble arises out of the transaction whereby the plaintifï
acquired possession and control of the New Haven Car Register Com-
pany, which culminated at New Haven on March 17, 1903. Under
the bargain then made, the New Haven Company turned over ail its
property to the plaintiff, and agreed not to fill or attempt to fill any
orders or contracts which it had received, with a few unimportant
exceptions. Certain members of the New Haven Company, and
other parties whom they influenced to associate themselves with them
in the enterprise, believing that an opportunity for successful com-
pétition in the same Une of goods presented itself, organized the de-
fendant Company, and began business at New Haven. At the time
of the original injunction order the défendants had obtained and were
preparing to fill an order to supply the Boston Suburban Electric
Company with certain equipments relating to a car registering device,
which the complainant claims the right to fill under the terms of its
contract. The défendants halted in their work on the order, await-
ing the outcome of the motion to dissolve. Upon learning that the
injunction had been continued in force, they decided, under advice of
counsel, to go ahead and finish the order. That défendants are fill-
ing the order is made the basis of the request for punishment in
contempt, and they frankly admit the fa et, but say they hâve a right
to do se. Counsel were heard in court, and hâve filed briefs which
set forth their respective claims with much ability. My action is un-
doubtedly awaited with interest by ail parties. Uncertainty as to the
bearing of the injunction upon the Boston order was avowedly the
main reason for the motion to dissolve the injunction. In refusing
the motion I saw no reason for taking up that spécial branch of the
inquiry. Every clause of the injunction was warranted by the évi-
dence before me, and it seemed prématuré and unwise to attempt a
settlement, at that time, of the contention which had arisen over the
Boston order. The défendants, by their motion to dissolve, sought
an answer to the puzzle then ; the plaintiff^ by its présent motion,
asks for an answer now. The défendants' request was denied, and
nothing has since transpired which entitles the plaintiff to any dif-
férent treatment. It is a matter which, from every point of view,
should await settlement until the hearing on the merits.
Let the défendants be discharged from the proceedings in con-
tempt.
792 - 125 FBDBKAl, KEPORTBB.
HARLBY et àL v. HOME INS. CO. et ftl.
' (Circuit Court, D. South Carolina. Novëmber 4, 1903.)
1. Rbmoval of Causes — Diverse CitizenshiP— Défendants of Différent
CfTIZBtïSHII'— SkPARABLB CoKTROVERSY— DETERMINATION.
Wliere a défendant who is a citizen of tlie saine state as plaintifE Is
joined witli a défendant Of différent citlzensliip, and Buch détendant
claims tlie rigljt to remove the cause to tlie fédéral court on the ground
that the causes of action against the défendants are separable, such ques-
tion Is to fae determined by an examinatlon of the coruplaint alone.
8. SAkE.
Défendant J. recelved under the will of her husband certain real estate
and Personal property for life, remainder to plaintifCs. Défendant J. în-
sured the property with défendant Insurance company for $2,875, the
pOllcy providing that In case of loss the Insurer should be bouiid for
threè-foUrths of the actual cash value of the property. After loss a set-
tlement wasmade between défendant J. and insurer, fixing the loss at
$1,500. ;Thereafter plaintiffs, who were remaindermen, brought suit
against J. and the Insurance company, clalming, as against the Insurance
company, to recover the entire face value of the policy, and, as against
J., thàt the Insurance covered the interest Of the remaindermen, and that
J. was a trustée of the fund to hold for herself for life, remainder to
plaintiffs. Plaintiffs and J. were citizens of the same state, but défendant
Insurance company was not. Held, that the controversies between plain-
tiffs and eaeh défendant were différent and separable, and that the In-
surance company was therefore entitled to remove the cause to the fédéral
court.
8. Same— Pétition fob Bemoval— VERrFicATiON.
In the absence of an express requirement of Act Cong. Aug, 13, 1888,
c. 866, § 3, 25 Stat. 433 UJ. S. Comp. St. l^Ol, p. 510], providing for re-
moval of causes, where a cause is sought to be removed on the ground of
the separable controversies between plaintiffs and défendants, only one
of whom is entitled to remove for diverse cltlzenship, the pétition for re-
moval need not be verifled.
S. McG. Simpkins, for plaintiffs.
Spalding & Little and Smythe, Lee & Frost, for défendants,
SIMONTON, Circuit judge. This is a motion to remand a cause.
The action was brought in the court of common pleas of Edgefîeld
county, S. C, by Robert L,. Harley, administrator of Emma Hulda
Harley, and guardian of the miner children of his décèdent, against
the Home Insurance Conjpany, a corporation of the state of New
York, and Mrs. Mary E. Jennings, in her own right and as execu-
trix of Joseph H. Jennings, deceased. The plaintiffs and the de-
fendant Mrs. Jennings are citizens and résidents of South Carolina.
The Home Insurance Company in due time filed its pétition, with
bond, in the state court, praying removal upon the ground of sep-
arable controverSy. The prayer of the pétition wâs refused. Not-
withstanding thisj^ the petitioner filed in this court a certifîed copy
of the record, and now the plaintiffs enter their motion to remand.
We can only examine the allégations of the complaint. The rule
f 1. Separable coûtroversy as ground for removal of causé to fédéral court,
see notes to Robblns v. Ellenbogen, 18 0. 0. A. 86; Mecke v. Valleytown Min-
erai Co., 35 C. O. A. 155.
See Removal of Causes, vol. 42, Cent. Dig. § 115.
HARLET V. HOME INS. CO. 793
governing cases for removal on the ground of separable controversy,
and for discussing whether or not such controversy exists, has been
laid down in many cases in the Suprême Court of the United States,
from Hyde v. Ruble, 104 U. S. 409, 26 L. Ed. 823, to Torrence v.
Shedd, 144 U. S. 530, 12 Sup. Ct. 726, 36 L. Ed. 528.
The case of Barney v. Latham, 103 U. S. 205, 26 L. Ed. 514, had
laid down the doctrine that, when two causes of action are joined
in one suit, there can be a removal of the whole suit on the pétition
of one or more of the plaintiffs or défendants interested in the con-
troversy, which, had it been sued alone, would hâve been removable.
Commenting on this case, and analyzing it, Waite, C. J., in Hyde v.
Ruble, 104 U. S., at page 409, 26 L. Ed. 823, says;
"Two separate and distinct controversies were directly involved in this
cause. * * * One was a controversy about ttie land, and tlie other about
the money. Separate sults, each distinct in itself, might hâve been properly
brought on thèse two separate causes of action, and complète relief afCorded
in each suit as to the particular controversy involved."
Or as stated in Torrence v. Shedd, supra :
"The whole subject-matter of the suit must be capable of being finally de-
termined as between them, and complète relief afCorded as to the separate
cause of action, without the présence of others originally made parties to the
suit."
The complaint in this case sets out thèse facts: The Home In-
surance Company had issued a policy to Mrs. Mary E. Jennings
in her own name — a policy of fîre insurance, insuring certain real
and Personal property. This property was derived by her under the
will of her husband, Joseph H. Jennings, deceased. She held under
this will the land on which was a dwelling house, covered by the
poHcy, for her use during her widowhood ; remainder to Emma Hul-
da Harley, the décèdent of Robert L. Harley, administrator; re-
mainder to the minor plaintifïs, the children of Mrs. Harley. The
personalty covered by insurance was held by her under this will
for her widowhood, with remainder to Emma Hulda Harley abso-
lutely. The property was insured as foUows: To an amount not
exceeding $1,875 o" the dwelHng house, and $r,ooo on the per-
sonalty ; the Company, in case of loss or damage by fire, to be liable
for three-fourths of the actual cash value thereof. The property
insured was destroyed by fire. A settlement made between Mrs.
Jennings and the insurance company put the loss at $1,500. The
complaint charges that, in effecting this insurance, Mrs. Jennings
acted as trustée for herself and the remaindermen ; that, when the
risk insured against had been incurred, the proceeds of the policy
became impressed with a trust; that the full sum of $2,875 should
be paid to Mrs. Jennings ; that on its receipt this sum should be or
hâve been reinvested by her, and held subject to the limitations and
provisions declared in the will with regard to the property insured.
Proceeding upon this ground, the plaintiffs ignored the settlement
between the insurance company and Mrs. Jennings, and demanded
judgment as follows:
"(1) Against the défendants for the sum of two thousand eight hundred
and seventy-flve dollars, with interest thereon from the 14th day of August,
794 125 FEDERAL REPORTEE.
1902, at the rate ol seven pçr cent per annum. (2) That the sald défendants
be requlred to pay the sald sum lîito the hands of this honorable court, to be
Invested or put eut at IntereSt for the beneflt of thèse plalntlffs and the re-
maindermen under said wlll, as wéll aâ the défendant Mrs. Mary E. Jennings;
the said interest on sald fund to be pald the sald défendant Mrs! Mary E.
Jennings during her widowhood or llfe, and thereafter to be pald thèse plain-
tififs; sald fund, after belng paid by the sald défendants as hereln prayed for,
to be disposed of as set forth in parâgraph 19 of this complaint; for such
other and further relief as séemeth to the court just and équitable; and for
the costs and disbursements of this àiction."
Assuming, for the purposes df this motion, that the plaintiffs hâve
a right of action, there appears in this complaint a controversy as to
the arnouht due on this p6licy of insurance. There also appears a
controversy as to the disposition of the prûceeds of the policy when
they afe tealized. The controversy as to the true amourit of the
proceeds of the policy is Xhe pne with which the Home Insurance
Company is concerned. If it admit the claim of plaintiflfs, or if,
against its contention, that daim be established, and it should pay
it, it would leave this case whoUy discharged therefrom. It is in
no way interested in, concerned in, or chargeable with its disposi-
tion-7-especialIy with the disposition claimed by the plaintiffs. On
the other hand, the controversy between the infant plaintiffs and
Mrs. Jennings is as to the proceeds of the policy of insurance, when
they are reahzed. Did she, in taking out the policy, seek to pro-
tect only her own interest in the property — her own indemnity for
her own loss — or did she intend to, ôr will the law présume that she
did, represent the estate, and will it be held that its indemnity and
benefit necéssarily incurred to the protection of the estate, and that
its proceeds, when the loss_occurred, took the place of the dwelling
house and personalty? This is a controversy wholly between the
plaintiffs and Mrs. Jennings, in which the Home Insurance Company,
as has been seen, has no concern of any kind. Thèse are two dis-
tinct controversies. The answers hâve not been filed, and the line of
défense is not stated. Suppose that the Home Insurance Company
should admit the contention of the plaintiffs, and pay the money
into court. Would it not be discharged? Would there be any fur-
ther necessity for its présence in the case? Suppose that Mrs. Jen-
nings should admit the contention of the plaintiffs — should be
brought to realize that she has been acting as, or is bound by the
responsibility of, a trustée. Then, in this view, the certain sum
insured should be paid to her, and, of necessity, the plaintiffs would
be bound to take her as a coplaintiff with them, and, as their trus-
tée, recover through her ail they claim.
The plaintiffs made further objection to the removal upon the
ground that the pétition for removal was signed by the attorney of
the Home Insurance Company, and in the vérification the attorney
does not explain why he, and not the défendant, makes the vérifica-
tion; and, further, because he does not make it as of his own
knowledge. There is no settled practice on this point. In some
forms prepared by text-writers a vérification of the complaint is
added. In others it is omitted. Perhaps this will dépend on the
practice in the state courts. In South Carolina, by section 177 of
IN EE AH TAI. 795
the Code of Civil Procédure, every pleading in a court of record
inust be subscribed by the party or his attorney; and, when any
pleading is verified, every subséquent pleading, except a demurrer,
must be verified also. If the state practice prevail, and the pétition
for removal be a pleading, in the présent case it will not require
vérification, as the complaint — ^the only pleading in the case — is not
verified. It would seem that, if the pétition for removal is based
upon the existence of certain matters of fact, the pétition ought to be
verified. Where, as in this case, the ground of removal is the exist-
ence of a separable controversy — a fact which can appear on the
complaint only, and is dépendent upon the construction of it by
the court — a vérification is not necessary. Be this as it may, in the
absence of an express requirement in the act of Congress (Act Aug.
13, 1888, c. 866, § 3, 25 Stat. 433 [U. S. Comp. St. 1901, p. 510]),
this objection cannot prevail.
It appears that there is a separable controversy hère. The motion
to remand is refused.
In re AH TAL
(District Court, D. Massachusetts. November 16, 1903.)
1. Aliens— Chinese — Exclusion — Nature op PROCEBDiNa— Bail.
A proceedlng for the déportation of a Ohinese alien under the exclu-
sion acts Is not crlminal in its nature so as to entitle such alien to
bail, as a person accused of crime, pending appeal from a commisslon-
er's order of déportation.
a. Same.
A proceedlng under the exclusion acts for the déportation of a Chinese
alien, though civil in its nature, is sui generis, and the District Judge
to whom an appeal is taken from a commissioner's order directlng dé-
portation has inhérent power to admit the alien to bail pending the
appeal.
8. Same.
Chinese Exclusion Act Nov. 3, 1893, c. 14, § 2, 28 Stat. 8 [U. S. Comp.
St. 1901, p. 1322], providing that an order of déportation shall be ex-
ecuted by the United States marshal of the district within which such
order is made, and pending exécution the Chinese person shall remain
In the custody of the marshal and shall not be admitted to bail, ap-
plles only where the order of déportation is final, and does not prevent
the admission of a Chinese alien, ordered to be deported, to bail pend-
ing an appeal from such order.
William H. Garland, Asst. U. S. Atty.
John L. Dyer, for Ah Tai.
LOWELL, District Judge. A Chinaman was complained of un-
der the Chinese exclusion acts of May 5, 1892, c. 60, 27 Stat. 25 [U.
S. Comp. St. 1901, p. 1319], and November 3, 1893, c. 14, 28 Stat. 7
[U. S. Comp. St. 1901, p. 1322], as being a Chinese laborer in the
United States without authority. After hearing, the commissioner
1[ 1. Citizenshîp of the Chinese, see notes to Gee Ford Sing v. United States.
1 C. C. A. 212; Lee Sing Far v. United States, 35 C. G. A. 332.
î 3. See Aliens, vol, 2, Cent Dlg. § 94.
796 125 FEDERAL REPORTER.
:ordered:his déportation. He has duly appealed to me, and, pending
a hearing on his appeal, asks to be admitted to bail. The district
attorney has oppqsed his pétition, and has objected that he cannot
be bailed under the circumstances.
The bailing of a Chinaman under the exclusion acts is not easily
brought within the gênerai principles governing the law of bail and
recognizance. In Fong Yue Ting, 149 U. S. 698, 13 Sup. Ct. 1016,
37 L. Ed. 905, it was held that the proceedings under thèse acts
are not crjminal in their nature. It was there said, "When * * *
the executive officer * * * brings the Chinese laborer before the
judge in order that he may be heard, and the facts upon which dé-
pend his right to remain in the country be decided, a case is duly
submitted to the judicial power; for hère are ail the éléments of a
civil case—a complainantj a défendant, and a judge." Page 728, 149
U. S., page 1028, 13 Sup. Ct., 37 L. Ed. 905. "The proceeding be-
fore a United States judge, as provided for in section 6 of the act of
1892, is in no proper sensé a trial and sentence for a crime or of-
fense." Page 730, 149 U. S., page 1028, 13 Sup. Ct., 37 L. Ed. 905.
See Li Sing v. U. S., 180 U. S. 486, 494, 21 Sup. Ct. 449, 45 L. Ed.
634. The décision of the first-mentioned case turned upon the nature
of the proceedings for déportation. Had thèse been deemed crim-
inal, the statute would hâve been held unconstitutional. It seems
to follow that Chinamen whose déportation is sought by the United
States hâve not the right, as persons accused of crime, to demand
release upon bail. On the other hand, if the proceedings for dé-
portation are deemed civil in their nature, it is not easy to find au-
thority for admission of the respondent to bail, unless an arrest in
a civil case necessarily imports the right to a release upon bail. The
statutory provisions for spécial bail (Rev. St. § 942 [U. S. Comp.
St. 1901, p. 693]), hâve little apparent application to a case like
this, and section 945 [U. S. Comp. St. 1901, p. 694] provides merely
that certain officers may take bail where bail is required or allowed.
In the déportation of Chinese the proceedings are sui generis ; they
are authoritatively declared to be civil in their essence, but they
are somewhat criminal in their appearance. Thus the statutes speak
of violation of .the provisions of the act, of arrest, conviction, and
imprisonment at hard labor. In judicial opinions the courts hâve
spoken of testimony in a déportation case as incriminating the re-
spondent (Ex parte Sing [C. C] 82 Eed. 22) ; of "the ofïense" (using
the word only for convenience), and of punitive provisions (In
re Ng Loy Hoe [C. C] 53 Fed. 914); of "verifîed complaint" and
"warrant" (U. S. v. Wong Dep Ken [D. C] 57 Fed. 206. See U. S.
V. Long Hop [D. C] 55 Fed. 58) ; of "presumption of innocence"
(In re Chu Poy [D. C] 81 Fed. 826, 828) ; of "a plea of not guilty"
and "a fînding of guilty" (In re Tsu Tse Mee [D. C] 81 Fed. 562;
In re Gut Lun [D. C] 83 Fed. 141, 142) ; of a respondent as "tried
and convicted" (U. S. v. Long Hop [D. C] 55 Fed. 58, 59).
In this and other districts, bail has been taken at some stage of
the proceedings for déportation, j This is the practice in the Dis-
tricts of Vermont and Southern New York, both before the com-
missioner's hearing and after an appeal to the judge. Until objec-
IN RE AH TAI. 797
tion was made in this case, the practice in this district had been the
same without objection. This has been the practice in the Dis-
trict of Maine until lately, when the legality of admitting to bail after
the commissioner's judgment of déportation has been mooted. Bail
was taken in the case of Mrs. Gue L,im, 176 U. S. 459, 20 ,Sup. Ct.
415, 44 L. Ed. 544; in U. S. v. Moy Yee Tai, log Fed. i, 48 C. C.
À. 203 ; and has been recently taken, I am informed, by Mr. Justice
Peckham in certain cases now pending before the Suprême Court.
See, also, Chow Goo Pool (C. C.) 25 Fed. yy, 78. The admission
to bail in proceedings for habeas corpus is governed by statute, and
has no application to the case at bar. The exclusion acts themselves
recognize by implication that bail is not altogether excluded in pro-
ceedings thereunder. Section 2 of the act of November 3, 1893,
c. 14, 28 Stat. 8 [U. S. Comp. St. 1901, p. 1322], by providing that a
Chinaman shall not be admitted to bail at one stage of the proceed-
ings, impliedly recognizes that he may be admitted to bail at an-
other stage. Even in proceedings for extradition, the Suprême
Court has refused to déclare that courts were wholly without an in-
hérent right of taking bail. Wright v. Henkel, 190 U. S. 40, 63, 23
Sup. Ct. 781, 47 L. Ed. 948. It is also most convenient that bail
should not be altogether excluded. Were bail never taken, the jails
might be overcrowded, and the récent arrests in this city show that
this danger is not imaginary. To hold bail altogether inadmissible
under the act would invalidate hundreds of existing recognizances.
The reported cases, the practice of many judges, the language of the
statutes, and practical convenience ail combine to suggest that bail
should not be altogether excluded in proceedings for déportation.
This court is not disposed to disregard considérations of such im-
portance.
If bail be anywise admissible, it may ordinarily be taken pending
an appeal as well as before the original hearing. Thus it was said
in Hudson v. Parker, 156 U. S. 277, 285, 15 Sup. Ct. 450, 453, 39 L.
Ed. 424:
"The statutes of the United States hâve heon framed upon the theory that
a person accused of crime shall not, until he has been flnally adjudged
gnilty in the court of last resort, be absolutely compelled to undergo ini-
prisonment or punlshment, but may be admitted to bail, not only after ar-
rest and before trial, but after conviction and pending a writ of error."
The appeal is hère to the District Judge rather than to the District
Court (Chow Loy v. United States, 112 Fed. 354, 50 C. C. A. 279),
but there is nothing intrinsically improper in admission to bail by a
judge rather than hy a court, nor does any reason appear why a
respondent may not give bail to appear before a judge as well as be-
fore a court.
The government relied chiefîy upon an express prohibition of bail,
after sentence of déportation by the commissioner, supposed to be
found in the second section of the act of 1893:
"Such order of déportation shall be executed by the United States mar-
Bhal of the district within which such order is made, and he shall exécute the
same with ail convenient dispatch; and pending the exécution of such order
such Chinese person shall remain In the custody of the United States mar-
shal, and shall not be admitted to bail."
798 125 FEDERAL REPORTER.
But this clause applies only where the order of déportation is final,
and it is inapplicable while an appeal from the décision of the com-
missioner is pending. That an appeal from the judgment of the com-
missibnei" iS analogous to an appeal from the judgment of an inferior
court waS said in 22 Op. Atty. Gen. 340. Pending an appeal it is
not the dflty of the United States marshal to déport the Chinaman
with ail convenient dispatch, and so there is no sufHcient reason
why, "pending the exécution of such order, the Chinese person shall
remain in the custody of the United States marshal, and shall not be
admitted to bail." Even after judgrnent of déportation by the judge,
a Chinarrian was temporarily discharged from custody because the
marshal Was without means ol deporting him.. Ny Look (C. C.) 56
Fed. 81. To prevent a release upon bail under those circumstances,
the prohibition just quoted was inserted by Congress.
The form of recognizance hitherto used in this district in proceed-
ings for déportation is like that used in criminal cases. Before the
commissioner's hearing, he admits to bail. After his judgment of
déportation and an appeal therefrom, the recognizance has hitherto
been taken by the clerk of the District Court, conditioned that the
respondent shall appear before the District Court of the United
States "from day to day of this présent term, and from day to day
and from term to term thereafter, theh and there to prosecute said
appeal and to answer to such matters and things as shall be objected
against him. on behalf of the United States, and relating particularly
to the said appeal now pending in said court."
The condition "to appear before the District Court" may hâve
been improvidently adopted. Perhaps the recognizance should be
entered into before the judge in person. This décision is not in-
tended to debar the district attorney from moving to change the
form of condition or otherwise to modify the existing practice.
WAGNBE et al. v. CONKIED et al.
(Circuit Court, S. D. New York. November 24, 1803.)
1, CONTKACTS-^PUBLICATION OF OpERA — MODIFICATION.
A contract by the composer of an opéra, ceding to certain publlshers
the exclusive rlght to publlsh the opéra for ail countrles, reserving only
the acting rlght, except wlth regard to concerts, was not modified, as to
the publisher's rlght to publlsh the entire work, by a subséquent agree-
ment between the publlsher and the cothposer's helrs, by wblch the act-
ing rlght wab rellnqulshed to the pùblishérs as to concerts, and the rlght
to render complète or sllghtly abridged performances of the work In
concert style was restored to the composer's helrs.
2. Samk — Rbsbrtation of Acting Right— Ejfbct— What Law Govebns.
The efCect of the publication of a German opéra, and offering the same
for sale in the Ùnlted States, wlth a réservation of the acting rlght to
the helrs of the composer, Is to be determlned by the laws of the United
States.
8. Samk— Dedication to PubIiIC.
Where the publlshers of a German opéra entitled to the exclusive
publication of the same under a contract reserving the acting rlghts to
the composer's helrs published and offered complète copies thereof for
WAGNER V, CONEIED. 799
promlscuous sale In the TJnlted States, they thereby dedlcated the opéra
to the public, depriving them or the composer's heirs of the right to re-
strain theatrical production thereof.
This cause cornes hère upon a motion for a preliniinary injunc-
tion to restrain the production on the stage o£ the Metropohtan
Opéra House, New York City, of the opéra of Parsifal.
Hanes. & Judge, for complainants.
Dittenhoefer, Gerber & James and Alexander & Colby, for de-
fendants.
LACOMBE, Circuit Judge. The answers to the main questions
raised by this motion are found in written documents so plainly ex-
pressed as to require no oral testimony for their interprétation.
On September i6, 1881, at Bayreuth and at Mainz a written con-
tract was entered into between Richard Wagner and the publishing
firm of B. Schott's Sons, of Mainz. By it "Richard Wagner cèdes to
the pubHshing firm B. Schott's Sons the exclusive right of publica-
tion for ail countries, of his musical dramatic work Parsifal — a stage
festival play — the absolute possession of the composition and the
libretto of the said work having already been transferred to the firm
of B. Schott's Sons on November 17, 1877." The défendants con-
tend that the German words hère translated "absolute possession"
should be translated "unconditional ownership." The resuit is the
same, whichever translation be accepted. The contract further pro-
vides that "for this transfer the firm of B. Shott's Sons pays to Herr
Richard Wagner the sum of 75,000 marks in the following way:
40,000 marks after this engagement has been drawn up, 20,000 marks
on December 31, 1882, 15,000 after the fiftieth performance of Parsi-
fal. Besides, the iirm of B. Schott's Sons cancels in its books the
remainder of Richard Wagner's debt, amounting to 2,500 marks."
The contract concludes with this clause : "The acting right of Parsi-
fal in regard to the théâtres is preserved to Herr Richard Wagner,
whereas in regard to concerts he formally resigns it in favour of the
iîrm of B. Schott's Sons."
It is unnecessary to inquire what were Richard Wagner's inten-
tions on entering into this contract. Its language is clear, précise,
and unambiguous, and it must be assumed that parties who thus ex-
press themselves in written contracts intend what they express.
This contract did not make B. Schott's Sons merely the agent of
Richard Wagner to introduce his "musical-dramatic work" to the
world, reserving to him the power to regulate the time, place, man-
ner, and extent of such introduction. For a valuable considération
he transferred to them the exclusive right of publication for ail
countries, and ail that such publication implies. He did reserve the
acting right in regard to theaters, and it is understood that under
the law of Germany a publication of the entire work, coupled with
a notice to the efïect that acting rights are reserved, secures such
rights to the composer's family for a certain number of years after
his death. If, therefore, on the day he gave to B. Schott's Sons
the exclusive right of publication coupled with this réservation, he
had himself published the work in Germany with a like réservation,
800 125 FEDERAL. EEPOUTKB.
he would not hâve lost the actihg'right in thàt country. The effect
of publication' of the whole work, acçpmpanied by such réservation,
in some country other than Germany, is to be determîned by the
law of that country. The contract- gave B. Schott's Sons the right
to publish in any country, giving notice at the same time of what
Wagner undertook to reserve, airtd such publication, wheh made un-
der this contract, is to be given ,the same efïeçt as if it had been
made by Wagner himself with Ii}ce notice of réservation.
Subsequently to iRichard Wagner's death, possibly before there
had been any publication, even in Germany, of the entire work, this
original contract, September i6,i88i, was modified by a contract
between his heirs and the firm of.B. Schott's Sons. This second
contract is dated Octôhér 29, 1884. It recites that by the first con-
tract "Herr Richard Wagner has formally resigned, in favour of
the firm of B.; Schott's Sons, the acting right of Parsifal as to con-
certs." The heirs relinquish 15,000 marks of the considération nam-
ed in the first contract, and the parties agrée as follows:
"That this right [1. e., the acting righï as tô cûncerts], as faras It regards
the complète performances Of the work as an oratory [oratorio], or only little
abridged perforaifinçes la copcert-style, Is restored to Elchard Wagner's heirs.
On the other hand the right of dlsposlng o{ the work for the performance of
fragments In concerts Is left to the flrin of B. Schott's Sons; by this, how-
evér, the possibllity that a manager is entitlfed to perform successively frag-
ments, unpubllshed as yet, In common with fragments already published:
prélude (Vorspiel)^ then transformation music (Verwandlungsmusic) and end
of the flrst act and Good Friday's speU-,(Harfréitagszauber) must not pe af-
forded."
This quotation has been given at length, in the translation given
by complainants' witnesses, because it is contended that this second
contract has so modified the first one as to restrict the right of pub-
lication therein conveyed. It is thought that the lânguage last above
quoted conveys no such méaning. It seems most clearly to be con-
cerned solely with performances at concerts, leaving to B. Schott's
Sons the right of performance of fragments, but reconveying to the
heirs the right of performance of the whole work, either complète
as an oratorio, or in soiiîe abridged form, which, although eut more
or less, still préserves the symmetricâl form and spirit of the work.
There is nothing in the record which qualifies in any way the right
of publication sold and transferred to B. Schott's Sons by the con-
tract of September 16, 1881.
With B. Schott's Sons' publication of Parsifal in Germany we are
not concerned. A large single-volume quarto édition of the fuU score,
with words and stage directions, was issued and sold under certain
agreements with the purchasers as to nonperformance on the stage.
In 1902 the firm printed a duodecimo édition in three volumes, and
sent a number of copies to their New York agent, G. Sehirmer,
by whom they were offered for sale to whomever would buy, aiid
several copies were actually sold. The fact of publication bf this
édition is beyond dispute. There was not merely a distribution of
a limited number of copies to selected individuals for a spécial pur-
pose, as was the case in Press PubUshing Co. v. Mbnroe, 73 Fed.
196, 19 C. C. A. 429, 51 L. R. A. 353. They were so oflfered that
DETROIT FISH CO. V. UNITED STATES. 8Û1
"the public, without discrimination of persons, had an opportunity
of enjoying them." Upon the title-page of each copy of this duode-
cimo édition thus sold appears the following notice: "This copy
must not be used for production on the stage"; but it is the well-
settled law of this country that if the pubHcation is complète such
notice is ineffective to reserve the very right which such publication
dedicates to the public.
The complainants contend that the smaller édition is incomplète;
concededly the quarto contains the entire "orchester partitur," or
score of the "musical-dramatic work." The testimony, however, is
overwhelming to the contrary. In the i2mo there has been some
niechanical condensation. For example, "the fîrst page of the Vor-
spiel in the original édition has one staff for the fîrst fagotte and
another staff for the second and third fagotte, while in the smaller
édition the three fagottes are condensed into one staff," and there
are instances of like treatment of the score for other instruments ;
but this seems in no way to affect the orchestration, nor to leave out
a single note or bar of music. The three volumes contain the score
of Parsifal completely and fully, nothing is missing, no bar, measure,
stage directions, or explanations contained in the larger édition are
omitted therefrom. The orchestration is not changed or abridged,
and the score is in no respect garbled or mutilated. It can be used
to extract therefrom the différent orchestra parts, and the parts for
the artists, singers, chorus, and musicians. It also contains the
libretto. In view of such a publication, neither the composer nor his
heirs can insist that performance be enjoined.
It is further contended that by reason of certain transactions in
which Conreid and one Goldmark, an alleged partner, participated,
he should be estopped from performing Parsifal. As to that branch
of the case the facts are in dispute, and it should not be decided upon
ex parte afïidavits.
The motion is denied.
DETROIT FISH CO. v. UNITED STATES.
(Circuit Court, E. D. Mlehigan. 'llarch 18, 1901.)
1. CusTOMS DuTiES— Classification— FisH — Ownership.
An American corporation imported fish caught in Canadlan fresh
waters by a Canadian corporation, which in catching the fish used nets
which were bought by the former corporation, and leased to the latter
for a perlod covering the life of the nets, and for * sum much less
than their value. EM, that the importlng corporation "owned" thèse
nets, wlthin the contemplation of paragraph 571, Tariff Act Oct. 1, 1890,
c. 1244, § 2, Free List (30 Stat. 606), providing for the free entry of
"fresh or frozen fish (except salmon), caught in fresh waters * • •
with nets or other devices owned by citizens of the United States," and
that the fish thus caught were free of duty under said paragraph.
On application by the importers to review a décision (G. A. 1,271)
of the Board of General Appraisers, which aiïîrmed the assessment of
duty by the coUector of customs at the port of Détroit on importa-
tions made November 25 and December 7, 1891, and January 2 and
S, 1892.
125 F.— 51
802 125 FEDERAL KEPOBTBB.
CE. Warner, for importers.
J. V. Dil Willcox, Asst. U. S. Atty.
SWAN, District Judge. The entries of fish upon the dates stated
jn the title of this cause were made at Détroit by the Détroit Fish
Company, a corporation organized May 14, 1891, aftd existing under
the laws of the state of Michigan, for the purpose of carrying on the
business of fishing, and buying and selling fish, nets, and other prop-
erty uséd in- the business. The appellant daims that the fish were en-
titled to free entry under the act of October l, 1890, c. 1244, 26 Stat.
567, entitled "An âct to reduce the revenue and equalize duties on im-
ports and for other purposes." By section 2 of that act a "free list" is
Created, and by paragraph .571 under said section (Free List, c. 1244,
30 Stat. 606) "fish, the product of America;n fisheries, and fresh or fro-
zen fish (except salmon), caught in fresh waters by American vessels,
or with nets or other devices owned by citizens of the United States,"
are entitled to fi-ee entry. The collector of customs held otherwise,
and assessed duty upon the entries, "for the reason that the owner-
ship of the nets with which thèse fish were caught does not seem to be
the ownership conteraplated by law." The duties were paid by the
appellant under protest. The Board of Appraisers found that the fish
were not salmon; that they were taken with nets, boats, and other
devices, ail of which, with the exception bf the nets, were admittedly
the absolute property of the Mânitoba Fish Company; that the nets
were bought by citizens of the United States, who are the stockhold-
ers of the Détroit Fish Company, and althôugh of greater value than
$1,000 were leased by the purchasers or by the Détroit Fish Company
for the season of the year 1891 for the sum of $1,000; that during the
term of the said lease the Mânitoba Fish Company had the exclusive
possession and control ôf the nets; that the stockholders of both of
said companies are substantially the same, the Détroit Fish Company
receiving and disposing of the product of the Mânitoba Fish Com-
pany. As conclusion from thèse and minor facts not herein recited,
the board held as foUows :
"Nets may be owned by citizens of the TJnlted States who may employ
other persons who are aliens to flsh with them, yet the nets would still be
In the lawful possession and control of the United States citizen; but if
Buch nets, by a contract, bargaln, or lease, are put Into the possession and
control of an alien, so that for a glven period such alien has the absolute
possession and Control of the same, especlally" if the tinie Is a period cover-
Ing the existence of the nets, In our opinion the possible reversionary In-
terest In the United States citizen would not be the condition contemplated
by a falr construction and application of the word 'owned' as used in para-
graph 571. The supposed ownership by United States citizens in this
case appears to us to be but a colpràble one at best, adopted to évade pay-
ment of duty upon flsh caught by the Mânitoba Flsh Company, and upon
thé facts we hold that the nets with -which the flsh af oresald were taken were
not 'owned' by citîzens of the United States, within the meaning of para-
graph 571 of the new tarlffi. The protests are overruled, and the action of
the collector afflrmed."
The facts in this case are not in dispute. No évidence was submit-
ted in support of the findings and conclusion of the Board of Ap-
praisers except that of the appellants. From this it clearly appears
DETROIT FISH CO. V. UNITED STATES. 803
that the nets with which the fish were caught were owned yy the
Détroit Fish Company, which had loaned them to the Manitoba Fish
Company, by which the fish were caught in Ontario. The stock-
holders of the Détroit Fish Company, ail citizens ofthe United States,
together with Messrs. Reeves and Gautier, citizens of Canada, com-
posed the Manitoba Fish Company. There is no évidence contra-
dicting or impeaching the claim of the appellant that the fish import-
ed were caught with the nets leased by the appellant to the Manitoba
Fish Company, except the inference drawn by the appraisers from the
fact that the stockholders of the Détroit Fish Company were also
stockholders in the Manitoba Fish Company, and the further fact
that the nets were leased to the latter for a rental of $i,ooo per annum,
though their value largely exceeded that sum, and their life was, at
most, a year. Neither is there any évidence in the return of the
Board of Appraisers that any other devices than thèse nets were used
to catch the fish imported.
While it is possible that the lease of the nets was intended and exe-
cuted for the purpose of exempting from duty fish caught with them
by the Manitoba Fish Company, there is nothing in the language of
paragraph 571 which prohibits that purpose or its accomplishment.
It is patent that the lease did not divest the owner of the nets of the
title to the property, but only transferred its use and possession for
the term of the démise. There is nothing in the statute warranting
the conclusion of the Board of Appraisers that the possession and con-
trol of the nets by an alien, under a contract, bargain, or lease, divests
the reversionary interest of the owner, or in any degree impairs his
title to the property.
While it is true that the Circuit Court, upon an appeal from the
détermination of the Board of Appraisers, should not disturb the find-
ing of the latter upon confiicting testimony, especially in those cases
where the board has seen and heard the witnesses, and had opportu-
nity to judge of their intelligence and credibility, yet where thèse
conditions do not exist, and the conclusion reached by the board is
clearly a misconstruction of the law, or without évidence in its sup-
port, or disregards the great weight of the évidence, it is the duty of
the court to disregard it. In re Van Blankensteyn, 56 Fed. 474, 5 C.
C. A. 579; Morris European & Express Company v. U. S. (C. C.) 94
Fed. 643.
There is no évidence whatever that appellant's title to the nets was
"colorable," or adapted to évade payment of the duty on fish caught
by the Manitoba Fish Company. The construction of paragraph 571
compelled by its language acquits appellant of any purpose of éva-
sion.
A statute must be judged by a fair construction of its language,
and if that fails to suggest that the Congress intended to prohibit the
lease to a foreigner of nets owned by a citizen of the United States,
or to qualify the word "owned," it is not the province of the Board of
Appraisers or of the court to amend the act by construction. In re
Schallenberger (C. C.) 72 Fed. 491. No possible construction of par-
agraph 571 of the act of 1890 évinces either intent. The rule is that
where there is a serions ambiguity in the language of a law imposing
804 125 FEDERAL REPOETER.
duties, nr it is open to vague or doubtful interprétation, the construc-
tion ofthelaw should be in favor of the importer. American 'Net &
Twine Co. v. Worthington, 141 U. S. 468, 12 Sup. Ct. 55, 35 L. Ed.
821.
It is not necessary, however, to invoke this rule of construction.
The language used admits of but one meaning. There were no limi-
tations in the act of 1890 upon the right of free importation of fîsh
(except salmon), other than the requirement that they must hâve been
"caught with nets or other devices owned by citizens of the United
States." By the act of July 24, 1897, c. 11, § 2, Free List, par. 555,
30 Stat. 198 [U. S. Comp. St. 1901, p. 1683], a free list is provided
which includes "fîsh, fresh, frozen or packed in ice, caught in the
Great Lakes or other fresh waters by citizens of the United States."
Noting this change from the language of paragraph 571 of the act of
1890, Judge Coxe, in Lake Ontario Fish Company v. U. S. (C. C.)
99 Fed. 551, comparing thèse two paragraphs, said of the latter:
"The nets and devices being owned by the importer, it is probable that
fish taken in such nets would be entitled to free entry if the para-
graphs of the previous acts were in force." This intimation is well
founded» and expresses the true construction of paragraph 571, Free
Ivist, § 2, c. 1244, Act 1890, 30 Stat. 606. The finding and conclusions
of law of the Board of Appraisers are reversed, with costs.
Judgment will be entered in favor of the appellant for the duties
paid on thèse importations, with costs to be taxed.
TEERY v. NAYLOR et al,
(Circuit Court, E. D. North Carollna. September 21, 1903.)
1. RePEBÏÎNCE — PlKDINGS OF SPECIAL MaSTKR— REVISION BY COURT.
A spécial master to whom is referred a question of damages in an ac-
tion atlaw; Is appolnted In aid o£ the court, which is not bound by his
flndings, although no exceptions are flled thereto.
2. Same — CosTs — iNTRonncTiON of Irbelbvant Testimony.
The cost o( taklng testiinony before a référée or spécial master, which
Is irrelevant to the matter referred to hlm, will be taxed to the party in-
troduclng the same.
At Law. On trial to the court.
See iio Fed. 494.
C. M. Bernard, for plaintifï.
C. M. Busbee, for défendants.
PURNELL, District Judge. This cause comîng on to be heard,
the parties having at the June terra waived a trial by jury, and agreed
the judge should hear the case and détermine the facts and the law,
and being heard, plaintifï representing himself, and défendants being
represented by C- M. Busbee, Esq., after a full hearing, it is consid-
ered, ordered, and adjudged:
(i) That the debt declared on bas been settled and paid as fol-
lows : The first note by a judgment to that efifect in the state court
TEERT V. NATLOR. 805
(Terry v. Robbïns, 128 N. C. 140, 38 S. E. 470, 83 Am. St. Rep.
663), which judgment this court could not review, and the payment
of the balance of said debt into this court. Terry v. Robbins, 122
Fed. ^2^.
(2) That judgment be entered in favor of plaintiff and against the
défendants for costs, including attorney's fee, to be taxed by the
clerk of this court up to the time of the payment into court of the
$10,500 balance due on the debt.
(3) That judgment be entered in favor of the défendants and
against the plaintifï for costs, since the payment as aforesaid, such
costs to be taxed by the clerk of this court, not including attorney's
fee.
And now, upon the considération of the report of the spécial mas-
ter to whom was referred the question of what damages défendants
hâve suflfered by reason of the restraining order, improvidently sign-
ed herein, the court placing confidence in the parties applying for
the same, and supposing of course such application was based on a
bill in equity filed in aid of the suit at law, it is considered and ad-
judged that such report, to which exceptions were not filed in apt
time, be, and the same is, modifîed as hereinafter stated.
Plaintifif introduced no testimony on the question of damages, did
not cross-examine the only witness as to this question, and the wit-
nesses do not sign the dépositions. In this and other respects the
examination is loose, irregular, and unsatisfactory. Had objections
been made, the whole report would hâve been rejected; but plain-
tiff being présent, both before the spécial master and before the
court, ail parties appearing anxious to hâve the cause disposed of,
does not hold to the strict rule. The allowance, however, cannot
be afïîrmed without violence to the conscience of a chancelier ; hence
is disallowed.
Seventeen pages of the record, and the testimony of ail the wit-
nesses except one, relate exclusively to an attempt on the part of the
défendants to prove a tender, and three and a half pages only are
pertinent and germane to the question of damages, the only ques-
tion upon which the spécial master was authorized to "ascertain and
report by reason of the issuance of the restraining order." The
entire hearing was at two sessions on the same day, and yet the spé-
cial master renders a bill of costs for such hearing amounting to
$97.85, $75 of which is for his own services. The spécial master
merely presided at the meetings, a stenographer being présent to
take the testimony, passed upon no questions, and this claim exceeds
by many dollars that allowed the Chief Justice of the Suprême Court
of the United States.
It is for the reasons stated, and others apparent in the record,
and within the knowledge of the court, considered, ordered, and ad-
judged that the item of $46.76 allowed to Thos. H. Robbins as a sal-
ary be and the same is disallowed. Item, copy of dépositions for
C. M. Busbee, Esq., $5.90, is disallowed and taxed against the de-
fendants, for whom Mr. Busbee was afterwards attorney, original
copies having been furnished plaintifï and defendaijts. Administer-
ing oaths, 30 cents, 20 cents for witnesses exclusively for défend-
806 125 FEDERAL REPORTER.
ants upon matters not contemplated iil the order of court, disallowed.
Seventy-five dollars to spécial master disallowed; ten dollars allowed,
as amply sufficient for services jrendered. The witnesses subpœnaed
for défendants, and examined upon matters not contemplated in the
order, will be taxed against the défendants — fées, subpœnas, and
dépositions. The account is thus restated: Damages to défendant
Lillian F. Naylor, $120.75 > less amount allowed to Thos. H. Rob-
bins as salary, $46.76 — $73.99.
While no exceptions were filed, a spécial master is appointed to
aid, not bind, the court, and there is no force in the argument that,
in the absence of exceptions, the court is bound by the findings of
the master, and will as a matter of course afïïrm such findings on
motion. Especially is this practice when items in the report do vio-
lence to the conscience of the chancellor.
The restraining order was in force 11 days, and was dissolved as
soon as the attention of the court was called to the facts. The spé-
cial master allows $46.76 as salary to Thos. H. Robbins, father of de-
fendant Naylor, who alone claims to hâve beèn damaged, and this
claim is made through others, to whom, as appears in the record,
Thos. H. Robbins cgnveyed the land the day after it was conveyed
to him by plaintifï, and by him and his wife reconvéyed as a security
for the purchase money. This claim js. allowed solely by the spécial'
master on the testimony of W. A. Robbins, T. H. Robbins, and
lillian F. Naylor, who are défendants not appearing or testifying,
nor is the connection of W. A. Robbins with the business of défend-
ant Naylor shown.
The following cost? will be taxed against the plaintiflf:
Stenographer , $1 00
Original copy of déposition 1 08
Administering one oath 10
Subpœna one wltness 25
Wltness ticket W. A. Robbins 1 50
One-flf th allowance to spécial master 2 00
$6 03
The following costs will be taxed against the défendants :
Services o( stenographer ; Ç 4 00
Original copy of dépositions 4 72
Copy of dépositions to 0. M. Busbee, Esq 5 90
Administering 2 oatbs , 20
Subpœna for 4 witnesses 1 00
J. H. Sawyer, wltness ticket 1 50
L. S. Blades, wltness ticket 1 50
Four-âf tbs spécial master's allowance 8 00
$26 82
As thus reformed ît is ordered that the report of the spécial master
be affirmed, but no part of the amount allowed défendants shall be
paid until the costs taxed against them are adjusted.
JAMES H. PABKEB & CO. V. MOOBE. 807
JAMES H. PARKER & CO. v. MOORE.
(Circuit Court, D. South Oarollna. October 21, 1903.)
L CoKTEACTS— Sale of Cotton for Future Delivekt— Legalitt under
South Carolina Btatutb.
Code S. C. 1902, §§ 2310, 2311, whlch provide that contraets for the
sale of cotton for future delivery shall be vold unless at the time it was
the bona fide Intention of both parties that the cotton so sold should be
actually delivered and received, and that In any action to collect a claim
based on such a contract the burden shall rest on the plaintiff to prove
such intention, cannot be Invoked by a défendant to defeat an action by
brokers to recover money advanced as marglns at bis request to protect
contraets for the purchase of cotton made for hlm by plalntlfEs on the
New York Cotton Exehange, by the rules of which it is expressly pro-
vidéd that the parties to such contracta shall be bound to deliver and re-
celTe the cotton sold, even though he testifies that he did not Intend to re-
ceive the cotton bought, but merely to gamble on the market price, where
It is shown that in each case he was notlfled that the purchase was made
in conformity with such rules, and made no objection thereto, and did
not disclose hls real Intention to plalntlfCs,
At Law.
C. P. Sanders and T. P. Cothran, for plaintiffs.
Stanyarne Wilson and A. H. Dean, for défendant.
SIMONTON, Circuit Judge (orally charging jury). The plaintifïs,
brokers of New York City, metnbers of the New York Cotton Ex-
change, bring thîs action against the défendant. The cause of action
is an account for sums of money paid by plaintifïs in keeping good the
margins on future contraets in cotton made by them, as brokers, on
the account of défendant, and under his instructions at his request.
The answer of défendant dénies ail liability, because thèse contraets
were usurious, and, under the law of South Carolina, absolutely void.
A future contract in cotton is not usurious and void if, under the
terms of the contract, one party could insist upon the actual delivery
of the cotton, and the other party could insist upon the actual receipt
of the cotton. Of course, if this right existed under the contract,
either party could waive it, and, instead of insisting on the actual prés-
ence of the cotton, could settle on the différence of values in money.
The contraets in this case were made expressly under and subject to
the rules of the New York Cotton Exchange. Thèse rules contem-
plate and insist on the actual delivery of cotton under such contraets.
So, on their face, thèse contraets were légal, and money paid on ac-
count of them could ordinarily be recoveratjle. The testimony shows,
and it is not disputed, that when plaintifïs made each of the contraets
in this case they reported it to the défendant, and each report con-
tained a notice like this :
"Mr. W. A. Moore — Dear Sir: Under your instructions we bave this day
bought for your account and rlsk, In conformity with the rules and régula-
tions of the New York Cotton Exchange:
"Quantity and Description: Price:
"Please take notice that ail orders for the purpose of sale of cotton, coffee,
grain and provisions for future delivery, are received and executed with the
8Q8 V 125 FEDERAL REPORTEE.
distinct understanding that actual delivery is contemplated, and the party
giving the order so understands and agrées. It is further understood that
on ail marginal business the right is reserved to close transactions when mar-
gins are near, exhaustion without notice.", ,
Plaintiffs hâve put in évidence the rtiles of the New York Cotton
Exchange, ând thé testimony of severâl parties, membërs of the ex-
change, as to the opération of thèse rules. Among other things, it
appears that, when brokers make' coiitfacts on the floor of the ex-
change, they are persohally bound, ifthey are not closed out, to keep
them alive, on pain pf suspension fronj the exchange. The items in
the account sued upon are sums paid by plaintifïs on thèse contracts
of défendant — keeping them alive, it is said, at his instance and under
his instructions.
The défendant rests his défense on this: He swears that he never
intended at any time to deliver or to accept the delivery of cotton
under afty of thèse contràdts, and he relies upon an act of the Législa-
ture Qf this State. This act déclares every contract, bargain, or
agreement of any kind for the sale at any future tinie of any cotton
and certain other enumerated articles shall be void, unless the party
contracting to sell is the owner of the cotton, or the agent of such
owner, at the time of making the contract, or "unless it is the bona
fide intention of both parties to the contract at the time of the making
thereof that the said cotton," etc., so agreed to be sold shall be âctual-
ly delivered in kind by the party contracting to sell, and shall be ac-
tually received in kind by the party contracting to receive the same, at
the period in the future fi?ced by the contract. Code 1902, § 2310.
Then comes the part of the act on which the défendant relies :
"In any and ail actions brought In any court to enforce such contracts,
or to collect any note, or any claim founded on such contract, the burden of
proof shall be on the plaintIfC to establish that at the time of malàng the con-
tract it was the bona flde intention o( both parties thereto that the said cot-
ton so agreed to be sold should be actually delivered and received in kind by
said parties at the future period mentloned therein." Code 1902, § 2311.
This is the law which controls us, and will décide this case, unless
the défendant has so acted as to prevent him from shielding himself
under the act. Pursuing the terms of this act, he, called as a witness
in his own behalf, déclares that he went into thèse contracts as a
matter of spéculation — gambling — and that he never at any time
intended the actual delivery or actual receipt of the cotton. His
objectwas the price in money. This déclaration of his purpose has
been made by the défendant at the trial. Now, you must examine
this testimony, and see if défendant had given notice of this purpose
to plaintifïs when thèse advances were made, or when the contracts
were entered into. If he had given such notice to plaintiff, they can-
not now recover. But if, in his dealings with plaintifïs, the défendant
concealed from them this purpose — ^if he so acted with them and wrote
to them as if hé did not object to abiding by the rules of the New
York Cotton Exchange — he cannot now, for the fîrst time, set up his
private purpose, to the injury of the plaintifïs. It would be a fraud
for him to do so, and no man can take advantage of his own wrong.
This case has been up in the Circuit .Court of Appeals. They hâve
8. M. LAWDEB A SONS V. 8T0NB. 809
sent it back, among other things, to ascertain the nature of the deal-
ings between thèse parties. Your conclusion upon this will détermine
your verdict. The défendant contends that during the correspond-
ence he had recalled the authority to plaintiffs to keepalive thèse
contracts. You will examine the correspondence, and, if you find
this to be the fact, you will disallow any advances made after that
time, in case you find the issues in favor of the plaintifïs.
S. M. LAWDER & SONS v. STONB.
(Circuit Court, D. Maryland. November 4, 1901.
L CusTOMs DuTiES — Valdation— Additional Duties— Clérical Erbob.
On entering certain merchandise the Importers presented an entry
and invoIce together, the former of whlch stated only the value of the
merchandise, omitting a dutlable item of packlng boxes, but the latter
plainly stated both items. The merchandise was appraised at the higher
value, as stated in the Invoice. EeM that, In the absence of circum-
stances indlcating an Intention to évade the law, this was a case "aris-
ing from a manifest clérical error," vehich exempted the merchandise
from the addltional duty accrulng where the appraised value exceeds
the entered value, "except in cases arlslng from a manifest clérical er-
rer," as provided In section 7, Customs Administrative Act June 10,
1890, c. 407, 26 Stat. 134, as amended by section 32, Tariflf Act July 24,
1897, c. 11, 30 Stat. 211 [U. S. Comp. St. 1901, p. 1893].
AppHcation by the importers, S. M. Lawder & Sons, for review
of the décision of the Board of General Appraisers, which afifirmed
the assessment of duty on certain merchandise imported at the port
of Baltimore.
In assesslng duty, the coUector considered the case one of undervaluation,
under section 7 of the customs administrative act of June 10, 1890, c. 407,
26 Stat. 134, as amended by section 32 of the tarlff act of July 24, 1897,
c. 11, 30 Stat. 211 [U. S. Comp. St. 1901, p. 1893], and proceeded to coUect
the addltional duty there provided for such cases. The pertinent portion
of said section reads as follows: "If the appraised value of any article of
imported merchandise subject to an ad valorem duty or to a duty based
upon or regulated In any manner by the value thereof shall exceed the
value declared in the entry, there shall be levled, coUected, and pald. In
addition to the duties imposed by law on such merchandise, an addltional
duty of one per centum of the total appraised value thereof for each one per
centum that such appraised value exceeds the value declared lu the entry.
* * * Such addltional duties » * * shall not be remitted, nor pay-
ment thereof in any v^ay avoided, except in cases arlslng from a manifest
clérical error." The Importers contended that It was a case of "manifest
clérical error," wltbin the meaning of said section.
Steele, Semmes, Carey & Bond, for importers,
The United States Attorney, for the collecter.
MORRIS, District Judge. The invoice produced by the import-
ers was as follows: "1,238 cases of preserved pineapples, containing
2,476 dozen, at 50 cents per dozen, $1,238. Cost of packing boxes
for the same, $380." The entry of the merchandise was made as of
a value of $1,238. The local appraisers' return on the invoice shows
that he "adds $380 to make correct market value of preserved pine-
ÔIO ,125 J"BI>BBAL BHPOBTEEi .
apples, being the cost of cans andpacking not entered by import-
ers." Upon the return of the local appraisers the entry was liqui-
dated, showing, in addition to the duty imposed by law, an addi-
tfonal pénal duty of 30 per cent., amounting to $485.40. Against
the assessment of the pénal duty the importers protested, alleging
that the omission to add the charges at the time of making their
entry was due entirely to a clérical error. On appeal to the Board
of General Appraisers the décision of the coUector imposing the
pénal duty was sustained. The ground of the décision was that it
appeared from statements made by the importers in their protest
that the omission tp include the cost of the packages containing the
preserved pineapples was not through clérical mistake, but was
intentional, and for a reason disclosed by the protest.
In their protest the importers say :
"Ih contiectioii wlth our protest, we beg leave to state that In making
entry for tiiegoods [àlthough] tnerely àcitual cost of the merchandise was
entei-ed as the dutiable Value, the chargés of packlng and cost of the cases
and catls werè plalnly inarked on the involce, but through a clérical error
or blundier the applicant^ failed to àdd, thèse charges. * * * In support
of our çlàlrD of clérical error, beg to çàll your attention to the fact that
the charges mentioned were clèarly set' iforth on the Invoice, being particu-
làfly spéÇifled, so that ordlharlly no èrror could hâve been made; but the
entry was accepted and passed through the custom house as entered with-
out additions for cases and cans, evidetjtly through error, as thèse charges
wouid havé certainly been added before passage of the entry, had the error
been detected." ^ v
The stâtement of the protest which is relied upon as showing that
the omission to add the packing charges did not arise from manifest
clérical eiror, but was intentional, separated from its context, is as
follows :
"In fact, as stated to yo^ in our respects of July 6th, the charges are not
actually dutiable, as the cases and cans were exported from this port on
the schppner Lady Sbea, Ii^ay 24, 1898, and the cases and cans should hâve
bçen claimed as An)erlca,n pianufacture, and the drawback, amounting to
$74.65, should bave been repaid the government on reimportation of the
goods. •,! * ■ * The omission to make the additions to the entry at the
time was entirely an erroï, as we hâve thèse importations once a year, and
bave always added to the.entrles. the drawback whiph was paid on the
cans when exported, an^,, gave affldavits of the American manufacture of
the cases." /; ! ',.
The affidavit of Mr. Pentz réitérâtes the statemeûtof the protest,
and déposes that he, "making the entry for the goods mentioned,
through' an error forgot to make addition for the covering of the
goods. Thèse charges are plainly stated on the invoice, and it was
entirely by oversight that the addition was not made. * * *'
The charges for the above coverings are plainly stated on the in-
voice, and it is a mystery to me to know how the blunder was made
by me, arald how the papers should hâve gone so far before the error
was discoveréd."
In RoeîJling v. United States (C. C.) 77 Fed. 601, the imported
Steel billets were invoiced and entered at a named price per ton "on
trucks," which it seems indicated that something might properly
be deducted from thé cost of the mérchandise for the cost of putting
s, M. LAWDEB & SONS V. STONB. 811
it on trucks and cartage. The importers claimed that the inclusion
of the cost of trucking in the dutiable value was such a manifest
clérical errer that it should be corrected on the production of a new
invoice afterwards obtained and produced before the Board of Gen-
eral Appraisers stating the cost of the trucking. The court, against
this contention, held that, although the original invoice showed
that something not dutiable possibly was included, it did not show
how much, if anything, was to be deducted. The court held that
the manifest clérical error m.ust be apparent upon the papers pro-
duced to the collector, and that the importers could only be relieved
from any hardship arising from their mistake by application for re-
lief to the Secretary of the Treasury.
The présent case is dififerent. The invoice itself furnished ail the
data required for a correct liquidation. It correctly stated the value
of the preserved pineapples, and the cost of the packing boxes for
the same, and, in order to arrive at the invoice value of the importa-
tion, it was only necessary to add together thèse two items of cost
plainly appearing on the invoice. That the dutiable value was not
thus ascertained would seem to be only because both the importer
and the customs ofïïcials failed to notice this obvions mistake until
it reached the local appraiser's ofifàce, where it was discovered and
corrected by a simple inspection of the invoice. Where two items
which together constitute the correct cost and value of the importa-
tion are plainly stated in the invoice, which is produced with and ac-
companies the entry, and only one of the items is extended on the
entry, and the error is discoverable by a simple inspection of the in-
voice, and there is no circumstance indicating intention to évade
the law, it would seem that a case is presented in which the underval-
uation arises from a manifest clérical error. Doubtless this is the
ruling which would hâve been made by the collector and by the
Board of General Appraisers, but for the fact, set out in the protest,
that the packing boxes s,tated in the invoice to be of the cost of $380
(over one-fourth of the value of the merchandise) were really not
dutiable at ail, having been exported from the United States.
It does not appear to me that this fact should aiifect the présent
question. It nowhere appears that the importer intended to do any-
thing but what he did in his invoice, viz., to give the value of the
importation as made up of the value of the merchandise and the cost
of the packages; The fact that in his protest to the collector, and
in his eflfort to obtain a change of ruling, he added as a make-weight
that the packages were not properly dutiable at ail, does not, it
seems to me, affect the contention that upon the face of the invoice
it was a manifest clérical error not to enter the value of the goods
as stated in the invoice. It appears to me that it was proper to add
$380 to the $1,238, in order to arrive at the correct marlcet value as
stated in the invoice, but that it was not proper, under section 7 of
the act of June 10, 1890, as amended by section 32 of the act of July
24, 1897, to penalize the importers by imposing the additional duty
of I per cent, on the total appraised value for each i per cent, by
which the appraised value exceeded the value given in the entry, as
the value declared in the entry was a manifest clérical error.
812 125 FËDBKAL EUFOBTBB.
MONUMENTAL SAV. ASS'N OF BALTIMORE, MD., V. FENT-RESS et al.
(Circuit Court E. D. Virginia. November 14, 1903.)
1. Injunction— Against Action at Law.
A suit liaving been commenced to cancel complalnant's subscriptlon
to stock of a corporation and to réquire repayment of a sum paid
thereon, an action at law, in another fédéral court, on the subscriptlon,
commenced after the suit in equlty, and in which the full and adéquate
remedy of an equity court cannot be afforded, will be enjoined, notwith-
standing pendency of a thlrd suit in a state court to wind up the affairs
of the corporation.
E. N. Rich and D. Lawrence Groner, for complainant.
Floyd Hughes, George Whitelock, and D. Tucker Brooke, for de-
fendants. , .
WADDILL, District Judge. . The object of the bill of complaint
filed in this cause, among other things, is to cancel and annul the sub-
scription of the. complainant to certain issues of bonds of the défend-
ant the Norfolk Cold Stbrage & Ice, Company, of Norfolk, Va., for
$130,000, and to require the repaynient to it of the sum of $20,000,
heretofore paid on account of such subscriptlon; complalnant's con-
tention being that as to $30,000 of such subscriptlon it never author-
ized the same, and that as to $100,000 thereof, though the subscrip-
tion was made, and on, apcount of, the same $20,000 was paid, the
agreement was entered ,into under such circumstances as to èntitle
complainant to hâve the same canceled by a court of equity.
The cause is now hefore the court upon an application on the part
of the complainant to epjoin the défendant Richard B. Fentress, in-
diyidually, and as syndicate manager of the said Norfolk Cold Storage
&: Ice Company, of Norfolk,' Va., from the further prosecution of a
certain suit at law, instituted by him in the Circuit Court of the Unit-
ed States for the District of Maryland, against the complainant, to
recover the çalls made by the défendant company on account of the
subscriptlon laforesaid, amounting to the sum of $45,000; and this
motion arises specially upon a petijtion filed since the institution of the
original suity'andtis now heard on said pétition and bill and answer,
and afifidavits ,filed by the respective parties; and the conclusion
reached by thé, court is t^at the ternporary restraining order prayed
for, enjoining the, prosecution of said suit in the Circuit Court of the
United States for the District of Mafyland, should be awarded as
asked. ■ ^ ~ r;,,. -.-■'■.■'■, ,,\
In taking t^ïs action the, court is not unmindful of the fa et of the
delicacy witli wHch an injupction should issue to enjoin the prosecu-
tion of a siiit in anptlîef c.Q,urt, but the duty, to exercise the power
in this case seems clear, &ej.suit sought to be enjoined beirjg one
brought after the institution of this cause, and having for its object the
enforcement,of a contract sought to be canceled and annuUed in this
proceeding. on account :of, fraud.iiv-its Àtiception. Not only is the suit
at law subséquent in date tQ.th^f suit» but it cannot be said that the
compjainant in this cause, the, ,<iefejidant tKerein, can there receive the
fuir complète îarfd adéquate remedy' that can be afforded in this — a
IN EE ONG LUNG. 813
court of equity — with ail the parties to the transaction before it. Nor
has sight been lost of the fact of the institution of the suit in equity
in the circuit court of Baltimore City by the défendant Richard B.
Fentress, as syndicate manager as aforesaid, against the complainant
herein, and that defendant's contention is that the suit at law in the
Circuit Court of the United States for the District of Maryland afore-
said, sought to be enjoined, is a mère ancillary suit to the suit in eq-
uity so instituted in the circuit court of Baltimore City. Upon a care-
ful examination of the records in thèse two causes, the court is con-
vinced that the suit at law aforesaid, sought to be enjoined, is not a
mère ancillary suit to the suit in equity in the circuit court of Balti-
more City, or in any manner dépendent upon the last-named suit,
and that said suit in the circuit court of Baltimore City is a suit in
equity under the statute of Maryland, having for its object and pur-
pose the winding up of the affairs of the complainant company as a
corporation, and to which creditors of the complainant company, and
stockholders, are parties; and that said suit can apparently proceed
irrespective of the outcome of the issues either of this suit or of the
action at law in the Circuit Court of the United States for the Dis-
trict of Maryland aforesaid.
A restraining order will accordingly be issued, as prayed.
In re ONG LTJNG.
(Circuit Court, S. D. New York. October 16, 1903.)
1. Chinesb Exclusion— Habeas Corpus PROCEEDrNQ— Baif..
The provision of section 5 of the Chinese exclusion act of May 5, 1892
(chapter 60, 27 Stat. 25 [U. S. Comp. St. 1901, p. 1320]), that on an appli-
cation to any judge or court of the United States in the first instance
for a writ of habeas corpus by a Chinese person refused admission into
this country no bail shall be allowed, was not repealed by Act Aug. 18,
1894 (chapter 301, 28 Stat. 390 [D. S. Comp. St. 1901, p. 1303]), which
makes the décision of the immigration offlcer conclusive unless reversed
by the Secretary of the Treasury, and governs where a Chinese person
refused admission by the imnilgration offlcers and the secretary applies
to a fédéral court for a writ of habeas corpus.
Habeas Corpus Proceeding. On motion to admit to bail.
Max J. Kohler, for petitioner.
Henry A. Wise, Asst. U. S. Atty.
LACOMBE, Circuit Judge. The fifth section of the act of May
5, 1892, c. 60, 27 Stat. 25 [U. S. Comp. St. 1901, p. 1320], reads as
follows :
"That after the passage of this act, on an application to any judge or
court of the United States In the first instance for a writ of habeas corpus,
by a Chinese person seeklng to land In the United States, to whom that privi-
lège has been denled, no bail shall be allowed and such application shall be
Heard and determined prorûptly wlthout uiinecessary delay."
This section was not repealed by the provision in Sundry Civil
Appropriation Bill Aug. 18, 1894, c. 3QI, 28 Stat. 390 [U. S. Conip,
St. 1901, p. 1303], that décisions of immigration ôfficeirs, îf advèi-se
814i 125 FEDHIBAL REPORTER.
to the immîgrant, should be final It was expressly Held ty this
court that.it was not so repealed. In re Chin Yuen Sing, 65 Fed.
571, 572, 788. Nor is there any subséquent act repealing such sec-
tion. ,
The petitioner hère sought to land in the United States. That
privilège has been denied him by the immigration officers, and affirmed
by the Secretary of the Treasury, and to this court in the first in-
stance he has applied for a writ of habeas corpus. He thus cornes
within the provisions of the section, and bail should be refused. The
cases cited on the brief, viz., Du Shen Tau v. U. S., 187 tJ. S. 652, 23
Sup. Ct. 843, 47 L. Ed. 350, U. S. v. Lee Yen Tai, 185 U. S. 213, 22
Sup. Ct 629, 46 L. Ëd. 878,, Chin Bak Kan v. U. S., 186 U. S. 193,
22 Sup. Ct. 891, 46 h. Ed. 1121, do not overrule or modify the décision
of this court in Chin Yuen Sing's Case, supra, which remains the rule
for this court, although in spécifie instances, of which no record is
found in the Reports, some individual Chinaman may bave been admit-
ted to bail ,
The application is refused.
In re ONG LUNG.
(Carcnlt Court, S. D. New York. October 19, 1903.Ï
1, Oeinbsb Exclusion— Rbturn of Laborer to United States— Bpfect of
Oertificate.
Article 2 of the treaty of 1894 between China and the United States,
which provides that the gênerai prohibition of the entry of Chlnese la-
borers Into this country contalned In article 1 "shall not apply to the re-
turn to the United States of any reglstered Chlnese laborer who had a
la^ful wife, chlld or parent In thé UUlted States, or property therein of
the value of one thousand dollars or debts of like amount due him and
pendlng settlement," bas référence to the condition of the laborer at the
time of his retum, and It is compétent for the appropria te department
of the govemment to adopt a régulation requlring an inquiry into the
matter by the immigration offlcers on the laborer's return, notwlthstand-
Ing his possession of a collector's certiflcate, obtained when he left the
country, as provlded for by the treaty; and the adverse décision of such
offlcers is wlthln the terms of Act Aug. 18, 1894, c. 301, 28 Stat. 390
[U. S. Comp. St. 1901, p. 1303], and conclusive, unless reversed on appeal
to the secretary.
Writ of Habeas Corpus to Discharge from Custody of Immigra-
tion Officers.
Max J. Kohler, for petitioner.
Henry A. Wise, Asst. U. S. Atty.
LACOMBE, Circuit Judge. The brief submitted by tfie district
attorney contains the following statement of facts, which are not dis-
puted:
"The petitioner, a reglstered Chlnese laborer, deslring to make a vlslt to
China, made application to the apprbprlate govemment officer at the port of
f 1. Cltizenship of Chlnese, see note to 6ee Fook Sing v. United States, 1 0.
a A. 212; Lee Sing Far t. United States, 36 a a A. 332.
IN EE ONG LtJNQ. 81.5
Malone for what Is known as a 'retum certlflcate,' and In complîance with
article 2 of tlie treaty of 1894 between the United States and Cblna, and sec-
tions 5 to 7, Inclusive, of the act of September 13, 1888 (chapter 1015, 25 Stat.
477 [V. S. Comp. St. 1901, pp. 1314, 1315]), as re-enacted by tbe act of April 29,
1902 (chapter 641, 32 Stat. 176 [U. S. Comp. St. Supp. 1903, p. 188]), he ex-
ecuted and dellrered to the said government offlcer a statement purportlng to
show that he waa then, to wit, September 2, 1902, possessed of property
■within the United States, and debts due him pending settlement, of up-
wards of $1,000. Tbereafter he received from said government offlcer what
Is known as a 'retum certlflcate,' and on or about September 29, 1902, de-
parted for China. Thereafter, and on or about August 11, 1904, he re-
turned to the port of Malone, the port from whlch he had departed, and
sought to re-enter, and was then examined by F. W. Berkshire, the chief
officer In charge of the enforcement of the Chinese exclusion laws for the
State of New York. The petitloner then presented, as évidence of hls right
to re-enter, the statement verifled September 2, 1902, and whlch statement
contalned the claim that the petitloner was possessed of property and debts
unsettled In the United States in excess of $1,000; and thereupon said Berk-
shire claiming the right to examine said petitloner, and, clalmlng that it was
incumbent upon said petitloner to show at the time of hls application to
re-enter that he was possessed of property and debts due and unsettled in
excess of $1,000 In the United States, sought to examine the petitloner,
whereupon the petitloner stood mute, and declined to answer various ques-
tions propounded to him. Whereupon said Berkshire decided that tbe peti-
tloner had not proved that the necessary condition entitling him to re-enter
existed, and thereupon denled him the right to re-enter. From this déci-
sion, the petitloner, pursuant to rule 8 of the Chinese régulations, approved
July 27, 1903, appealed to the Secretary of Commerce and I>abor from the
décision of Berkshire, and said appeal was decided adversely to the peti-
tioner, and he now seeks by wrlt of habeas corpus to review the action of
said Berkshire, as approved by the said Secretary of Commerce and Labor."
The sundry civil appropriation act of August i8, 1894, contains the
following :
"In every case where an alien Is excluded from admission into the United
States under any law or treaty now exlsting or hereafter made, the déci-
sion of the approprlate immigration or customs offlcers, if adverse to the ad-
mission of such alien, shall be final, unless reversed on appeal to the Secre-
tary of the Treasury." Chapter 301, 28 Stat. 390 [U. S. Comp. St. 1901, p.
1303].
This clause has been many times considered by the courts, and
has been repeatedly construed in conforraity with its plainly ex-
pressed intention. The petitioner's counsel does not question the
conclusions in any of thèse cases, but contends that they do not ap-
ply hère, because, as he asserts, the "décision" excluding Ong- Lung
was not made in an investigation "under any law or treaty," and be-
cause, as he further asserts, such décision was not made in the free
exercise of the judgment of the officer making it. By Act Feb. 14,
1903, c. 552, § 7, 32 Stat. 828 [U. S. Comp. St. Supp. 1903, p. 46],
the duties that under the exclusion acts had previously devolved upon
the Secretary of the Treasury and his subordinates were transferred
to the newly created Department of Commerce, and that departmentj
under authority conferred by section 2 of the act of April 29, 1902
(32 Stat. 176 [U. S. Comp. St. Supp. 1903, p. 189]), has recently
promulgated régulations under which the immigration officiais make
an investigation in order to détermine whether, when a returning
Chinese laborer applies for readmission, the conditions recited in the
816 125 FEDBEAri REPORTEE.
treaty, or one of them, exist. The first two articles pf the treaty of
1894 are as follows: .'
"I. The hlgh contractlng partîes agrefr that for a peripd of ten years, be-
ginning wlth the'date of the ekeliange oï the ratifications of this convention,
the coming, except under the éondltlons hereinaîter specifled, of Cbinese la-
borers to the United States shail be absolutely prohibited.
"II. The preoeding article shall not apply to the return to the United
States of any reglstered Chinese laborer who bas a lawful wife, child or
parent In the United States, or property therein of thé value of one thou-
sand dollars, or debts of llke amount dtie h!m and pending settlement. Never-
theless every* such Chinese laborer shall, before leaving thé United States,
deposit, as a condition of hts return, with the collecter of customs of the
district from whlch he départs, a filU description in writing of his f amily,
or property, or debts, as af oresald, and Shall be f urnished by said coUector
with such certiflcate of his. right to return under this treaty as the laws
of the United States may now or hereafter prescribe and not Inconsistent wlth
the provisions: of this treaty; and should the written description aforesaid
be proved to be false, the right of return thereunder, or of continued rési-
dence after return, shall In eacb case be forfeited. And such right of re-
turn to the United States shaU be exerciséd wlthin one yeat from the date
of leaving the United States; but such right of return to the United States
may be extended for an addltional period, nôt to exceed one year. in easea
where by reason of sickness or other cause ot disabillty beyond his control,
such Ohinese laborer shall be rendered unable sooner to return — which facts
shall be fully reported to thé Chinese consul at the port of departure, and
by hlm certifled, to the satisfaction of the colleetor of the port at which
such Chinese subject shall land in the Unîted States. And no such Ohinese
laborer shall be pennitted to enter the United States by land or sea without
producihg to the proper offlcer of the customè the return certiflcate herein re-
qulred."
It is Gontended that the production of the certificate of a right
of return is sufficient to entitle the returning Chinese laborer to-
admission, provided such certiflcate is not false, and that no in-
vestigation into the conditions existing when he applies for read-
mission is warranted by law or treaty. Such a construction is not
warranted by the language of the treaty, is contrary to its fair intent,
and would be absurdly preposterous. The treaty first broadly ex-
cludes Chinese laborers generally. Next it provides for certain ex-
ceptions. Thé United States recog'nizëd the justice and propriety
of allowing a Chinese laborer who might leave hère to make a brief
visit elsewhere to return if he had a wife, child, or parent living hère,
or $1,000 woT&i of property hère, or a like amount of debts due him.
The daim of persons so situated to especial considération is easily
appreciated. But what sensé or reason would there be in making an
exception in favor of a person whose father or wife or child had once
lived hère, but had died, or left the country six months before, or in
favpr of a person who once had $i,oco of property hère and $1,000
of debts due him, but who had collected the debts and removed the
whole $2,000 to China long before he presented himself for admission
upon his return. The language used in the treaty is that the first
article "shall not apply to the return to the United States" of any
régistered Chinese "laborer who has" a lawful wife, child, or parent
m the United States, or property therein, or debts due him. The
plain meaning is that the first article shall not apply to the laborçr
who has relatives or property in the Unîted States at the time of his.
NTE, JENKS & CO. V. TOWN OF WASHBTTRN. 817
return thereto. The provisions as to making proof of the exist-
ence of the prescribed conditions before departure are for abundant
caution, and do not take the place of an examination to ascertain
if such conditions exist at the time of return. The secretary there-
fore had authority to provide for such an examination, and the déci-
sion of the appropriate immigration or customs officers made in the
course of such examination is within the terms of the act of August
i8, 1894, supra.
It is further contended that the judgment of the examining of-
ficers is improperly constrained by a régulation which instructs them
to give the government the benefit of the doubt in doubtful cases.
This, however, is practically nothing more than an instruction that
the burden of proof is on the person seeking to enter, which it un-
doubtedly is.
There are various objections taken to the manner in which the
examination is conducted — to its being conducted only in the prés-
ence of the government inspecter and interpréter, to déniai of coun-
sel to represent the applicant for admission, to the prévention of com-
munication with outsiders until the examination shall hâve been had.
Similar objections to the administrative détails of the immigration
acts hâve been raised before many times in this court, and hâve been
uniformly overruled. The contention that the appointment of any
officiai other than the collecter of customs who issued the certifîcate
on departure to investigate conditions upon return is an "attempt
to override and repeal the provisions of the treaty" is wholly without
merit. The argument to sustain the proposition that judicial pro-
ceedings are necessary to cancel a return certifîcate is immaterial,
since the government makes no contention that such certifîcate is
false. It may very well be that the petitioner had $i,ooo hère when
he left, and had not a dollar hère when he returned. The only in-
quiry now made is as to what were the conditions at the daté of
return. No question is made as to conditions at the date of depar-
ture.
The writ is dismissed.
NTE, JENKS & CO. v. TOWN OF WASHBT7RN et al.
(arcult Court, W. D. Wisconsln. November 11, 1903.)
Ko. 101.
1. Personal Propertt Tax— Suit to Enjoin— Pkopkiett.
Both under Rev. St. 1 3224 [TT. S. Comp. St. 1901, p. 2088], providing
that no suit to restraln the assessment or collection of any tax shall be
maintained In any fédéral court, and on gênerai prlnclples of equity, an
Injunction suit cannot be maintained to restrain the collection by town
authorlties of a personal property tax; there being an adéquate remedy
at law to be had, by paying the tax and bringing an action to recover it,
and it l?eing contrary to public policy to tle up the collection of taxes.
% Bame — Allégations oï" Fraud.
The allégation In a bill to restrain town authorlties from coUecting a
Personal property tax that the town's board of review, including its as-
sessor, "wrongfully, fraudulently, and unlawfuUy confederated, connlved,
125 F.— 52
818 125 FEDERAL BBPOETER.
and coUuded to injure plalntifE by placlhg on said assessment roU" the
propertï in question, isipsufflclent to lay a foundatlon for equity Jurls-
diction. ; ,
8. Bame— EypECT op Fbadd.
Fraud in levylng a Personal property tax wlll not confer jurlsdiction in
equity to enjoin the tax, wliere the légal rétnedy remains adéquate.
In Equity. On demurrer to complaint.
A. W. McLeod, for complainartt.
John Walsh, for défendants.
BUNN, District Judge. This is a suit in equity to enjoin the col-
lection of a tax upon personal property, and is in violation of the posi-
tive provision of the law -of Congress (section 3224> Rev. St. [U. S.
Comp. St. 1901, p. 2088]) which provides that no suit for tfie purpose
of restraining the assessment or collection of any tax shall be main-
tained in any court, and also is contrary to many décisions of the
Suprême Court of the United States on the same subject. If the
allégations of the bill of complaint are true, it is altogether probable
that the attempt to assess the plaintiflf's wheat, stored in warehouses
in the défendant towjn while in transit to other parts of the continent,
is altogether unjustifîable in the law. But if so, the plaintifif has an
adéquate remedy in the law, by paying the tax, and bringing a suit
at law to recover back the money. It is contrary to every principle
of equity jurisprudence that the collection of taxes on personal prop-
erty should be stayed by injunction. Whenever the party injured,
or supposed to be injured, has an adéquate remedy in the law, it is
contrary to public policy that the collection of taxes should be tied up
in that way.
The case is fairly ruled, I think, by Dows v. Chicago, 1 1 Wall. 108,
20 L. Ed. 65, and Shelton y. Platt, 139 U. S. 591, 11 Sup. Ct. 646, 35
L. Ed. 273. In thèse cases, as well as in many other cases decided
by the Suprême Court, it, was directly ruled that a suit in equity will
not lie to restrain the collection of a tax on the sole ground that the
tax is illégal, but there must exist, in addition, spécial circumstances
bringing the case under some recognized head of equity jurisdiction,
such as that the enforcement of the tax would lead to a multiplicity of
suits or produce irréparable injury, or, where the property is real
estate, throw a cloud upon the tîtle of the complairiarit. There is no
doubt that cases, of fraud may sometimes constitute an exception to
this gênerai rule of law, but the allégations of the bill of complaint do
not bring this case within that exception. The statement that the
board of review of the défendant town, among whom was the as-
sessor, wrongfully, fraudulently, and ùrilawfully confederatèd, con-
nived, and cdîluded to itijure plaintifï by placing on said assessment
roU $300,000 wortlï of grain, valued by said assessor at $90,000,
adds nothing to the bill by way of taking it out of the gênerai rule
laid down by the, Sttprenle Court. The allégations of fraud and con-
spiracy are (i|ùiïë too gênerai. No facts are stated. Besides, it is
not every case of fraud, though properly alleged, that will confer juris-
diction in equity. Fraud is a légal as well as .équitable ground of
action, and, if the remedy at law is complète and adéquate, equity
MOODT V. FLAGG. 819
will not take Jurisdiction. The case should be made to corne within
some recognized head of equity jurisdiction, as to save multiplicity of
suits, call for discovery or accounting, or prevent a cloud upon title
to real estate. A person may be defrauded of a sum of money by
gross deceit, and yet, if an action at law will furnish a remedy, as it
usually will, no suit in equity will lie. If the members of the board of
review conspired together to put the complainant's grain upon the
assessment roll, the injury to the complainant would be just the same,
and no greater than, if the same property had been placed there with-
out such connivance. The remedy at law would be just as adéquate
in the one case as the other.
The demurrer will be sustained, and the bill of complaint dismissed,
with costs.
MOODT et al. v, FLAGG et al.
(Circuit Court, D. Massachusetts. November 11, 1903.)
No. 1,525.
1. Trusts— Construction.
"Where an Instrument creatlng a trust provided that, whenever a ma-
jority in interest of the beneflciaries should vote to transfer the prop-
erty to a corporation, the trustée should convey the same, discharged of
the trust, and that the proceeds of such sale, after payment o( liabilities
of the assoeiated beneflciaries, should be divided among the beneflciaries,
and on such division, sale, and transfer, if no further property remained
in the trustée, the association should be dissolved, such provision con-
templated a sale by the trustée only for cash.
8. Same — Action aqainst Trustée — Pleading.
Where a trust authorized the trustée to sell the property for cash only,
a bill alleging that he threatened to transfer, or had already transferred,
the property to a corporation for no considération except the shares of
such corporation, was not demurrable.
8. Same— Multifariousnkss.
Where a trustée acted for the beneflciaries in the administration of a
trust and as manager of the business of an association operating the
trust property, a bill against such trustée alleging breaches of trust both
In hls capacity as trustée and as manager was not multifarious.
4. Same— JoiNDER of Actions.
Where a bill was brought against a trustée for alleged breach of trust,
for an accounting, and to restrain a transfer of the trust property, an
action against members of an executive committee, appointed to manage
such trust property for an association of beneflciaries, charglng conspir-
acy wIth the trustée to effect the alleged transfer, was not germane to
the cause alleged in the bill, and could not be joined therewith.
In Equity.
Brandeis, Dunbar & Nutter and Storey, Thorndike & Palmer, for
complainants.
Dunbar & Rackemann and George A. Rockwell, for défendants.
COL,T, Circuit Judge. In its essential character this îs a bill
brought by beneflciaries against a trustée for an injunction and an
account. Each of the two défendants who are before the court ha s
demurred to the bill for want of equity and on the further ground of
multifariousness. It is clear that the bill sets forth a good cause in
820 125 FEDERAL REPOKTEU.
equity against the deferidànt Flagg, if article 7 of the déclaration of
trust only provides fOr a cash sale of the property of the association.
The article reads, as follows:
' "Seventti. Whenever a majority in interest shall, at a meeting duly called
for that pùrpose, vote' to transfer the prdperty and business of the associa-
tion, or any portion thereof , to a corporation legally authorized to receive
and hold the same, or to any other party or persons, the trustée shal- fcn-
vey and transfer the same free and discharged of this trust, and tiere-
after no memher of this association shall hâve any claim to or right in gttid
property, patents ând business, or the bénéficiai results thereafter acciulng
from the property and patents so sold and transferred (except he may ^e a
stockholder to such corporation or otherwise interested in the purchase); and
the proceeds of such sale shall, after ail debts and liabilities of the associa-
tion and business are paîd, be divided ahiong the members according to their
respective interests; and upon such division, sale and transfer, if no further
property remains in said trustée, this association shall be dissolved."
The meaning of this a|"ticle, upon careful reading of the whole para-
graph, seems to be plain, unmistakable, and free from doubt. It
contemplâtes the sale of the property for cash, and I do net think it
is susceptible of any other rational interprétation. The closing words
of the article fix the character of the sale. It is to be a sale in which
"the proceeds," after the debts of the association are paid, are to be
"divided amorig the members according to their respective interests."
Ail which précèdes thèse words is merely declaratory, and to the
effect that the trustée, whenever a majority in interest so vote, may
transfer or sell the \A'hole or a part of the property to à corporation
or a person. Any othér construction of.the article is forced, and
leads to such confusion that the provisions become contradictory
and unintelligible. From this construction of article 7 it follows that
the biU is not demurrable for want of èquity, since it allèges that the
défendant Flagg, the trustée under the déclaration of trust, threatens
to transfer, or has already transferred, the property of the association
to a corporation of the; same name, for "no considération except the
shares of said corporation."
Nor do I think, as àgaihst Flagg, that the bill js multifarious, in
that it seeks to join sepai^ate and itïdepéhdent causes of action, The
bill is brougl)t against Flagg in respect to his administration of the
trust and of the business of the association. It appears that he held
the légal title to the property, arid it is alleged that he controlled and
conductéd the business of the association,, Upôn the state of facts
set forth in the bill he ocçijpied à fiduciary relation towards the com-
plainants, both as trustée under the déclaration of trust and as active
manager of the business of the association ; and he is charged with
breaches of trustin respiEct to both thèse matters. Further, if there
is a technical distinction in the capacities in which Flagg is sued, it
may be said that ail the breaches of tfbst: complainéd of concern the
same subject-matter, and may be conveniently tried in the same
'action. ' / ■ ; ":; ■'■' :- 'j- '■"■ '^',, /■-■
As to the remaining Refendants, l 'âlîi of the opinion that the bill
does not disclose sufïîcient' gjrounds for an accounting against them as
members of the executive committee, and that, so far as they are
charged with conspiracy in connection with Flâggto efîfect an illégal
WALLER V. COLEE, 821
transfer of the property to a new corporation, a separate and indé-
pendant cause of action is set forth, which is not in any way germane
to the bill. Maynadier and Fullerton were charged with no duty with
respect to the alleged transfer of the property, and any allégation
that such transfer was procured with their connivance, or as the re-
sult of a conspiracy, assuming it were properly pleaded, would seem
to résolve itself into an action at law for damages.
The demurrer of défendant Flagg is overruled. The demurrer of
défendant Maynadier is sustained.
WALLER et al. v, COLER et al.
(Circuit Court, S. D. New York. October 19, 1903.)
1. JUKISDICTION DP FEDERAL COURTS — DiVEBSITT OP CiTIZENSHIP— ReALIGNMENT
OF Parties ik Eqdity.
Where a bill flled in a fédéral court by stoekholders agalnst the corpo-
ration and otbers does not conform to the requirement of equity rule 94
by showlng the efforts made to secure action by the stoekholders, or ex-
cuse the fallure to make such efforts, the usual rule applies that the par-
ties must be aligned according to their interest for the purpose of de-
termining the jurisdiction of the court, and the corporation must be
aligned with the complainants.
In Equity. Motion to dismiss for lack of jurisdiction.
Hotchkiss & Barber, for the motion.
Roger Poster, opposed.
LACOMBE, Circuit Judge. If the trust company défendant were
aligned with the stoekholders' complainant, there would be citizens
of the same state on both sides of the controversy, and this court
would be without jurisdiction. It is manifest from the bill that the
company rightfully belongs on the complainant's side of the contro-
versy, but it is contended that the wholesome rule which aligns parties
according to interest does not apply to stoekholders' actions against
the corporation and other parties, founded on rights which may propr
erly be asserted by the corporation. The case of De Neufville v. N.
Y. & N. R. R., 8i Fed. lo, 26 C. C. A. 308, decided in this circuit, is
authority for this proposition, but intimâtes that it should be applied
only in cases which are brought within the ninty-fourth rule in equity.
The bill in this cause does not comply with the requirements of that
rule, which provides that it must set forth with particularity the efïorts
of the plaintifï to secure such action as he desires on the part of the
managing directors or trustées, and, if necessary, of the shareholders,
and the causes of his failure to obtain such action. If it be conceded
that the plaintifï bas set forth with sufïicient particularity his efïorts
to induce the directors so to act, and the causes of his failure to secure
such action by them, it then became necessary to set forth with equal
particularity his efïorts to secure action on the part of the stockhold-
1[ 1. Diverse citizenship as ground of fédéral Jurisdiction, see notes to Shipp
V. William?, 10 C. C. A. 249; Mason v. Dullagham, 2T C. C. A. 298.
822 125 FEDBEAIi KEPORTER.
ers, or at least to show some good reason why any such effort would
be futile ; as, for instance, thât a majority of the stockholders are
hostile to complainant's proposed action. No averments of this sort,
however, are found in the bill, and the cause is therefore not brought
within the ninety-fourth rule, and so not excepted from the gênerai
rule which aligns parties according to interest. Such alignaient
brings a citizen of New York on each side of the controversy, and
leaves this court without jurisdictioh.
The motion to dismiss for want of jurisdiction is granted
PEPPBR V. FIDBLITY & CASTJALTY CO.
(Çarcult Court, D. Oonnectlcut. Oetober 29, 1903.)
No. 537.
1. CosTS— Rbquibisg Secdmtt— Action by Recbiveb dp Nationai- Bank.
Eev. St § 1001 [U. S. Çomp. St. 190l, p. 713], whlch exempts the United
States, or any party acttng by direction of any départaient of the gov-
ernment, from glvlng bond for costs In a fédéral court, la applicable to
an action brought by a receiver of a national bank.
At Law. Upon démurrers to two pleas in abatement; one attack-
ing the jurisdiction of the court, and the other seeking dismissal
of the suit because filed by a nonresident without furnishing bonds
for costs.
Joseph R. Webster, for plaintifï.
Seymour C. Loomis, for défendant.
PLATT, District Judge. The contentions of the défendant in
support of the plea attacking the jurisdiction of the Circuit Court in
this district hâve been examined with scrupulous care. I am satis-
fied that, despite every considération presented, the jurisdictional
power of this court is plenary. I may be pardoned for refraining
from setting forth the reasons for my action. The time at my dis-
posai forbids, and, beyond that, I deem it unnecessary to exploit a
conclusion so palpable.
The other plea also lacks merit. It is based upon a Connecticut
statute which provides that, if the plaintifï in any civil action is not an
inhabitant of the state, a substantial inhabitant thereof shall, beforé
process is signed, either as surety or individually, give a bond to the
adverse party that the plaintiff will make his plea good. Gen. St.
1902, § 714. The highest court of the state has decided that a writ
cannot be made good by a bond given in court. Morse v. Rankin,
51 Conn. 326. In ordinary cases the rule would be followed in this
court, but in the case at bar it is necessary to obey the provisions of
Rev. St. U. S. § looi [U. S. Comp. St. 1901, p. 713] :
"Whenever a wrlt of error, appeal, or other process In law, admlralty, or
equlty, Issues from or is brought up to the Suprême Court, or a Circuit Court,
either by the United States or by direction of any department of the govem-
ment, no bond, obligation, or seeurlty shall be required from the United
States, or from any party acting under the direction aforesaid, either to
AMEKICAN ALKALI CO. V. BEAN. 823
pi'oseciite said suit, or to answer in damages or costs. In case of an ad-
verse décision, such costs as by law are taxable against the United States,
or against the party acting by direction as aforesaid, shall be paid ont of the
contingent fund of the department under whose directions the proceedings
were instituted."
The défendant argues that the plaintiff does not coma within the
statute. The case of Platt, Rec. F. & C. Nat. Bank, v. Beach, 2 Ben.
303, Fed. Cas. No. 11,215, seems to settle that contention. Judge
Benedict's décision therein was confîrmed by Judge Blatchford in
Stanton, Rec'r First Nat. Bank of Washington, D. C, v. Wilkeson,
8 Ben. 357, Fed. Cas. No. 13,299. Both cases, decided as they were
by such eminent jurists, will repay the earnest student for a careful
examination, and, when surveyed from every viewpoint, will afïord
the critic a light which I trust will illumine upon the entire conten-
tion before me, and furnish another reason for my reluctance to
incumber records.
The demurrers are sustained. The pleas in abatement are over-
ruled at the cost of the défendant.
AMERICAN ALKALI CO. y. BEAN et al.
(Circuit Court, B. D. Pennsylvanie. December 5, 1903.)
No. 26.
L Stock Sdbscriptions— Vaeiance by Parol.
Défendants in an action on their written stock subscriptîon which In
no way intimâtes that they subscribed as agents or other than as princl-
pals may not show an oral agreement with the président of the corpo-
ration that thelr subscrlption was for others.
2. SAMB— DiREOTING ISSUANCB IN NaMB OP AnOTHKK.
Défendants are not released from liability for an assessment on stock
under their stock subscriptîon ' by their direction in the subscrlption,
and comphance therewith, that the stock be issued in the name of
another, who did not own any of the shares, though the subscrlption pro-
vided that only the holders of shares of record on the books at the
time of assessments should be liable therefor; this applylng only to
bona fide changes of ownership.
Burr, Brown & Lloyd, for plaintifï.
Thomas De Witt Cuyler, for défendants.
DALLAS, Circuit Judge. This action was brought to recover an
installment of an assessment upon 2,100 shares of the preferred stock
of the American Alkali Company, under a certain subscrlption agree-
ment, of which it is at this point enough to say that it was executed
by the défendants, and that prima facie it imposed the liability sought
to be enforced. Stated broadly, the défense was that the subscrlp-
tion in question was not made by the défendants for their own ac-
count, but as brokers for others. The rulings of the court upon the
trial excluded this défense, and I hâve not been convinced that those
rulings were in any respect erroneous. Neither in the body of the
V 1. See Evidence, vol. 20, Cent. Dlg. § 1760,
824 125 FEDERAL REPORTER.
agreement nor in the signature of the défendants is tliere any intima-
tion of açency, and it is quite certain thait, if tliey were agents, their
principals were not in any ma:njier disclôsed. Consequently they be-
cariie persorially bound, even if in fact tliey were authorized to bind
others and intended to act only in pursuance of that authority.
Moreover, as the légal efifect of this contract in writing was to make
the défendants a substantial, and not merely a nominal, party to it,
the capacity in which they acted is not open to question; and the of-
fer which was made to prove that the président of the company agreed
with the défendants that the subscriptions made by them were made
for their conàtitùents was especially objèctionable. It amounted to
nothing but a proposai to substitute for' the written contract with
the corporation an oral agreement with its président. Pitcairn v.
Philip Hiss Co. (C. C. A.) 125 Fed. 113. The liability which the de-
fendants incurred under the subscription agreement was not re-
leased by anything which subsequently occurred. At the time they
signed that agreement, and by writing immediately under their sig-
nature, they directed that the certifîcates for the stock should be in
"the name of Geo. W. MacTague," who was their clerk, and who ad-
mittedly did not own any of the shares. This direction was complied
with. But what did it import? Plainly, I think, that MacTague was
to stand for the défendants ; and, if this understanding be correct, it
follows that he stood for them as absolute owners, since^ as has been
shown, it was as absolute owners they acquired the stock and assumed
the obHgation to pay for it. But it is contended that, even if the de-
fendants would ordinarily hâve been liable upon an assessment made
under such circumstances (of which I hàye no doubt), yet, that this
particular agreement contained a provision which exempted them
from that liability. The provision referred to is :
"Upon payment of the flrst Installment of 20% the fuU-pald eertificates of
common stock and partially pald certiflcfttes of preferred stock, setting forth
that 20% has been pald thereon, shall be dellvered to the subscribers hereto
and as subséquent installments are pald they shall be endorsed on the latter.
"Provlded, however, that after the payment of the 20% provided for above,
amounting to a total of $10 per share, the subscribers hereto shall no longer
be liable for any balance on their subscription exceptlng upon such shares
as shall stand of record on the books of the company in their names at
the tlme any subséquent assessments or calls are made, but the holders of
such shares of record on the books of the company at that tlme, and they
only shall be liable for the same."
In my opinion, the construction which the learned counsel of the
défendants seek to put upon the foregoing extract is an inadmissible
one. It could not be adopted without holding that it was contem-
plated that subscribers to the stock of this corporation might évade
the obligation , generally and properly incident to such subscriptions
by simply directing that tl?e shares for which they subscribed should
stand in the name of some fînancially irresponsible , third person.
Without pausing to consideir whether any provision that would really
hâve this efïect should not be disregarded as being in conflict with the
policy of the law, I content myself with saying that the particular
provision in question may reasonably be, and therefore should be, so
interpreted as to limit its applicability to cases of bona fide changes of
JORDAN V. CITT OF PHILADELPHIA. 825
ownership. What was intended, I think, was that the liability of
subscribers should cease upon the actual — not merely nominal— trans-
fei' of the shares subscribed for, and that upon such transfer the new
owners would become exclusively Hable.
Upon the whole case I hâve reached the conclusion that the verdict
which was rendered by direction of'the court shoùld not be disturbed,
and therefore the défendants' rule for a new trial is discharged.
JORDAN V. CITY OF PHILADELPHIA.
(Circuit Court, E. D. Pennsylyania. December 6, 1903.)
No. 90.
1. New Trial— Submission to Jury— Waiver op Objection.
The question of contributory négligence baving been submitted to
the jury in précise accordance with defendant's request, it cannot, as
ground for new trial, claim that the évidence thereon caUed for bind-
ing instructions for it.
Henry W. Scarborough, for plaintifiE.
Harry T. Kingston, for défendant.
DALLAS, Circuit Judge. John Jordan fell from a wagon which
he was driving upon a highway of the city of Philadelphia, and his
death resulted from that fall. This action was brought by his widow,
under the Pennsylvania statute, to recover compensation for the
loss sufïered by herself and the children of John Jordan, by reason
of his death, which she alleged had been caused by the failure of
the city to exercise due care to put and maintain the highway in
question in reasonably safe condition and repair. This allégation
was denied, and the issue of fact thus presénted was submitted to
the jury for détermination upon the évidence bearing upon it, which
was quite voluminous. I hâve understood the learned counsel of
the défendant to concède that this submission was proper, and that
the instructions of the court with respect to it were unobjectionable.
I, at ail events, hâve no doubt upon either point. The testimony,
I still think, required that this question should be referred to the jury,
and I do not perceive that the law relating to it was in any particu-
lar erroneously stated by the trial judge.
The défense of contributory négligence was set up, and it was
claimed that this défense had been so conclusively established as to
call for binding instructions in favor of the city. But I did not think
so at the trial, and I do not think so now. On the contrary, it seems
to me to be questionable whethcr there was any évidence upon which
a finding that John Jordan had, by négligence of his own, contributed
to cause the accident which occasioned his death could hâve been
sustained. However, this question also was submitted to the jury,
and in précise accordance with a request made on behalf of the de-
fendant. It has no ground for complaint, either of the action of the
court or of the conclusion reached by the jury.
826 J?p; FEDERAL REPORTER.
I cannot say that the verdict was exces3ive. It was for $8,000,
and, in my opinion, that sum is not greater than, under the évidence,
and the measure laid down, without objection, by the court, could
reasonably hâve been arrived at. . Harkips v. Pullman Co. (C. C.)
52 Fed. 724.
The defendant's rule for a new trial is discharged.
SWIFT & CO. V. BRENNER et al.
(Circuit Court, S. D. New York. December 2, 1Ô03.)
L UHLAWPUL COMPETITION— GioODS— SlMILARlTY OP LABELS.
Plalntlff manufactured and sold soap put up in single-cake packages,
marked, "Old Mlll Soap," with a' pleture of an old mlll, and, underneath,
"Made by Swift & Co., Chicago," and on each side was prlnted the same
words. Défendant, undèr the name Crown Manufacturing Company, put
up soap In slmilar packages, on the top of whlch was prlnted, "Old Stone
Mlll Soap," with a pleture of an old mlll, and, under It, "Made by Orown
Mfg. Cô.," with the samé words on each side. The situation of the letters
and the type of the names were slmilar in each case, and the àppearance
of the package was well calculated to deceive the public. Seld, that de-
fendanf s act constituted unfalr compétition.
In Equity.
Appleton L. Clark and Bond, Adams, Pickard & Jackson, for plaintifï)
Henry Kuntz, fc* défendants. ''
WHEEIyER, District Judge. This suit is brought for unfair com-
pétition in trade in the sale of soap. The plaintiff deals in what it calls
"Old Mill Soap." It is put up in cakes in single packages marked on
the top, "Old Mill Soap," with a picture of an old mill, and, underneath,
"Made by Swift & Co., Chicago," and on each side, "Old Mill Soap
made by Swift & Co., Chicago." The défendant, under the name of
the Crown Manufacturing Company, has made and put up soap in
single cakes, on the top of which is "Old Stone Mill Soap," with a
picture of an old mill, and undèr it, "Made by Crown Mfg. Co.,"
and on each side, "Old Stdne Mill Soap made by Crown Mfg. Co."
The situation of letters and the type of the names are similar in each.
This similarity in the wrappers of the cakes and of the names "Old
Mill" and "Old Stone Mill" présents a similar àppearance of the
soap of the défendant to that of the plaintifï, and it seems well calcu-
lated to make those ordinary purchasers of such articles who are
familiar with the plaintiff's soap think that the defendant's soap is
the same as that of the plaintifï. The insertion of the name "Stone"
in "Old Stbne Mill" is not marked enough to attract the attention
of an ordinary purchaser looking for "Old Mill Soap," and the dis-
similarity in the mills and in the name of the maker would not cor-
rect the impression. The efïect of the whole would be to lead many
purchasers of sùch articles to think that they are the same. The
1 1. Unfalr compétition, see notes to Scheuer t. MuUer, 20 C. 0. A. 165;
Lare v. Harper & Bros., 30 C. 0. A. 376.
OARR T. SHIELDS. 827
testimony discloses no reason why the défendant should, under an-
other name than his own, take up this naitie of "Old Mill Soap" and
thèse packages, with so much similarity and such slight différences,
to use in his business. He might as well hâve taken his own name,
or some other than this. The impression made is that this was taken
for the purpose of passing off his soap as that of the plaintiff.
Thèse considérations entitle the plaintiff to a decree. Decree for
plaintiff.
CAER V. SHIELDS.
(Circuit Court, S. D. New York. October 29, 1903.)
1. Master and Servant — Personal Injokieb — Négligence of Fellow Ser-
vant— New York Statdtb.
New York Laws 1902, p. 1748, c. 600, glving an action to an employé
the same as if he had not been employed, in cases where he is injured
by defects in the ways, works, or machinery due to the négligence of the
employer or one intrusted by him with supervision, or by reason of the
négligence of a superintendent, does not confer a right to recovery for
the négligence of an ordinary fellow servant in failing to wam the plain-
tiff of the lowering of a "scale," by which he was injured.
2. Same— Common-Law Doctrine.
A servant cannot recover at common law for an injury inflicted by the
négligence of a fellow servant.
8. Same— General Allégation— Epfect.
The allégation In a servant's complaint for injuries that they were
caused "without fault, neglect, or want of due care on his part, but
solely and only through the fault and neglect of the défendant, his agents,
servants, and employés," Is too gênerai to amount to an allégation of an
act of négligence.
Charles J. Hardy, for plaintifï.
Henry L. Twichell, for défendant.
WALLACE, Circuit Judge. The complaint does not allège that
the Personal injuries of the plaintiff were caused by "any defect in
the condition of the ways, works, or machinery connected with
or used in the business" of his employer, or by reason of the négli-
gence of any superintendent, regular or temporary, of his employer,
but it sets forth in détail ail the facts which enter into the cause of
the action. From this detailed statement it is manifest that the plain-
tiff was injured by the lowering of a "scale" while he was beneath it
by two of his co-employés, and because one of them (the signal-
man) did not give notice to him of the descending scale.
Plainly, the statute of New York of 1902 (Laws 1902, p. 1748,
c. 600), to "extend and regulate the liability of employers to make
compensation for personal injuries suffered by employés," does not
give a cause of action to the plaintiff; and it is equally plain that
for an injury so received, occurring by reason of the négligence of a
fellow servant, he has no cause of action at common law unless his
employer had not exercised reasonable care of sélection — a fact not
alleged in this case.
T 2. See Master and Servant, vol. 34, Cent. Dig. i 352.
828 125 FÎ3DERAL REPORTER.
The demuxjier îs well taken, junless a gênerai statement made after
the particular statement of facts is to be read as allegiiig some addi-
tional act of négligence. This statement is that the injuries afore-
said were caused to plaintifï "without fault, neglect, or want of due
care on his part, but solely and only through the fault and neglect
of the défendant, his agents, servants, and employés."
It would give this statement a strained and unreasonable meaning
to interpret it as is urged in behalf of the plaintifï.
The demurrer is sustained, with costs.
HATZEIi V. MOORB.
(Circuit Court, S. D. New York. October 28, 1903.)
1. BiLLS AND Notes— Transfbr—Bona Fide Purchasek— Payment— Answer.
In an action on certain notes, an angwer alleging that the notes were
not to be pald except from the profits of the theatrical venture of which
plaintifC and his predecessors In title , had notice, and that there were
no profits accmlng from sueh ventùre, stated a good défense to the notes.
8. Samb — Demukrer.
Where an answer In a suit on certain notes alleged that the notes were
to be payable only ont of the profits pf a venture, ând that no profits had
accrued, an objection that such agreement was verbal, and could not be
proved to defeat the notes, could not be considered on demurrer to the
answer.
See 120 Fed. 1015.
Henry F. Lippold, for plaintifï.
Edward L. Blackman, for défendant.
WALLACE, Circuit Judge. The answers demurred to do not
allège the diversion by Whitney of accommodation notes delivered
to him by the défendant, but allège that the notes in suit are a part
of a larger number of notes given by défendant to Whitney for the
purchase price of an interest in a certain venture, and that as part
of the contract of purchase Whitney agreed to accept the notes of the
défendant, and apply a certain number of them to the payment of an
indebtedness owing by Whitney to third parties, and retain in his
hands ail of the notes not so used, and apply defendant's share of the
profits of the venture to the payment thereof. It is not alleged that
Whitney failed to apgly the requisite number of the notes to the
payment of the indebtedness owing by him, or that there were any
profits arising from the theatrical venture. So far as appears, the
notes in suit were properly retained by Whitney, and there has
never been any fund realized for their payment. But the answer
avers that by the contractthe notes were not to !be paid in any other
way than out of the profits of the venture. If that was the contract,
to the extent that the profits were insufficient there has been a failure
of considération, As the answer allèges that the plaintifï and his
predecessors in title to the notes had notice pf the contract, the
% 1. See Bllls and Notes, vol. 7, Cent. Dlg. § 1372.
MARVEL CO. V. TULLAR CO. 829
défense would seem to be good. It is urged that the contract was
verbal, and cannot be used to defeat the notes without violating the
rule of évidence. The court cannot assume that the contract was a
verbal one, or undertake to décide a question of pleading upon a rule
of évidence which may be waived at the trial.
The demurrer is overruled, without costs.
MAEVEL CO. V. TULLAR CO. et al.
(Circuit Court, S. D. New York. December 2, 1903.)
1. Unlawful Compétition — Patbnted Articles— Manupacturk—Foiîm dp
Article.
Wliere a patented article was manufactured by both plaintiff and de-
fendants, and the simllarity in the article made by défendants was only
sueh as was necessary in the making and opération of such article, and,
though the form of the boxes in which the Instruments of both parties
were packed was similar, the circulars and labels used on defendant's
boxes distinguished the origln of their instruments, and were not similar
to plaintlff's labels, except as to the picture of the instrument, défendants
were not gullty of any mlsrepresentation tending to lead the public to
believe that their Instruments were manufactured by plaintiff, and were
therefore not gullty of unfair compétition.
In Equity.
C. A. L. Massie and Philip Mauro, for plaintifï,
John P. Bartlett, for défendants.
WHEELER, District Judge. This bill is brought against alleged
unfair compétition in the sale of Médical Whirling Spray Syringes.
There are patents concerning thèse syringes which hâve been as-
signed by one of the défendants to an assignor of the plaintifï, but this
suit is not in any manner upon the patents. And an allusion is made
in the brief and argument to some estoppel said to grow out of an as-
signment of good will; but the assignment referred to covers only
patents and control of patents, and does not in any terms purport to
assign any good will, or to in any way estop the assignor from man-
ufacturing the article otherwise than under the patents. So the case
js to be considered entirely in relation to the unfair compétition in
trade, stripped of ail or any liability growing out of the patents or
the assignment. This view of what is involved seems to be arrived
at finally by the plaintifï's counsel, for, in a supplemental mémoran-
dum to the brief, at page 14, after alluding to what is to be observed
in connection with unfair représentations in trade, after quoting from
a décision that "the imitation need only to be slight, if it attaches to
what is most salient," he asks:
"What is most salient about our goods? Not the boxes or any wrappings,
because the goods are displayed outside of and removed from any boxes or
wrappings; and the défendants' manager, Pearl, admits that the goods are
brought to the attention of the public by the appearance of the article itself."
U 1. Unfair compétition, see notes to Scheuer v. Muller, 20 C. C. A. 165; Lare
T. Harper & Bros., 30 C. C. A. 376.
830 125 FBDEBAL REPORTEE.
As this case is presented, therefore, the question is whether the ap-
pearanceof the article itself, as a principal thing, is a sufïïcient foun-
dation for restraining the making and selling of the article. There
is nothing about the article, as made and sold by the défendants, that
is not necessary in the making and opération of such an instrument.
It is made in the form that it must be made in order to accomplish
its purpose, and, if the making in that form is any représentation
that the thing made came from the plaintiff, it is because of the ex-
tent to which the plaintifï had made and displayed and sold it before
the défendants began. The défendants had as good a right, aside
from the patents or estoppel, to make and sell thèse articles as the
plaintiff had; and the compétition, if any, as to that, would grow
out of merely doing what the défendants and any others had a right
to do. There are no cases, so far as has been ohserved, that go
so far as.to take away this natural right. Tbese instruments are
sold in boxes, and there would bè no misrepresentation otherwise
than by the article, except what might be put upon or about the
boxes themselves. In this case the boxes are merely such as are
suitable for containing such an article. They are in a similar shape
to the plaintiff's boxes, as boxes for containing thèse articles must
be. They are différent in color, and therefore whatever might dis-
tinguish the boxes is used. The labels on the boxes and the plain-
tiff's and défendants' cirqulars are alike in so far as they show this
instrument as it is supposed to be in opération. Aside from this
picture of the instrument, the labels and circulars of the défendants
distinguish the origin of the instrument as their own, as the plaintiff
distinguishes the origin of its instruments as its own. The only
similarity not necessary to the showing of the articles themselves is
the inclination of the picture to one side, which is common in some
instances to both. This pf itself, in connection with the different-
colored boxes, and the full display of the names of the makers, does
not seem to be any such représentation that the instruments are of
the plaintiff's production and make as to amount to any misleading
or unfair statement that the articles made and sold by the défendants
originated 'with thé plaintiff. Whatever rights the plaintiff may hâve,
growing out ôî the patents, that are not involved hère, those claimed
to be involved hère do not seem to amount to any unfair or unlawful
compétition in trade.
Bill dismissed.
ALEXANDBE v. MASON.
(Otrcplt Court, S. D. New York. Oetober 28, 1903.)
ACCOUNTING— EqUITY JnBISDICTION— ADEQUATE ReMEDT AT LaW.
A suit In equlty for «ù àccouiitlng, not growing out of a trust relation,
cannot be maintalned unless the blll discloses such a Complexlty In the
aceount as to render the remedy at law unduly burdensome and em-
barrasslng.
Simpson, Thatcher, Barnum & Bartlett, for demurrer.
John S. Wise, in opposition.
IN EE QAKPENTEB. 831
WALLACE, Circuit Judge. I am unable to dîscover any such
complexity in the nature of the accounting sought for in the bill
as justifies a resort to equity. Jurisdiction in this class of cases
dépends upon the inadequacy of tlie common-law remedy, and it is
quite impracticable to lay down any hard and fast rule by which to
détermine in an action for an accounting not growing out of a trust
relation whether the remedy at equity is more convenient than the
remedy at law. Unless the bill discloses enough complexity to ren-
der the accounting in a court of law unduly burdensome and em-
barrassing, the court should refuse to take jurisdiction.
Demurrer sustained, without costs.
In re CARPE NTER.
(District Court, N. D. New York. December 2. 1903.)
L BAîJKRUPTCT— CONDITIONAL PcKCHASB OF GOODS FOB RESALE— VaLIDITY AB
AGAINST TrDSTBE.
Goods purciiased to be resold In due course of business cannot be
claimed by the seller, as against the trustée of the bankrupt purchaser,
where sold under a secret, imrecorded agreement that title should not
pass till payment was completed.
9, Same — Ckkation dp Aqenct — Construction of Contract.
A buggy dealer obtained goods to be resold, under an agreement direct-
Ing them to be shipped "at prlces herein specifled, and for which we
agrée to give our note on receipt of invoice, payable as per terms stated.
* • * Terms 4 Mos. May Ist Less 5% for cash In 30 days." The
agreement provided that "ail goods on hand and the proceeds of sale
of ail goods received under this contract, whether the goods are in cash,
notes or book accounts, we, as agents of 'the seller,' agrée to hold the
same In trust for the benefit of and subject to the order of 'the seller'
until we bave paid In fuU, In cash, ail our obligations of whatsover
nature now due or yet to become due to" the seller. Also, that "the
sale and disposition of ail goods received under this contract * • •
shall be made and the proceeds held by us as agents of" the seller.
HeM not to create an agency, and that the seller could not clalm title
to the goods as a principal, against the trustée of the bankrupt pur-
chaser.
8. Same— MoRTSAGB bt Bankrupt.
Under Bankr. Act July 1, 1898, c. 541, § 70, 30 Stat. 565 [U. S. Comp.
St. 1901, p. 3451], vesting in a trustée in bankruptcy title to property
transferred In fraud of credltors, an agreement by which title to goods
sold to be put into the purchaser's common stock and resold in the due
course of his business, and title to the proceeds of such resales are to
remain In the seller until ail the purchaser's obligations, existing and
future, are met, is invalid as a mortgage against such trustée.
4. Same— Rights of Trustée.
A trustée in bankruptcy may take advantage of the invalidity of an
agreement fraudulent as to the credltors of the bankrupt, the same
as a judgment créditer mlght
Pétition for the review of an order made by a référée in bank-i
ruptcy adjudging the title of certain personal property claimed by
the Columbus Buggy Company to be in the trustée of the bankrupt.
ï 4. See Bankruptcy, vol. 6, Cent. Dlg. §§ 273, 421.
832 125 VSaaÈ.At, &EPOBTBB.
Henry W.Sftiith, for trustée.
Dyer & Teneyck, for Columbus Buggy Ce.
RAY, District Judge. Inasmuch as the Columbus Buggy Com-
pany asserts that this was a spécial référence to the référée to as-
certain iand report the focts to the court for. its décision, with no
power "to make an orderas to the title, this court will so treat the
matter, and décide the question of title on the undisputed évidence,
without référence to the décision of the référée. The notes of trial
say, "Spécial référence to report question of title of certain prop-
erty," etc.
For some time prior to the bankruptcy of Beecher E. Carpenter
he had received carriages from the Columbus Buggy Company on
written orders given to him. The foUowing is a copy of one, omit-
ting description of goods:
"Order.
"Salesman Nelson 2/22 1901
"Columbus Buggy Co.,
"ColuilQbus, Ohlo.
"On or about April Ist, 1901, please shlp the followlng goods to B. B. Car-
penter, Troy, N. Y., at priées herein, speclfied; and for wblch we agrée to
give out note on recelpt ot Involce, payable as per terms stated below.
"57-R-O. TMa order not subject to countermand. AU orders fiUed with
Steel tires unless otherwise speclfled.
* * « •« • •• • •• •
"Terms: 4 Mos. May Ist. Less 5% for cash In 30 daya.
"Ail goods on hand and the proceeds of ail sales of ail goods received
under this contract, whether the goods are in cash, notes, or book accounts,
we, as agents of the Columbus Buggy Co., agrée to hold the same in trust
(or the beneflt of, and subject to the order of Columbus Buggy Co., until we
hâve paid in full, in cash, ail our obligations of whatsoever nature now due,
■or yet to become due to the said Columbus Buggy Co. And the sale and dis-
position of ail goods received under this contract it is hereby mutually agreed
shall be made, and the proceeds thereof held by us, as the agents of said
Columbus Buggy Oo. The title to and ownershlp of ail goods received or
shipped under this contract shall, remain vestedin Columbus Buggy Co., but
nothing in this clause to release us from making settlement and payment
of our obligations as herein provided.
"We accept the same terms on ail further orders we may send durlng the
year.
"No agreement or understanding with agents will be recognized unless
noted in the order.
"The conditions of guarantee published In your Catalogue are hereby
recognized as blndtng with référence to the order. (Subject to approval of
home office.)
"[Sign] B. B. Carpenter,
"Approved ; . [Town] Troy, N. Y."
The others were like thîs in substance, except in date and de-
scription of goods and priées. As the goods were delivered, notes
were given by Carpenter for the price or value therçof. Some of
thèse notes were paid when due, and some were paid after renewal.
At the date of the filing of the pétition in bankruptcy herein, Car-
penter had on hand six bUggies received at différent times, so or-
dered, of the value of $689.50, and the Columbus Buggy Company
held his unpaid notes to the amount of $2,300. At the time he or-
dered thèse vehicles Carpenter was running a business where he
sold goods of this description, and ail thèse goods to the knowledge
IN RE CABPENTEB. 833
of the Columbus Buggy Company were purchased by Carpenter
to be sold by him in his business as a gênerai dealer. The claim
is that the title to thèse buggies never passed to Carpenter, or that,
if it did, the company, under thèse orders or agreements, has a pre-
ferred lien thereon for the amount of its claim, which is largely in
excess of their value, and that the company is entitled to take the
property. It is also asserted that Carpenter held this property in
trust as agent for the company, and was not a vendee in possession,
and had no title wbatever thereto. Ail of thèse claims are made by
the company and disputed by the trustée in bankruptcy.
It is plain that the company cannot maintain its claim of title on
the theory of a conditional sale; that is, that the property was sold
and delivered to Carpenter with a précèdent condition that title
should be retained by the company until the buggies were paid for.
In re Garcewich, 115 Fed. 87, 53 C. C. A. 510, 8 Am. Bankr. R. 149;
In re Howland (D. C.) 109 Fed. 869, 6 Am. Bankr. R. 495; In re
McCallum (D. C.) 113 Fed. 393. Thèse goods were purchased, if
purchased, to be resold in due course of business; and hence In re
Kellogg (D. C.) 112 Fed. 52, 7 Am. Bankr. R. 270, has no applica-
tion whatever. There the molders were purchased to be kept and
used by the vendee. Such was the case in Earle v. Robinson, 91
Hun, 363, 36 N. Y. Supp. 178, afRrmed 157 N. Y. 683, 51 N. E. 1090.
Were thèse goods delivered by the company to Carpenter as agent
for the company, to be sold by him as such agent, and received
and held by him as such agent for such purpose? This court knows
of no law that will prevent the owner of personal property deliver-
ing it to a duly constituted agent to be sold by him for the prin-
cipal, or for his benefit, the agent holding the proceeds of a sale
as such until paid over. In such a case the unsold goods and the
proceeds of ail sales made, if identified, would belong to the prin-
cipal. But there is not a scintilla of évidence in this case, aside from
what we read in the "Order," that Carpenter ever acted or agreed
to act as agent for this company. What was done by the parties
négatives the idea of an agency. For the goods shipped Carpenter
is to give his note or notes. Carpenter holds the goods, or the pro-
ceeds of such as he has disposed of, until he has paid his "obliga-
tions of whatsoever nature now due or yet to become due to the said
Columbus Buggy Company." This is consistent with the existence
of the relation of vendor and vendee, but absolutely inconsistent
with the existence of the relation of principal and agent. Clearly,
the obligations referred to are the notes given for the purchase price
of the buggies, some due and others not due, and not the liability
to pay over money received as agent for the company. Nor is it
consistent with the theory of the existence of an agency that the
alleged agent, Carpenter, should give his note for the value of the
buggies sent him. In the order of February 22, 1901, we find the
"terms" are "4 Mos. May ist. Less ^fo for cash in 30 days." Are
thèse the "terms" on which Carpenter is authorized to sell, or are
they the terms on which Carpenter purchases the goods? Clearly
the latter. Again, not a word is said to the effect that Carpenter
is agent in receiving or selling the goods. Indeed, the fair infer-
125 F.— 53
^i 125 S'Éii>MiiiLL BBFOBTSiB.
ence is that thé 'goods are not received by Carpenter as agent for
the Company, or soldby him as such. The language is, "AU goods
on hand, ând the proceeds ôî ail sales of goods received ùnder tffis
contract, we as agents," etc. It seems plain that this is an attempt,
by meré wofds inserted in the ôrder, to create a lien in favor of the
veridor in case ôf default in pàyment by the vendee; an attempt to
transform the vendee into an agent for the holding of unsold goods
and the proceeds of sales, in case of default of payment, for the mère
purpose of giving seCurity to the vendor. This does not create the
relation of principal and agent, nor, as against creditors in bank-
ruptcy proceedirtgs, can the ' ownership of the vendee be transferred
to the vendor for such a purpose in such a manner. "In order to
create an agency, there must te an appointment of the_ agent by the
principal and an acceptance bf such appointment. This foUows the
fact that agency is one form of contract, and must possess the essen-
tial éléments of every contract." i Am. & Eng. Enc. of Law (2d Ed.)
948. "The agency is to be established or disproved by the facts taken
as a whole, aïid éléments apparently characterizing the transaction
as of a différent nature must often be disregarded when the gênerai
intention to create an agency appears. The converse of this is true ;
and, if such gênerai intention does not appear, the relation will not
be created, although there exist some éléments of agency." Id. 950.
In this case it is apparent that there was no purpose to create an
agency, except a meré executory agreement to create a so-called
agency to transform the ownership of the debtor, the àlleged agent,
into an ownership by the creditors, the alleged principal, in case of
default in payment of the debt owing for the goods sold.
Nor is the instrument valid as a mortgage. It is presumably
fraudulent, and therefore void, because the vendee, alleged mort-^
gagor, was at liberty to sell in the tisual course of business. The
goods went into his common stock, and were to pass to purchasers
of the vendee in due Course of business. If it was the purpose to
create an agency, and intrust the goods to the agent, Carpenter,
for sale, as sUch, why was not such an agreement made in plain and
unambiguous terms? If Carpenter was to sell for the benefit of the
Company, why this large indebtedness, showing Carpenter had been
allowed to retain the proceeds of sales for his own benefit? Why
this absence of an accounting? The conclusion is irrésistible that
it was the purpose of the Columbus Buggy Company to give Car-
penter apparent ownership— a false and delusive crédit on the
strength of his possession and apparent ownership. The lien at-
tempted to be created eîitends not simply to the goods sold at a cer-
tain date under a spécifie order, but purports to extend to goods
paid for, money and notes received for goods already paid for, and
to after-acquired property and money and notes received therefor.
Il 'ïs a sort 01 an omnibus contract or agreement, so drawn as to be
capable of any sort of a construction the Columbus Buggy Company
might désire to hâve put upon it to suit the exigencies of the case
or the circuiiiistances as they might arise. It was secret, unfiled,
and unrecorded. As against the creditors of this bankrupt, it is
Foid both as a conditional sale and as a mortgage or an instrument
835
attempting to create a lien in behalf of the Columbus Buggy Com-
pany.
It is claimed by the company that ail presumption of fraud has
been overcome. But the court finds no évidence or facts to war-
rant any such holding or conclusion. It is apparent that Carpenter
was to sell for his own benefit, inasmuch as he was only to hold
the proceeds until his obligations — notes — ^were paid, and there is no
suggestion he was to make sales for the company. The following
cases are more or less in point: Hangen v. Hachemeister, 114 N.
Y. 566, 21 N. E. 1046, 5 L. R. A. 137, II Am. St. Rep. 691; Che-
mung Canal Bank v. Payne, 22 App. Div. 353, 47 N. Y. Supp. 877;
Quinn Brewing Co. v. Hart, 48 Hun, 393, i N. Y. Supp. 388 ; Potts
V. Hart, 99 N. Y. 168, i N. E. 605 ; Russell v. Winne, 37 N. Y. 591,
97 Am. Dec. 755; Southard v. Benner, 72 N. Y. 424. See, also,
opinion in In re Garcewich, 115 Fed. 87, 53 C. C. A. 510, 8 Am.
Bankr. R. 151, 152. The trustée in bankruptcy may take advantage
of the invalidity of this instrument the same as a judgment créditer.
It is not such a case as In re N. Y. Economical Printing Co., iio
Fed. 514, 49 C. C. A. 133. As a mortgage it is void as against ail
creditors, because made in fraud of creditors. Section 70 of the
bankruptcy act (Act July i, 1898, c. 541, 30 Stat. 565 [U. S. Comp.
St. 1901, p. 3451]) says that ; not because of omission to file or refile.
The court holds as matter of fact and conclusion of law that the
trustée in bankruptcy of Beecher _E. Carpenter has title to the bug-
gies in question, and is entitled to the possession of same, and that
as against him and the creditors of the bankrupt the said Columbus
Buggy Company has no lien thereon. An order to that efifect will
be entered.
In re McLAEEN et al.
(District Court, N. D. New ïorlj. November 21, 1903.)
l. Bankruptcy— Pahtneiîship—Existehcb.
Where, on an application for an adjudication of bankruptcy against
a firm, it appeared that both of the original partners had dled, leaving
their Interests to certain others, some of whom were minors, aûd it dld
not appear by whom or under what arrangement the flrm was subse-
quently condueted, except that two persons conducted the business and
committed the acts of bankruptcy alleged, and the continuance of the
partnershlp was denied by the alleged infant members, an adjudication
would be denied until the existence of the partnership was proved.
Application to hâve an alleged copartnership adjudicated a bank-
rupt, notwithstanding the interposition by several of the alleged mem-
bers of the firm of answers aîleging their infancy and denying that
they are members of the firm or copartnership.
Charles S. Aldrich, for petitioning creditors.
Chas. I. Webster, for Ida B. Howard et al.
M. F. O'Connor, for Robert L. McLaren.
Samuel Poster, for Ella McLaren et al.
RAY, District Judge. On the i2th day of October, 1903, certain
creditors of the alleged firm of J. & R. McLaren filed a pétition in
836 125 FBDUBAL BBPORTEB.
involuntary bankruptcy, asking to hâve said firm and the individual
members thereof adjudged bankrupt, and alleging that the firm is
composed :of Sarah Mcl^aren, John R. McLaren, Ida B. McLaren
Howard, John Howard McLaren, Ella McLaren, David Grarit Mc-
Laren, as to ail indebtedness owing by said firm and in existence
prior to January i, 1901, and also Robert L. McLaren, to the ex-
tent of the property interests involved in and a part of said copart-
nership business that were devised to him by Robert McLaren.
John Howard McLaren and John R. McLaren file an answer and
consent, duly verified, as follows:
"In the District Court of the United States, Northern District of New York.
"In the Matter of J. & R. McLaren, Alleged Bankrupts.
"In Bankruptcy. No. 1589.
"At Sand Lake, In said district, on the 6th day of November, A. D. 1903.
"Now, the. said J. & R. McLaren a co-partnership mentioned In said péti-
tion appears in this proceedlng, and admits, that the said firm of J. & R.
McLaren is insolvent, and that It commltted the acts of bankruptcy alleged
in said pétition, and expresses its willingness to be deelared bankrupt within
the purvlew of the acts of Congress relating to bankruptcy.
"Thomas H. Guy,
"Attorney for said Bankrupts,
"5 Keenan Building,
"Troy, N. Y.
"The TJnlted States of America, Northern District of New York, County of
Rensselaer — ss.
"John Howard McLaren and John R. McLaren, being duly sworn each
déposes and each for himself says, that he Is a member of the firm of J.
& R. McLaren, the alleged bankrupts herein; that he has read the foregoing
answer and knows the contents thereof, that the same Is true of hls own
knowledge; and that thèse two alBants hâve for several years had the active
management of the business and affairs of the said firm.
"John Howard McLaren,
"John R, McLaren.
"Swom to before me thls 7th day of November, 1903.
"Le Grand M. Turner,
"Notary Public, Rens. Co., N. Y.
"[Seal of Le Grand M. Turner, Notary Public, Rensselaer Co., N. Y.]"
The other alleged partners file answers, each denying that he or she
is a member of such firm or copartnership, or that he or she ever
has been a member of any firm Or copartnership, and each dénies that
he or she has committed the acts of bankruptcy alleged, and ail also
alleging their infancy.
From the answer of Robert L. McLaren (an infant) it appears (and
the facts are admitted on this application) that prior to 1889 two broth-
ers, John McLaren and Robert McLaren, were engaged in the knit
goods business at West Sand Lake, Rensselaer Co., N. Y., as co-
partners under the firm name of "J. & R. McLaren." September
27, 1889, said Robert McLaren died, and left a will, which was duly
proved, containing the foUowing provision:
"Pourth. I give, devise and bequeath my Factory Investment to my wife,
Sarah McLaren, to John R. McLaren, to Ida D. McLaren, my daughter, to
Robert L. McLaren, my second son, each to share and share alike, when
they are of âge. And I hereby appoint John McLaren of West Sandlake,
837
Kensselaer County, N. T., and George French of North Adams, Mass., es-
ecutors of thls my Last Will and Testament"
Thèse legatees, or some of them, are named in the pétition as co-
partners in such firm. Just what was donc, or what arrangement
was made, does not appear, except that the business was continued
by some persons under the same name. December ii, 1894, John
McLaren, the surviving partner, died, and le£t a will containing this
provision :
"I give, devise and bequeath ail my right and tîtle and Interest in the knit-
ting mill property at West Sandlake to my wife, Jane Elizabeth McLaren,
and my sons, John Howard McLaren and David Grant McLaren, and my
daughter, Ella M. McLaren, In equal shares to my aforesaid -wife, two sons
and daughter. • • » i also direct that during the minority o( my son,
David Grant McLaren and my daughter, Ella M. McLaren, they shall hâve
no voice in the management of their interests in the knitting mill business,
but that their interest shall be attended to solely by the executors of this
my Last Will and Testament"
Thereafter the business was carried on under the same firm name,
but by whom, or under what arrangement, does not appear, except
that John Howard McLaren and John R. McLaren admit that they
are members of said copartnership, and that they and the firm hâve
committed the acts alleged. This admission also carries with it, by
implication at least, an allégation on their part that thèse infants are
members of this copartnership.
When Robert McLaren died, the original copartnership was dis-
solved, and the partnership property passed to the surviving partner
for the purpose of winding up the business ; and the interest of the tes-
tator, when that was donc, went, under his will, to Sarah McLaren,
John R. McLaren, Ida D. McLaren, and Robert L. McLaren. It
does not appear that the estate of Robert McLaren was ever settled.
Any firm of J. & R. McLaren subsequently existing must hâve been
the resuit of some new agreement. If John McLaren became a mem-
ber of the new copartnership (assuming there was one), it was dissolv-
ed when he died, in 1894, although his will seems to contemplate a
continuation of the business. The business was carried on under the
same name thereafter it is said. But by whom ? Under what agree-
ment? What property was involved? Ordinarily, an infant cannot
be a copartner, and especially is this true in the absence of an agree-
ment. It would seem improper to adjudicate a copartnership bank-
rupt because two of the alleged members admit its existence, and
that they are members, ail the other members denying any connec-
tion with it, and denying the acts of bankruptcy alleged. Possibly
on a trial the court will dismiss as to the infants, and hold the adults
to hâve constituted the partnership of J. & R. McLaren ; but the
facts must ail appear, and be admitted or otherwise proved, before
the court can act intelligently. It is undoubtedly true that under the
présent law a partnership is an entity, a person, within its meaning.
(In re Meyer, 98 Fed. 976-979, 39 C. C. A. 368; In re Sanderlin
[D. C] 109 Fed. 857-859; Collier on Bankruptcy, 61, etc.), but this
fact does not justify an adjudication in such a case as this as against
the alleged partnership, its existence and composition as alleged be-
ing denied.
7^38 125 FBDB^AL BEFORTER.
Adjudication is refused until the uncertainties are removed by a
trial or by an amended pétition and other necessary proceedings
wherein the facts are made to appear.
re JOHNSON.
(District Court, B. D. North Carollna. Octobcr 17, 1903.)
1. M0BTSA6K8— Debt SeDdrbd— Implibd Aghbemknt.
Where a mortgage executed by a bankrupt secured a part of the in-
debtedness evldenced by certain notes only, and not an open account, an
agreemeht that the account should also be secured by the mortgage
could not be ImpUed în favor of subséquent credltors of the bankrupt.
8. Bankhuptcy— Secured Claims— Application of Payment.
"Where a bankrupt was Indebted to a créditer on three notes secured
by a mortgage and on an open account whlch was unsecured, and made
payments without any Instructions as to their application, the créditer
was entltled to apply fhe payments on the unsecured indebtedness.
In Bankruptcy.
N, A. Sinclair, for bankrupt.
Jno, H. Cook, J. G. McCormick, and B. F. McLean, for creditors,
PURNELL,, District Judge. The référée herein having filed his
report, this cause was Set down for hearing, and on September i7th
was heard on the exceptions filed by creditors other than Pearsall
& McNair, who file no exceptions ; the exceptions being to conclu-
sions of law, and not to findings of fact. The report of the référée
as to findings of fact and conclusions numbered i, 2, and 3, to which
there were no exceptions, is affirmed. Exceptions are confined to
conclusions numbered 4 and 5.
The fourth item in the report is thus stated, in substance, omit-
ting détails: The creditors contend that the rents received from the.
mortgaged property, $313, and which ought to hâve been received
therefrom by the bankrupt; the proceeds of timber eut, $1,000, and
tar obtained from the mortgaged land; and the amount received
from insurance on a house burned located on the land, amounting
to $1,586.47 — "are by légal effect" payments upon the mortgage debt.
The référée fînds the $1,586.47 is the total amount of the said rents,
timber, and insurance ; that the proceeds of timber and rent of
turpentine boxes on the Murphy land — $201.92 — was paid to Mc-
Nair & Pearsall, but the balance was not so paid, but was used in
improving the mortgaged property, payment of insurance on the
houses thereon, for taxes, and merchandise indebtedness generally.
The three $1,000 notes bear no crédits of moriey paid McNair &
Pearsall, but the payments madé to them are credited on the gênerai
account. The bankrupt never directed how the amounts paid should
be credited, The référée held "that McNair & Pearsall had the priv-
ilège of applying ail payments to the gênerai merchandise account,
if they elected to do so," and that thé three $1,000 notes should not
be credited by implication of law with the aforesaîd $1,586.47.
IN RE JOHNSON. 839
The fifth finding îs so closely allied to the foregoîng that it may
be considered as a part thereof, and is as follows:
"That the mortgage provides that the failure to pay either of the three
$1,000 notes shall hâve the effiect of immediately maturing the mortgage in-
debtedness, including the Une of crédit; that none of the three $1,000 notes
hâve been paid or renevred; that on February 12, 1898, the merchandise In-
debtedness exceeded $800, and that at no time slnce that date vs^as the said
merchandise Indebtedness less than $800. The undersigned ruled that, this
clause in the mortgage gave to McNair & Pearsall the right to treat the whole
indebtedness as due, but this right vyaa one whieh McNair & Pearsall could
exercise or not, at their pleasure."
On February 12, 1897, being in embarrassed circumstances, to
settle an existing indebtedness and to establish a line of crédit bank-
rupt executed a mortgage to McNair & Pearsall on six tracts of land
to secure three notes of $1,000 each, payable one, two, and three
years after date, and a line of crédit, not to exceed three years, for
$400, which might, at the option of McNair & Pearsall, be increased
to $800. The provision of the mortgage is as follows :
"That whereas, said James H. Johnson, one of the parties of the flrst part,
Is justly indebted to the said McNair & Pearsall, in the sum of three thou-
sand dollars, as evidenced by his notes of even date herewith, each in the
sum of $1,000, payable, one, two, and three years after date respectively and
ail bearing interest from date at the rate of six per centum per annum:
and whereas, the said McNair & Pearsall, by contract In writing, dated Feb.
4th, 1897, bave agreed to sell to said James H. Johnson, goods, wares and
merchandise of the kind kept by them to the amount of $400, and as the
same are paid for by the said Johnson to sell him other goods, wares, and mer-
chandise to said amount, that is to say, hâve agreed to glve to said Johnson a
Une of crédit to the amount of $400, which 'line of crédit' the said McNair &
Pearsall may at their option increase to an amount not at any time to exceed
$800, the sale of such goods to be on a cash basis and to bear interest from
dates of sales at six per cent, per annum and the total amount of such Une
of crédit to be due and payable upon the first default in the payment of
either of the notes above mentioned, or sooner upon the first failure of said
■Tohnson to comply with the terms of his said contract of Feb. 4th, 1897, to
which référence is hereby made."
It was further agreed that Johnson should hâve the buildings
insured, and in case of loss the insurance should be paid to McNair
& Pearsall, to be applied as far as it may extend to the satisfaction
of the mortgage. The line of crédit was not to extend beyond three
years, unless otherwise agreed between the parties. Then follows
the power of sale in case of default. The mortgage debt matured on
the default of the mortgagor, to wit, igoo. From that time on we
hâve a debt secured by the mortgage and an account without se-
curity, unless there was an agreement between the parties, as pro-
vided, varying the terms of the written contract. It is admitted there
was no such written agreement, and no express agreement of any
kind. Then the question arises, can an implied agreement vary
the written agreement, or be considered as such an agreement as
was contemplated in the written contract? The court feels no hes-
itancy in holding this question must be answered in the négative. An
agreement to vary a written contract must be of equal dignity with
the contract — in this case a written agreement under seal. This
left a secured and an unsecured debt. The mortgage was recorded.
840 125 FEiDBBÂIi BBPOBTEB.
and never satisfied as provided for by the laws of the state. It was
tKerefore notice to ail of its existence, and no légal presumption can
anse in favor of subséquent creditors of the mortgagor, as it ap-
pears those questioning the dealings between the mortgagor and
mortgagee are. That a créditer has a right, in the absence of in-
structions to the contrary, to crédit pjiyments on an unsecured debt,
and would naturally do so, rather than on a secured debt, is too well
settled to be questioned. This is what the créditer did. Courts are
very reluctant to disturb contracts and dealings between parties, es-
pecially at the instance of subséquent creditors, when both parties
still adhère to thèse dealings, and there is no fraud upon the rights
of third parties in a position to complain. The subséquent creditors
are not in such position. They gave crédit to the bankrupt without
inspecting the records for liens on his property, assumed the risk,
and must abide the conséquences. The mortgage must be satisfied
fîrst, as decided by the référée. The questions pressed by thèse sub-
séquent creditors are interesting, but they are not in a position to
question dealings between the parties which occurred several years
before they became creditors.
The référée is therefore afïïrmed.
In re OLBWINB.
(District Court, M. D. Pennsylvanla. November 12, 1903.)
No. 843.
1. Bankkctptct—Assets— Exemption— LiQUOR License.
A llquor license, thougli transférable only -wlth the approval of the
court of quarter sessions which granted it, and not subject to seizure on
exécution, is not only part of the bankrupt's assets, but may be claimed
by him as part of bis exemption.
In Bankruptcy. Exceptions to report of référée disallowing ex-
emption.
W. C. Sheely, for bankrupt.
Donald P. McPherson, for creditors.
ARCHBALD, District Judge. A liquor license in Pennsylvania,
being transférable only with the approval of the court of quarter ses-
sions which granted it, is held to be a privilège so purely personal that
it does not pass on the death of the licensee to his légal représentative
as an asset of his estate (Grimm's Estate, i8i Pa. 233, 37 Atl. 403),
although there may be, under certain circumstances, a qualified re-
sponsibility for it (Buck's Estate, 185 Pa. 57, 39 Atl. 821, 64 Am. St.
Rep. 816; Mueller's Estate, 190 Pa. 601, 42 Atl. 1021); nor will a
contract for the sale of it be specifically enforced (Cronin v. Sharp,
16 Pa. Super. Ct. y6). It was nevertheless decided in Re Becker, 3
Am. Bankr. R. 412, 98 Fed. 407, that, having a recognized transfer-
1 1. Franchises and licenses as assets in bankruptcy, see note to Flsher v.
Cushman, 43 C. C. A. 889.
m BE MORRIS. 841
able value, it goes to the trustée in bankruptcy, to be disposed of by
him for the benefit of creditors ; and a similar ruling was made with re-
gard to such licenses in Massachusetts. In re Brodbine, 2 Am. Bankr.
R- 53> 93 Fcd. 643 ; Fisher v. Cushman, 4 Am. Bankr. R. 646, 103 Fed.
860. It is in this respect like a seat in a stock exchange (Hyde v.
Woods, 94 U. S. 523, 24 L. Ed. 264; Sparhawk v. Yerkes, 142 U.
S. 12, 12 Sup. Ct. 104, 35 L. Ed. 915; Page v. Edmunds, 9 Am.
Bankr. R. 277, 23 Sup. Ct. 200, 47 L. Ed. 318), a stall in a market (In
re Gallagher, 16 Blatchf. 410, Fed. Cas. No. 5,192; In re Emrich, 4
Am. Bankr. R. 89, loi Fed. 231), or a salable office (Ex parte Butler,
I Atk. 210) ; ail of which hâve been held to be a part of the bankrupt's
estate, and to pass to the trustée. But, if a license so far possesses
the character of property as to be available in this way for the bene-
fit of creditors, it is difficult to see why it cannot be claimed by the
bankrupt as part of the exemption allowed by the state law. The
ground on which this right was denied in Re Myers, 4 Am. Bankr. R.
536, 102 Fed. 869, seems to be that, as the exemption is only allowed
on exécution or distress for rent, and with respect to property liable
thereto, it cannot be made to cover a license which is not capable of
being so seized. But, carried to its legitimate resuit, this would ex-
clude the bankrupt from his exemption altogether, proceedings in
bankruptcy not being an exécution ; and if, on the other hand, it be
assumed that they are such in eiïect, as in some respects is trué
(Longstreth v. Pennqck, 20 Wall. 575, 22 L. Ed. 451 ; "In re Hoover
[D. C] 113 Fed. 136), if compétent to reach and appropriate the
license of the bankrupt, as they are, he ought by the same logic to be
able to claim and retain it on his part by virtue of his exemption, hav-
ing been so seised. Indeed, considering the character of the license,
it would seem to be peculiarly fitting that he should be allowed to
keep that which has been granted to him by the quarter sessions as a
Personal privilège, rather than that it should be turned over by the
trustée to a stranger, subject to the uncertainty of approval by that
court.
The exceptions are sustained, the report of the référée is set aside,
and it is ordered that the bankrupt be allowed to retain his license
under his exemption.
In re MORRIS.
(District Court, E. D. North Oarolina. November 21, 1903.)
Bankkuptcy— Attohnet's Pee— Scheduling as Unsecured Claim— Epfect.
Where the attorney representlng a bankrupt schedules a claim for a
fee as an unsecured debt having priority by agreement, it will be treated
as such, and not allowed as a priority, though Banlir. Act July 1, 1898,
c. 541, § 64, 30 Stat. 563 [U. S. Oomp. St. 1901, p. 3447], enacts that the
attorney's fee provlded for is a priority to be paid in full, the allowance
of which is withln the discrétion of the judge.
Same.
The allowance of an attorney's fee In bankruptcy Is In the discrétion
of the judge, and payments of fées in contemplation of bankruptcy are
valid only in so far as subsequently approved by the court.
In Bankruptcy,
842 125 ÉajMÉBAr. ïiaPÔRTBR. ■
' iPÛRNELlii, District Judge. ■ lliis matter comitig on to be heard,
ahd being héard upon the affiàaVit of Donnell Gilliam, Esq., and upon
the tecommendation of Jas. R.- Gaskill, a référée in bankruptcy, to
whom the cause was referred, that an attorney'S fee bf $50 be allowed
said attorney.
In the pétition and schedules there appears an attorney's fee of
$200, as an unsecured debt, having priority by agreement. A péti-
tion askihg' for the allowance of an attorney's fee of $200, under the
act of July I, 1898, c. 541, § 64j 30 Stat. 563 [U. S. Comp. St. 1901, p.
3447], wâsfiled, and refused by the judge. Under this section, the
attorney's fee provided for is a priority to be paid in full, the allow-
ance of which is in the discrétion of the judge. It would be irregular,
as the bailkrupt and attorney hâVe seen proper to schedule this claim
as an uniseciired debt, tô take it out of the class in which they hâve
placed it, and order it, or any jpart of it, to be paid as a priority. If it
is à debt as scheduled, it must bé' so proved and allowed as other debts
are proved and allowed, and claimant would be allowed the dividend
declared on the class ôf debts to which his claim belongs, and no
more, rtO less. He cannot schedule it as an unsecured debt, and then
claim it as a priority. This court has, by rule, fixed the maximum
fee in volUntary proceedings, where there is no unforeseen litigation
or extraôrdihàry services, at $50, as in this proceeding there has
been none. Jn re Carr & Co. (D. C.) 117 Fed. 572. The entry of
$200 in thé schedules wàs in violation of this rùle. Under any cir-
cumstances, the allowance of an attorney's fee is in the discrétion
of the judge, and payrrients ôf fées in contemplation of bankruptcy
are valid only in so far as sùbsequently approvéd by the court. In
re Kross, 3 'Am. Bankr. R. 189, 96 Fed. 816; Collier (3d Ed.) 373.
This court has had occasion in màny cases to consider the question
of allowance to attorneys, and, it is probable, expressed some im-
patience at being plagued and harassed by unreasonable requests to
exercise the discrétion cohferred by the bankruptcy act. But the
court has established rules, and adhered to them strictly. In volun-
tary câseS, thèse views are expressed in Re Smith, 5 Am. Bankr. R.
559, 108 Fedj 39. In involuntary cases, in Re Carr & Co., supra, to
which the attention of référées and attorneys practicing before them
is again called. The application for attorney's fee in the case at
bar does not comply with the rule, and the attorney having elected
to schedule it as an unsecured debt in violation of the rule at this
time — the dividend sheet not being before thê court — ^it would be
improper to ta,ke it out of its çlass and allow it as a priority.
The order asked for is refused.
IN EE STEVENSON. 843
In re STEVENSON.
(At Chambers, In St. Louis, Mo. November 4, 1903.)
1. Courts— SpBciAL Sessions— Infobmai,itt in Calling.
Where a Judge who had power to fix terms of court, and to hold spe-
cial sessions at such times as he might deem expédient, having flxed
regular terms and tbe limit of thelr duration, at the close of one of
such terms, instead of adjouming court sine die adjourned to the next
secular day, hls action was équivalent to the convening of a spécial ses-
sion to commence on that day, and the court had the same power to
transact business thereat as though a formai order had been entered
calling such session in the absence of any statutory provision requiring
such order.
S. SaMB— AODITIONAL JDDGE FOR INDIAN TbBRITORT— POWEIiS.
The addltional judge for the Indlan Territory appolnted under Act
June 7, 1897, e. 3 (30 Stat. 62), whlch provides that he shall hold court
at such places as shall be designated by the appellate court, and "shah
hâve ail authorlty, exercise ail powers, perform like duties and receive
the same salary as other judges of said courts," vfhen holding a term of
court under assignment from the appellate court has the same power to
cal] and hold a spécial session after the close of the regular term, to
dispose of unfinished business, as the judge of the district would hâve.
8. Same— Legality of Spécial Session— Simultaneous Holding of Regular
AND Spécial Terms.
A spécial term of court may lawfully be held while a regular term
Is in session at another place in the same district, where there are two
judges each having authority to hold court in such district.
At Chambers. On application for writ of habeas corpus.
S. C. Price, for petitioner.
James E. Humphrey, Asst. U. S. Atty., for the Indian Territory.
D. P. Dyer, U. S. Atty., for respondent.
THAYER, Circuit Judge. The above-named petitioner made ap-
plication to me, at chambers, for a writ of habeas corpus to secure
his release from the United States penitentiary at Ft. Leavenworth,
Kan., where he is now serving out a term of imprisonment which was
imposed upon him May 13, 1901, by the United States court for the
Southern District of the Indian Territory, sitting at Pauls Valley, in
said district. He appears to hâve been convicted upon his plea of
guilty of the offense of selling liquor within the Indian Territory, and
was sentenced to two years and six months' imprisonment in the
United States penitentiary at Ft. Leavenworth, Kan., and to pay a
fine of $250. In his pétition for the writ he alleged that he was unlaw-
fully restrained of his liberty by the warden of the penitentiary for
the following reasons : That is to say, for the reason that the term
of court at Pauls Valley, as fixed by law and the order of court, had
expired before the petitioner was brought to the bar of the court and
required to plead to the indictment or was sentenced, and that the
judge of said court. Honorable John R. Thomas, had no authority of
law for holding said court, either at the time the petitioner pleaded
guilty to the indictment or at the time he was sentenced. His con-
tention is that, as the term of court at Pauls Valley had ended at the
S 8. See Courts, vol. 13, Cent. Dig. S 245.
844 125 FBDEBAL REPORTES.
time of hîs conviction, the sentence, when imposed, was, and ever
since has been, utterly void, and that he is entitled to his discharge
by the writ of habeas corpus.
The facts upon which this contention is based are not denied, but
upon hea,ring before me wére fuUy admitted, and are as follows : The
United States court in the Ihdian Territory was created on March i,
1889, with one judge (Act March i, 1889, c. 333, 25 Stat. 783). The
seventh section of that act provided that two terms of court should
be held each year at Muskogee, in said territory, on the first Monday
in April and September, "and such spécial sessions as may be neces-
sary for the dispatch of the business in said court at such times as
the judge may deem expédient ; and he may adjourn said spécial ses-
sions to any other time previous to a regular term." By an act of
Congress approved May 2, 1890 (26 Stat. 81, c. 182), and by the thir-
tieth section thereof, the Indian Territory was divided into three divi-
sions, to be known as the fîrst, second, and third. By the same act
the United States court for the First Division was directed to be held
at Muskogee, for the Second Division at South McAlester, and for the
Third Division at Ardmore. The clerk of the court was required to
appoint a deputy for each division in which the clerk did not himself
réside, at the places in such division where the terms of court were to
be held. The same section of the act further required the judge of
said court to "hold at least two terms of said court each year in each
of the divisions aforesaid, at such regular times as said judge shall
fix and détermine." By anothér act of Congress approved on Maich
I, 189s (28 Stat. 693, c. 145), the Indian Territory was divided into
three judicial districts instead Of three divisions, which were to be
known "as the Northern, Central, and Southern Districts," in which
districts "at least two terms of the United States court in the Indian
Territory" were required to be held each year at each place of holding
court in each district, "at such regUlar times as the judge for such dis-
trict shall fix and détermine." This act provided that the Southern
Judicial District should consist of ail the Chickasaw country, "and the
places of holding courts in said district shall be at Ardmore, Purcelle,
Pauls Valley, Ryan, and Chickasha." The act further provided for
the appointment of two additional judges of the United States court
in the Indian Territory, ohe of whom should be the judge of the
Northern District, the other the -judge of the Southern District, and
that thé judge of the United Stateis court in the Indian Territory then
in office should, from and àfteî" the^ appointment of the other two
judges, be the judge of the Central District, and that said judges
should réside in the judicial districts for which they were appointed.
The act further declared that "the^ judges shall hâve within the judi-
cial districts for which they are appointed, ail such authority both in
tcrm time and vacation, as to ail matters and causes, both criminal
and civil, pending or that may be brought in said districts and shall
hâve the 'same supefintending control over commissioners' courts
therein and thesame authority in the judicial districts to issue writs
of habeas corpus," etc., "as is now by law vested in the judge of the
United States court in the Indian Territory or in the Circuit and
District Courts of the United States." The èleventh section of said
IN EE STEVENSON. 843
act created a Court of Appeals in the Indian Territory composed of
nisi prius judges, to be presided over by the judge oldest in com-
mission as Chief Justice of said court. By an act of Congress ap-
proved on June 7, 1897 (see 30 Stat. 62, ^84, c. 3), provision was made
for the appointment of one additional judge for the Indian Territory,
and the act declared that "the appellate court of said territory shall
designate the places in the several judicial districts therein at which
and the times when such judge shall hold court; and courts shall be
held at the places now provided by law and at the town of Wagner
and at such other places as shall be designated by said appellate
court; and said judge shall be a member of the appellate court and
shall hâve ail authority, exercise ail powers, perform like duties and
receive the same salary as other judges of said courts and shall serve
for a term of four years from the date of appointment." In pursuance
of this latter act, Hon. John R. Thomas was appointed as such addi-
tional judge on July i, 1897. Judge Thomas appears to hâve been
the judge who held the court at Pauls Valley when the petitioner was
convicted and sentenced.
On January 20, 1900, an order was made by the United States court
in the Indian Territory for the Southern District by Judge Townsend,
judge of that district, fixing the terms of the United States court for
the Southern District of the Indian Territory, and by that order it
was directed that terms of court should thereafter be begun and held
"at Pauls Valley on the eighth Monday after the first Tuesday in Oc-
tober and the second Monday after the first Tuesday in April, and
each term may continue in session three weeks."
After the appointment of the Hon. John R. Thomas in the manner
and form aforesaid, to wit, on April 4, 1901, the United States Court
of Appeals for the Indian Territory made the following order: "That
the Honorable John R. Thomas, additional judge of the United
States court for the Indian Territory, shall, until otherwise ordered
by this court, hold court in the Northern Judicial District of the
Indian Territory at the places therein provided by law, at the times
fixed therein by the judge of the Northern District, in pursuance of
law, and in addition thereto said additional judge may hold court at
Pauls Valley, in the Southern Judicial District of the Indian Terri-
tory, at a term of the United States District Court to begin on the
rSth day of April, 1901." In pursuance of this order, Judge Thomas
appeared at Pauls Valley on April 15, 1901, being the second Monday
after the first Tuesday in April, and opened a term of court. At the
expiration of three weeks, to wit, on Saturday, May 4, 1901, the court
did not adjourn sine die, but ârose until the following Monday morn-
ing, May 6th, and on that day resumed its session pursuant to adr
journment on the previous Saturday. Thereafter, on May 7, 1901,
the petitioner was arraigned and pleaded guilty to the indictment, and
on the succeeding I3th day of May, 1901, the court having continued
its session without interruption until that day, he was sentenced in
the manner and form aforesaid.
It was also conceded that the United States court for the South-
ern District of the Indian Territory was convened at Ardmore in
regular session on Monday May 6, 1901, the term at that place being
846 125 FËDBRAL BE^POBTEB.
held by Judge Townsend while Judge Thomas was still engaged in
holding a session of the court at Pauls Valley. The court was in ses-
sion at Ardmore, as it seems, on Monday, May 13, 1901, when the
petitioner was sentenced, and it did not adjourn at that place until
July 3, 1901.
Counsel for the petitioner invoke thè doctrine^ which is supported
by much authority, that where the length of a term of court is pre-
scribed by statute ail acts donc by the court after the prescribed
period has elapsed are coram non judice and void. Garlick v. Dunn,
42 Ala. 404 ; Wightmân v. Karsner, 20 Ala. 446 ; White v. Riggs, 27
Me. 114; Archer v. Ross, 3 111. 303 ; Davis v. Fish, i G. Green, 406,
413, 48 Am. Dec. 387. See> also, Lipscomb v. State, 76 Miss. 223,
249, 25 South. 158; Horton & Heil v. Miller, 38 Pa. 270. And
counsel urge that the same doctrine obtains where judges are em-
powered to fix the times and places for holding terms of court, and
an order has been made in pursuance of_such authority, fixing the
time for holding a given court and the length of that term. They
urge that such an order, when made, has the force and efïect of a
législative enactment ; citing 21 Enc. of PI. & Pr. p. 612. The argu-
ment in opposition to the above contention résolves itself into three
propositions : First, that Judge Thomas, having been duly assigned
to hold the court at Pauls Valley on April 15, 1901, by order of the
United States Court of Appeals made on April 4, 1901, had the right
to continue the session at that place until the pending business of
the court was disposed of, or, in other words, that it was a term
created by the appellate court ; second, that Judge Thomas was
vested by law with ail the powers of any other of the judges in the
Indian Territory ; that while assigned to duty in the Southern Dis-
trict of the Indian Territory he had the same powers as Judge Town-
send, the regular judge of that district, and that among thèse was the
power to call and hold a spécial session, and that the order adjourn-
ing court on Saturday,; May 4, içoi,"^!© Monday, May 6, 1901, was
tantamount to ordering a spécial term to be^n on the latter day;
and, third, that the court so held was, în any event, a court de facto,
and that, as the petitioner went to trial at such term without chal-
lenging the right of the court to sit and try him, the sentence im-
posed was, at most, simply erroneous, and not void, and that it can-
not be successfully challenged by habeas corpus.
The order of the Court of Appeals in the Indian Territory, which
was made on April 4, 1901, assigning Judge Thomas to hold the court
at Pauls Valley, cannot be construed fairly as creating a new term
of court at that place, to be held by Judge Thomas irrespective of the
existing order fixing terms of court at Pauls Valley. The order was
manifestly made in view of the well-known fact that a term of court
at that place had aiready been fixed by an order made by Judge
Townsend on January 20, 1900, the intention being that Judge
Thomas should hold that court as well as the courts in the Northern
Judicial District at the times which had been theretofore fixed for
the holding of courts in that district. There is nothing in the order
in question which indicates that the judges of the Court of Appeals
intended thereby to create new terms of court or to designate new
IN EE STEVENSON. 847
places for holding court, although the act of June 7, 1897 (30 Stat.
84), empowered them to do so if they thought proper. They simply
undertook to designate the places in the Indian Territory where the
additional judge should hold court, without altering any orders pre-
viously made as to the places where courts should be held and when
terms of court should begin.
Conceding, therefore, as I feel disposed to do, that Judge Thomas
Avas assigned to hold a term of court at Pauls Valley, the time for the
commencement of which had been prescribed by an order previously
made in the Northern District of the Indian Territory, does it follow
that ail acts done by him from and after May 4 or May 6, 1901, were
void? It is too plain for controversy that after he commenced the
term at Pauls Valley he had ail the powers of Judge Townsend,
the regular judge of the Southern District. The act of June 7, 1897,
under which he was appointed, leaves no room for doubt on that
point, because it provided that the additional judge "shall hâve ail
authority, exercise ail powers, perform like duties and receive the
same salary as other judges of said courts." 30 Stat. 84, c. 3. What-
ever acts Judge Townsend could lawfully do and perform Judge
Thomas could in like manner perform. Their powers and functions
cannot be differentiated. It was within the power of Judge Town-
send to hold "such spécial sessions as may be necessary for the
dispatch of business * * * at such times as the judge may deem
expédient," for the act of March i, 1889, supra, conferred that power
on the United States judge in the Indian Territory, and it was not
taken away by any subséquent act, but was expressly continued and
confirmed by the act of March i, 1895 (28 Stat. 693, c. 145), and by
the second paragraph of the second section of that act. Had Judge
Townsend been holding court at Pauls Valley when the 4th day of
May, 1901, arrived, and the business of the court was not concluded,
he could hâve appointed a spécial term to begin on the following
Monday, May 6, 1901, or he could hâve amended the order of Janu-
ary 20, 1900, making the term to continue for two weeks longer.
That order having been made by the judge, and not being a législa-
tive enactment, was subject to amendment at any time by the same
authority that had made it. Judge Thomas had the same power.
It is said, however, that on May 4, 1901, no formai order was made
prolonging the term or appointing a spécial session, but that the
court merely adjourned to the following Monday. Such action on
the part of Judge Thomas was fully tantamount, in my judgment,
to ordering a spécial session to begin the following Monday. The
law looks at the substance of things, rather than the forro, and,
where a court possesses the power to appoint and hold a spécial
term of court at a future day, it matters very little whether it ad-
journs to that day, as in the case in hand, or adjourns the term which
it is holding sine die, and at the same moment appoints a spécial ses-
sion for such future day. In either event, the same resuit is accom-
plished, and, if litigants in cases pending before it are given notice
by the order of adjournment that the court will résume its sessions
on a certain future day, it would seem that they are not prejudiced,
and hâve no just ground to complain, although the court does not
848 125 FEDERAL EBPOKTEK.
make a formai order calling a spécial session. If the power to ap-
point and hold a spécial session résides in the judge, it would seem
that the manner and form of its exercise is not of much importance,
unless a statuté requires the power to be exercised in some particular
manner. United States v. The Little Charles, 26 Fed. Cas. 982, i
Broclc, 380; Mattingly v. Darwin, 23 III. 567.
Some stress has been laid, in argument, on the fact that a regular
term of court convened at Ardmore on May 6, 1901, and that the
assembly of the court there necessarily terminated the sessions of
court at other places in the Southern District of the Indian Terri-
tory, patticularly at Paiils Valley. This might hâve been the effect
of the Ardmore session, if there had been but one judge in the dis-
trict who was empowered to hold the courts in the district and
whose présence was required at Ardmore. Archer v. Ross, 3 111.
303. But it is not perceived that any such difficulty is encountered,
or that any such conséquence ensues, when there are two judges
in a district or circuit, each of whom is empowered to hold its courts.
In that event it is not impossible to hâve two courts in session in
différent parts of the same district. Besides, the holding of two
courts in différent parts 6f the district, or at the same place in the
district, when thére are two or more judges having co-ordinate pow-
er, tends to the prompt dispatch of public business, and should be
encouraged. The point made by counsel for the petitioner that the
term at Pauls Valley ended when the term at Ardmore commenced
is not well taken, and must be overruled. The idea that one judge
must discontinue the trial of cases in one part oî the district because
another judge bas opened a term of court elsewh'ere in the district
rests upon no substantial foundation of reason or authority.
A number of cases hâve been cited by counsel for the respondent,
notably Smurr v. State, 105 Ind. 133, 4 N. E. 445, in support of the
proposition that although the term at Pauls Valley, after May 4,
I901, was held irregukrly, still the court acted under color of au-
thority, and its acts were not void, so that a writ of habeas corpus
will not lie to obtain the petitioner's release. But, without entering
upon an investigation or discussion of this point, it will suffice to
say that for the reasons above indicated I am of opinion that the
term at Pauls Valley was held by authority of law after May 4,
1901 ; that it was in fact a spécial term at that place which Judge
Thomas was authorized to convene and did convene ; and that the
petitioner has no just cause to complain.
The writ of habeas corpus is accordingly discharged.
MOOBE V. BANK OF BBITISH COLUMBIA. 849
MOOEB V. BANK OP BEITISH COLUMBIA et al.
BANK OF BRITISH COLUMBIA et al. v. MOORE.
(Circuit Court of Appeals, Nlnth Circuit. October 5, 1903.)
No. 921.
1. Trust— Agreembnt Ckbating Constrdkd— Riqhts of Parties Dbtehmined.
Complainant was the holder of certain stock of a corporation as col-
latéral security for notes ot a lumber company. At the instance of
such company, and for its benefit, she transferred the stock to défendant
bank to carry eut an agreement of the company to give défendant a
majority of the stock for voting purposes for the term of five years,
the company covenanting with complainant to pay any assessments
against the stock. Défendant executed to complainant a receipt reciting
that the stock was not delivered as security for any debt, but In com-
pliance with the agreement of the company, and was to be held for voting
purposes only, complainant to receive any dividends pald thereon. It
further provided that the stock might be reissued in any other name
at the option of défendant, whlch should return an equal number of
shares at the end of flve years; that complainant should pay any as-
sessments on the stock, but if not so paid, and paid by défendant, it
should recoup itself with interest out of subséquent dividends, holding
the stock in the meantime as collatéral security. Défendant caused
the stock to be reissued in the name of an employé, as it also did other
stock which it held in pledge from the lumber company. An assessment
was subsequently made on the stock, which the lumber company paid
on the amount of stock it had in pledge with money lent it by défend-
ant and charged to its account. The assessment was not paid on any
other stock, and it was ail sold for the nonpayment and bought in
by the corporation which issued it. Défendant did not notify complain-
ant of the assessment, nor that her stock had been reissued, and she had
no knowledge of such facts. Défendant, having bought the interest of
the lumber company in the pledged stock at exécution sale, caused a
certificate to be issued for the exact number of shares recelved from
complainant, which it tendered to her at the expiration of the five years,
conditional on her paying it the amount of the assessments paid thereon,
which she refused to do, and thereupon she brought suit to recover the
stock. HeU, that the agreement under which the stock was delivered
created a trust which bound défendant as trustée to return the stock
unconditionally at the stipulated time, unless after notice to complainant
of the assessment, and her failure to pay the same, it exerclsed its option
to pay it and to look to future dividends for repayment; that having
caused the Identity of her stock to be lost and failed to notify her of
any assessment thereon, or to pay the same itself it could not charge her
with the amount of assessments which had been pald on the substituted
stock by her pledgor.
Appeal from the Circuit Court of the United States for the North-
ern District of CaHfornia.
For opinion below, see io6 Fed. 574.
Thls suit was origlnally brought in the superlor court of the clty and coun-
ty of San Francisco by Frances J. P. Moore against the Bank of British
Coluœbla, a corporation, the Moore & Smith Lumber Company, a corporation,
the Sanger Lumber Company, a corporation, and Walter Young, and was
thereafter removed to the Circuit Court of the United States for the Northern
District of California, where, after the death of Frances J. P. Moore, a bill
of revivor was filed by A. D. Moore, the duly appointed, qualifled, and actlng
exécuter of her estate, in pursuance of which bill, and upon stipulation of
the respective parties, the suit was revived and contlnued by A. D. Moore,
exécuter ef the will of Frances J. P. Moore, deceased, as complainant,
against the défendants Bank of British Columbia and Walter Young, thb
125 F.— 54
850 ,J , 125 PBDHRAL EEPOETEB.
other défendants havlng been dlsmlssed on motion of the complalnant. The
pûipose of the sait was the recovery by the <;omplalnant f rom the défend-
ant bank of 6,000% shares of the capital stocis of thé Sanger Lumber Com-
pany. A motîon for the appointment of a recelver of the stock pending the
lltigatlon was made in and denled by the court below (106 Fed. B74), the court
then being bf the opinion that It did not appéftr that the cbmplainant would
probably prevall In the cause. After a trial upon the merits, however, the
«ourt below decreed that the défendant bank dellver to the complainant, A.
D. Moore, as executor of the last will of Fiances J. P. Moore, deceased,
certificates for 5,000% shares of the stock of the Sanger Lumber Company,
duly indorséd, upon the payment by the executor to the bank, within a stated
time, of the sum of $70,231.01, with certain Interest, aggregating about
$98,000, and that, In case of the executor's f allure to pay the whole of the
prmcipal sum and Interest, ail right, tltle, and interest of the said Frances
J. P. Moore and of, the said A. D. Moore, the executor of her last will, and
of her estate; j in the said shares of stock, be foreclosed and extinguished,
and that neither the said A: D. Moore, as such executor, nor any other
représentative of her estate, hâve any further right to demand any stock
of the Sanger Immber Company from the défendant bank, nor any claim
or right or demand whatsoever against the bank growlng out of the matters
in dispute. Neither party was satisfled with thls decree, and from it both
the complalnant and the défendants appealed to thls court, the former claim-
ing the right tO the stock In question absolutely, and without any payment or
condition, and the latter contending that the complainant is not entitled to
any of the stock upon any tèrms or conditions, and certalnly not without
making the payment required by the decree.
The case shows that on the 18th day of September, 1894, the foUowing
written agreement was executed by and between the Moore & Smith Lumber
Company, A. D. Moore, H. O. Smith, and the défendant Bank of British
Columbia :
"Agreement made thls 18th day of September, 1894, between Moore &
Smith Lumber Company, hereinafter called the Company, and A. B. Moore
and H. C. Smith, and the Bank of British Columbia, hereinafter called the
Bank.
"Whereas, the Company Is Indebted to the Bank in the sum of one
hundred thousahd dollars, secured by a mortgage of the Port Discovery Mill,
and certain lumber lands in the State of Washington (which mortgage also
sécures the other Indebtednc'ss 'of the Company hereinafter mentioned); and
iii the sum of sèventy thougahd dollars, secured by pledge to the Bank of
thrèe noteis et the ÏCings River Lumber Company each for the sum ôf fifty
six thousand' two hùndred and fifty dollars, and In the sum of fourteen
hundred and nlnety dollars, secured by pledge to the Bank of a certifleite of
stock of the Pacific Pine Lumber Company, and whereas the Kihgs River
Lumber Company is indebted to the Bank In the sum of ten thousand dollars,
and whereas it Is proposed afflOng certain credltors of the Kings River Lum-
ber Company to form a new cprporatlon to be called the Sanger Lumber
Company and th*at such éi-édltors of the Kings River Lumber^ Company
shall assign thelr claim against the Kings River Lumber Company" to the
Sanger Lumber Company in , exchange for the stock of the Sanger Lumber
Company: r . ,,
"Now, if said new corporation is formed and said arrangement goes into
efCect among the credltors of the Kings RlveT Lumber Company, the Bank
hereby agrées to take stock in the Sanger Lumber Company at its -par
value to the amount equal to said three notes of the Kings River Lumber
Company, and said $10,000 ^ebt of the Kings River Lumber Company, and
said $1,490 debt of the Compiany, in ail amounting to $180,240; and will
assign ail of said notes and debts to said Sanger Lumber Company in pay-
rnent of its stock, such asslgnment to be without recourse against thé
Bank or any indorsers on said notes, includlng the Mpore & Smithi Lùmbep
Company, and the asslgnment of the note evidenclng the $1,490 debt to bear
upon Its fàcé the stipulation that the Sanger Lumber Company shall look
for its payment only to the sâid certlflcate sècuring it; and the interest oi;i
said three notes of the Kings River Lumber Company to be indorséd
MOOBE V. BANK OF BBITISH CX)HJMBIA. 851
thereon as paid up to the tlme of their delivery to the Sanger Lumber Com-
pany, and will deliver said certiflcate to the Sanger Lumber Company.
"The Company -will convey by a deed absolute to the Bank or its nominee
the said Port Discovery MIU and sald lands in Washington, and the Bank
will cancel and deliver up to the Company said $100,000 note and sald $70,000
note.
"The Bank shall then open an aecount with the Company in whleh the
Company shall be debited with said sum of $100,000 and aU taxes, insurance,
and expansés connected with said mill and timber lands and the sum of
eighty-one thousand four hundred and ninety-one dollars, being the actual
cost to the Bank of the stock of the Sanger Lumber Company, and with
interest on such amounts at the rate of six per cent, per year from July
Ist, 1894, and shall be credlted with any dividends on said stock of the
Sanger Lumber Company, and with the proceeds of any sales of said stock
made under the permission hereinafter given, and with the proceeds of
any sales of the said mill property or timber lands made under the per-
mission hereinafter given, and with ail sums paid to the crédit of said ae-
count by the Company, and with interest on ail such crédits at the rate
of six per cent, per j'ear, the interest so to be charged and credlted to
be adjusted and charged and credlted at the end of each six nionths.
"The Bank shall hold said stock of the Sanger Lumber Company and
said mill and timber lands as security for the amount due to it as sliown by
said accoimt, and may any time sell said mill or any part of the whole
said timber lands for any price it pleases, provided that if at any time it
can sell said mill and lands for $100,000, it shall be bound to do so; and it
may at any tlme sell not more than one-half of said stock of the Sanger
Lumber Company for any price it pleases, giving the Company, however,
the préférence of purchasing at the price the Bank is willing to accept.
"At any time within five years from the date thereof, the Company may
pay the Bank the balance of debt shown by said aecount, and on such
payment the Bank shall cause to be conveyed to the Company ail then
remaining unsold of said mill and timber lands, and shall transfer and
deliver to the Company ail then remaining unsold of said stock of the
Sanger Lumber Company.
"At the end of five years from the date hereof the balance of debt shown
by said aecount shall be due and payable by the Company to the Bank,
and if not paid, the Bank may foreclose its lien for the same against
said mill and timber lands, and In any action of such foreclosure shall be
allowed a counsel fee at the rate of flve per cent upon the amount found
due, and may sell any or ail of said stock of said Sanger Lumber Company
then remaining unsold at either public or private sale with or wlthout notice
and wlthout any préviens demand upon or notice to the Company, and at any
such sale may Itself become a purchaser, and shall render any surplus of
the proceeds of such sale to the Company.
"The sald A. D. Moore and H. C. Smith, jointly and severally, hereby
guarantee to the Bank the payment by the Company at the end of five
years of the balance due on said aecount, walving ail demand on the
Company and ail notice to them of nonpayment, and any défense arising out
of any delay on the part of the Bank in enforcing its debt or realizing
on Its security, or arising out of any extension or renewal of tiie debt by
the Bank, or the taking by the Bank of any further security for the same,
and walving notice of any such extension or renewal, meaning to guarantee
the debt until paid and whether renewed or not.
"The Company will deliver to the Bank and cause to be transferred to It
or Itg nominees on the books of the corporation, sufladent stock of the Sanger
Lumber Company to give the Bank, with the stock of the corporation which
it is to take as security as aforesaid, a majority of the Issued stock In Its
possession and control. Thls latter stock so to be dellvered to the Bank Is
not to be held by It as security for sala aecount, but only In trust for
the purpose of giving the Bank the power to vote It. AU its dividends
shall be payable In cash to the Company as soon as declared and paid,
and upon the payment by the Company of Its debt as shown by said
aecount, or upon the commencement of any action for the foreclosure of the
Bank'B Uen on the Washington property and the reallzatlou of the Bank's
S52 125 FBDERAL BBFOBTKB.
pledge of the Sanger Company's stock held by the Bank as securlty, It shall
he returned by the Bank to the Company, and in no event shall It be
retalned by the Bank longer than flve years from the date hereof. If at
any tlme the rlght of the Bank to vote the Sanger Lumber Company's stock,
either that held by it as Securlty or that held by it in trust as aforesaid,
shall be for any reason successfully reslsted, then, at the option of the
Bank, of which no notice need be given to the Company or said Moore or said
Smith, the amount shown to be due by said account shall become Im-
mediately due and payable, and the Bank may foreclose its lien on the
Washington property and ail the stock of the Sanger Lumber Company held
by it as security aforesaid.
"Thls agreement is conditloned by the formation of the Sanger Lumber
Company and the going Into efCect of the aforesaid arrangement among
certain creditors of the Kings River Lumber Company for the assignment of
thelr clalms agalnst the Klngs Klver Lumber Company to the Sanger .
Lumber Company.
"In wltness whereof the Moore & Smith Lumber Company has caused
thèse présents to be signed by its président and secretary, and Its corporate
seal to be afflxed hereto, and the said A. D. Moore and H. C. Smith hâve
subscribed their names hereto, and the said Bank of British Columbia has
caused thèse présents to be signed by Walter Powell, Its manager In San
Francisco, ail in due duplicate the day flrst above written.
"[Seal.] Moore & Smith Lumber Company,
"By A. D. Moore, Président.
"By Chas. A. Moore, Secret".ry.
"A. D. Moore.
"H. C. Smith.
"Bank of British Columbia.
"By W. Powell, Manager,"
The Sanger Lumber Company was thereafter incorporated with a capital
stock divided Into 24,000 shares of the par value of $25 each, of vcMch
the Moore ,& Smith Lumbei^ Company became the owner of 19,552^ shares.
7,209% of thèse shares the Moore & Smith Company pledged to the bank
prior to December 19th, 1894, in pursuance of the provisions of the agree-
ment of September 18, 1894. Between those dates, to wit, on the 17th of
November, 1894, the Moore' & Smith Lumber Company executed three
promlssory notes in favor of Frances J. P. Moore, who was the wife of
A. D. Moore, the président of the eompany, each for the sum of $19,374.43,
bearing interest at the râtè of 6 per cent, per annum; and, as collatéral
security for the payment 6t the principal and interest of one of the notes,
the compan^ delivered to Mrs. Moore 1,875 shares of the capital stock of the
Sanger Lumber Company, eVidenced by two certificates numbered, respective-
ly, 45 for 1,250 shares and 46 for 625 shares, both Issued in the name of A.
D. Moore, trustée for the Moore & Smith iLumber Company, and so indorsed
by him. As collatéral security for the payment of another of the notes,
the Company delivered to ■ Mrs. Moore 1,875 shares of the stock of the
Sanger Lumber Company, evidenced by two certiflç^tes, one numbered 44
for 1,250 sliàres, and the other numbered 47 for 625 sharçs, both of which
weré also l?sued in the name of A. D. Moore, trustée for Moore & Smith Lum-
ber Comfiany, and by him so indorsed; and as collatéral security for the other
of the notes,, the compâny delivered to Mrs. Moore 1,875% shares of the
stock of the Sanger Lumbet Company, evidenced by two certificates, one
numbered 43 for 1,250 shares, and the other numbered 48 for 625% shares,
both issued in the name ôf A. D. Moore, trustée for the Moore & Smith
Lumber Company, and by him so Indorsed. Bach of thèse notes and
coUaterals was accompanied by a writteu agreement on the part of the Moore
& Smith Lumber Company, exjiressTy declarlng and providlng, among
other things, ttisit "Thls Company wlll pay ail assessments levied on above
stock, and falllng tb do so, the payée may pay same. and add amount
with interest to above note, and in latter cage the above note aûd Interest
become at once due and payable."
Subse;quéntly, at the j-ëqùest of the Moore & Smltlj Lumber Company,
and tb enablè It to carry out Its agreement with the défendant bank
made September 18, 18é4i Mrs. Moore delivered to the bank at différent
MOOKE V. BANK OF BRITI8H COLUMBU. 853
times, and In three installments, 5,000% shares of the 5,625% shares of thp
Sanger Lumber Company's stock held by her as collatéral, the tlrst of which
installments was so delivered on the 19th day of December, 1894, upon and
in considération of which delivery the bank at the time executed to her this
receipt and agreement:
"San Francisco, December 19th, 1894.
"Recelved from Frances J. P. Moore thirty-one hundred and twenty-flve
(3,125) shares of the capital stock of the Sanger Lumber Company issued
under certificates number 45 for twelve hundred and fifty (1,250) shares,
number 43 for twelve hundred and fifty (1,250) shares, and number 48 for
six hundred and twenty five (625) shares, to A. D. Moore, trustée from
(for) Moore & Smith Lumber Company, and so indorsed in blank, by him
as such trustée, and held by her as collatéral securlty for debts due to her
by the Moore & Smith Lumber Company and delivered by her to this Bank,
with consent of the Moore & Smith Lumber Company, and which stock may,
at the option of this bank, be re-issued in such other name as this bank may
elect. and said stock to remain in the hands of this bank for flve (5) years,
from September 18, 1894, and wlth the obligation of this bank at the end
of sald time to hand back to Frances J. P. Moore, her heirs or asslgns,
said stock, or an equal number of shares of said stock, and to pay over
to her, her heIrs and assigns, ail dividends declared and pald during said
flve (5) years on said stock, as same are declared and paid, it being under-
stood that ail assessments on said stock during said time shall be paid by
said Frances J. P. Moore, and if not so paid and pald by this bank, then
this bank to recoup itself, with interest at six per cent, per annum, out of
subséquent dividends, holding the stock in the meantlme as collatéral securlty.
"It Is understood that this stock is not delivered to this bank as col-
latéral securlty for any debt, or clalm due to it by said Frances J. P. Moore
or any other person or company, but to enable the said Moore & Smith
Lumber Company to carry out Its agreement with this bank of September
18th, 1894, to glve to this bank a majority of the stock of sald the Sanger
Lumber Company, for the purpose of voting.
"[&eal] "For the Bank of Britlsh Columbia, San Francisco.
"W. Powell, Manager.
"With our consent: Moore & Smith Lumber Company.
"By A. D. Moore, Président.
"By Chas. A. Moore, Secretary."
A similar receipt and agreement was executed by the bank to Mrs. Moore
upon the delivery to it of the other installments of stock mentioned.
Before consummating this arrangement, certiflcate No. 44, for 1,250 shares,
was canceled, and, in its stead, two certificates were issued in the name
of A. D. Moore, trustée for the Moore & Smith Lumber Company, numbered,
respectlvely, 91 for 450 shares, and 92 for 800 shares, the certificates reeeived
by the bank from Mrs. Moore being as follows:
Number. Shares.
43 for 1250
45 for 1250
46 for 625
48 for 625%
91 for 450
92 for 800
5000%
Thèse certificates, so delivered to the bank, were thereafter, at its request
canceled and replaced by certificates in the name of the défendant Walter
Young, trustée, as follows:
Number. Shares,
72 for 8125%
94 for 800
109 for 1075
. 5000%
854 125 F&DBBAL BBFOBTEB,
At the tlme of the respective dellverles of the stock by Mrs. Moore to the
bank, aggregatinjg 5,000% shares, Indorsemelits were respectively made by
the Moore & Smith Lumber Company, through Its président and secretary,
on the notes of that company held by Mrs. Moore, of similar Import, the first
of which reads as foUows:
"At the request and by the advice of thls company, the payée of this note,
Frances J. ï"; Moore, bas thls day placed In trust with the Bank of British
Columbla, of thls dty, one (1) of the certlflcates of stock of the Sanger Lum-
ber Company, to--#It, number 45, for twelve hundred and flfty (1250) shares,
pledged for collatéral to thls note in order to help this company to carry out
a certain agreement: between It and sald Baink, dated September 18th, 1894.
"Dec. 19, 1894. Moore & Smith Lumber Co.,
"By A. D. Moore, Président.
"By Chas. A. Moore, Secretary."
On the 9th day of January, 1896, the subscribed and issued stock of the
Sanger Company was 23,849% shares. Of thèse the Moore & Smith Lumber
Company owned 19,552% shares, 7,209% of which were then pledged to the
défendant bank as collatéral security for money owed it by the Moore &
Smith Lumber Company; 5,625% of whiçh stood pledged to Mrs. Moore as
collatéral security (or money due by the Moore & Smith Lumber Company to
her, 5,000% of whlch 5,625% shares were then in the hands of her trustée,
the défendant bank, for the purpose and under the agreement above set out;
6,495% of whlch shares stood In the name of A. D. Moore, trustée; and 222
shares of whlch stood in thé name of the Moore & Smith Lumber Company.
Of the 23,849% shares of the stock of the Sanger Lumber Company out-
standing on the 9th day of January, 1896, the défendant bank thus held
12,210% shares, and, therefore, the controUIng interest. On that day an as-
sessment of $2.50 per share was leyied by the Sanger Company. The assess-
ment was paid on the 7,209% shares held by the défendant bank as col-
latéral security for moneys due it f rom the Moore & Smith Lumber Company,
but was not paid either upon the 5,000% shares theretofore delivered to the
bank by Mrs. Moore and by it placed in the name of one of its employés,
the défendant Walter Young, as trustée, nor upon the 625 shares of the
5,625% shares pledged to Mrs. Moore by the Moore & Smith Lumber Com-
pany and retained by her. Ail of the stock that was pledged to Mrs. Moore,
and ail of the other stock of the Moore & Smith Company except the 7,209%
shares pledged to the bank, was thereafter sold for the assessment and
bought In by the Sanger Lumber Company at the dellnquent sale. A. D.
Moore was président both of the Moore & Smith ^Company and of the Sanger
Lumber Company, presided at the directors' meeting at whlch the assessment
was levied, and voted for it. No notice was given by the défendant bank to
Mrs. Moore of the leyy of the assessment or the sale thereunder, nor was
she informed that the stock delivered by her to the bank had been, at Its re-
quest, put In the name of the défendant Walter Young, trustée. At the tlme
of the assessment, and at the time of the sale of the stock, the Sanger Lumber
Company was indebted to Mrs. Moore In the sum of about $40.000.
The flve years provlded for in Mrs. Moore's agreement wlth the défendant
bank expired September 18, 1899. A year or more prier to the expiration of
that period, the Bank of Cal^fornia sued the Moore & Smith Lumber Com-
pany for a debt, levIed upon the Interest of the Moore & Smith Lumber Com-
pany in the 7,209% shares of the stock of the Sanger Company held by the
Bank of British Columbla In pledge, and, under an exécution sale based upon
a judgment recovered by the Bank of California In that action, purchased the
Interest of the JMoore & Smith Lumber Company In and to those shares of
stock, and thereafter assigned ail of Its Interest therein to the défendant
Walter Young in considération of $100. Subsequently Young, still acting for
the défendant bank, caused the certlflcate for the 7,209% shares whlch
stood In his name, as trustée, to be canceled, and in Its stead two certlflcates
to be issued in his name, one of whlch, numbered 142, was for 5,000% shares.
The évidence shows that thls proceediHg was taken at the request and In the
Interest of the défendant Bank of British Columbla, and that one of its pur-
poses was to bave sufficient of the Sanger Company's stock available for de-
livery to Mrs. Moore at the expiration of the flve-year term provlded for In
MOOEE V. BANK OF BKITI8H COLUMBIA. 855
the agreement between her and the bank. When tha.t tlme expired she de-
manded of the bank the return of the 5,000% shares delivered to It by her.
In response to that demand, the bank replied In writing, as follows:
"Mrs. Frances J. P. Moore— Dear Madam: Whereas, on December 19th,
1894, the Bank of Britlsh Columbia received from you thirty-one hundred and
twenty-five and three-quarters shares of capital stock of the Sanger Lumber
Company, issued under certiflcates number 45, 43, and 48; and whereas on
Pebruary 14th, 1895, sald bank received from you eight liundred shares of
said stock, being certificate number 92; and whereas on June 28th, 1895, said
bank received from you ten hundred and seventy flve shares of said stock,
being certificate number 46; and whereas ail of said stock was received by
said bank from you with the obligation of said bank at the end of flve years
from September 18th, 1894, to hand back to you said stock, or an equal num-
ber of shares of said stock
"Now, therefore, the said Bank of Britlsh Columbia hereby and hère with
tenders to you and offers to deliver to you certificate number 142 for flve
thousand and three-quarters shares of the Sanger Lumber Company, in the
name of Walter Young and duly endorsed by hlm.
"As a prerequisite to and condition of the delivery of said flve thousand
and three-quarters shares to you under thls offer and tender, the said Bank
hereby demanda that you pay to it the sum of ninety-eight thousand seven
hundred and fifty dollars, being the amount of the assessments upon the said
stock which hâve been levied and paid since the delivery of said shares by
you as aforesaid to said Bank.
"Upon the payment by you of said sum of said flve thousand and three-
quarters shares of stock will be delivered to you.
"September 19th, 18»9.
"For the Bank of Brltish Columbia, San Francisco.
"W. Powell, Manager."
Mrs. Moore, having declined to pay the bank the $98,750 demanded of her
as a condition to the delivery of the stock, or any other sum of money,
brought the présent suit. Before doing so, however, and after the receipt
of the bank's reply of September 19, 1899, she canceled the Indebtedness of
the Moore & Smith Lumber Company to her in considération of the assign-
ment by that Company to her of ail of its interest in the 5,625% shares of
the Sanger Company's stock theretofore pledged to her. Since the submission
of the case, A. D. Moore died, and on the 20th of May, 1903, an order was
entered substituting Percy P. Moore, adminlstrator with the will annexed of
the estate of Frances J. P. Moore, in the place and stead of A. D. Moore,
exécuter.
Garber, Cresswell & Garber and Smith & Pringle, for appellant.
Bishop, Wheeler & Hoefler and Pringle & Pringle, for appellees.
Chas. S. Wheeler, for exécuter.
Sydney V. Smith, for Bank of British Columbia.
Before GILBERT and ROSS, Circuit Judges, and HAWLEY,
District Judge.
ROSS, Circuit Judge, after making the foregoing statement of the
case, delivered the opinion of the court.
We regard the case as a plain one. The delivery by Mrs. Moore ol
5,ooo^ shares of the Sanger Company's stock, held by her as col-
latéral security for the indebtedness of the Moore & Smith Company
to her, was made to the défendant bank at the request of the Moore
& Smith Company, and in fulfillment of one of the covenants con-
tained in the agreement between it and the bank of September i8,
1894 ; and they were so delivered to the défendant bank, iiot as an or-
dinary bailment, but in trust. It is so declared in express terms, not
856 125 FEDBKAL EBPOETBK.
only in the receipt and agreement executed by the bank to Mrs.
Moore àt the time of the delivery to ît 6f the stock, but also in the
contract of September i8, 1894. One of the conditions of the trust
agreement was that whatever dividends might be paid during the
period of five years therein mentioned on the stock so dehvered
should be paid over by the bank to Mrs. Moore, her heirs or assigns,
it being therein expressly declared that the stock was net delivered
to the bank as collatéral security for any debt or claim due. to it by
Mrs. Moore, or any other person or company, but only to enable the
Moore & Smith Company to carry out its agreement with the bank
of September 18, 1894, to give to it a majority of the stock of the
Sanger Lumber Company "for the purpose of voting"; in other
words, to give the bank the control of that corporatron. By the
agreement of the parties it was further stipulated, in express terms,
that the bank should not be required to return to Mrs. Moore the
identical shares of stock so delivered to it by her, but might, at its
option, cause those certificates to be canceled and other certificates
of stock to be issued in lieu thereof in such other name as it might
choose, and at the expiration of the fîve years return to her an equal
number of shares of the stock of the Sanger Company.
The stock pledged to Mrs. Moore by the Moore & Smith Lum-
ber Company was accompanied by an express agreement on the part
of that company to pay ail assessments levied thereon, with a pro-
vision to the effect that, if not paid by the company, Mrs. Moore
should hâve' the right to pay the same, and add the amount thereof,
with interest, to the notes for which it was held as security, and the
further right, in that event, to treat the notes and interest as immedi-
ately due and payable.
As between Mrs. Moore and the défendant bank> the agreement
was that she should pay ail assessments levied on the stock delivered
by her to the bank during the five-year period, with a provision that
"if not so paid, and paid by this bank, then this bank to recoup itself,
with interest at six (6) per cent, per annum, out of subséquent
dividends, holding the stock in the meantime as collatéral security."
It will be observed that under this provision no money paid by the
bank as assessments upon the stock delivered to it by Mrs. Moore
could be recovered by it from her, but only out of subséquent divi-
dends upon the stock ; until the payment of which, however, the bank
should hâve the right to hold the stock as collatéral security for
assessments so paid by it. Perhaps this provision may hâve had
something to do with the failure of the bank to avail itself of the
privilège of paying the assessment upon the 5,000^ shares of stock
delivered to it by Mrs. Moore; for, however promising the outlook
may hâve been at the timeof entering into the agreeraents in question,
it is quite évident from the record that "dividends" on the stock of
the Sanger Lumber Company, during the period for which the stock
in controversy was placed with the défendant bank, were impossible.
It is not claimed that the bank ever notifîed Mrs. Moore that it had
caused the stock delivered to it. by her to be reissued in the name of
one of its employés, the défendant Young, as trustée, nor that the
bank ever notifîed her of the assessment levied by the Sanger Lumber
MOORE V. BANK OP BRITISH COLUMBU. 857
Company, or of the fact that the assessment upon the 5,000^^ shares
of stock then standing in Young's name was net paid.
Considering the 5,000^ shares delivered by Mrs. Moore to the
bank as being represented only by the certificate afterwards issued
at the bank's request in the name of Young, trustée, we think the
bank is, in equity, bound to return to the complainant an equal num-
ber of shares, unconditionally, unless it has paid some assessment or
other charge thereon. The testimony of Mrs. Moore is distinct and
positive that she did not know of the assessment, and that she was
financially able to hâve paid it. It is earnestly insisted on the part
of the bank that, in view of the relationship existing between her and
A. D. Moore (in whose interest and for whose benefit she manifestly
delivered the stock to the défendant bank), it is incredible that the
husband did not inform the wife of the assessment. We do not think
so. The assessment under which the 5,000^ shares standing in
the name of Young, trustée, were sold, was levied January g, i8g6.
The undisputed évidence is that A. D. Moore made strenuous eiïorts
to induce the défendant bank to loan the Moore & Smith Lumber
Company sufEcient money with which to pay the assessment upon ail
the Sanger Lumber Company's stock owned by it. It further shows
that he was in London — the home office of the défendant bank — en-
deavoring to accomplish that resuit at the time of the deUnquent sale.
While striving and hoping to bring about that end, and thus to com-
ply, among other things, with the obligation of his company to his
wife to pay the assessment upon the stock it had pledged to her, we
do not think it incredible that he failed to inform her of the assess-
ment, or of the inability of the Moore & Smith Company to pay it as
it had agreed to do. Husbands do not always tell their wives of their
troubles and shortcomings. As a matter of course, in this instance
A. D. Moore should hâve donc so ; but the testimony of Mrs. Moore
is positive that he did not, and we see nothing in the circumstances
of the case to justify the rejection of her testimony as being untrue.
As the défendant bank held the stock in question in trust for Mrs.
Moore, for its own purposes, with the right to place it in the name of
another of its own sélection, and with the privilège of paying — in the
event its cestui que trust did not do so — ail assessments thereon dur-
ing the trust period, recouping the amount thereof, with interest, out
of the contemplated dividends, and as the bank, in the exercise of
the right conferred upon it, did cause the stock of its cestui que trust
to be placed in the name of one of its own employés, thereby giving
it the control of the corporation, it was, upon the most obvions
principles of fair dealing, bound to give its cestui que trust notice, not
only of the assessment, but also of the fact that the stock which had
been turned over to it in trust then stood in the name of its employé
Young. Otherwise how, in any event, would its cestui que trust know
upon what stock to pay? We know of no principle of equity under
which a trustée of stock so placed and held, and with the stipulated
right in itself to pay the assessments thereon and recoup the amount
thereof with interest, can permit the same to be sold for delinquency
and bought in by the corporation, other stock of which it holds, with-
out notice to its cestui que trust either of the fact of the assessment
858 125 FBDBRAL REPORTEB.
or of the person in whose name it has caused the trust stock to be.
placed. But we are of the opinion that it does not appear that any of
the trust stock was ever sold for any assessment. As has been seen,
under the trust agreement the bank was not required to hold or to re-
turn the spécifie shares it reteived from Mrs. Moore, but was ex-
pressly authorized to convert them into other shares, and was only
required to return, upon the expiration of the five-year period, an
equal number of shares of tke stock. The record shows that the
bank Gommenced to exercise the rights thus conferred almost immé-
diat ely upon entering upon its trust, and wiped out the identity of the
shares it received from Mrs. Moore by causing the certificate therefor
to be canceled, and the stock to be issued in the name of its employé
Young. Bût the bank ail the time retained in its possession an equal
number of shares, and more. It held continuously the 7,209>^ shares
it received from the Moore & Smith Lumber Company as collatéral
security, and more than a year before the expiration of the trust
period undertobk to acquire ail of the interest of the Moore & Smith
Company therein, and thereafter caused the certificate for those
shares to be broken up and one of the certificates issued in lieu thereof
to be issued in the name of the défendant Young for 5,000^ shares.
AU of this was donc, accôrding to the testimony of the officers of
the bank, for the distinct purpose of being ready to return to Mrs.
Moore. an equal number of shares of the same stock it had received
from her> when the proper time should arrive. And thèse 5,000^
shares it did actually tender her in writing, upon the expiration of the
five-year period, in response to her demand for her stock. Havjng
thus treated 5,000% of the shares pledged to it by the Moore &
Smith Lumber Company as "the equal number of shares" it had
bound itself to return to its trustor, the bank cannot now be allowed
to change the position it has ail along assumed, and to successfuUy
contend that, in fact, its trustor's stock was sold while Standing in
the name of One of its own employés, in which it had caused it to be
placed without notice to its truster, and without notice to her that any
assessment thereon had been levied. Equity does not so regard the
rights and obligations of trustée and trustor.
While the défendant bank failed to exercise the right, reserved
to it by its agreement with Mrs. Moore, of paying the assessment on
the stock delivered to it by her, and recouping the amount with in^
terest out of subséquent dividends thereon, it did advance the money
for the payment of the assessment upon the 7,209}^ shares that were
held by it as collatéral security for the indebtedness of the Moore &
Smith Lumber Company. The assessments upon that stock were
paid ; but they were paid by the Moore & Smith Lumber Company,
to which the bank loaned the money for that purpose, and to which
Company the bank charged the money so advanced upon its books,
with interest. This fact is distinctly testified to by two of the prin-
cipal officers of the bank, and is further shown by the record of a
suit brought by the bank to recover of the Moore & Smith Lumber
Company, and from A. D. Moore and H. C. Smith individually, a
large sum of money, including the moneys loaned by it to that Com-
pany with which to pay the assessments upon the 7,209 J^ shares of
MOOEE V. BANK OP BRITISH COLTIMBIA. 859
Stock of the Sanger Company. And those loans, it must be noted,
were made in pursuance of the agreement between the défendant bank
and the Moore & Smith Company, of date September i8, 1894, here-
inbefore set out, wherein, in considération of certain securities given
it by that Company and certain agreements on its part, the bank
agreed to
"Open an account with the company In which tUe company shall be debited
with sald sum of $100,000, and ail taxes, insurance, and expansés connected
with said mill and timber lands, and the sum of elghty one thousand four
hundred and ninety one dollars, being the actual cost to the bank of the
stock of the Sanger Lumber Company, and with interest on such amounts
at the rate of six per cent, per year from July Ist, 1894, and shall be credlted
■with any dividends on said stock of the Sanger Lumber Company, and with
the proceeds of any sales of said stock made under the permission herein-
after given, and with the proceeds of any sales of the said mill property or
timber lands made under the permission hereinafter given, and with ail sums
paid to the crédit of said account by the company, and with interest on ail
such crédits at the rate of six per cent, per year, the interest so to be chargea
and credlted to be adjusted and charged and credited at the end of each six
months."
That agreement further provided that;
"The bank shall hold said stock of the Sanger Lumber Company and sald
mill and timber lands as security for the amount due to it as shown by said
account, and may any time sell said mill or any part of the whole [of] said
timber lands for any price it pleases, provided that if at any time it can
sell said mill and lands for $100,000, it shall be bound to do so; and it may
at any time sell not more than one-half of said stock of the Sanger Lumber
Company for any price it pleases, giving the company, however, the préfér-
ence of purchasing at the price the bank Is willing to accept. At any time
withln five years from the date thereof, the company may pay the bank the
balance of debt shown by said account, and on such payment the bank shall
cause to be conveyed to the company ail then remaining unsold of said mill
and timber lands, and shall transfer and deliver to the company ail then re-
maining unsold of said stock of the Sanger Lumber Company. At the end
of flve years from the date hereof, the balance of debt shown by said account
shall be due and payable by the company to the bank, and if not paid, the
bank may foreelose its lien for the same against said mill and timber lands,"
etc., etc.
It thus appears by the written agreement of September 18, 1894,
not only that the bank contemplated making advances upon the
crédit of the Moore & Smith Lumber Company, but that such sums
of money as it should be willing to loan that company during the
continuance of that agreement should not become due and payable
until the expiration of five years from the date of the agreement, un-
less "the right of the bank to vote the Sanger Lumber Company 's
stock, either that held by it as security, or that held by it in trust
as aforesaid, shall be for any reason successfully resisted," in which
event "at the option of the bank, of which no notice shall be given
to the company, or said Moore, or said Smith, the amount shown
to be due by said account" should become immediately due and pay-
able, and the bank hâve the right to foreelose its liens on the Wash-
ington property, and also on the stock of the Sanger Lumber Com-
pany held by it as security. The bank may hâve made a bad bar-
gain, but, if so, it constitutes no just ground for contending that
money it loaned to the Moore & Smith Lumber Company at inter-
860 125 FSDEBAL BBPOHTEB.
est, for the purpose of paying assessments upon the Sanger Lumber
Company's stock, should be treated as a payment by itself of those
assessments,, The bank never having paid any assessment upon the
stock in question, so far as appears, the payment demanded by it as a
condition to a return of the 5,000% shares was whoUy without right.
It results that the judgment. must be so modified as to decree that
the défendant bank deHver to the complainant certifîcates for 5,000%
shares of the stock of the Sanger Lumber Company, properly in-
dorsed, unconditionally and without the payment of any money or
other thing, and costs of suit; and, as so modified, it will stand af-
firmed.
HAREISON V. HUGHES et al.
(Circuit Court of Appeals, Third Circuit September 1, 1903.)
No. 38.
1. Navigable Waters— Obstruction bt IInpinished Breakwatbr— Duty op
CONTRACTOR TO MAINT AIN lilOHTB.
Contractors witli the United States for the construction of a brealcwater
near the mouth of Delaware Bay, who were required by the contract to
erect and maintaln at their own expansé a stake light at the end of the new
structure wtille the work was in progress, in accordance with the instruc-
tions of the engineer offlcer In charge, or his agent, and aiso such other
lights as the engiueer might direct, were bound not only to maintain
lanterns in the required positions, but also to see that they were kept
trimmed and brightly burnlng durlng the hours of darkness, and they are
liable for injury to a vessel stranded on the new construction by reason
of the extinguishment by the wind of the stake light, where they had
knowledge that it was liable to be so extinguished, and had been a number
of times previously.
9. Same— Construction op Contract.
The provision of the contract requlring them to maintain such other lights
as the engineer should direct did not necessarily measure their obligations
to third persons to whom they owed the duty of maintaining such lights
as were necessary or proper In vlew of the dangerous character of the
structure, whether directed by the engineer or not
8. Same— ACT op God.
The extinguishment of the stake light by the wind due to Its improper
adjustment cannot be attributed to the act of God or vis major, so as to
relieve the contractors from Uabllity, being something which might reason-
ably bave been anticlpated, and could bave been guarded against in the
exercise of reasonable care and vigilance.
4. Same— Care Kequirbd op Contractor.
Eeasonable care and vigilance required the contractors to guard against
the probable conséquences of the extinguishment of the light or its failure
to burn at night, and, If it was Impracticable to properly relight the lantern
whenever the Ught was blown out in a storm or high. wind, they should,
in View of the great danger to navigation resulting from darkness at that
point, either hâve erected an electrtc light which could hâve been operated
from the shore, or made such disposition of their floating plant as to warn
Tessels away from the new breakwater.
5. PiLOTS— QuALiFrcATioNS— Care and Skill Required.
Pilots whose vocation is to control the course of vessels into and out of
Delaware Bay and River and their anchorage therein, are required to
exercise the care and skill of river and harbor pilots, and are chargeable
with knowledge of natural objects on shore and the obstacles to navigation,
and of the signiflcance of ûxed and permanent lights.
HAKRISON V. HUGHES. 861
6. Admiraltt— Faults Attributabliî to Vessel— Négligence of Compulsort
PiIjOt.
By tàe American admiralty law, the fault or négligence causing a col-
lision with another vessel or a structure is imputable to the vessel, althougli
it was that of a compulsory pilot.
7. Navigable Watbrs— Injuries prom Obstruction— Conthibdtory Fault of
Tlie injurj' of a steamship by running Into a partly constructed break-
water in Delaware Bay in tlie night held due in part to the fault of the
contractors in failing to maintain lights and in part to the négligent navi-
gation of the vessel by the pilot, which precluded her from recovering
full damages.
Appeal from the District Court of the United States for the District
of Delaware.
For opinion below, see i lO Fed. 545.
John F. Lewis and Francis C. Aider, for appellant.
H. G. Ward, for appellees.
Before ACHESON, DALLAS, and GRAY, Circuit Judges.
GRAY, Circuit Judge. A careful review of the testimony, as dis-
closed in the record in this case, convinces us that the decree of the
court below should be afhrmed. The opinion of the learned judge of
that court so entirely, and satisfactorily to us, covers ail the points
in controversy, that we adopt the same as the opinion of this court.
It is as follows :
"The libel in this case is In personam and was flled by Albert Harrison,
master of the British steamship Glenochil, against Eugène Hughes, James
Hughes, Charles Hughes and Ansom Bangs, trading as Hughes Bros. & Bangs,
to recover damages for Injuries sustaiued by that vessel through running upon
the new breakwater oËf Lewes, near the mouth of Delaware Bay, about 1
o'clock in the moming of November 30, 1897. At the time of the accident
the new breakwater, extension to the breakwater, or harbor of refuge, as it is
indifferently termed, was in course of construction by the défendants, under a
contract between Major C. W. Raymond of the corps of engineers of tlie United
States Army, acting for and in behalf of the United States, as party of the flrst
part, and the défendants as parties of the second part. The contract was in
writing, bore date February 5, 1897, was approved by the chlef of engineers
February 20, 1897, and provided among other things as follows:
" 'The said Hughes Brothers and Bangs shall furnish the necessary plant and
material and do ail the work required for the construction of a stone breakwater
in Delaware Bay, Delaware, in strict accordance with, and subject to ail the
conditions and requirements of the spécifications hereunto attached and form-
ing a part of this agreement'
"Among the conditions and spécifications are the foilowing:
" '(3) Maps of the locallties may be seen at this office. Bidders, or thelr au-
thorized agents, are expected to visit the place and to make their own estimâtes
of the facilities and difficulties attending the exécution oi the work, including
the uncertainty of weather and ail other contingencies.'
" '(42) Description of the Locality. The site of the proposed breakwater is
about 2^4 miles north of the Delaware Breakwater Harbor, about 3 miles from
the Government Pier at Lewes, Delaware, and about 10 miles from Cape May.
« « *>
" '(56) * * • The work shall be conducted in strict accordance with in-
structions given from time to time by the engineer oflicer in charge. * * •
Ail opérations connected with the work will be under the immédiate supervision
of assistant engineers, inspectors or other agents of the engineer oflicer in
charge, and their instructions shall be strictly observed by the contractor and his
employées.'
862 125 FEDERAL EEPOBTEE.
'• '(59) The work wlU be commenced by the construction of the substrueture
at the upper or northwest end of the breakwater, where the mound wUl be ralsed
to the level of mean low water as rapidly as possible, and over a length at
mean low water at least 100 feet. Upon thls mound a stake light will be
erected, whlch must be thoroughly protected from ice and storms by deposlting
very large stones arpund it Thls Ught w;ll be erected and protected In accord-
ance with the instructions of the englneer offlcer in charge, or bis agent, and
it will be maintalned by the contractor as long as required by the engineer
offlcer in charge.'
" '(62) Plant. The plant shall be adapted to the work and shall be kept In
good condition at ail tlmes.'
" '(65) Lights. During the progress of the work, the contractor must keep
suitable lights, every night from sunset to sunrise, upon ail his vessels at or
in the vicinity of the work. He must alsô maintaln on the work such lights
as the engineer ofttcer In charge may direct. Thèse lights will be mantalned
at the expense of the contractor. TUe United States will not be responsible for
any accident that may occur to the contràctor's plant, to passing vessels, or
to any property whatever during the progress of the work.'
"'(70) Bidders shall further state, on the form hereto appended, and in ac-
cordance with the directions thereon, whether they are now or ever hâve been
engaged on any contra Ct or other work slmllar to that- whlch is proposed, giv-
ing the nature and location of the work, the year or years in whicb it was done,
the manner of Its executioui and such other information as will tend to show
theirabiUty to vigorously and successfiijly prosecute the work required by thèse
spécifications. Any bid not complying witn thèse instructions will be rejected.'
"The défendants in thelr prciposal for the work, dated November 24, 1896,
among other things said:
" 'We are now éhgaged in coùstrueting a stone breakwater at Point .ludith,
R. I., and a stone breakwater, also at entrance at harbor at New Haven, Conn.
Both for the TJ. S. Government. • • * We make thjs proposai with a fuU
knowledge of the work. * * *• , ,
"Oh or about May 8, 18Ô7, work was commenced on the new breakwater and
about the same time a stake light was placed on a mound or stone pile consti-
tutihg its northwesterly end. On the night of the accident the breakwater had
been partially constructed for a distance of about 1,925 feet at low water ex-
tending from the end provided with the stake light southeâstwardly; no other
light having been provided for the work prior to that time. The llbel, among
other things, contains the folio wlng averrnêht:
' " 'That the stranding of the said steamship upon the new breakwater as
af oresaid was caused by the carelessness, négligence and recklessness of the
said respondents, in that the said new breakwater so under construction by said
respondents, as contractors as af oresaid was at and beforé the time of the said
stranding of said steamship, ëntirely withbut lights to mark its position and was,
at its then stage of construction, thereby rendered a dangerous obstruction to
navigation, whicb said absence of lights and dangerous obstructions were at the
time known, or with proper diligence ought to hâve been known to the said
respondents.' ,
"It is admittéd that at the time of the accident the stake light was not
buming. The fact that it was not then burning undoubtedly caused or eon-
tributed to the disaster. Tbere Is, Indeed, a conflict of évidence on the question
whether the lantern was at that time attached to the stake or mounted on any
portion of the breakwater. On careful examination of the évidence I am satiSr
fled that it was at the time attached to the stake, properly trimmed and fur-
nished with oil, but that the Ught had been extlnguished, probably by the strong
wind then prevailing from: the northwest In connection with the defective and
négligent manner in which the lantern was mounted on the stake. It was a
Funek lantern, with a red lens from six to eight inches in diametèr, calculated
to bum, without refllllng, from eight to ten days, hung in the open air, by
means of a ring at its top td a bracket or cross-piece at or near the top of the
post or stake at the height of about twenty-five feet above bigh water. The
lantern was furnished to the défendants for use on the stake directly or indi-
rectly by the engineer in charge. When the lantern was suspended from the
HAKRXSOUr V. HUGHES. 863
bracket or cross-pIece Its bottom dld not rest on any platform, nor was It
otherwise prevented from swinglng In the wlnd. When so swinging the lantera
was liable to présent itself to the wind at such an angle as to allow the wind,
through deflectlon from its dome-shaped top, to Wow down against and extin-
guish the flame. It appears from the évidence that prior to the disaster the
lantern was on a nnmber of occasions extinguished, while it should hâve been
burnlng. The witness Hasskarl who was government inspecter in charge of
the work on the new breakwater, testified as follows: 'X 87. About how
many times did you notice the light on the upper end of the new breakwater
ont before the Glenochil went ashore? A. I found it ont, and noticed it ont,
but I cannot tell you how often. I do not know that I kept any track of it
• * • X 93. Do you know what the difficulty was with that old lantern? A.
Difflcultyî X 94. Yes. Dldn't it smoke and show very dimly, and sometimes
go ont? A, Yes, It did ail that, I think.' Hasskarl, in an officiai communica-
tion to the engineer in charge, dated October 17, 1898, says of the stake light
In question or a lantern similar to it In position, size, construction and adjust-
ment: 'The light at the upper end of the work frequently goes out, or is blown
ont during storms, and therefore cannot be considered a reliable light.' The
insufflciency of the stake light as originally adjusted was, after the accident,
recognized by the government, and steps were takeu to remedy the evil. The
chairman of the lighthouse board in an officiai communication to the chief of
engineers, dated December 6, 1898, says in part: 'The board then reached the
conclusion, after careful examination, that the temporary lights ou the extension
to the breakwater should be standard lens lauterns of the hghthouse board
known as "Punck Tubular Lanterns" with pressed glass lens, red in color, and
that they should be set lipon rigid platforms on posts which should be strongly
braced laterally at the présent height of 25 feet.' The engineer in charge De-
cember 19, 1898, indorsed the communication as follows: 'The temporary lan-
terns now and heretofore shown on the extension to the breakwater are standard
lens lanterns of the lighthouse board, known as the "Funck Tubular Lanterns"
with pressed glass lenses, red in color, as within recommended. It is proposed
to set them on rigid platforms as soon as possible.' Hasskarl in an officiai com-
munication to the engineer in charge, dated January 3, 1899, says: 'I hâve the
honor to report that the lights on the Harbor of liefuge were to-day changed
from thelr former positions on brackets to rigid platforms on posts 25 feet
above high water, and their présent positions comply in every respect with
the recommendations made by the lighthouse board contained in a letter ad-
dressed to the chief of engineers under date of December 6, 1898.'
"AU of the correspondence above mentioned was admitted la évidence wlth-
out objection. There is no évidence that after the lanterns had been attached
to rigid platforms the light was extinguished by winds or storms. But the
question to be decided on this branch of the case is, not whether the offlcers
of the government charged with the duty of properly lighting the new break-
water during the progress of the work or of furnishing means to that end,
were guilty of actionable négligence in failing, before the accident and after
Hasskarl had become aware of the liability of the original stake light to be ex-
tinguished during storms or high winds while the lantern was swinging In the
open air, to guard against such a resuit by adopting the obvious précaution, so
tardily resorted to, of placing the original stake light on a rigid platform not
subject to latéral motion. Nor is it necessary to go into the vexed question how
far contractors, entering into government contracts prescribing or authorizing
Bubordinate offlcers to prescribe négligent and dangerous methods or instru-
mentalities for the making of a public improvement, can be held liable by
third persons injured by the employment of such methods or Instrumentalities.
The question now to be decided is whether the défendants were guilty of ac-
tionable négligence toward the libelant, causing or contributing to the acci-
dent. The new breakwater in course of construction when not properly
lighted was an obstruction extremely dangerous to shipping, and in the lan-
guage of one of the officiai communications in évidence, 'a greater menace to
navigation than it can ever be in the future, from the fact that it is unknown
to étrangers and not delineated on charts generally of that locality.'
"The défendants, wlthout qualification or condition, undertook in thelr con-
tract to maintain the original stake light at the northwesterly end of the worlt.
864 12S FBiDffiBAI.- RBFOHTBB.
properly bumlng. Spécification 59 of the eontract provMes: Thia llght wlll
be erected and protected In accordance wlth the Instructions of the englneer
offlcer in charge, or his agent, and it wlll be maintained by the contracter as
long as r«quired by the engineer offlcer in charge.' Spécification 65 also pro-
vides wlth respect to the duty of the défendants, therein termed the 'contractor' :
'He must also maintaln oa the work such lights as the englneer officer in
charge may direct. Thèse lights will be maintained at the expense of the con-
tractor.'
"Under thèse provisions the duty of the défendants waa not merely to main-
tain lanterns in the required positions, . but lantems properly trimmed and
brightly buming during the hours of datliness. It Ig contended, however, on
the part of the défendants, that the extlnguishment of the stake llght by the
wind on the night of the accident was an act of God for the conséquences of
which they are in no manner liable. As between the parties to an express eon-
tract the act of God or vis major fumishes no excuse for the nonperformance
of what one bas by the eontract uncondltionally bound himself to do. But the
stranding of the Glenoehll on the new breakwater was In no legltimate sensé
attributable to the act of God or vis major. It is true that the stake light,
improperiy adjusted, was extinguished by the wind as a burning and unpro-
tected candie would be blown out In a draught, but It cannot in Its relation to
the accident be held the act of God. The accident was not 'one which could
not hâve been prevented by human effort, sagacity and care' (The Majestlc,
166 U. S. 375, 388, 17 Sup. Ot. 597, 603, 41 !.. Ed. 1039), nor was It one arlsing
from purely natural causes impossible by the exercise of reasonable dUlgence
and circumspection to hâve been perceived and therefore unreasonable to guard
against. The contractors were chargeable under their eontract wlth knowledge
of 'the facillties and diffleultles attending the exécution of the work, includlng
the uncertainty of weather and ail other contlngencies,' and made their proposai
'wlth full knowledge of the work.' They also had knowledge or are presumed
to hâve had knowledge before the accident that the stake light was liable to be
extinguished during storms or high wlnds. It had gone out several tlmes dur-
ing the progress of the work and while It was unquestionably their duty to
observe whether it continued to bum. It is f urther contended on the part of
the défendants that they had no authority under their eontract wlth the govem-
ment to erect and maintain other lights on the work than those directed by
the government offlcers in charge, and that it would hâve been improper for
them so to do. But this court is not prepared to hold that the measure of theh:
contractual obligation to the government necessarily limited or deflned the pré-
cise measure of their duty to third persons, whose lives and property would be
exposed to extrême péril, In case of failure to Indicate at night the northwesterly
end of the breakwater by the maintenance of the stake llght, or some other llght
at that point, or by other means. They owed a duty to such third persons
independently of their contractual obligations. They could not in reckless
disregard of the lives and property of others shield themselves from accounta-
bllity for destruction of llfe or property on the ground that the stake light was
extinguished by a force of nature over which they had no control, if by the
exercise of reasonable carè and précaution they could hâve adopted proper
means to avert the calamlty. There is no provision in or implication to be
drawn from the eontract that, when necessary for the protection of navigation,
the défendants should not place on the work in course of construction other
lights than those mentioned in the eontract or préscribed by the government
offlcers in charge. Such a prohibition would hâve been inconsistent wlth the
manifest purpose of the eontract that to avoid disaster to persons or property
the upper end of the breakwater should be properly llghted. For this purpose
the défendants undertook to maintain the stake light at that point As before
stated, they were before the accident chargeable wlth knowledge of 'the un-
certainty of the weather' and of the fact that the stake light was liable to be
extinguished during storms or high wlnds. Reasonable care and vigilance re-
quired them to guard against the probable conséquence of the extlnguishment
of the llght or its failure to bum at night. While owing to the condition of the
wind or water it may hâve been impractlcable promptly to relight the lantern
whenever the llght was blown out in a storm or high wind, no reason Is per-
ceived why the défendants should not, In view of the great danger resultlng
HAREISON V. HUQHB8. 865
from darkness at that point, hâve elther there erected an electric light en-
closed. in a red lens which could hâve been operated from shore in case of the
extinguishment of the stake light, or hâve made such disposition of their
floating plant as to warn vessels away from the new breakwater. In omit-
ting to resort to such or other précautions they f ailed to exercise the degree
of care which the law demanded of them, and were guilty pt fault proximately
causing or contributing to the accident.
"The question remains whether the Glenochil was not also in fault. She was
in charge of a Pennsylvania pilot for the Delaware Kiver and Bay. There is a
broad distinction between an océan pilot, who is compelled to direct the course
of a ship mainly by eompass, reckoning and astronomical observations, and a
river pilot who relies not so much upon the eompass as his famiharity with the
natural objects and lights along the river. In Atlee v. Packet Co., 21 Wall.
389, 396, 22 L. Ed. 619, Mr. Justice Bradley, delivering the opinion of the court,
said: 'The character of the skill and knowledge required of a pilot in charge
of a vessel on the rivers of the country is very différent from that which
enables a navigator to carry his vessel safely on the océan. In this latter
case a knowledge of the rules of navigation, with charts which disclose the
places of hidden rocks, dangerous shores, or other dangers of the way, are
the main éléments of his knowledge and skill, guided as he is in his course
by the eompass, by the reckoning, and the observations of the heavenly
bodies, obtained by the use of proper instruments. It is by thèse he détermines
his locality and is made aware of the dangers of such locality if any exist.
But the pilot of a river steamer, like the harbor pilot, is selected for his
Personal knowledge of the topography through which he steers his vessel.
In the long course of a thousand miles in one of thèse rivers, he must be
familiar with the appearance of the shore on each side of the river as he
goes along. Its banks, towns, its landings, its houses and trees, and its
openings between trees, are ail landmarks by which he steers his vessel.
The eompass is of little use to him. He must know where the navigable
ehannel Is, in its relation to ail thèse external objects, especially in the
night. He must also be familiar with ail dangers that are permanently
erected in the course of the river, as sand bars, snags, sunken rocks or
trees, or abandoned vessels or barges. Ail this he must know and remember
and avoid. To do this he must be constantly informed of changes in the
current of the river, of sand bars newly made, of logs or snags, or other
objects newly presented, against which his vessel might be Injured. • * ♦
It may be said that this is exacting a very high order of ability in a pilot.
But when we consider the value of the llves and property committed to
their control, for in this they are absolute masters, the high compensation
they receivG, and the care which Congress bas taken to secure by rigid and
fréquent examinations and renewal of licenses this very class of skill, we do
not think we flx the standard too high.' This language clearly is applicable
to pilots wlîose vocation is to control the course of vessels into and out of
the Delaware Bay and River and their anchorage therein. Like river and
harbor pilots, they are chargeable with knowledge of natural objects on shore
and the obstacles to navigation, and of the significance of fixed or permanent
lights. The pilot in charge of the Glenochil had large expérience in his
calling. For some fifteen or sixteen years he had been engaged in piloting
steam and sailing vessels of ail slzes into and out of the Delaware Bay and
River. He was thoroughly familiar with the relative positions of the old
and new breakwater, with their distance apart, with the stake light on
the latter, and with the range and other lights visible in that locality. He
boarded the Glenochil a short distance outslde of the capes about or shortly
after midnight; that vessel being bound to the old breakwater for orders
and intended to anchor there for that purpose. When the proposed anchorage
was reached, 'just outside of the old breakwater,' the master ordered that
the starboard anchor be let go. This order was not carried out owing to the
Jamming or fouling of the windlass. At this time and until the accident there
was a strong wind from the northwest. The night, however, was clear, not
only the stars, but the range and other fixed lights capable of being seen in
that locality, being distinctly visible. Upon the failure of the starboard anchor
to drop, owing to the détective condition o£ the windlass, the master directe!
125 F.— 55
866 125^'B'EDBBAIi- RÉPOBTBB.
that; the Glenochll bè put to sèa, lu drder that prepara'ttons mlght be made
foï thë use of the port afacbor^ Thé jpUbt fdrthwlth ordéred tliè helm ported
and the Gléhochil i^frungto Starboard uiider a f uU head of steain; and being
light and the direction of thé wind belng against her starboard bow, she failed
toswihg to starboard wlth sufflclent speed to clear the new brealswater,
■with the résuit that -she ràn against and on the same, thereby recelving the
damage complalned of. There Is some expert évidence to the ettect that,
o'kitis to her lightness and the direction and force of the "wind, It was im-
praçticablé for her to swing under a port helm from the proposed anchorage
cleaf of the neW breakwater. If thls beà fact, of whlch I hâve considérable
doubt on the évidence as a whole; thç pllot was chargeable with knowledge
of It, and, ktiowlng the position of the néV breakwater relatlvely to the old
and the distance between them, he should hâve so regulated her movements
as to avold the disaster, theré belng an abundance of sea ' room for that pur-
posé, as Hereinaf ter stated. Although aware of the fact that the upper end
of the work was' provlded wlth n dtake llght It does not satlsfaetorlly appear
from hls évidence or from any otber évidence In the case, when he flrst
looked for that;light or aséertalned it was not buming. On hls own showlng
the pllot cpnvlcts hlmself of gross négligence or incompetency directly con-
trlbutlng to the accident. He testifles In part as follows: 'Q. Was the
place selected by you to anchbr the Glenotfhil a proper place? A. Yes, sir.
Q. Was It' a place In which you hâve anchored other vesséls? A. Yes, sir;
many a tlme. • • • Q. Well, when he told you to put the Glenochll
to sea again, what did you do? A. I put the wheel to port and rang her up.
* • * Q. Well, nowi then what happened? A. Well, I stranded on the
breakwater, I thought I was doser to the old breakwater than I was.
* * • Q. Please state whether there Was any llght on the upper end of
the breakwater pir not? A. No light at ail. Q. Are you positive about that?
A. Tes, sir. Q. What klnd;b£ a nlgjit was it with respect to seeing lights?
A. Why, It was a right nice night to see lights. * • » q. please state
whether thère was anythiUg in the character of the nlght that night, which
would hâve prevented you seeing a llght upon the upper end of the break-
water had one been there? A. Nothlng at ail, sir. * • * Q. Had you
been by thé new breakwater frequently or not? A. Yes, sir. Q. Dld you
know whéré ;it was? A. Yes, sir. Q. Well, If you knew where the new
breakwater was, why dldn't you avold it? A. Well, If there had been a light
there, we could bave avoldéd It, but there was no Ught at ail. * • • XQ.
Hâve you any recollection as to how long that light had been showlng on
the new breakwater beforè you had tiils accident? A. Yes, sir. Well, it was
tbere quitô ^ whlle otï and. on. * * • XQ. How near to the old break-
water do you judge you were, when yoU gave the order to let go the anchor?
A. About three-quarters of a mile, probably a llttle further, I judge. XQ.
And It was that distance Which you say you were mlstaken in? A. Mls-
taken? XQ. Dldn't you say you thought you were mlstaken In supposlng
that you were so close to the breakwater when you gave the order to let go
the anchor? A. No, sir. XQ. Then, do you stlH state you were about three-
quarters of a mile from the old breakwater when you gave the word to let
go the anchor? A. Yes, sir. XQ. That is your présent judgment? A. Yes,
sir. XQ. That was your judgment at the tlme you gave the order? A. Yes,
sir. XQ. Do you know of any réason to change that judgment? A. No, sir.
* * * XQ. Mr. Bennett, how far Is It In a straight Une from the old
breakwater to the new breakwater, as far as the new breakwater was stlck-
Ing up above the surface at low tlde in November last? A. I should judge
about two miles. • * » XQ. When you gave the order to port the wheel,
I judge from the distance that you hâve told me that you were off, you had
about a mile and a quarter of clear water to turn around In; is that about
right? A. Yes, sir; but I was decelved in my judgment. XQ. Now, think
about It, and tell me how near you were actually to the new breakwater
when you gave the order to port the wheel? A. Well, I couldn't. I judge
I was that distance from the old breakwater, and I judged wrong. * * •
XQ. That was a mlstake, wasn't it, Mr. Bennett, that you had as much as
a mile and a quarter of clear water to turn around In? A. Oh, certalnly, It
was a mlstake. ♦ • • XQ. Are you able to make a judgment how far
HAEEISON V. HXJGHES. 867
ofl, in your best Judgment, you were from the new breakwater when you
gave the order to port your wheel? A. No, sir; I eouldn't, because I don't
know. XQ. New, wlien you lieard tliat tiail from the forecastle you didn't
suppose you were anywhere near tlie new breakwater, did you? A. No, sir.
XQ. Didn't you ttiink ttie new breakwater was half a mile or so over to
your port side? A. I ttiouglit the breakwater was further off. I judged
that I could eome out clear. • * * XQ. You hadn't any more expectation
of hitting the new breakwater, the stone pile, that night than you hâve to-
day? A. No, sir; not a bit. XQ. You didn't suppose that you were within
half a mile of it? A. I didn't suppose I was within a mile of It. XQ.
Wel!, had you been looking for that red light on the stone pile? A. I had
been previous. I had been looking for it that night. * • * XQ. Do you
recollect looking for that red light on the stone pile? A. Yes, sir. XQ.
When did you look for it? A. I looked for it as I was turnlng the ship
around. XQ. You did not see it? A. No, sir. XQ. You didn't think that
was anything remarkable? A. Yes, sir; because it was published to be put
there. XQ. You didn't see it; didn't that make any change in your naviga-
tion? A. Xo, sir. Why how could that make any change? Then it was too
late to make any change. I didn't see it. XQ. You mean it was too late
when you thought to look for the light? A. I looked for the light as I tried
to turn the steamer. I was too close to the breakwater. XQ. You didn't
think to look for the light until you were that near, that it was too late?
A. Oh, yes, sir; I looked for the light. If a light had been there, I could
hâve reversed the engines and wouldn't hâve hit. XQ. Now, Mr. Bennett,
what I am asking you is whether you recollect looking for that light when
you first started to turn around the Glenochil? A. Yes, sir. XQ. Well, now
you told me it was ten minutes before you hit, wasn't it? A. I suppose It
was; somewheres around there. * * • XQ. And you didn't see it? A.
No, sir. XQ. And it was a good night for seeing lights, and you saw ail
the other lights around you? A. Yes, sir. * * * XQ. Well, Mr. Bennett,
didn't you think your judgment was good enough to keep clear of that stone
pile, even if you didn't see the light? A. Well, if I had known there was no
light there. XQ. You knew that there was no light there that night? A.
I didn't know until I got in there. XQ. You knew that you didn't see any
light there that night? A. Yes, sir. XQ. For ten minutes before you hit?
A. No, sir; I didn't say that. XQ. Didn't you say that you were looking
for that light when you gave the order to port the wheel? A. No, sir; I did
not. XQ. You don't remember saying that? A. No, sir. XQ. Well, now,
how long after you gave the order to port the wheel, do you think, that you
did look for that lantern? A. I couldn't tell you. It was before I struck.
I know the light was gone. I looked for the light and I thought I had plenty
of room to corne around. XQ. Did you look for the light before you heard
the hall from the forecastle? A. Yes, sir. XQ. How long before? A. Why,
it wasn't no time. I hadn't gotten my glasses down. XQ. You were just
looking for the light when you heard the hall from the forecastle? A. No,
sir. Hold on, I am going too fast. No, I looked for the light, and afterwards
I heard the hall, because I thought I had plenty of room. XQ. You had been
looking for the light through your glasses? A. Yes, sir. XQ. And just as
you took your glasses down, you heard this hall? A. Oh, no; it was a llttle
while afterwards I heard the hall. XQ. Well, as much as two seconds?
A. Oh, yes, sir; it was a long while. I couldn't tell you how long it was.
* "■ * XQ. What I understand you to say now, Mr. Bennett, that you
looked for the light once, a little or some while before you heard the hall
from the forecastle? Oh, yes; quite a while before I heard the bail. XQ.
And you looked through the glasses? A. Yes, sir. XQ. And you didn't see
It? A. No, sir. XQ. But you thought you were giving the stone pile a good
berth, anyhow? A. Yes, sir. XQ. So you went ahead? A. Yes, sir. Cer-
tainly If the light had been there, there would hâve been no trouble at ail.
• • "■ XQ. How long before you struck the stone pile, in your best prés-
ent judgment, was it that you noticed that there was no light on the stone
pile? A. Quite a while, as I said before. » • * xQ. Do you think it
was as mijch as three minutes? A. I think it was as much as four minutes.
XQ. That is your best judgment? A. Yes, sir. XQ. Four minutes? A. Yes,
868 125 FEDERAL REPORTER.
9ve minutes. XQ. Will you stick to flve minutes? A. Yes, sir. XQ. Tlien
it was flve minutes before you hit, that you satlsfled yourself tbat there was
no Ught on that stone pile? A. ïes, sir.' It thus appears from the testimony
of the pllot that, notwithstanding the range and other flxed lights which
should fully hâve informed him, he was in substantial errer as to the dis-
tance of the proposed anchorage from the old brealiwater; that, Ijnowing the
Cfieiiochll was light and the wind on her starboard bow, he ported her helm
in an attempt to swing her to starboard and clear the new brealcwater on
his Way to sea for the purpose of gaining time to prépare for the loweriug
of the port anchor; that he knew the distance of the new from the old
break wa ter; that at the proposed anchorage the stake llght on the upper
end of the new breakwater If bumliig would hâve been dlstinctly visible;
that had he known at the tlme that the stake light was not burning he
could haVè avolded the new breakwater; that he did not look for that light
or ascertalh that It had been extinguished untll several minutes after the
helm was ported or untll very shortly before the accident; that he knew a
light should bave been burning there; that if the llght had been burning, the
Glenochll could hâve been pUt full speed astem and the accident prevented;
and that he had satisfied himself flve minutes before the Glenochil struck
that the stake llght was not burning, yet instead of reversing, kept her on
a port helm under a full head of steam. * * *
"Further, there is no évidence that after It was discovered that the windlass
was jammed or fouled there was any necessity to put to sea or exécute
the maneuver attempted. The Glenochll at the time in question ârew ouly
flfteen feet of water and the tide was about high water slack. The officiai
charts used In évidence show that for a distance of about three miles west
northwestwardly from the proposed anchorage there was an ample depth of
water for the navigation of the Glenochil even at mean low tide, and that
thls Inner basin had a width of equ&l depth for about two miles. No reason
is disclosed or perceived why the Glenochil under thèse circumstances should
hâve attempted to go to sea. She could, while preparing the windlass for the
lowering of her port anchor, hâve proceeded slowly up thls basin and when
proper hâve returned to the proposed anchorage either by going astern or
by tuming and heading for it. The évidence abundantly shows that there
were sufflcient range and other flxed lights to enable her to accomplish her
ultimate purpose without resortlng to the Improper movements resulting in
the disaster. It was further the duty of those in charge of the Glenochil
when enterlng the bay for the purpose of anchoring, with the wind so strong
as repeatedly to extlngulsh her binnacle light, to see to it that she was in
proper order to anchor, and guard against the fouling or jamming of her
windlass. While the last point may not of itself be sufiicient to inculpate
the Glenochil, I am satlsfled by the évidence as a whole that she was in
fault, and that it proximately contributed to the accident. Oounsel for the
llbelant bave referred to Casement v. Brown, 148 U. S. 615, 13 Sup. Ct. 672,
37 L. Ed. 582, as establlshing the proposition that there was no fault on the
part of the Glenochil, and counsel for the défendants hâve referred to the
same case as establlshing the proposition that the défendants are not liable.
I am satlsfled on carefui examination that the facts disclosed in that case
were so unllbe those in thls, that it eannot be treated as an authority sup-
porting either proposition. As the Glenochil as well as the défendants was In
fault she is entltled to recover only one-half of the damages and costs. Let
a decree be prepared aecordingly."
The point made by the appellant, presumably not raised in the court
below as it is not covered by the opinion of the learned judge, just
quoted, that, inasmuch as the Glenochil was obliged by iaw to take a
pilot, his négligence eannot be imputed to the ship, requires from us
only a brief notice. It is admitted that, at common Iaw, no action
can be maintained against the owner of a vessel, for the fault of a com-
pulsorily taken pilot, as, in such case, the pilot is in no sensé the agent
or servant of the owner; but, although the same doctrine holds in
THE BELGIAN KING. 869
Eiigland, botli at common law and in admiralty, a différent view of the
îiability of the ship is taken in admiralty cases in this countrv. The
China V. Walsh, 7 Wall. 53, 19 L. Ed. 67; Ralli v. Troop, 157 U. S.
386, 402, 15 Sup. Ct. 657, 39 h. Ed. 742: The John G. Stevens, 170
U. S. 113, 120, 18 Sup. Ct. 544, 42 L. Ed. 969; The Barnstable, 181
U. S. 464, 21 Sup. Ct. 684, 45 L. Ed. 954; Homer Ramsdell Co. v.
Compagnie Générale Trans Atlantique, 182 U. S. 406, 411-413, 21
Sup. Ct. 831, 45 L. Ed. 1155. The theory of the admiralty law in
this country in such cases, is that the collision impressed upon the
wrongdoing vessel a maritime lien, which the vessel carries with it
into whosesoever hands it may corne. The vessel is treated, according
to this theory, as the guilty thing. It is the res, to which fault is im-
putable, and which is held to respond in damages. The responsibility
of the owners, as owners, and tlie law of agency, as applicable to the
employment of a pilot, do not corne into considération. "This theory
treats the faults of conduct in the vessel's navigation as imputable to
the vessel itself." Ralli v. Troop, supra. It is true that in the présent
case, the libelant, as the master of the ship Glenochil, proceeded
against the défendants in personam ; but the suit is in admiralty, and
the défense inculpâtes the vessel and not the owners, so that the law of
agency, as applicable to their Iiability, is not involved in the considéra-
tion of the case.
The decree of the court below is afïirmed.
THE BELGIAN KING.
HUNTBR et al. v. DAMPSKIBSSELSKABBT TBLLTJS et al. SAMB T,
DAMPSKIBSSELSKABET TELLUS. OALIFORNIA &
ORIENTAL S. S. CO. v. SAME.
(Carcult Court of Appeals, Nlnth Circuit Octotier 19, 1903.)
No. 930.
1. ColIjIsion— Stbam Vesskt.s in Fog— Speed.
A steam vessel in a dense fog is bound to observe unusual caution,
and to maintain only such a rate of speed as will enable lier to corne to
a standstill by reversing lier englnes at full speed before sbe could coUide
■with a vessel which she could see through the fog.
£. Samb— Evidence Coksidkhkd.
Evidence eonsidered in a cause for collision between the steamshlps
Tellus and Belgian King in the Pacific Océan at night, in a dense fog,
and the Belgian King held solely in fault for violation of the navigation
rules in failing to go at a moderate speed after entering the fog, or to
stop her engines on hearing the fog signais of another vessel nearly
ahead and whose position was unknown; and also for misunderstanding
the signais of the Tellus, which was in ail respects navigated with
care and in conformity to the rules, having corne to a stop before the
collision.
1 1. Collision rules— Speed of steamers i" fog, see note to The Niagara, 28
C. C. A. 532.
See Collision, vol. 10, Cent. Dig. § 170.
870 125 FEDERAL REPORTEE.
Appeals from the District Court of the United States for the North-
ern District of California.
For opinion below, see 113 Fed. 525.
The several libels heréln set fdrth, arising out of one eveht, namely, a
collision between the Norwegîan steamship Tellus and the Brltlsh steamship
Belglan King, were Consolidated by order of the court below, and tried upon
one hearlng. Several decrees were entered by the District Court, and, by
stipulation of the respective parties, appeals from the several decrees were
presentedto this court upon one record.
It is alleged, in the amended libel of G. B. Hunter and the Wallsend Slip-
way Cîompany for salvage services rendered to the stearpship Tellus, that
they are the sole owners of the British shlp Belgian King, a vessel of about
2,170 tons reglster, and at the time mentioned of the value of about £25,000
sterling; that on the 17th day of July, 1900, the Belglan King, then being
in ballast, left the port of San Francisco, bound to the port of Seattle, in the
State of Washington; that between 10 and 11 o'clock p. m. of that day, when
about 25 miles to the southward and westward of Point Arena, on the coast
of California, and 7 miles distant from land, dense fog then prevailing, a
collision took place between said Tellus and the ship Belgian King, the former
being laden with a f ull cargo of eoal, and bound from Comox, in British
Columbia, to the port of San Francisco; that the collision occurred without
any négligence on the part of the ofBcers and crew of thé Belgian King; that
both ships sustained damage by reason of sald collision, the Tellus having
a large hole made in her port bow between her collision bulkhead and bulk-
head No. 1, through which the water in large quantities entered, and, fear-
ing that the ship would sink almost immediately, of which there was great
danger, her entire company went on board the Belgian King; that the Bel-
gian King remained by the Tellus until the followlng day; that on the morn-
ing of that day, the Tellus being still afloat, but having a great deal of water
in her, and stUl leaking, and in danger of sinking, the master of the Tellus
requested the master of the Belglan King to take the Tellus in tow for the
purpose of assisting her to the port of San Francisco as speedily as possible;
that thereupon the Belgian King made fast to the Tellus with 120 fathoms
of a 4-inch steel hawser, and towed her until she arrived at a point about
three miles distant from the entrance to the Bay of San Francisco, when the
hawser parted; that, the sea being then smooth, the master of the Tellus
did not deem It necessary for the Belgian King to again make fast to her,
and started the Tellus ahead under her own steam; that the Belgian King
accompanied her in order to render any assistance needed, and so continued
until about 8 o'clock p. m. of said 18th day of July, when the vessels arrived
at an anchorage in the said harbor, at a point six or seven miles from where
said hawser parted. It is allçged that the Tellus was and is in her damaged
condition of a value of £18,000 sterling, or thereabouts, and the value of her
cargo of, coal not less than $21,000; that the said ship was so serlously in-
jured and damaged as to rehder her liable to sink at any moment, and, to-
gether with her cargo, becoiûe a total loss before she could, by her own
unaided efforts, reach a place of saf ety, , and that it would hâve been ex-
tremely dangerous to the lives of her offlcers and crew to remain on board
of her, for the purpose of attempting to navigate her to a place of safety,
without the immédiate présence and aid of the Belgian King; that by reason
of the premises the libelants are entltled to recover against the said Tellus
and her cargo a reasona:ble salvage reward for the services alleged to hâve
been rendered.
The owners of the Belgian King also libel the steamship Tellus, her
tackle, apparel, and furniture, for the amount of damages sustained by the
Belgian King in said collision, In the sum of $14,000. It is alleged in the libel
that "at about 45 minutes past 10 o'clock on the night of said 17th day
of July, a long blast of a steamer's whistle, which afterwards proved to be
that of the steamship Tellus, was heard, apparently about three points o£C
the etarboard bow of, the ship Belglan King, whereupon the englnes of said
Belgian King were immediately put to slow, and she proceeded ahead at a
rate of about three knots an hour, which was as low a rate of speed as was
THE BELGIAN KING. 871
consistent with good steerageway, whlch speed was malntalned untll her
englnes were reversed as berelnafter mentioned. In a few minutes there-
af ter, two blasts in quick succession of the whistle of the approacbing vessei
were tieard, which were Interpreted by those on board of the Belgian King
to mean: 'I am directing my course to port.' Then tlie helm of the Belgian
King was immediately put to starboard, and two blasts of her whistle were
sounded, Indicating: 'I am directing my course to port.' In a short time
after, the approaching vessei again gave two blasts of her whistle, which
appearing to be close by, the engines of the Belgian King were stopped and
reversed full speed, and three blasts of her whistle, indicating, 'My engines
are going at full speed astem,' were sounded. Shortly after, the masthead
light of the approaching vessei was sighted about two points off the starboard
bow of the Belgian King, and then her red light came in view, and then,
in a time so short thereafter as to render It impossible for those navigating
the Belgian King to adopt any measures to avoid it, a collision took place
between the two vessels, the Belgian King coming In contact with the port
bow of the Tellus, which was then being navigated across the bow and
course of the Belgian King, in conséquence of which the Belgian King was
extensively damaged, that is to say: Eighteen plates on her bows broken,
bent or cracked; eight frames broken; breast hooks bent; stringers broken;
collision bulkhead bent, and the bulkhead frame crushed and broken; some
of the plates were cracked below the water Une so that the forward com-
partment filled with water; and doing other and extensive damage."
The Califomia & Oriental Steamship Company also libel the steamship
Tellus, her tackle, apparel, and furniture, for the amount of damages sus-
ta'ined by it, as charterer of the Belgian King, in the loss of contracts and
delay of the ship for repairs after said collision, in the sum of $18,694. The
navigation of the Belgian King is described in the same terms as those em-
ployed in the libel flled by the owners of the Belgian King.
In answer to each of thèse libels the Tellus Steamship Company admits
that the collision occurred, that the Tellus was damaged thereby, and that
it was towed by the Belgian King to San Francisco. It dénies that the Tellus
was in a sinking condition at any time, but avers that as water was coming
into the ship, and it being nighttime and foggy, they were not satisfled that
it was safe to remain on board; but that in the morning, when the true con-
dition of the ship could be ascertained, they found the ship in no danger,
and returned to her. It is denied that the Tellus was in serious danger at
any time, except in the event that she should meet with heavy weather.
It is denied that the Tellus was navigated in violation of the rules of naviga-
tion, or otherwise than with the greatest care and skill, and avers that the
offlcers of the Belgian King were solely to blâme for the collision, by reason
of the high speed which was maintained almost to the moment of collision,
and by reason of their lack of knowledge of the meaning of signais or their
correctness in Interpreting them. It is prayed that the varions libels against
the Tellus be dismissed.
At about the time of the flling of the libels against the Tellus, the Tellus
Steamship Company filed a libel against the Belgian King, her tackle, ap-
parel, and furniture, for the amount of damages sustained Ijy the Tellus by
reason of said collision, and for the loss resulting from the deprivation of the
use of the vessei while being repaired, in the total sum of $45,000. The libel
describes the movements of the Tellus on the night of the collision, as fol-
lows: "At half past 10, the fog having then settled down, the master ordered
that the engines be run at slow speed, the said vessei then making about
three knots an hour. About this time a long blast from a steam whistle was
heard about ahead of the Tellus, and at some distance away, which whistle
was immediately answered by a long blast from the Tellus. A similar long
blast was again heard and again answered, and like signais were kept up,
ail at an interval of about two minutes between blasts, and ail indicating
an approaching steamship. That as soon as the master of the Tellus dls-
covered from the said whistles that the said approaching steamship was still
ahead of the Tellus, and that she could not be far away, he ordered the helm
to port, and gave a short blast on the steam whistle to indicate to the ap-
proaching ship the fact that the Tellus was being direeted to the starboard.
872 125 FBDBBAL EBPOETBB.
That the approachîng steamer agaln gave a long blast, whleh as before was
answered, and was, after about SO seconds, followed by a short blast from
the Tellns iûdlcatlng a continued turning by her towards the starboard. That
thereupon the englues Of the Tellus were stopped, and so continued until the
approaching steamer, which afterwards proved to be the steamship Belgian
King, of about 2,000 tons; bound from San Francisco to Seattle, gave two
short blasts, and immedlately three longer blasts. Immediately the engines
of the Tellus v^ere reverâed at full speed, so that said vessel's way was
actaally stopped. In a short tlme the Ughts of the Belgian King came into
View, said vessel bearing about one and one-half points on the bôw of the
Tellus, and In about one-half of a minute the Belgian King struck the Tellus
on the port bow, cuttlng deeply into the same down to and below the water
Une, and breaking her f rames, beams, plating, and decks from the afterpart
of the collision bulkhead to the corner of No. 1 hatch, a distance of about
30 feet, and otherwise serlously Injuring her. * * * That for a long time
prior to the collision aforesald, and up to the occurrence of the same, the
master and offlcers of the said Belgian King, notwlthstandlng the fact that
a thick fog was prevailing, and that the said steamship was ail of the time
in said fog, and that it was impossible to see more than a very short distance
ahead, were proceeding at a high rate of speed, and, notwlthstandlng that
they knew from the signal blasts that were blown by the Tellus that another
vessel was In close proximity to her, and that there was risk of collision
unless due précaution should be had on her part, they failed to stop the
engines of said shlp until they could ascertaln the location of the Tellus, by
reason whereof, although the Tellus had been and was stopped, the said
Belgian King came into collision with said Tellus; ail of which acts on thé
part of the said master and crew of the Belgian King were negligently done,
and with laek Of proper care and skill in navigation."
The District Court held that the collision must be attributed to the fault
of the Belgian King in not stopping when she became aware that she was
in close proximity to the Tellus, Instead of moving ahead at a low rate of
speed. The libels against the Tellus were therefore dismissed, and a decree
entered for the Tellus Steamship Company in its cross-libel against the
Belgian King in the sum of $32,622.14. From thèse decrees appeals hâve
been taken to this court.
Milton Andros, for appellants.
Page, McCatchen & Knight, Chas. Page, E. J. McCutcheon, and
Samuel Knight, for appellees.
Before GILBERT, ROSS, and MORROW, Circuit Judges.
MORRpW, Circuit Judge, after the foregoing statement of the case,
delivered the opinion of the court.
The assignments of error relate to the various findings and conclu-
sions of the court, upon which its holding was based that the légal re-
sponsibility for the collision in which the injuries were received was
upon the Belgian King. As an appeal in admiralty causes brings both
the law and the facts before the appellate court for review, the principal
question for considération is whether either vessel was solely in fault
in causing the collision upon which the libels in controversy are based.
It is undisputed that the steamship Belgian King left the port of
San Francisco, in ballast, on the afternoon of July 17, 1900, bound
for the port of Seattle, in the state 6i Washington ; that the steam-
ship Tellus was laden with coal, and was nearing the end of her voy-
age from British Columbia to San Francisco; that a dense fog set
in about 6 o'clock in the afternoon, and continued until after the col-
lision ; that the steamships collided at some time between ro 40 and 11
p. m. of that day, at a point some 16 to 26 miles south bf Point Arena ;
THE BELGIAN KINQ. 873
that the lights on both steamers were in proper place and condition ;
that proper lookouts were on duty, and that both steamers were prop-
erly manned as to the number and degree of officers in charge ; that
the Belgian King struck the Tellus on the port bow, piercing the hold
of the Tellus to the distance of i6 feet, and cutting her down to about
lo feet below the water line ; that t?ie Belgian King was but slightly
injured, her sharp stem not being damaged at ail.
The main controversy turns upon the speed of the two vessels just
prior to the collision, the interprétation of signais given by the re-
spective steamers, and the maneuvers of the steamers upon those sig-
nais. The captain of the Tellus was on the bridgé at and for some time
before the occurrence of the collision. He testifies that at about half
past 10 of that evening the fog became very thick, and he slowed his
engines down to "slow speed," or about three knots an hour ; that he
had been sounding his regular fog whistle, a long blast every two min-
utes, ail the evening; that at 10:32 p. m. he heard a long whistle right
ahead, a good way off ; that he answered it with a long whistle ; that
he heard three long whistles from the other ship at intervais of two
minutes, and, being then sure of the bearing, he ported the helm 45
degrees, with the object of turning his vessel to starboard, at the same
time giving the direction signal that he was going to starboard, con-
sisting of the regular fog whistle of one long blast followed in 30 sec-
onds by a short whistle ; that he received one long whistle from tHe
other ship after that, about half a point on the port bow ; that he heard
nothing for three-quarters of a minute after that, so stopped his en-
gine and repeated the signal of one long blast with a short one 30
seconds thereafter ; that he counted the seconds between the blasts ;
that he then heard two short whistles from the other ship, followed
almost immediately by three short ones, which he understood to mean
Ihat the other ship was starboarding its helm and reversing its engine ;
that at this time the Tellus had been drifting under a stopped engine
for about fîve minutes ; that as soon as he heard the two short blasts
from the other ship he reversed the engines ofthe Tellus, and in about
two minutes sighted the masthead light of the other ship, about two
points ofif the port bow; that the green light came in view immedi-
ately after, and the collision took place about one minute afterwards.
He testifies that the Tellus was "about dead" when the two ships met,
but that the other ship must hâve had a good motion on. This testi-
mony was corroborated by Olsen, the lookout on duty on the Tellus
at the time, and by Berger, the second mate, who was on the bridge
with the captain, and attended to the whistle. The testimony of the
engineer on duty at the time corresponds with that of the captain, as
to receiving orders for the slowing and stopping of the engines, and
soon after reversing them.
The captain of the Belgian King was also on the bridge of his vessel
at the time of the collision, and for some hours before. He testifies
that at about 6:45 p. m., and again at 7:45 p. m., they had heard the
whistles of another vessel, and in each instance had stopped the en-
gines until the Sound of the whistles was definitelylocated,when he put
thevessel at half speed again ; that he kept the vessel at half speed until
10:45 P- i^'î that "half spèed" was 8}4 knots, in ballast; that at 10:45
S74 125 FElDEtBAIi RŒFOBTBB.
p. m. hè hfeaïd another.steâMefi's whistle off tlie starboârd bow about
three points;' that he then put the engines to "slow," and continued
soundiôg 8he régulation fog whistle every two minutes ; that he then
heard twb bïasts from the other vesseî, both appearing to him to be
pretty long and' of about the same tength ; that ne iniagined from thèse
whistles: that the other vessel wàs putting its helm to starboârd and
directing its course to port; that he then stopped the engines of the
Belgian Ring, 'put the helm to Starboârd, and blew two whistles; that
he then heard another twO blasts from the other vessel, in the same
direction, but much nearer ; that he then reversed his engines fuU
speed, and gave thrée blasts of the whistle ; that shortly after that he
sighted thé masthead light of the other vessel about four or five hun-
dred feet away, about two points on the starboârd bow, and then saw
the red Hght; that he gave an extra ring in the engine room to in-
crease the sternway, if possible, and biew three blasts of the whistle
again ; that in about two minutes after the light was sighted the
vessel struck the Belgian King on the starboârd bow and heeled her
over to port; that the momentum of the other vessel coming against
the starboârd bow of the Belgian King lifted her bow up a certain dis-
tance, and in recovering herself the Belgian King came down upon the
Tellus, smashing into her hull. He testifies that the Belgian King had
about come to a standstill when the vessels came together; that she
backed away, and cleared the Tellus in about two minutes after strik-
ing.
The third ofïicer, Lord, who was on the bridge with the captain, tes-
tifies that he heard the long blast of the other vessel three or four
times on the starboârd bow, and then heard the régulation two short
blasts, signifying that the vessel was going to port ; tHat his own vessel
then stopped and starboarded, giving two short whistles, and after
that he heard two blasts again, very close on the starboârd bow ; that
they then put their ship fuU speed astern, giving three blasts of the
whistle ; that about two minlates after hearing the last two short blasts
he saw the masthead light, and a few seconds later the port light.
The lookout on the Belgian King was a Chinaman, who testifies that
he went on duty at 10:30 p. m., and five, six, or seven minutes after
that he heard a whistle on the starboârd side of his vessel; that he
, heard nothing else for five or six minutes, when he heard two short
whistles, and at the same time saw the masthead light of the vessel;
that when he heard the first whistle hè reported it to the ofïicers, and
they then blew the whistle' of the Belgian King three times ; that when
they saw the lights they blew the whistle again three times, and three
more right after that.
The quartemtaster on duty at the time was also a Chinaman. Soon
after 10 :30 p. m. he heard one long whistle, which was answered by
the Belgian -King. He heard nothing more for five or six minutes,
when at the same time, practically, he saw the Hghts of the other ves-
sel, heard two short whistles, heard the Belgian King give three short
whistles, and received-Orders from the captain to put the helm hard
astarboard ; that the course of the Belgian King was not changed until
the lights of the other ship were seen, and only a minute or two then
elapsed beforç the collision.
THE BELGIAN KINO. 875
The chief engineer of the Belgian King testifies that the engines
were at half speed at 9:15 p. m., slow at 10:45, stopped and full astern
at 10:50, and the ship stopped entirely at 10:55, according to the log
slate kept by him ; that the engine was going astern for two minutes
before the colHsion, and continued going astern for three minutes
thereafter.
Article 16 of the act of August 19, 1890, as amended May 28, 1894
[U. S. Comp. St. 1901, p. 28fô (see 28 Stat. 1250)], prescribing régu-
lations for preventing colHsions at sea, provides as foUows :
"Every vessel shall, in a fog, mist, falling snow, or heavy raln storm, go
at a modéra te speed, having careful regard to the exlsting circumstances and
conditions.
"A steam vessel hearing, apparently forward of her beam, the fog-signal
of a vessel the position of which is not ascertained, shall, so far as the cir-
cumstances of the case admit, stop her engines, and then navigate with cau-
tion until danger of collision is over.
"Steering and Sailing Rules.
"Risk of collision can, when circumstances permit, be ascertained by care-
fully watching the compass-bearing of an approaching vessel. If the bearing
does not appreclably change, such risk should be deemed to exist."
"Article 18. When two steam vessels are meeting end on, or nearly end on,
so as to involve risk of collision, each shall alter her course to starboard, so
that each may pass on the port side of the other."
Did the vessels act in accordance with thèse régulations? There is
évidence tending to show that the Belgian King had been going at a
greater rate of speed than "half speed" prior to the hearing of the fog
whistle of the Tellus at 10:45 P- "i- ^^^ accepting the testimony of
the captain of the Belgian King that his vessel was proceeding on her
course at half speed, or at the rate of 8j^ knots per hour; that be-
tween 10:25 and 10:30 p. m. the fog had become dense and "had shut
in thick" ; and accepting the testimony of the captain of the Tellus
that at half past 10 o'clock his vessel also encountered the fog, and
that the engines of his vessel were brought down to "slow speed," or
three knots per hour, which speed, the captain testified, was the lowest
at which steerageway of the ship could be maintained ; and that seven
or eight minutes later, according to the engineer of the Tellus, the
engine was brought to a stop — we hâve this situation : From the time
the dense fog set in at 10 :30 p. m. until the Belgian King was made
aware of the approach of the Tellus, at about 10 :45 p. m., the Belgian
King was going at 8^2 knots per hour, and the Tellus at 3 knots per
hour, the slowest rate consistent with the maintenance of steerageway ;
that this speed was maintained for 7 or 8 minutes, when the engine was
stopped. It is évident from this statement of the testimony that the
Belgian King was not during this time going at a moderate rate of
speed, having careful regard for the existing circumstances and con-
ditions. This is determined partly by the inference to be drawn from
the fact that the Tellus under the same conditions reduced her speed
to 3 knots per hour, and after 7 or 8 minutes stopped her engine, while
the Belgian King maintained a speed of 83^ knots per hour ; but it is
also determined by the fact that, while the Tellus was being navigated
at the moderate rate of speed required by law, the speed of the Belgian
King was maintained at such a rate that she could not and did not
876 125 FBDBBAIi BBPOaTBB.
Stop in tîtrfô to avoid a collision after the Tellus came in sîght. The
rule is that avessel in a dense fog is boundto observe unusual caution,
and to maintain only such a rate of speed as would enable her to come
to a standstill by reversing her engines at full speed before she could
collide with a vessel which she coùld see through the fog. The Colo-
rado V. The H. P. Bridge, 91 U. S. 692, 702, 23 L. Ed. 379 ; The Na-
coochee v. Moseley, 137 U. S. 330, 339, 11 Sup. Ct. 122, 34 L. Ed. 687.
That the Tellus observed this'tûle, and that the Belgian King did not,
is estabhshed bythe testimonyas to the rate of speed each vessel main-
tained prior to the collision, and the fact that at the time of the coUi-
sion the Tellus had stopped and the Belgian King had not; also,
by the char,acter of the wound inflicted upon the Tellus. This was
the finding of the court below, and is supported by the évidence,
not only did the ofHcers and crew of the Tellus testify that the engines
of the Tellus had been stopped for some time, but the testimony of
other parties, entirely disinterested, supports this presumption. Capt.
C. M. Goodall, of large expérience in the steamship business, examined
the Tellus as soon as she vi^as discharged at San Francisco, as a matter
of gênerai intefest, and states positively that in his opinion the Tellus
must hâve been still when the collision occurred, from the nature of
the injury received. Capt. Thayer, inspector of the Bureau Veritas,
inspected the Tellus as soon as she was discharged, and reaches the
same conclusion. Capt. Turnër, marine surveyor for the Fireman's
Fund Insurance Company and for the Bureau Veritas, examined the
Tellus with a view to estimating the repairs necessary to put her again
iti her class, and testifîes that ii) his judgment she was lying still, or
nearly so, when collided with by another vessel. Capt. Metcalfe, sur-
veyor to Llôy<ï's Register of British and Foreign Shipping, surveyed
the Tellus and reported upon her condition as to necessary repairs, and
afterwards aitténded while the rëpâirs \Vere being made, and says, "The
indications, I think, pretty concliisively point to the fact that the Tellus
had no headwày on her at the time," also stating that the other vessel
must hâve had Some motion. W|ë are of the opinion that had the Bel-
gian King \Vhen she encounterea th'e dense fog, reduced her speed as
did the Tellus, the collision would not hâve occurred.
" The next inquiry relates to the iriterpretation ôf signais given by
the respective steamers, and the màheuvers of the vessels upon those
signais. When the whistle oî the Belgian King was first heard,
the position was sufRciently âscertâinable by the Tellus to permit her
to continue On her course at slow speed, and give the direction sig-
nal that shè was going to starboard. Not receiving a proper re-
sponse to that signal, the engines were stopped and the signal re-
peated, the'ship drifting for some minutes before the collision. The
Belgian King .was going at half speed until the fog whistle of the
Tellus was heard. Her engines were then put to "slow." Two
bîasts wère heard from the Tellus, which the captain of the Belgian
King understood tO be of the, same length, signifying that the Tellus
was directing its course to port. The engines were then stopped,
and the signal answered. Hearing twô more blasts of the whistle
much neaTer;'the engines werè feversed, but it was too late, as in
about twô' minutes the vessels 'came together. The régulations pre-
THE BELGIAN KINQ, 877
scribe one long blast, of from four to six seconds' duration, sounded
at intervais of two minutes during a fog, and the signal that a vessel
is directing her course to starboard is one short blast of about one
second's duration. The Tellus claims to bave given one long blast,
followed at an interval of 30 seconds by a short blast. The captain
of the Belgian King claims to hâve heard two rather long blasts of
about the same length. It is our opinion that the captain of the
Belgian King misunderstood the signais of the Tellus. He states
that he understood the signais to mean that the vessel was direct-
ing its course to port. Had the blasts been long, as he stated, such
an interprétation would hâve been incorrect. Two long blasts indi-^
cate a steam vessel under way, but stopped, while the direction of a
vessel's course to port is signaled by two short blasts. When this
fact was called to his attention by counsel upon cross-examination,
the captain stated that such was not his understanding of the régu-
lations, and in other particulars showed that he was not familiar with
the distinctions made in the régulations between the différent sig-
nais. Had the course of the Belgian King been dtrected to star-
board, in response to the signal of the Tellus. no collision would hâve
occurred between them.
It is charged against the Tellus that she changed her course after
the fog signais of the Belgian King indicated that the two vessels
were drawing together, and that she notified the Belgian King of
this change of course by sound signais. This charge appears to be
based upon the theory that the two vessels were on parallel courses,
or nearly so, and that, without any change of course on the part of
the Tellus, and signais to that effect, the two vessels would hâve
passed each other starboard to starboard. But this view of the situ-
ation is not supported by the évidence. The course of the two ves-
sels, when each became aware of the présence of the other, was not
parallel, 'but crossing. The course of the Belgian King was N. W.
y^ w. magnetic, and the course of the Tellus was S. E. J^ E. mag-
netic. Thèse courses were similar to the courses of the Umbria and
the Iberia in The Umbria, 166 U. S. 404, 17 Sup. Ct. 610, 41 L. Ed.
1053. In that case the captain of the Iberia heard the whistle of
the Umbria two points on the port bow, and apparently a long dis-
tance away. He ported his helm and directed his course to Star-
board, signaling the Umbria to that efïect. This course was in fact
across the path of the Umbria, but the captain of the Iberia appears
to hâve determined that by porting his helm he could crosS the path
of the Umbria before the latter vessel could reach the point of inter-
section, assuming, of course, that the Umbria was going at a moder-
ate rate of speed. In the présent case the captain of the Tellus
heard the whistle of a steamer right ahead. The sound appeared
to be a long way ofï. It was a long whistle. The Tellus answered
with a long whistle. The captain of the Tellus heard three long
whistles from the Belgian King at intervais of two minutes. Then,
being sure of the bearings, he ported his helm and went to star-
board, giving one short blast to notify the Belgian King that the, Tel-
lus was going to starboard. The Belgian King, he says, was "right
ahead." It was certainly not a fault on the part of the Tellus to turn
878 125 FHDœBAIi EEPOETEB.
away from an approaching véssel right ahead, and in goîhg to star-
board he todk the course required of approaching vessels in sight
of each other. In the case of The Umbria, the Suprême Court,
commenting on the action of the Iberia in changing her course under
circumstances less favorable under the apparent conditions, said :
"Under such circumstances, and In vlew of the fact that the exact position
and course of the Umbria could not be determined, we think It would hâve
been more prudent on the part of the Iberia not to hâve changed her course
until the position and course of the approaching steamer had been definitely
ascertained, altbough we should be reluctant to hold that such change of
course waS à fàult on her part whlch should condemn her In a moiety of
damages. There are undoubtedly authoritles and somë expressions of this
court to the effect that a change of the helm, In ignorance of the exact posi-
tion and course of an approaching vessel, is a f ault, although we hâve never
held that It would be a fault in every case presentlng thèse conditions." (Olt-
Ing cases.)
The majority of the court were of opinion that the Iberia was not
in fault, while the other iiiembers of the court rested their conclu-
sion upon the view that, even if she were at fault, such fault did not
contribute to the collision. The court held that the Umbria was
alone at fault.
Applying the rule of that case to the présent one, we hâve no dififî-
culty in reaching the conclusion that the Tellus was not at fault. The
responsibiUty for the collision, and the damage resulting therefrom,
must therefore be laid upon the Belgian King.
The decree of the District Court is aflfirmed.
CRISSEY V. MOERILL et al.
(Circuit CJourt of Appeals, Elghth Circuit. November 2, 1903.)
No. 1,725.
1. COBPOKATIONS— LiABILITT OF STOCKHOI.DKBB UNDBB KANSAS StATUTE— LIMI-
TATION.
Under the provisions ôf Gen. St. Kan. 1889, § 1192, relating to the
llablllty of stockholders as construed by the Suprême Court of the state,
a right of action in favor of a corporate créditer against a stockholder
accrues one year after the corporation ceases to transact any business
except for the purpose of liquidation, and an action against the stock-
holder is barred In three years from that tlme whether the debt as
against the corporation la matured or not, and in whatever form of pro-
ceedlng the créditer undertakes to enforce the llablllty; but the rule
applies only to an IndebtediieBS of the corporation whlch is absolute, and
where It is merely a guarantor on an unmatured obligation of another
limitation does not begln to run In favor of a stockholder until the
llablllty of the corporation bas become fixed by the default of the prin-
cipal debtor.
i, Samb— Pbocbkdiho against Stockholder.
The fact that a number of demands held by a creditor against a
Kansas corporation weré liierged In a single judgment before proceed-
f 1. Stockholders' llablllty to credltors In equlty, see notes to Rlckerson
RoUer MlU Co. t. Machine Co., 23 0. 0. A. 815; Scott v. Latlmer, 33 C. 0. A.
23.
CEISSET V. MOKRILL. 879
Ings were Instîtuted against a stockholder thereon does not preclude the
creditor from showlng that the Uability of the corporation on one of the
original demands was contingent only, and the date when It became
fixed, to meet the défense of limitation pleaded by the stockholder.
3. Limitation of Actions— Riqht of Défendant to Invoke — Burdbn of
Pboof.
When the défense of limitation Is properly pleaded, the burden rests
on the plaintifC to prove, If such is the fact, that by reason of coneeal-
ment or absence from the state défendant is not entitled to the beneflt
of such défense.
•4. Same— Peocebding against Stockholder— Kansas Statutk.
A proceeding against a stockholder by motion for exécution against
him after recovery of a judgment against the corporation, and return
of exécution nulla bona, as provided for by the Kansas statute, Is a civil
action, within the fair meaning of the statute of limitations, and the
défense oî limitation may be invoked therein.
6. Corporations— Procbedin» against Stockholder— Equitable Défenses.
In a proceeding against a stockholder in a fédéral court, by motion for
exécution against him after the recovery of a judgment at law against
the corporation and return of exécution nulla bona, as provided for by
the Kansas statute, the stockholder cannot Interpose as a set-off a claim
against the corporation, which does not constitute a légal défense as
against the plaintiff, and can only be avàiled of by a suit in equity.
In Error to the Circuit Court of the United States for the Dis-
trict of Kansas.
This is a proceeding which was begun by E. B. Crissey, the plaintiff in
error, against E. N. Morrill and Alexander Caldwell, the défendants in error,
who were stockholders of the Interstate Loan & Trust Company, to enforce
a liability imposed upon them as stockholders under and by virtue of the
laws of the state of Kansas, where the Trust Company was incorporated and
had Its domicile. The lower court made a spécial flnding of facts, from
which we bave extracted such facts as are deemed material to the correct
décision of the questions that we bave to détermine. The Interstate Loan
& Trust Company (hereafter termed the "Trust Company") was incorporated
under the statutes of the state of Kansas on July 22, 1885. Its business con-
sisted principally in loaning money on real estate security, taking from the
borrower bonds which the Company would transfer to purehasers guaranty-
Ing the prompt payment of the Interest thereon as it matured, and the pay-
ment of the principal of the bonds within two years from the date of their
maturity. E. N. Morrill, one of the défendants in error, became the owner
-of 20 shares of stock in the Trust Company on June 29, 1887, and remained
a stockholder at ail times thereafter, until this proceeding was begun against
him on December 16, 1898. Alexander Caldwell, the other défendant in error,
became a stockholder in the company on June 6, 1887, by the purchase of
20 shares of stock, and remained such stockholder from that time forward
until this proceeding was instituted on December 16, 1898. The Trust Com-
pany became financially em barra ssed as early as the month of July, 1887,
and on October 27, 1888, a spécial meeting of the stockholders was called
to be held on November 12, 1888. At this meeting the by-laws of the Com-
pany were amended, reducing the number of trustées from 13 to 5, any 3
of whom should constitute a quorum for the transaction of business; and
on November 14, 1888, the trustées being of the opinion that it was imprac-
tlcable to transact other business besides that of winding up its affairs,
adopted a resolution to the efCect that the Trust Company proceed to wind
up its business with the least possible delay and expense, with a view to Its
linal dissolution, and that it should not seek any new business, but pay and
adjust its debts as soon as possible, and that when such debts were paid
should make such dividends as might be practicable among its stockholders.
If 3. See Limitation of Actions, vol. 33, Cent. Dig. §§ 713, 714.
880 12S FEDERAI, EBPORTEB.
Prom that tlme forward tMe Trust Ctompany transacted no business what*
soever save such as tended tb wlnd up Its affalrs. In the year 1898 the prop-
erty and assets of the Company were, by order of court, placed in the hand»
of a recelver, for f urther administration, who appears to hâve been ap-
pointed by the Circuit Court of the United States for the District of Kansas.
Among the bonds secured by mortgage, whlch the Trust Company bad ob-
tained and negotiated with a guaranty on its part to pay the interest as it
accrued and to pay the principal of the bond within two years from maturity,
was one executed by August Sire and wife,;dated July 1, 1887, for the sum
of $2,000, due in seven years from date, with interest at the rate of 7 per
cent, per annum, represented by interest notes attached thereto. The Trust
Company also acquired and negotiated, ■with the same guaranty of payment,
another bond secured by a mortgage whlch was executed by James W. Wells
and wifé, February 1, 1887, for the sum of $700, and was due flve years after
date. It also acQulred and negotiated in the same manner another bond
executed by Shuble Y. Seeds and wife, dated February 1, 1887, for $1,450,
due flve years after date; also another bond executed by, Robert Dawson
and vrtfe, for $700, dated April 1, 1887; due five years thereafter. The
several bonds last mentloned, executed by Sire and wife, Wells and wlfe,
Seeds and wife, and Dawsoii and wife, were acquired and became the prop-
erty of E. B. Crlssey, the plaintiff In error, who brought an action thereon
in the Circuit Court of the Ùnlted States for the District of Kansas, and re-
covered a judgment against thè Trust Company, whlch had negotiated the
same, on December 31, 1897, for the sum, in the aggregate, of $6,792.20.
Execution was duly issued upon this judgment, and was returned nulla bona
on January 6, 1898. Thereafter, on December 16, 1898, Orissey, as the owner
of said judgment, filed a motion for exécution against the défendants, Morrill
and Caldwell, to enforce their liablllty as stockholders. The laws of Kansas
(Gen. St. Kan. 1889, par. 1192) contain the foUowing provision, in pursuance
of which the présent proceeding appears to hâve been inaugurated: ' "If any
exécution shall hâve been issued against the property or efCects of a cor-
poration except a rallway or a religions or charitable corporation, and there
cannot be found any property whereon to levy such exécution, then exécution
may be issued against any of the stockholders to an extent equal in amount
to the amount of stock by him or her owned, together with any amount
unpald thereon; but no exécution shall Issue against any stockholder except
upon an order of court in which the action, suit or other proceeding shall
hâve been brought or instltuted, made upon motion in open court, after
reasonable notice In writing to the person or persons sought to be charged;.
and upon such motion such court may order exécution to Issue aecordingly;
or the plaintiff in the exécution may proceed by action to charge the stock-
holders with the amount of bis judgment."
While the Trust Company was in process of liquidation its acting board
of trustées from tlme to time, subséquent to November 14, 1888, passed reso-
lutions making assessments on stockholders for an amount in addition to the
par value of their stock. In response to one of thèse attempted assessments
the défendant Morrill, on June 25, 1892, paid an assessment of 15 per cent,
upon his stock, amounting to $300, which was used by the secretary of the
Trust Company In paying the current debts of the Trust Company. In the
year 1893 the défendant Caldwell, at the solicitation of persons who then
had the afifairs of the Trust Company in charge, advanced the sum of $1,000,
whlch was used in meeting demands against the company, and to secure the
repayment of the money so advanced the offlcers in charge of the company
caused to be dellvered to said Caldwell two bonds, for the sum of $500 each,
dated June 1, 1893. At the conclusion of the trial below the motions for
exécution were denled, and a judgment was awarded against the plaintiff
below for costs. He has brought that judgment to thIs court for revIew on
writ of error.
•
L. A. Stebbins (Clinton J. Evans, on the brief), for plaintiff in error.
C. F. W. Dassier (O. H. Dean, on the brief), for défendants in«
error.
CKISSET V. MOERILL. 881
Before SANBORN, THAYER, and VAN DEVANTER, Circuit
Judges.
THAYER, Circuit Judge, after stating the case as above, deliv-
ered the opinion of the court.
The first question that is presented by the plaintif? in errer for
our considération is whether the statute of limitations had run in
favor of the défendants in error as respects so much of the unpaid
judgment for $6,792.20, in favor of the plaintifï in error, as was made
up of the bond which was executed by Sire and wife on July i, 1887,
in the sum of $2,000. The trial court seems to hâve decided this
question in the affirmative, holding that the entire judgment was
barred, but it is insisted that such décision was erroneous.
In view of the foregoing statement, it is apparent that the Sire
bond was due, on its face, seven years after July i, 1887, or on July
I, 1894. The guaranty on the part of the Trust Company was a
guaranty to pay the principal of the bond "within two years from
maturity," so that the guaranty matured July i, i8g6, and this pro-
ceeding by motion was inaugurated December 16, 1898, or within
three years thereafter. It seems to be conceded on both sides that
the period of limitation applicable to the case is three years, so that
the bar of the statute was not complète as respects the Sire bond
on December 16, 1898, unless it began to run prior to the maturity
of the guaranty.
In behalf of the défendants in error it is contended that the stat-
ute of limitations began to run in favor of the stockholders, as re-
spects ail outstanding debts of the Trust Company, whether matured
or unmatured, at the expiration of one year after November 14, 1888,
when the resolution to go into liquidation was adopted and the cor-
poration ceased to transact further business, and that such debts,
so far as stockholders are concerned, became fuUy barred at the end
of three years thereafter, to wit, on November 14, 1892. This con-
tention is based on certain décisions of the Suprême Court of Kan-
sas, notably Cottrell v. Manlove, 58 Kan. 405, 49 Pac. 519; First
National Bank of Atchison, Kansas, v. King, 60 Kan. 733, 57 Pac.
952 ; and Brigham v. Nathan, 62 Kan. 243, 62 Pac. 319. InasmucH
as thèse décisions deal with the construction of local statutes, they
are binding, as a matter of course, upon this court in so far as they
affect the question which we hâve to détermine. In the first of thèse
décisions (Cottrell v. Manlove) it was held, in substance, that the
three-year limitation period begins to run in favor of stockholders
from the date of corporate dissolution, and that where a corporate
créditer had the right, by virtue of a local statute (vide Gen. St.
Kan. 1889, par. 1204), to bring an action against stockholders be-
cause the corporation had become dissolved, leaving its debts un-
paid, and also had the right, under another local statute heretofore
quoted (vide Gen. St. Kan. 1889, par. 1192), to proceed by motion
for an exécution against stockholders after recovering a judgment
against the corporation and issuing an exécution thereon, and he
adopted the latter remedy in place of the former, that the opération
125 F.— 56
S82 125 FEDERAL REPOBTEB.
of the statute of limitatioiis i was not thereby sust>ëride<l until ' he
had procured a judgment against the corporation, but that the stat-
tite began to run from the date of corporate dissolution. In the
same case it was held, in subst^ncç, that the statute of the state per-
mitting stockholders of a corporation to be sued for corporate in-
debtedness if the corporation becomes dissolved, leaving debts un-
paid, appHes to corporate debts maturing after the dissolution as well
as to those whiçh had become due and payable at the time of the
dissolution. In the second of the above cases (First National Bank
of Atchison y, King) it was hçld, in substance, that the right of
action in favor of the creditors of a corporation, as against stock-
holders, accrues, and that the statute of limitations begins to run in
favor of stockholders, at the expiration of one year after the cor-
poration has ceased to transact business, and not after such suspen-
sion of business has been shown or determined in some judicial pro-
ceeding. In thç third case above cited (Brigham v. Nathan) it wras
held, in substance, that, within the meaning of section 1268 of the
General Statutes of Kansas for 1899, a corporation becomes dis-
solved for the purpose of enabling creditors thereof to bring actions
against stockholders, provided it has ceased for one year to transact
ail business for which it was organized, and in the meantime has
confined itself to the doing of such acts as were incidental and nec-
essary to the final closing up of its afifairs. It appeared in that case
that the corporate creditor, at the time the corporation became dis-
solved, had no matured obligation against the corporation, having
surrendered thç matured obligation, and taken a new one, which had
not become due at the date of the dissolution. It was held, however,
that, notwithstanding the immaturity of his demand against the cor-
poration, he had an immédiate right of action against the stock-
holder, and that the statute of limitations began to run in favor of
the stockholder at the expiration of one year after the company sus-
pended business, , See, algo, the cases of Sleeper v. Norris, 59 Kan.
55Si 53 Pac. 757; and Fox y, Bank, 9 Kan. App. 18, 57 Pac. 241,
which enunciate substantially the same doctrine.
It is clear, thçrefore, that under the laws of the state of Kansas,
as construed by its highest court, the fact that a debt of a corpora-
tion has not become due at the time it becomes dissolved (that is,
after the expiration of one year from the time it ceases to transact
business and goes into liquidation) does not prevent the creditor
from pursuing stockholders. It is due by force of the statute per-
mitting theni to be sued, so far as stockholders are concerned, as
soon as the corporation becomes dissolved, although not due as re-
spects the corporation, and: the statute of limitations begins to run
immediately in favor of stockholders, and becomes a bar at the end
of three years. Since thèse décisions were rendered, however, and
since this case was decided by the learned trial judge, another quesr
tion that is whoUy analogous to the one whicla arisesin the case
at bar has been decided by the Suprême Court of the state of Kan-
sas in McHale v. Moore, 71 Pac. 522, 524. In that case an action
was brought to compel a stockholder to pay a corporate debt which
consisted in part of notes that had been executed by the corporation
CEISSET V. MOKKILL. 883
itself, and in part of a note the payment of whîch the corporation
had guarantied. This latter note was executed May i, 1890, but
did not mature until May i, 1900. The corporation suspended the
transaction of business in March, 1892, and never thereafter re-
sumed business. Proceedings against the stockholder were begun
on March 21, 1901. As respects the guarantied note, the court held
that the statute of limitations had not run in favor of the stockholder.
It remarked that the corporation "had guarantied payment of the
obligation when. it became due, but whether it would become a debt
against the [corporation] could not be known until the time of pay-
ment had arrived, and either payment or default had been made by
the [maker of the note]. Until that time the holder of the ob-
ligation was not a créditer of the [corporation], but was a créd-
iter of the [maker of the note]. The statute did not contemplate
that stockholders should be required to respond for anything short
of a debt of the corporation, and certainly until the relation of debtor
and creditor arose between the claimant and the corporation no
right of action accrued against the stockholder." It foUows, as a
matter of course, that the same may be said of the Sire bond which
figures in the case at bar. The holder of that bond did not become a
creditor of the Trust Company until the guaranty matured, on July
I, 1896. It was not a debt of the corporation until that time, and
the statutory bar was not complète on December 16, 1898, when
this action against the stockholder was inaugurated.
Counsel for the défendants in error suggest that because the plain-
tif? in error saw fit to recover a judgment against the Trust Com»-
pany on the Sire bond, and the other bonds heretofore mentioned,
there can be no inquiry, in this proceeding by motion against the
stockholder, into the origin of any part of the indebtedness upon
which the judgment is founded, for the purpose of showing that
this proceeding against the stockholder is not barred by Hmitatinn.
With respect to this contention we observe that it may be conced'ed
that the corporation cannot go behind the judgment for the pur-
pose of establishing a défense which it did not make when the judg^-
ment was recovered, but we perceive no substantial reason why the
judgment creditor in this collatéral proceeding against the stock-
holder should not be permitted to show that a part of the indebted-
ness, now merged in the judgment, became a corporate debt at such
a late day that the statute of limitations cannot be invoked by the
stockholder in a proceeding against him, especially when the stock-
holder seeks to avail himself of the statute of limitations as a dé-
fense. The question whether the demands now merged in the judg-
ment against the corporation were recoverable from stockholders
was not one of the issues which was tried in the action brought
against the Trust Company, nor could such an issue hâve been tried
in that case; nor do we perceive that évidence tending to show the
précise dates when the respective demands became debts of the cor-
poration has any tendency to impeach the judgment. We are of
opinion, therefore, that the suggestion of counsel to the efïect last
stated is without merit, and that the trial court properly found when
the respective demands did become debts of the corporation for
884 125 FKDBBAL BQPOIlTEa.
the purpose of making a proper application of the statute of limita-
tions, Ward V. Joslin, i86 U. S. 142, 152, 22 Sup. Ct. 807, 46 L).
Ed. 1093.
We entertain no doubt that the lower court correctly held, as re-
spects the other demands which entered into and formed a part of
the judgment for $6,792.20, that they were barred by Hmitation.
Thèse other bonds, which were executed by Seeds and wife, Wells
and wife, and Dawson and wife, matured against the makers in the
early part of the year 1892. The guaranty thereon matured in the
early part of the year 1894, and they became corporate debts at that
time. The statute of limitations accordingly began to run as soon
as they became corporate debts, and the bar of the statute became
complète in favor of the stockholders in the early part of the year
1897, long before this proceeding was inaugurated, inasmuch as
the Trust Company, under the facts as found by the trial court and
under the Kansas décisions, became dissolved as early as November
14, 1889, by virtue of its having ceased to transact any business for
a year previous thereto. The décisions heretofore cited leave no
room for doubt that thèse debts were efïectually barred as against
stockholders of the Trust Company before this proceeding was
commenced, and the lower court was right in so holding.
The point appears to hâve been made on the trial below, but it bas
not been pressed by the défendants in error on appeal, that the prin-
cipal debt, in conséquence of the nonpayraent of the interest thereon,
became due long prior to July i, 1894, and that the guaranty there-
on matured long prior to July l, 1896, because the Siré bond con-
tained a provision, in substance, that, if default was made in the pay-
ment of any interest thereon for the space of 10 days after the same
became due and payable, then the principal of the bond, "at the option
of the payée," should at' once become due and payable without fur-
ther notice. This contention, in oUr opinion, is untenable for the
reason that the fîndingof facts does not show that the owner and
holder of the Sire bond exercised his option to déclare the principal
due before July i, 1894, thê day specified in the bond. Moreover,
this court has recently held in Keene Five Cent Sàvings Bank v.
Reid et aL (G. C. A.) 123 Fed. 221, that when a note or bond con-
tains a provision that the' principal thereof shall become due and
payable if the interest thereon is not paid when due, such a provision
is not self-op'érâtive, but is intended for the benefît of the payée, and
that he mUSt take some affirmative action to mature the' obligation
in advance of the period-'df maturity specifîed oh the face of the
obligation. ■ No sUcli affirriiativè action on the part of the payée of
the Sire bond is shown in the pl'esent case, and it does not appear,
therefore, that the bond became due' prior to July i, 1894.
Learned côunsel for thê plaintifï in error make the following addi-
tion al contentions in opposition to thè judgment: First, that the
défendants below failed to prove that they were résidents of Kansas
during the statutory period df limitation, so as to be entitled to the
benefit of the statute ; second, that this proceeding is a motion for
exécution 'âgaîhst a stôckholder, and that in such a proceeding the
plea df limitation is not available; and; thitd, that the set-oflfs which
CRI8SEY V, MORBILL. 885
the spécial finding of façts tends to establish in favor of Morrill and
Caldwell are not available in this proceeding.
Concerning the first of thèse contentions, it is sufficient to say
that when the défendants invoked the statutory bar of three years
as a défense it was the duty of the plaintiff below, if the bar was
not appHcable because they liad concealed themselves or been absent
from the state, to establish that fact by compétent évidence. When
it appears on the trial of a case, where the statute of limitations
is pleaded, that the indebtedness became due beyond the statutory
period, the courts do not présume, in favor of the plaintiff who seems
to hâve been négligent, that the défendant has concealed himself
to avoid the service of process or has been absent from the state,
but require the plaintiff to make such proof. If the défendant proves
a state of facts which brings him within the opération of a gênerai
rule, he need not prove further that his case does not fall within an
exception that would deprive him of the benefît of the rule, but may
call upon the plaintiff to prove affiimiatively that his case is within
the exception and that the gênerai rule is not applicable. This is
the gênerai doctrine (State of Missouri, to the use of Ladd, v. Clark
et al., 42 Mo. 519, 523; McMillan v. Cheeney, 30 Minn. 519, 521,
16 N. W. 404) ; and it seems to be a doctrine which is fully recog-
nized by the Suprême Court of Kansas (Young v. Whittenhall, 15
Kan. 579, 581). In that case the court observed "it has always
been the duty of the plaintiff, both in courts of law and in courts of
equity, to plead the exceptions where the question of the statute of
limitations has been properly raised by the défendant. And it never
was the duty of the défendant, in such a case, to négative the excep-
tions. Zane v. Zane, 5 Kan. 137."
With référence to the second contention mentioned above, we
observe that it is a highly technical view that because the statute
of Kansas provides that "civil actions can only be commenced with-
in the period prescribed in this article after the cause of action shall
hâve accrued" therefore this proceeding, which the statute above
quoted denominates a "motion," is not an action in which the party
proceeded against can avail himself of the statute of limitations. It
is obvions that if he cannot plead the statute in défense to such a mo-
tion he is deprived of the benefît of the statute altogether, since
when an action is brought against a corporation to reduce a demand
to judgment no stockholder is entitled to intervene and défend on
the ground that the demand cannot be enforced as against stock-
holders if a judgment is recovered. Such a défense would not be
tolerated, and for that reason when a judgment is recovered against
the corporation, and an exécution has îjeen returned unsatisfied.
the stockholder, according to the plaintiff 's theory, would be left
powerless to invoke the statute. We are of opinion that the point
urged is not tenable ; that a proceeding by motion against a stock-
holder after the recovery of a judgment against the corporation is,
within the fair purview of the statute, a "civil action," although it
is otherwise termed a motion. The proceeding possesses ail of the
characteristics of a civil action. The stockholder is given reason-
125 FEIDBBAL BBPÔBTBB.
able notice to appear and défend, and dïsprove, if he can, tHe facts
stated in the motion, and the trial proceeds as in ordinary cases.
The third contention, that the défendants below are not entitled
to interpose set-offs in this proceeding, is entitled to more weight.
It seems to be the practice in Kansas to permit stockholders to avail
themselves of any set-offs which they happen to hâve as a défense
to motions of the présent character (Pierce v. Topeka Commercial
Security Goi, 60 Kan. 164, 55 Pac. 853; Van Pelt v. Strickland, 60
Kan. 584, 57 Pac. 498; Abbey v. Long, 44 Kan. 688, 24 Pac. iiii ;
Campbell V. Reese, 8 Kan. App. 518, 56 Pac. 543); but when this
right ofset-ofï is asserted in the fédéral courts other considérations
présent themselves. The dèmands which the défendants below re-
spectively seek to oflfset are not demands against the plaintiff on ac-
count of: which he cpuld be sued in an action at law, but they are
claims against the judgment debtor, to wit, the Trust Company, for
which reason they cannot truly be said to be légal défenses to the
plaintifF's cause of action, but are rather demands against the Trust
Company, which the défendants are equitably entitled to hâve de-
ducted froni the amount of their ascertained stockholders' liability.
Being themselves creditors of the corporation, they are equitably en-
titled to be first paid before they are called upon to discharge the
claims of other creditors that are founded upon no higher equity.
It is a well-settled doctrine in the fédéral courts that défenses
which are essentially of an équitable character cannot be interposed
by the défendant in an action at law. In the fédéral courts the prac-
tice in equity is regulated by rules of procédure such as may be for-
mulated froro time to tin^e by the Suprême Court of the United
States, and such rules of procédure are not subject to modification
by the législatures of the several states nor by the action of state
courts. Missouri, Kansas & Texas Tr. Co, v. Krumseig, TJ Fed. 32,
23 a C. A. I, 9; Bennett v. Butterworth, 11 How. 669, 674, 13 L. Ed.
859; Thompson V. Railroad Company, 6 Wall. 134, 137, 18 L. Ed. 765 ;
Scott V. Neely, 140 U. S. 106, 11 Sup. Ct. 712, 35 L. Ed. 358.
We are of opinion, therefore, that the set-offs in favor of the de-
fendants below, which the finding of the lower court tends to estab-
lish, and, as we think, does establish, were not admissible as a dé-
fense in favor of the respective défendants, the same being set-ofïs
of an équitable character, and this being an action at law. To avail
themselves of thèse set-offs> the défendants must seek the aîd of a
court of equity. A court of equity undoubtedly possesses adéquate
power to render them effective by ascertaining the amount of the
respective set-oflfs, and decreeing that they be deducted from the lia-
bility of the respective stockholders, and that the plaintiflf in this pro-
ceeding only recover such balance, if any, as may remain after the
set-ofïs are discharged.
The judgment below is accordingly reversed, and the case is re-
manded to the Circuit Court, with instructions to ascertain the
amount which the plaintiff is entitled to recover from the respective
défendants on account of his ownership of the Sire bond in the simi
of $2,000, and to enter judgment in the plaintiff's favor against the
respective défendants for such amounts when duly ascertained. The
NATIONAL STJEETT CO. V. LONG. 887
défendants will hâve leave to apply to the Circuit Court by a bill în
equity to hâve the amount of their respective set-offs adjudicated and
deducted from the amount of their liability as stockholders, provided
the amount thereof cannot be fixed by agreement of the parties.
NATIONAL SUBETY CO. v. LONG.
(Circuit Court of Appeals, Eighth Circuit. November 23, 1903.)
No. 1,883.
1. CoNTRACT— Action for Brbach— Care or Neoliqbnoe op Obmgoh.
The care or négligence with which an obligor, who failed, sought to
perform liis contract, is no défense to an action for its breacti. The
only test of the right to recover is the existence of the breach of the
covenant upon which the action is based.
8. Samb— Construction.
Under an agreement that a contracter shall complète a building by
the Ist day of September, 1901, and that in case of a failure to finish it
by September 15, 1901, he shall pay damages at the rate of $5 for each
day after that date until the building is finished, the time for the com-
pletion of the structure Is September 1, 1901.
8. Same — Immédiate Notification.
"Immediately" means before the happening of other events — forthwith.
A covenant to notify a surety of the default of his principal immediately
is not perf ormed by mailing a notice 11 days after the known default.
4. Samk— Warranties anp Conditions Précèdent— Effect of Breach.
The Immateriality of a warranty or of a condition précèdent made by
the agreement of the parties, and the innocuousness of a failure to per-
form it, do not nuUlfy or mitigate the fatal effect of such a failure pre-
scribed by their agreement.
5. Principal and Surety— Release op Sdrett.
A surety Is discharged if a condition known to the obligée, upon which
the surety agreed to be bound, is not complied wlth.
6. Contract— Party in Default Cannot Recover.
He who commlts the first substantial breach of a contract cannot main-
tain an action against the other contracting party for a subséquent
failure on his part to perform it
(Syllabus by the Court.)
In Error to the Circuit Court of the United States for the Eastern
District of Arkansas.
On May 23, 1901, Thomas Lee Humphreys made a written contract with E.
A. Long, the plaintiiï below, to eonstruct and complète a brick building for
him by September 1, 1901, for the sum of $6,600. On May 28, 1901, Hum-
phreys, as principal, and the National Surety Company, a corporation, the
défendant below, as surety, executed and delivered to Long a bond whereby
they covenanted that Humphreys should perform his contract, and save the
obligée and the property from liens and loss, on the condition that the liability
of the surety should be limited by, and be subject to, the conditions précèdent
written into the bond. The principal failed to complète and abandoned the
building on September 9, 1901, and on the same day he left for parts un-
known. The plaintiff notified the surety company of this fact on September
12, 1901, and demanded that It should finish the building, and pay the dam-
ages which he had sustained by the default of the contractor. The surety
company declined to do this. Thereupon the plaintiff finished the building
at a cost of $8,037.44 more than the contract price. He then sued the surety
company for Its alleged breach of the condition of the bond, and recovered a
i588 125 FEDERAL REPOETEB.
verdict and -judgruent agalnst It In the! court below for $3,126. The writ of
error In this case has been sued out to reverse this judgment.
Robert A. Holland (J. E. McKeighan and M. F. Watts, on the
brief), for plaintiff in error.
E. A, McCulloch (S. H. Mann, on the brief), for défendant in
error.
Eefore SANBORN and VAN DEVANTER, Circuit Judges, and
HOOK, District Judge.
SANBORN, Circuit Judge, after stating the case as above, deliv-
ered the opinion of the court.
One of the défenses of the surety company, and the only one that
it will be necessary to notice in this court, was that the plaintiff be-
low failed to comply with the third and fourth paragraphs of the
bond, which by its terms constituted conditions précèdent to the
liability of the défendant. In so far as thèse paragraphs are mate-
rial in this case, they read in this way :
"If, at any time, the above-named principal shall, In any manner, fail,
neglect or refuse to keep, do or perform, any matter or thlng at the time and
in the manner in said contract set forth and specified to be by sald principal
kept, done or performed, the obligée shall Immedlately so notlfy the company
in writing, by registered letter, prepaid, addressed to the company, at its
principal ofiBces in the Oity of New York,"
"If, at any time, it appears that the above-named principal has abandoned
the work, or will not be able, or does not intend, to carry out or perform the
contract, the obligée shall immediately so notify the company in writing. by
registered letter, prepaid, addressed to the Company, at its principal offices
in the City of New York, and the company shall hâve the rlght at its option,
to assume snch contract and to sublet or complète the same, and, if it
80 elect, ail moneys due, or to become due thereafter, under said contract,
including percentages agreed to be withheld unHl completion, shall, as the
same shall become due and payable under the terms of sald contract, be pald
to the company, regardless of any asslgnment or transfer thereof by the
principal."
The contract contained this stipulation:
"The sald party of the second part agrées to complète sald building by the
flrst day of September, 1901, and the said party of the second part further
agrées that in case he fails to complète sald building by the flfteenth day of
September, 1901, shall pay -^o the sald party of the flrst part, as llquldated
damages, the sum of flve dollars for each and every day or part of a day that
sald building remains incompleted after the sald time, that sum being the
actual loss occurrlng to the said party of the flrst part by said delay."
The uncontradicted évidence was that on September i, 1901, the
plaintiff knew that the contracter, Humphreys, would not be able
to, and that he had already failed to, perform his contract in the
time and manner specified therein. He knew that the building then
lacked roof, doors, Windows, plastering, and floors. Nevertheless
he never notified the surety company of any of thèse facts until Sep-
tember 12, 1901, three days after Humphreys had abandoned his con-
tract and absconded.
In one of the paragraphs of the bond, which précèdes the condi-
tions that hâve been quoted, this stipulation is found :
"This bond Is executed by the company as surety on condition that Its lla-
biBty shall be limited by, and subject to, the conditions and provisions hère-
NATIONAL SUEEir CO. V. LONG. 889
inafter contaîned, whlch shall be conditions précèdent to the rlght of the
obligée to recover liereunder, anything In oaid contract to the contrary not-
witbstandlng."
Moreover, the eleventh paragraph of the bond reads :
"The failure, neglect or refusai of the obligée to keep, strictly observe, and
f ully perform, any matter or thing in this bond or in said contract stipulated
and agreed to be done, Isept or performed by the obligée, at the time and in
the manner specifled, shall relieve the company from ail liability under this
bond."
In this State of the case, the circuit court refused to instruct the
jury to return a verdict for the défendant, and charged them that the
time iixed by the contract for the completion of the building was
September 15, 1901 ; that, if the plaintifï gave the notice of the ina-
bility or failure of the contractor to perform his contract to the
surety company in such time as a man of ordinary prudence would
hâve given it under similar circumstances, they might return a ver-
dict in his favor, but that, if he w^as guilty of négligence in this mat-
ter, their verdict should be for the défendant. The surety company
excepted to thèse rulings, and it has assigned them as error.
The care or négligence with which an obliger, who fails, seeks to
perform his contract, is no défense to an action for damages for his
failure. The only test of the right to recover in such an action is
the existence of the breach of the covenant. It is no answer to an
action for a failure to pay a promissory note that the maker, al-
though he paid no part of it, exercised ail the care to pay it that a
person of ordinary prudence in similar circumstances would hâve
used. It is no défense to an action for the breach of a contract that,
although the obligor failed to perform it, yet he exercised ordinary
care to do so. The very purpose of a promise or of a covenant is
to relieve the obligée of ail inquiry relative to the care or négligence
with which the obligor acts in its fulfîllment, and to impose upon the
latter the absolute obligation to perform it. Nothing less than fuU
performance satisfies the undertaking. The obligation of a promise
or of a covenant to pay a debt or to do an act is not to use ordinary
care to comply with the terms of the agreement, but it is to perform
it ; and, in an action for its breach, it is not material what care the
obligor used, or what négligence he was guilty of, in his endeavor to
fulfill it. The only question is, did he perform his contract? Guar-
antee Co. v. Mechanics', etc., Co., 183 U. S. 402, 421, 422, 22 Sup.
Ct. 124, 46 L. Ed. 253. The covenant of the plaintifï in the case
under considération was to immediately notify the surety company
of any failure or inability of the contractor to construct and complète
the building at the time and in the manner speciiied in the contract,
and the question was not whether or not, although he failed to give
the notice, he had exercised ordinary care to do so, but whether or
not he had actually given the notice immediately upon the appear-
ance of the known inability and failure of the contractor to perform
his agreement. The circuit court fell into an error when it in-
structed the jury that the care or négligence of the plaintiff condi-
tioned his right to recover hère.
890 125 FEDERAL EBPGRTBB.
By the Stipulation in the contract between Humphreys and the
plaintiff whicH has been set forth above, the contractor agreed "to
complète said building by the first day of September, 1901," and that
if he failed to complète it by September 15, igoi, he would pay to
the plaintiff damages to the amount of $5 for every day from that
time until the building was finished. The former date was clearly
the time fixed for the completion of the performance of the contract,
while the latter was the stipulated day from which the time that
measured the liquidated damages which the contractor agreed to
pay in case he failed to finish the building by September I5th should
commence to run. The two subjects — the time for the completion
of the building, and the day from which the time that measured the
liquidated damages should be reckoned — were distinct and separate.
There was no rule of right or of law that required thèse times to fall
upon the same day. The parties had the undoubted right to agrée
upon what date each should fall. They exercised this right, and
agreed that the, performance of the contract should be completed on
September 1,1901, and that the time which measured the Hquidated
damages should be computed from September 15, 1901. The courts
hâve no power, by construction or otherwise, to change either of
thèse dates, and thus to make a new contract for the parties, to the
efïect that the date for the completion of the work shall be on Sep-
tember 15, 1901, or on any other date than on September i, 1901,
where the parties to this agreement placed it by their stipulation. It
was error for the court below to charge the jury that the time fixed
by the contract for the completion of the building was on September
15, 1901.
The agreed time for the completion of the building was September
I, 1901. At that time the contractor had failed and was unable to
perform his agreement in the time and manner there specified, and
the plaintiff knew it. The latter had agreed, in such a case, to imme-
diately notify the surety company of thèse facts, but he failed to do
so until September 12, 1901. This failure was a clear breach of his
covenants. "Immediately" means without the intervention of other
events ; f orthwith ; directly. A notice 1 1 days after the known failure
of a contractor to complète the performance of his agreement is not
an immédiate notice thereof , and it is not a compliance with the
covenant and condition embodied in this contract. Streeter y.
Streeter, 43 111. 155, 165.
It is said that the question whether or not this notice given 11
days after the known failiire of the contractor was an immédiate
notice was a question for the jury, and was properly submitted for
their considération. There may be cases where the question of the
sufficiency of a notice in time and manner of service should be sub-
mitted to the considération of the jury. Cases where the évidence
is contradictory — where facts and circurnstances are established
which render doubtful the question whether or not there has been
a fair compliance with thé provisions of the contract in this regard —
may authorize this course of procédure. But there is nothing of
this character in the case in hand. The act of giving the notice was
a simple one. Its performance required nothing but the mailing
NATIONAL 8URETT CO. V. LONG. 891
of a writing containing the notice, It could hâve been performed
as well on September i, igoi, as upon any later day, and its per-
formance would hâve required less than one hour of time. No facts
or circumstances are established to excuse the delay. Under thèse
circumstances, there is no question for the jury, because the évidence
conclusively shows that the plaintiff did not immediately notify the
surety company of the failure of the contracter when he first learned
that fact.
It is earnestly contended that the failure to give this notice, to
the efifect that the contracter "will not be able * * * to carry
out or perform the contract," has no référence to the time of per-
formance, and is immaterial in this action, because by another pro-
vision of the bond the surety company is exempted from hability
for any delay in the completion of the building unless this delay
was caused by the contracter witheut reasonable excuse, purposely,
and premeditatively, and there is no évidence in the record of any
such delay. There are, however, other reasons than Hability fer
delay, simply, which rendered this stipulation, and its évident appli-
cation to the time of performance of the contract for the construc-
tion of the building, important and bénéficiai to the surety company.
The bond provided that this company should hâve the right upon
receipt of this notice to immediately take possession of the building,
to complète the work, and to receive ail moneys due or te become
due under the contract of construction. It is neither impossible nor
improbable that a notice of the failure of this contracter given to the
défendant on September i, 1901, eight days before he absconded,
and its exercise of this right, or its opportunity to cenfer with the
contracter before he fled, might hâve enabled it te complète the un-
dertaking of its principal with much less expense than that which has
now been entailed by a renewal of the work after the contracter had
gone, and after the work had been necessarily interrupted. More-
over, it is not indispensable to the validity or to the enforcement of
this plain cevenant of the obligée — this condition précèdent to the
Hability ef the défendant under the bond — that the latter should
either establish its beneficence or its materiality, or that it should
show that it has sustained injury frem the failure to fulfill it. Par-
ties to agreements hâve the right and the power to contract that
things immaterial as well as things material shall be the subjects ef
their warranties, or of conditions précèdent to their respective lia-
bilities, and their contracts in the one case are as légal and bindîng
as in the other. The all-sufficient, the conclusive, answer to the sug-
gestion that the subject of the warranty or of the condition précèdent
is immaterial, and its breach witheut efïect, is that the parties had
the right to agrée and they hâve contracted otherwise. The imma-
teriality of a warranty or of a condition précèdent made by the agree-
ment of the parties, and the innecuousness of a failure to perform it,
de net nullify or mitigate the fatal efïect of the failure prescribed by
their contract. Rice v. Fidelity & Deposit Co., 103 Fed. 427, 430,
432, 43 C. C. A. 270, 273, 275 ; Indemnity Co. v. Woed, 19 C. C. A.
264, 73 Fed. 81, 84; American Crédit Indemnity Co. v. Carrollton
Furniture Mfg. Co., 36 C. C. A. 671, 95 Fed. m, 113; Jefifries v.
692 125 FEDERAL BKPOBTEB.
Insurance Co., 22 Wall. 47, 54, 22 L. Ed. 833 ; Insurance Co. v,
France, 91 U. S. 510, 512, 23 L,. Ed. 401; Anderson v. Fitzgerald,
4 H. L. Cas. 483, 487; Cazenove v. Assurance Co., 6 C. B. (N. S.)
437. 450. 4Si> 6 Jur. (N. S.) 826; Price v. Insurance Co., 17 Minn.
497 (Gil. 473)/ 10 Am. Rep. 166.
The parties to this bond agreed that the failure, neglect, or refusai
of the obligée to fully perform any matter or thing in this bond stip-
ulated to be donc, kept, or performed by him, at the time and in the
manner speçified, should relieve the company from ail liability under
it. On September i, 1901, the principal of the bond was not able
to carry out or perform the contract of construction which he had
made with the plaintifï, and he had neglected and failed to complète
the building upon that day, when, by the terms of his contract, he
had agreed to finish it, The plaintiflE had covenanted with the surety
company in the bond that in the event of such inability or failure he
would immediately notify the défendant, in writing, of that fact. He
failed to fulfill this condition précèdent to the liability of the com-
pany. That company was the surety of the contractor. If a condi-
tion of the liability of a surety known to the obligée is not complied
with, the surety is discharged. Rice v. Fidelity & Deposit Co., 103
Fed. 427, 432, 433, 43 C. C. A. 270, 276 ; 2 Brandt, Sur. § 403 ; Jones
V. Keer, 30 Ga. 93, 95 ; Cunningham v. Wrenn, 23 111. 64, 65 ; Lynch
V. Colegate, 2 Har. & J. 34, 37; HoU v. Hadley, 4 Nev. & M. 515,
520; Bonser v. Cox, 4 Beav. 379, 384; U. S. v. Hillegas, 3 Wash.
C. C. 70, 76, Fed. Cas. No. 15,366; Whitcher v. Hall, 5 Barn. & C.
269; Combe v. Woolf, 8 Bing. 156, 161.
Again, this bond contains the mutual covenants of the parties —
covenants by the surety company that Humphreys, the principal,
should construct the building, and keep it free from liens ; covenants
by the plaintiiif that, if Humphreys was unable or failed to perform
the contract in the time and manner therein speçified, he would im-
mediately notify the surety, and that the latter might then take the
contractor's place. The plaintifï failed to keep his covenant before
the surety company had in any way failed to comply with those
which it had made. On this account, he cannot enforce the fulfill-
ment of the covenant of the défendant. He who commits the first
substantial breach of a contract cannot maintain an action against
the other contracting party for a subséquent failure on his part ta
perform. Guarantee Co. v. Mechanics', etc., Co., 183 U. S. 402,
421, 22 Sup. Ct. 124, 46 L,. Ed. 253; Impérial Fire Ins. Co. v. Coos
Co., 151 U. S. 463, 467, 14 Sup. Ct. 379, 38 L. Ed. 231 ; Hubbard
V. Association, 100 Fed. 719, 40 C. C. A. 665 ; Seal v. Ins. Co., 59
Neb. 253, 80 N. W. 807; Brady v. Association, 66 Fed. 727, 9 C. C.
A. 252 ; Rice v. Fidelity & Deposit Co., 103 Fed. 427, 433, 43 C. C.
A. 270, 276; Cattle Co. v. Martindale, 63 Fed. 84, 89, 11 C. C. A.
33, 38; Norrington v. Wright, 115 U. S. 188, 204, 205, 6 Sup. Ct.
12, 29 L. Ed. 366; Filley v. Pope, 115 U. S. 213, 6 Sup. Ct. 19, 29 E.
Ed. 372; Rolling Mill v. Rhodes, 121 U. S. 255, 261, 264, 7 Sup. Ct.
882, 30 E. Ed. 920; Beck & Pauli Lith. Co. v. Colorado Milling &
Elevator Co., 52 Fed. 700, 3 C. C. A. 248; King Philip Mills v.
Slater, 12 R. I. 82, 34 Am. Rep. 603; Smith v. Eewis, 40 Ind. 98;
NEW TORK CENT. & H. E. R. CO. V. DIFENDAFFEK. 89.3
Hoare v. Rennie, 5 Hurl. & N. 19; Pope v. Porter, 102 N. Y. 366,
371, 7 N. E. 304; Dwinel v. Howard, 30 Me. 258; Robson v. Bohn,
27 Minn. 333, 344, 7 N. W. 357; Reybold v. Voorhees, 30 Pa. 116,
121; Stephenson v. Cady, 117 Mass. 6, 9; Branch v. Palmer, 65 Ga.
210; Fletcher v. Cole, 23 Vt. 114, 119.
The plaintiff failed to comply with the conditions précèdent upon
which he knew and upon which he had agreed that the défendant
contracted to be bound, and he committed the first substantial breach'
of the contract between them. On account of thèse facts, he was
not entitled to recover anything of the défendant, under the évidence
in this record, and the jury should bave been instructed to return a
verdict in favor of the surety company.
The judgment below must be reversed, and the case must be re-
manded to the court below with instructions to grant a new trial,
and it is so ordered.
NEW YORK CENT. & H. R. E. CO. v. DIFBNDAFFER.*
(Circuit Court of Appeals, Seventh Circuit. October 6, 1903.)
No. 958.
1. Trial — Questions for Court— Evidence to Authorizk Sdbmissionto Jury.
The rule in the fédéral courts is that it is not proper to submit a cause
to the jury merely because some évidence has been introduced, unless
that évidence be of such character that it would vyarrant the Jut in
flndlng a verdict In favor of the party Introducing it.
2. C0NTBACT8 — Grounds pob Avoidance— Failurb to Read.
The mère fact that a person on entering the employment of the Pull-
man Company as porter on one of its sleeping cars failed to read the
contract which he was required to sign, and which contained a provision
that he assumed ail risk of injury from railroad travel while engaged in
such employment, does not afCord ground for bis avoidance of such pro-
vision, in the absence of any évidence of fraud or misrepresentation.
In Errer to the Circuit Court of the United States for the North-
ern District of Illinois.
This Is a wrlt of error sued out by the plaintiff in error (défendant below)
to reverse a judgment in favor of the défendant in error for Personal injuries
sustained by him by reason of a collision occurring on the line of railway of
the plaintiff in error at Bast Buffalo, in the state of New York. The plaintiff
below was a porter in a sleeper, and in the service of the Pullman Company.
The collision occurred by reason of an open svs'itch, a freight or switch en-
gine leaving the track and plunging into the sleeper in which the plaintiff
below was riding.
To the déclaration the défendant below flled a plea of the gênerai issue,
with two spécial pleas, setting fortli the contract between the défendant in
error and the Pullman Company, dated July 21, 1900, being the date upon
which Difendaffer entered into the service of that company. This contract
is entitled, "Contract of Employment," and, so far as is material to the case
In hand, is as follows:
"Be It Known, That I the undersigned hereby accept employment by and
enter into the service of The Pullman Company upon the following express
• Rehearing denied November 18, 1903.
' 1 2. See Master and Servant, vol. 34, Cent. Dig. § 169.
894 125 FEDERAL REPORTER.
terms, conditions and agreements, whicli in considération of such employ-
ment and the wages thereof, I do hereby make wlth said Tlie Pullman Com-
pany, to-wit:
*' » 'i ' ' ' ' * • *''• .». • *
"Fourth: I assume ail risks of accidents or casualties by railway travel op
otherwise, incident to such employment and service, and hereby, for myself,
my heirs, executors, adminlstrators or legâl représentatives, forever release,
acquit and discharge The Pullman Company and its offleers and employés,
from any and ail çlàlms for liablllty of any nature or character whatsoever,
on account of any Personal injury or death to me In such employment or
service.
"Fifth: I am aware that said The Pullman Company secures the opération
of its cars upon Unes of railroad, and hence my opportunity for employment,
by means of contracts wherein said The Pullman Company agrées to in-
demnify the corporations or persons owning or controUing such Unes of
railroad against liablllty on their part to the .employés of said The Pullman
Company in cases provided for in such contracts, andi do hereby ratify ail
such contracts made or to be made by said The Pullman Company and do
agrée to protect, indemnify and hold harmless said The Pullman Company
witli respect to any and ail sums of money it may be compelled to pay or
liability it may be subject to under any such contract, in conséquence of any
injury or death happening to me, and this agreement may be assigned to any
such corporation or person and used in its défense.
• ***•***«•
"I hâve read and understand every word of this paper.
"Joshua DifendafCer. [Seal.]
"Signed, sealed and deUvered in the présence of
"E. H. SchaU.»
To the spécial pleas the plalntifC belovr replied "that, at the time of the
exécution of the said contract mentioned in said second plea, the said Pull-
man Company, through Its agents and servants, wlth intent to deceive and
deprive the plaintlflC of his légal rights, falsely and fraudulently represented
to him (the plaintifC) that said contract was a document or paper relating sim-
ply to the routine business connected with the plaintiff's duties as porter in
the employ of the said Pullman Company, and was a paper of no signifl-
cance other than the mère registration and facts connected with the ti-ip as
porter about to be made by the plaintifC for the Pullman Company, and that
said contract did not In any way tend to deprive the plaintliï of his rights to
recover in case he sufCered injury through the négligence of the said Pullman
Company, or of any one or more of the various railroad Unes over which its
j^leeping cars were run; and that thereupon, being deceived and misled by
the statements and représentations of the said PuUman Company's agents
and servants, this plaintiff then and there signed his name to the said con-
tract or document, and that at the time the same was not read by the plain-
tiff, and was not read by any one to the plaintiff, and this plaintiff had no
îdea that the provisions of the said document were of the nature now claimed
to be by the défendant, untll after he had sufEered the injuries set forth in
his déclaration and had broùght suit to recover therefor, and that no consid-
ération moved from the said Pullman Company or from the New York Cen-
tral & Hudson River Railroad Company, or from any one for either, to this
plaintifC, and that said signature of the plaintiff to the said document was
obtained through f raud and misrepresentatlons. And this the plaintiff is
ready to verify."
There was rejoinder to the replication, denying the allégations of the
replication. At the trialthe facts of the collision and the resulting injury
were not serlously disputed, the case turning upon the contract introduced
in évidence by the défendant below. There were but two witnesses testlfy-
ing upon the subject — the plaintiff in his own behalf, and SchaU, the sub-
scribing witness. The plaintiff testifled, with respect to the contract, that
the signature thereto was his, but he did not know when he signed it, wheth-
er It was on the day he went to work for the Company or after that, or
wbether it was before be went to work for the company. He also said he
never signed any papeir before he went to work; that he signed papers every
NEW YORK CENT. & H. R. E. CO. V. DIFENDAFFER. 895
trîp In and eyery trlp out, and signed whatever was put before him to be
signed. At another stage of hls testlmony he said that he handed In hls
application for employment, and the président of ttie Pullman Company said
to lilm, " 'Go to work.' * * ♦ I do not know how long after that It was
when I signed tlils. It was just ttie flrst tliing"; that the paper was not
read to him, nor was he told what it was. Mr. Schall, the chlef clerk in
the district office of the Pullman Company, testlfied that he remembered sign-
ing the paper as a witness; that the paper was given the plaintifE below
rlght after he had fiUed out hls application for employment; that the witness
asked Dlfendaffer to read It carefuUy, and if he did not understand any parts
of it to come back and it would be explained to him, and asked him to sign
the document in the présence of the witness; that DifendafEer took the paper,
went into the outer ofiBce, and remalned about half an hour; that he does
not know whether Dlfendaffer read the paper or not. He returned, and the
witness asked Dlfendaffer if be understood the paper. He said that he did,
and he then signed his name, and Schall signed it In hls présence as a wit-
ness, and thereupon he went into the service of the company.
At the conclusion of the évidence, the défendant below requested of the
court a peremptory charge to the jury to retum a verdict for the défendant,
which motion was denied, and to whlch due exception was taken.
Francis B. Daniels, for plaintiff in error.
Cyrus J. Wood, for défendant in error.
Before JENKINS, GROSSCUP, and BAKER, Circuit Judges.
JENKINS, Circuit Judge (after stating the facts as above). The
court correctly charged the jury that the burden of proving fraud
rests upon the party asserting it ; that fraud must be proven by clear
évidence; that if the contract in question was executed without
fraud or misrepresentation on the part of the Pullman Company,
that contract constitutes a valid défense to the action ; that mère
failure on the part of the plaintifï to read the contract which he
signed would not amount to fraud on the part of the Pullman Com-
pany, if the plaintifï at the time had opportunity given to him to
read and his failure to read was his own négligence.
In Baltimore & Ohio Southwestern Railway Company v. Voigt,
176 U. S. 498, 20 Sup. Ct. 385, 44 L. Ed. 560, it is ruled, in a some-
what similar case, that one occupying a like position to that of the
défendant in error hère, and under a like contract, was not a pas-
senger, and that such a contract did not contravene public policy,
and exonerated the railroad company from liability, if the contract
was entered into freely and voluntarily and without fraud. So that
the question hère is whether there was évidence proper to be sub-
mitted to the jury to sustain the plea of fraud in the exécution of
the contract in question. The rule in the fédéral courts is "that,
before the évidence is left to the jury, there is or may be in every
case a preliminary question for the judge, not whether there is lit-
erally no évidence, but whether there is any upon which a jury can
properly proceed to find a verdict for the party producing it, upon
whom the burden of proof is imposed" ; and that it is not proper to
submit the cause to the jury merely because some évidence has been
introduced, unless that évidence be of such a character that it would
warrant the jury to proceed in fînding a verdict in favor of the party
introducing such évidence. Commissioners of Marion County v,
Clark, 94 U. S. 278, 24 L. Ed. 59.
896 125 FEDERAL EBPORTEB.
We are of opinion, considering alone the testimony; of the plaintiff
below, that there is absQlutely no évidence of fraud upon which the
cause siiould liave beep submitted to the jury. There was no rep-
résentation, true or false, made to him with respect to the contents
of the paper. Giving to his testimony the fullest efifect to which it is
entitled, the case is simply that of one who could read, but did not
read, the paper before he signed it. Assuming that he was an il-
literate man and unable to comprehend from the language employed
the nature of the contract which he was requested to sign, he nei-
ther asked the officers of the .cômpany for an explanation, nor did
he seek the advice of any other person. It is merely the case of
one executing a contract without reading it ; and in such case,
where no imposition has been practiced upon him, the omission to
read is no défense to the contract. The plaintiiif below was in heaith
and vigor. He was not preyented from reading it, and there was no
misrepresentation to him of the nature of the document. He de-
Hberately elected to sign and did sign the document without reading
it. Under such circumstances the contract is binding.
Chief Justice Gibson, with his usual clearness and terseness, in
Greenfield's Estate, 14 Pa. 496, states the rule thus:
"If a party who can read will not read a deed put before him for exécu-
tion, or If, being unable to read, will not demand to hâve it read or explalned
to him, he is guilty of supine négligence, which, I take it, is not the subject
of protection, elther In equity or at law."
The rule has been abundantly sustained by the courts. Thus, in
Upton, Assignée, v. Tribilcock, 91 U. S. 45, 23 L. Ed. 203, the court
says :
"It Avill not do for a man to enter into a contract and, when called upon
to respond to his obligations, to say that he did not read it when he signed
It, or did not know what it contained. If thls were permitted, contracts
would not be worth the paper on which they were written; but such is not
the law. The conti-actor must stand by the words of his contract, and. If
he will not read what he signs, he alone is responsible for his omission."
And in Andrus v. St. Louis Stnelting & Refining Company, 130
U. S. 643, 9 Sup. Ct. 645, 32 L,. Ed. 1054, it is said:
"The law does not afCord relief to one who sufCers by not using the ordi-
nary means of information, whether his neglect be attributable to indiffér-
ence or credulity."
See, also, Chicago, St. P., M. & O. Ry. Co. v. Belliwith, 28 C. C.
A. 358, 83 Fed. 437 ; Chicago & N. W. Ry. Co. v. Wilcox, 54 C. C.
A. 147, 116 Fed. 913; Insurance Co. v. Hodgkins, 66 Me. 109;
Pennsylvania Railroad Co. v. vShay, 82 Pa. 198; Keller et al. v.
Orr, 106 Ind. 406, 7 N. E. 195 ; Albrecht v. Milwaukee & Superior
Railroad Company, 87 Wis. 105, 58 N. W. "^2, 41 Am. St. Rep. 30.
In the latter case, the party seeking to avoid his contract was a Ger-
man. He did not read the paper he signed, and said he could not
read it, and did not know whether it was read to him or not, and
did not know the contents of it; and the court said that it cannot
be tolerated that a man shall exécute a written instrument and,
when called upon to abide by its terms, say merely that he did not
read it, or did not know what it contained. It is needless to pursue
KORN V. CHESAPEAKE & O. RT. CO. 897
the subject. The rule has been established time out of mind. i
Shep. Touch. 56 (30 Law lib. 121). The plea of fraùd was not sus-
tained by any évidence whatever„ The plaintiff below yfàs a free
man, with liberty to contract or not, as he saw fit. It was hïs duty
to read and to understand the contract of employment which the
Pullman Company required. He does not prétend that there was
any misrepresentation to him, or, in fact, any représentation what-
ever of the contents of the instrument. Jîe deliberately elected to
sign the document without reading or understanding it, and he must
take the conséquence of his own négligence. The paper signed is
the highest évidence of the agreement of the parties. Except in
case of fraud or iriistake, it speaks conclusively the contract which
the parties hâve made, and it may not be impugned by one party,
where the other party has acted upon it, upon the ground that he
misunderstood it, or that he refrained from reading it, or that he
neglected to hâve the document explained to him. Where fraud or
imposition or misrepresentation has intervened, the party is not
bound; but, in their absence, failure to read or hâve it explained will
not avail to annul the deliberate writing of the party.
The judgment is reversed, and the cause is remanded with a di-
rection to the court below to award a new trial.
KOEN V. CHESAPEAKE & 0. ET. CO.
(Circuit Court of Appeals, SIxth Circuit. July 7, 1903.)
No. 1,173.
1. Carriers— Ejection of Passengkr— Death— Liability of Carbieri^Evi-
DBNCE.
PlaintifC's intestate boarded a passenger train about 7 c'clock at night,
apparently under tlie influence of liquor, but sensible of hIs surroundings
and capable of controlling his movements. After the train started, he
refused to state his destination or pay his fare, and was eject'ed at a
point about 300 yards from the station, with lighted houses neàr. The
next morning he was found near the track, dead, either from exposùre or
cocaïne poisoning. Ueld, the conductor was justified In ejecting him from
the train under the circumstances.
8. Samb— Station Agent— Négligence— Scopb op Authoritt.
PlaintIfE's Intestate passed a part of the afternoon, before he boarded
the passenger train, in the station, apparently In a stupor resulting from
the use of liquor or drugs. The station agent knew this, but did not in-
form the conductor of the train. Held, that the knowledge of the station
agent could not be imputed to the company, because It was no part of
his duty to pass upon the Intestate's fltness to travel, or glve the con-
ductor information upon that point.
In Error to the Circuit Court of the United States for the Western
Division of the Southern District of Ohio.
Thls was an action brought by the administrator of John J. Korn, de-
ceased, to recover damages for the death of Korn through the négligence and
f 1. Llability of carrier for.:lnjuries to passengers caused by négligence or
torts of servants, see notes to Texas & P. Ry. Co. v. Williams, 10 O. C. A.
466; The Anchoria, 27 C. 0. A. 651.
See Carriers, vol. 9, Cent Dig. § 1454.
125 F.— 57
89» ' .1)325. «ï'ElDBBAI.BÏiPOBiBa. : >;
wrongful;.aot o£ the défendant rail*ay compianyiii X&b rfxial Judge Instructed
tliçjury tp jri^turB a ver^îvjforthe dqfendantj on, thei groupd ttiat he was
^nàble.tp nnd, pn^tlie Hnccwjœpvertea rapts, thfit ,thèj'è was any wrongful act
on tbe pîrt bf thé teaflittœn'reprëséntlng thé défendant whlcB was the prox-
M&ié odûsé oï the deatïïfof'KoM A motion for à' new trial havlàg been
overruled; the case hagiJbeenl'brooglit hère for mvie^r.
.Xhe.jEa(jts ^hown by th^ pmi»tl|e's évidence are stated with substantial ac-
curwy 1» the opinion of ÙpcQuri.below overrùUng the motion for a new
"Tîief "4éceâ:^ iratniè 1» ftëstatiBnbf the défendant ta South Portsmouth
abdtft 8 o'felôekîn tbô afiiiswitfùioî tbe^th day of Janûary/ 1898, and re-
mained feerc) natil ab'&'ut T-«î<d<i«ïk: In the evenlng,: wben he entered one of
the tr^fns'pf the defendai|t goin^ past, as a passenger. When he came to
the,8tatt<)n» hé }ivas in an allQOst hélpless condition, âlé manner and ap-
pearàiicé indicâtéd'that lié Wàl^-tiiiâer thé Inflèence of dirais or intoxieating
liçtuWK Hé' Was klloweaiio llè'dWû in the teiegraph office^ and part of the
tlme hé+sitabout tbê public rrçopi oC thet^tatipni asle^p or apitarently asleep.
Near the tlme of the .arrivai of the evenlnf train going • East, the station
8j;ent,, jv;ho,was aboUt tô.go'pÉf duty and cross the riveii to Poçtsmouth, Ohio,
roùséd ;hlm' Up and éndeaVoréd tb persuadé hlin to go wlth him to Ports-
moiitb, whèrehecouia bê carèd' for; but:thé;fresh air seemed to revive hlm,
and he réfjàaed to go tô Portsmouth. He tried to board the l'ear car of the
train, which had justt coine in. Glockner, the station agent, told the traln-
man that:he had no rho'néy, and Was hôt fit to go on the train, and the train-
màn^pilëîïéQ niiu off apd clbsed the door. Hé then ^^ent up to the middie
of the train, and climtiea.iup the'Bteps of the day coach, betwfeen the day
coach and the smoker. The conductor then came up, and was told by the
witness Charles Molster that the-deçeased was not fit to travel, and Molster,
or some of those standing about, also told the conductor that he had no
money; but the deçeased, .pwduced a , baç of .silver,, and the conductor then
said, 'I guess we v^lU hà-feto take him,' and pushed him from the day car
into the sn|.ofeç:ij. ïh?;witnf^a.;Boughner says that, shortly.before the train
arrived, deceased was walklng up and down the platform; that, when
roused up by the station agent, he seémed to hâve his présence of mind, and
knew wheçe.he was going and what he ^as doing.
"Thè Witbëss Howe says: 'îïé came oUt ànd hoUé'wed to hlïQ to come and
go over tl;(^ cjvpi;» r^He saîd,,;"î^o; I don't ■«vaut to ço over.In Kentucky."
pinally tbey^'g|D(î Jiîm ont, ani^, about thé, ilme they' got Ijim, put the train
arrived, ,ajnd|,pe,!wanted to gèt on, Mr. Glockner— il could, not say now
"fy-hether .Mi<fbj&a.y else had, hpl^ of hlm. Anywày, lie got away from Mr.
Glockner .jE(hi^;J5|ifgnt to the pe^r! cbach. The .dôor was'fastened,, and he got
off and camé. toi the nçxt, à5id.go,tj0.n, ajid som^ oné said: "Don't let him
90 there. He ha^n't gotanyî money,?' .Aiid thén he went in the coach, and
camé back oùt Hé said, 'T hâve got .money," and puUed ont a sack with
some money in tt,' ,,, „ ,
"The wita,çss;j0hnson ie^tifled a$ foUb'Ws: 'Q. When did !you flrst notice
him on. thé .traljil „ A. ,WTien ,the coUector told him to get off. Q. Did he get
offî, A, No, ^r. Q. What did he do? A, Well, my recoUectlbn is, he asked
the coneetoE,w?iy:he,shoul.d:g^t bff. The çpllectbr ^pld hlm, hecause he had
tV» nabney. Se sifiyg, "ïoU h'ave got np money." Q. Did Korn reply to that?
A, ,^e did,;, ;put.his hand in his pocket and took put a.bag, ,whleh I supposed
cbhtained silVer— twerity or tweàty-flye dollars. I dofl't knpw how much,
but I know it was silver. I thought that was what it was. He satisfled
the coliector, rat-ijeast, he [hl'di money.] Qi.,What happened ,then, if you re-
member? À. There was nothjng else done, The colïector and conductor
went on about theh- business until the train stopped. Korn, if he did any-
th'ing— I doË't'i*e6iember — ôtlly walked up iand dowh the àisICi Q. Do you
remember TfVhethér he sat down In the car? A.-I havé no recollection of
soelng hlm. Iidon't think he took a seat. Q. Did he attract your attention
after the train startëd? A. Not untlI the çbllector asked for his tare. Q.
Then whât happénèd? A. Tte.colléctbraëked him where he was going, and
he told him he was going to hell. Q. Gp on. A. The collecter then inslsted
on him telllng where he was golngy' and said he imu'st hare his fare. I
KORN V. CHBSAPEAKB & O. ET. OO. 899
don't recollect the words he sald, but It waa a good deal the same Une as
he answered the flrst tlme; ànd after a few words tUe conductor pulled the
cord, and the train stopped, and the conductor and the collector each took
hold o£ an arm and led him off.'
"The witness Ruane testifled: 'Korn came in and leaned his arm up
against the seat I was occupying. I had sat down, you know. He leaned
his arm up against thât seat. Q. Then what happenedî A. The conductor
told him he couldn't ride on that train. He says, "You cannot ride on this
train, for you haven't got no money." Q. Gô on. A. He then reached in
his pocket — overcoat pocket — and prdduced a little sack, something like a
shot sack, I guess ; and he sald he had enough money to buy that road.
Then they started the train. Q. Then what happened, Mr. Ruane? A. The
collector came In from the front of that car — came in and walked back—
and he says, "Pare." He didn't answer him then, and he says the second
time; he says, "Fare;" and' he says to :Korn, then, "Where are you going?"
and Korn said, says he, "None of your damned business." The conductor
stood right behind the collecter when he made this remark, so he pulled
the bell cord, and they stopped and put him ofC the train. Q. Was Korn
sitting on the arm of your seat during this conversation? A. He was
leaning on it; yes, sir; leaning on it.'
"He was put ofC the train about 7 o'clock in the evenmg of the 28th
of January, 1898, about 300 yards from the station, and within the yard
limits of the station in the outsklrts of the little village of Springville
or South Portsmouth. The Weather was near the freezing point, and durlng
the night there was a light snow. In the morning he was found dead with-
in 25 feet of the railroad track, near several houses, two of which were
within about 50 feet of the place where the body was found. His hat
was f olded under his head, and he was lying in a naturai position, and
his skin was still soft and pliable. There was found on his person, as
stated by Dr. Titus, a little of some kind of liquor, and about a dram bottle
half full of cocaine hydrochlorate In fine crystals; and, in answer to ques-
tions, Dr. Titus testifled as follows: 'Q. You spoke of a bottle partly flUed
with liquor being found. What did you mean by that? A. It was a liquor
containing alcohol. Q. About how much had been used from the bottle
of cocaine? A. About half. There are aixty grains in a bottle. Q. Do you
know what quanti ty taken intemally into the System may resuit fatally?
A. The books give as a fatal dose from half a grain to twenty-two grains.'
"In answer to a question, the witness Ruane testifled as follows: 'A.
Well, when the conductor spoke to him, and stopped the car and put him
ofC, he says, "I might as well get off hère as any place, for I am going
to hell anyhow." That was the only words he used.'
"He was well educated, had studled mediclne and pharmacy, and had
carried on business as a druggist for some time. The witness John J. Korn
testifled that there was a woman in the case."
This is the substance of the faets as shown by the plaintifC's évidence.
W. Stilwell and Frank S. Monnett, for plaintifï in error.
Henry Bannon and John Galvin, for défendant in error.
Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.
RICHARDS, Circuit Judge, having made the above statement
of the case, delivered the opinion of the court.
The right of a conductor of a passenger train to eject one who
refuses to pay his fare, or is drunk and disorderly, is unquestioned,
but not absolute. It is subject to limitations. In exercising it, due
regard must be had to the condition of the person to be ejected, and
the situation in which he will be placed when ejected. One helpless
from any cause, and incapable of taking care of himself, must not be
treated as one in the full possession of his faculties. In every case
900 125iFBDBRAt. BBPOftTBB.
care ^Utist be taken tO=eiçpose the perspn ejectetj.to no. unusual or
unnçcessa::y hàzard. , A,t !f né same time, the conduc^or is responsible
for hîis train, and it is iîot only his right, btit may be his duty, to eject
a trespasser or a drunlcen and disorderly passenger. Obviousijj
in doing this, hertiust, to a large extëiit, act uçon appearances and
in thelight of pfobabilities. Ail tiié, J^w reqwires is that he shall
use reasonable care and caution. • ^o the conductor, Korn presented
-himself as a young naan under ; the influence of liquor, but sensible
of his çurrdundings and capable 6f contfolling his movements, It
is true, thë conductor \vas told he w,âg, not fît tq travel; but this was
, coupled with the information ths^i hehad no money, and the reason-
able inference was he was not fit tottravel becaùse he had no money.
After it was reported that h€ hàd thoney, nopther reason being
suggested why he vvas not fit to ti;ây;elj the conductor naturally said,
"I guesi| we will have-Jto, take himj ' ând the train was started. Im-
mediateiy the épisode occurred which resulted in Korn's éjection from
the train. Having displayed his mpney when the train was at the
statipti, hè Tçfused, with an oath, tO pay his fare, or say where he
wanted to go, after the train got uhder way. So the train was stop-
ped, and he was put ofï. There was nothing about him at this time
to indi<;ate that he was helpless and unfît to take care of himself.
He had insisted on gettihg on the tfein, and succeeded, despite the
plan ôf the station agent to take hira to Portsmouth ; he had walked
up and down the aisle of the car ; he had shown his money, with a
boast, when told he had none; and"fiïially, when put ofï for refusing
to pay his, fare, he wentwithQutresistahçe, saying, "I might as well
get olï hère as any place,|îor I an) going to hell anyhow." None of
thèse things indicated incapacity of either mind or body, but rather
the reverse. He was boastful, rude, and feckless, as drunken men
frequently are; but he seémed td know' What he was about, and to
be ablé tpdo what he dësired. , . ,; ■
It is to be observed, moreovery that the cohductor did not hâve
presented to him thé casé of a passenger bouiid for a known sta-
tion. Korli bad no destination, and, when the conductor asked him
where he was going, replied, ''None pf your d rrd business." Ûn-
der thèse circumstances, with the train just started, and the knowledge
that there were persons at the station who had tried to keep Korn
there, the apparently propèr and pfydent thing was to stop the train
at once and put him ofîf. And this was done. He was put ofï 300
yards from the statipn, \vithin its yard limits, in thé outskirts of the
village of Springville, about 7 o'clock at night, with two lighted
houses not 5Qifeet away, and within easy call. The conductor must
hâve believéd, as he stated to a passenger, that hewas leaving him
"not far from friends." The next ,mdf ning the ypung man was found
dead not more fhan 25 féet from the track at thevpl^^ce/he was put ofï
the train. He was lying on his back in a natural ppsition, his hat
folded under his head., A bottle with a liquor containing alcohol
and a drachm bottle , h|.lf. fuU of cocaïne, were found uppn his per-
son. One physician thought be dîed front exposure; another, from
cocaine poisoning. Whateyér the cause oî death, it was plain he had
invited its coming, and silently awaited its work. "there were lighted
KORN V. CHESAPEAKE & O. ET. OO. 901
houses in sight, but he started for none of them. There were people
near, but he called to none of them. When he stepped off the train
saying, "I might as well get off hère as any place, for I am going to
hell anyhow," his last trip hère had ended, and he was evidently con-
templating a longer journey.
We think the conductor was justified in ejecting Korn, under the
circumstances ; but, if his act was wrong, we fail td see any con-
nection between it and Korn's death. Korn was net put off in a dan-
gerous place, nor at a dangerous time, nor under dangerous cir-
cumstances. His death was not occasioned by any danger which the
conductor could hâve foreseen. The only danger to which the éjec-
tion could expose Korn was the danger of being able to do what he
desired; and he would hâve been exposed to this danger if he had
been put off at the next station, or if he had never got on the train
at ail.
But it is insisted that, in point of fact, Korn was helpless through
the use of cocaine, and that the station agent was aware of this, and
that his knowledge must be imputed to the company, although not
communicated to the conductor. It does not appear from the rec-
ord that the station agent was fully advised as to Korn's condition,
and the cause of it. The young man was apparently in a drunken
stupor much of the afternoon, but, revived by the fresh air, he threw
off the stupor upon the arrivai of the train, and resumed control of
himself. He refused to return to Portsmouth, and insisted on taking
the train. Then the agent dropped the attempt to control him, and
retumed to Portsmouth. As a matter of humanity, he had donc
what he thought he could. He was under no obUgation to arrest
Korn and place him under détention. The circumstances would
hardly hâve justified such action on his part. But if the agent did
know Korn's condition, such knowledge cannot be imputed to the
company, because it was not his duty either to pass upon Korn's fit-
ness to travel, or to lay before the conductor information on that point.
The knowledge of the agent to be imputed to the company must af-
fect some matter lying within the scope of the agent's authority. It
must be a part of the agent's duty either to act upon the information
himself, or lay it before others for action. Information thus received
by the agent is imputed to the company because the company is
presumed to be présent, acting in the very matter to which the in-
formation relates. Mechem on Agency, § 725 ; Story on Agency, §
140; Waynesville National Bank v. Irons (C. C.) 8 Fed. i; Congar
v. Railway Co., 24 Wis. 157, i Am. Rep. 164. Now, it was not the
station agent's, but the conductor's, business to décide whether Korn
should be permitted to enter the train and remain on it, or should
be rejected or subsequently expelled. Moreover, if the station agent
had told the conductor ail he knew about Korn, the conductor would
still, in our opinion, hâve been justified in receiving him as a pas-
senger, and in subsequently ejecting him upon his refusai to tell
where he was going and to pay his fare. The conductor necessarily
assumed, when Korn boarded the train and showed his money, that
he had a place of destination, and that he would pay his fare. There
was nothing in Korn's condition or conduct which would hâve made
902 , 125 FBPBBAL BHPOBTEE,
it wrong for thç condi^ctor to receive him and carry him as a pas-
senger. Thaf hé .had ho destinatio|i and would pay no fare was net
known and cgfiild' riot, be anticipated by the conductor. The con-
ductor the^efo^e, did |i:%Ht in recejyiiig hini as a passenger, and, for
the reasbns wé nave'given above, (iid not do wrong in ejecting him
when he acted a? he did. ;
Agreeing w;th the tirial judge that there was a failyre of proof up-
on essential poîrits, thé jûdgment of thé court below is affirmed.
PETTERSON et al.; V, BERRT.
(CiTowJt Court of Appeals, Ninth Circuit. October 19. 1903.)
■ ' " "''" NO. 943.
1. UsnBT-^ÇpNSTKUOTION OP STATCTK-rEFF?iCT OF RePBAL.
Us^iry statutes do not aïEèct the obligation of tlie contract, bot pertain
to the temedy only, by glving to the debtor thé privilège of avolding his
contriaet' whén usùrioùs, and thèir repèaî, wlthoùt a saving clause, taltea
a'way such privilège, even as to contràcts previously made.
2. SaMB— :AtASKA,VibTATUTB.
The Oregon interest sta,tutes, in force i» Alaska f ronj 1884 to 1900,
llmited, the rate of interefet which might be lawf ully contràcted for to 10
per ceiitl, and prpvlded thàt cpintracts by which a higher rate was re-
served should be nsurious, and the entlre debt should be forfeited. Hill's
Ann., Laws Or. 1892, §§ 3^87-3590. Act June 6, 1900, C; 786 (31 Stat.
533), adopting a Codp for Alaska, §§ 255^259, contains sipHar provisions,
exccpt tbât thé coitçact' raté may bè 12 per cent, and the penalty for
usury is the forfeitiire bl the interest only. ÈeU, t\xs.t a mortgage ex-
ecuted'inî Alaska in 1898, securlng notes In which interest at the rate of
12 per cent, was reserved, on which; suit was there brought In- 1903, was
not subjéct to the défende of usiu:y.
8, SaMÉ— Pi-BADINO.
The défense of uëury cfinnot be made by demurrer to a bill or com-
plaint to fOreclose a rhortgage for both principal and interest of the
debt, where such défense, under the statute, affects only the interest.
Appeal froni the District Court of the United States for the First
Division bf the District of Alaska.
W. E. Crews and J. H. Çobb (Lorenzo S. B. Sawyer, of counsèl),
for appellants. ; •
, John G. Heid, Ê. S. Pillsbury, and Pillsbury, Madison & Sutro
(Alfred Sutro, of counsel), for appellee.
Before GILBERT and ROSS. Circuit Judges, and HAWLEY,
District Judge.
' ROSS, Circuit Judge. This suit was brought in the District Court
of the United States for the district of Alaska, Division No. i, to
recover the amount df a certain promissory note for $3,500, with
interest at the rate of I2 per cent, per annum, arid for thé toreclosure
of a mortgage upon certain real property situate in the town of
Juneau, Alaska, given to secure the payment of the note. Both
note and mortgage were dated September 24, 1898, and were made to
one Antonio Visalia, from Vvhoœ they were purchased by the âp-
PETTERSON V. BEEET. 903
pellee on the 8th day of May, 1901, who thereafter, to wit, on March
24, 1903, commeneed the présent suit. Interest on the note was paid
to December i, 1901.
To the complaint setting eut thèse facts, and asking for the fore-
closure of the mortgage, the défendants thereto demurred, upon the
ground that the contract sued on was usurious and against public
policy, and therefore that no action could be maintained on it. The
demurrer was overruled, and, the défendants electing to stand there-i
on, the court gave judgment for the complainant, and entered the
usual decree of foreclosure. The défendants thereupon brought the
case hère by appeal, and présent as the single spécification of error
relied on that "the court erred in overruling the défendants' de-
murrer to complainant's complaint, for the reason that it clearly ap-
pears on the face of said complaint that the contract declared upon
is usurious and against public policy."
At the time of the making of the note and mortgage in question
the gênerai laws of the state of Oregon, so far as applicable, gov-
erned in Alaska by virtue of the act of Congress entitled "An act
providing a civil government for Alaska:," approved May 17, 1884
(chapter 52, 23 Stat. 24), the seventh section of which declared "that
the gênerai laws of the state of Oregon now in force are hereby de-
clared to be the law in said district, so far as the same may be ap-
plicable and not in confiict with the provisions of this act or the laws
of the United States." 23 Stat. 25. But at the time of the com-
mencement of this suit the act of Congress approved June 6, 1900
(chapter 786, 31 Stat. 321), and entitled "An act making further pro-
vision for a civil government for Alaska, and for other purposes,"
had supplanted the laws of Oregon for that territory, and was in
force there.
The laws of Oregon, while in force in Alaska, were, as regards in-
terest, as foUows:
"Sec. 3587. The rate of interest In this state shall be eight per centum
per annum, and no more, on ail moneys after the same become due; on judg-
ments and decrees for the payment of money; on money received to the use
of another and retained beyond a reasonable time without the owner's con-
sent, expressed or implied, or on money due upon the settlement of matured
accounts from the day the balance Is ascertained; on money due or to be-
come due where there is a contract to pay interest and no rate specifled.
But on contracts, interest at the rate of ten per centum per annum may be
charged by express agreement of the parties, and no more.
"Sec. 3588. No person shall, dlrectly or indirectly, receive in money, goods,
or thlngs in action, or in any other manner, any greater sum or value for the
loan or use of money, or upon contract founded upon any bargain, sale, or
loan of wares, merchandise, goods, chattels, lands and tenements, than in this
chapter prescribed.
"Sec. 3589. If it Shall be ascertained In any suit brought on any contract
that a rate of Interest bas been contracted for greater than is authorized by
this chapter, elther directly or indirectly, in money, property, or other val-
uable thing, or that any gift or donation of money, property, or other valuable
thing bas been made or promised to be made to a lender or creditor, or to
any person for him, directly or indirectly, elther by the borrower or debtor,
or any person for hlm, the design of which is to obtain for money so loaned
or for debts due or to become due, a rate of interest greater than that speci-
fled by the provisions of this chapter, the same shall be deemed usurious, and
shall work a forfeiture of the entlre debt so contracted to the school fund
9Ù4i: 125 FBDBBAL EBPOETEB.
of the county,where suQh suit Is brought. The court In wMch such suit Is
proSeeuteà'èhàli rènder judgment for the amount of the original sum loaned
or the debt contradted, wlthout interest, against the defeadantaiMi in favor
of the State of Oregon, for the use of the common-schpol fund of said epunty,
and against the plalntlff fgr costs of suit, whether such suit be contestéd or
net. ■..■.-■..■.- >•
"Sec. 3590: Nottilng in thls act shall be construed to prevent the proper
bona Me assignée ofanynsuriouscontractrecovering against hls immédiate
assignor, or the qi^glDal usurer, the fuU, amount paid by him for such con-
tract, but the sàm^ piay be recorered by proper action, in any court having
compétent jurlsdtctlôn; i)rbylded, that such assignée had no notice of the
usury affècting the cbùtract." Hlll's Ann. Laws Or. 1892.
The pfovisions .'of Act Çong. Juné 6, 1900, c. 786, 31 Stat,. 533, in
regsi^rd^to the samesubjèct, are as foUows:
"Sec. 255. Legîil Rate of Interest. The rate of Interest In the district
shall beeight per.centum per annum, and ne more, on ail moneys after the
samé bécbhaè due; on judgmehts and decteés for the payment of money; on
money reeeived to the use of another and retalned beyond à reasonable time
without tiie owner's consent, expressed or, Implied, or on r money due upon
the settlement of matjiped: accounts from the day the balance is ascertained;
on monieydue or to becçine due where there is a contract to.pay Interest and
no rate Specifled. But oh contracta, Interest at the rate of t^éelve per centum
rùay be charged by exptéss agréement of the parties, and no more.
"Sec. 256. Illégal Interest not to ibe Taken. No person shall, directly or
Indlrectly, recelve in money, goods, or things In action, or in any other man-
ner, any greater gum or value for the loan oï use of money, or upon contract
founded iipon any bargain, sale, or loan of wares, merchandise, goods, chat-
tels, lands, and tenemeuts, than in this chapter preseribed.
"Sec. 25t. May Recover Usurious Interest Paid. If usurious Interest, as
deflnçd by the preceding sections, shall hereaf ter be reeeived or coUected, the
person bçi persons payiug the same, or their légal représentatives may, by ac-
tion brotight in any court of compétent jurlsdiction, wlthln two years after
such payment, recover from the person, flrm, or corporation recelvlng the
same double the amount ' of the Interest so reeeived or coUected.
"Sec. 258. Illégal Interest, Contract for. If It shall be ascertalned In any
action brought on any contract that a rate of interest has been contracted for
greater than Is authorized by this chapter, either directly or Indirectly, in
money, property, or other valuable thing, or that any gift or donation of
money, property, or other valuable thing bas been made or promised to be
made to a lènder or credltor, or to any person for him, directly or indirectly,
either by the borrower or debtor, or any, person for him, the design o£ which
Is to obtain for money so loaned, or for débts due or to become due, a rate
of interest greater than that specifled by the provisions of this chapter, the
same shall be deemed to be usurious, and shall work a forfeiture of the en-
tire Intere^ on thedebt. The court before whIch such action is prosecuted
shall rendèr Judgment for the amount due, without Interest, on the sum
loaned or the debt contpacted, against the défendant and in favor of the
plaintiff, and against the plàlntlfE for, costs of action, whether such action be
contestéd or not. «
"Sec. 259. Assignée of Usurious Contract may Recover Amount Paid for
Same. Nothlng In this Code shall bé construed to prevent the proper bona
fide assignée of any usurious contract recovering against his Immedlt^te as-
signer, or the original usurer, the full amount paid by him for such contract,
but the same may be recovered by proper action in any court having compé-
tent jurisdiction: provided^ such assignée had no notice of thè usury afCect-
ing the contract." Carter's Ann. Codes Alaska, pt 5, c. 27.
Whatever the proper construction of the Oregon law upon the
subject may be, it is entirely clear that by the foregoing provisions
of the Alaska Code, in force when this suit was brought, the for-
feiture declared by reason of a usurious contract for interest appHed
PETTERSON V. BERBT. 905
only to the interest, and did not in any manner affèct the principal
debt. Moreover, by section 255 of the act of June 6, 1900, it is de-
clared that "on contracta, interest at the rate of twelve per centum
may be charged by express agreement of the parties, and no more."
It is well settled that the défense of usury, either to the principal
of a contract debt or to the interest thereon, is in the nature of a
penalty or forfeiture, which may be taken away by législation, both as
respects previous as well as subséquent contracts. This is suf-
ficiently shown by the case of Ewell v. Daggs, 108 U. S. 143, 2 Sup.
Ct. 408, 27 L. Ed. 682, but we add other références. Ewell v. Daggs
was a suit for the foreclosure of a mortgage given to secure the pay-
ment of a note, both of which were executed in the state of Texas,
whose statutes at the time provided that a contract of loan at a rate
of interest greater than 12 per cent, per annum should be void and of
no effect for the whole premium or rate of interest only. At the
time of the commencement of the suit, however, a provision of the
Constitution of the state of Texas repealing ail usury laws had gone
into eflfect, and in answer to the défense of usury which was inter-
posed in the case the Suprême Court said : '.'
"It is claimed by the appellant that, notwithstanding thls repeal of the
usury laws, the rlghts of the parties are to be determlned accordiug to the
law in force at the time the transaction took place; that by the terms of
that law the contract between Daggs and James B. Ewell was void as to the
entire interest reserved and paid; that no subséquent law could make valid
a contract origlnally void; and that the appellant is not bound by the judg-
ment rendered against James B. Ewell in favor of Daggs, and is entitled in
the présent suit to make the défense. It is quite true that the usury statute
referred to déclares the contract of loan, so far as the whole interest is con-
cerned, to be 'void and of no effect.' But thèse words are often used in stat-
utes and légal documents, such as deeds, leases, bonds, mortgages, and others.
in the sensé of voidable merely, that is, capable of being avoided, and not
as meaning that the act or transaction is absolutely a nullity, as if It never
had existed, incapable of giving rise to any rights or obligations under any
circumstances. Thus we speak of conveyances void as to creditors, meaning
that creditors may avoid them, but not others. Leases which contain a for-
feiture of lessee's estate for nonpayment of rent, or breach of other condition,
déclare that on the happening of the contingency the démise shall thereupon
become null and void; meaning that the forfeiture may be enforced by re-
entry, at the option of the lessor. It is sometimes said that a deed obtained
by fraud is void; meaning that the party defrauded may, at his élection, treat
it as void. Ali that can be meant by the term, according to any légal usage,
is that a court of law will not lend its aid to enforce the performance of a
contract which appears to hâve been entered into by both the contracting
parties for the express purpose of carrying into effect that which is pro-
hibited by the law of the land. Broom's Légal Maxims, 732. And Lord
Mansfield, in Holman v. Johnson, Cowp. 341, stated the ground on which, in
such cases, courts proceed. He said: 'The principle of public policy is this:
ex dolo malo non oritur actio. No court will lend its aid to a man who
founds his cause of action upon an immoral or an illégal act. If, from the
plaintifC's own stating or otherwise, the cause of action appear to arise ex
turpi causa, or the transgression of a positive law of this country, then the
court says he has no right to be assisted. It is upon that ground the court
goes, not for the sake of thç défendant, but because they will not lend ithelr
aid to such a plaintifC.' And the elïect is the same, if the contract is in fact
illégal, as made in violation of a statute, whether the statute déclares it to
be void or not. Bank of United States v. Owens, 2 Pet. 527 [7 L. Ed. 508].
'There can be no civil right,' said Mr. Justice Johnson in that case, 'when
there can be no légal remedy, and there can be no légal remedy (or that
906 12^, I-f ,9E^A]U, RBiPOB.XSB.
wWch-teïtselfjUl^al.', A. distinction Is made between aç,^ yhioh are mala
Itt sei which are generàlly régaïd^d as àbàoltitely void, tn the sensg that no
flgbt or clâlmi can be derived froril them, and acts whjch are mala prohiblta,
■wlïlch are vold or voîdable, aceordJui^ to the nature and efflect of the act pro-
hibited. Fletcher v. Stone, 3 Plcte, ,250. It was accordingly held In Massa-
chusetts that a ihortga-gè or assurance glven on a nsurious considération was
only voidable, not-vyithstandlng th» strong words of the statute. Green v.
Kèmp, IS Mass. 515 [7 Am. Dec. 169]. And in such cases the advance of
the motoey, although ttie.contractls illégal for iasury, Is a meritorious consid-
ération, sufllcient to support a subséquent liabillty or promise, wnen the posi-
tive bar of the statute hàs been removed. 'A man by express promise may
render himself Uable to pày back, money ■i^hich he had received as a loan,
though Borne positive ruleof law or statute intervened at the time to pre-
vent the transaction (rom constituting a légal debt.', Might v. Reed, 1 H. &
C. 703; ,32 Law Jour. Rep. N. S. Hx. 265. O^he effect of the usury statute of
Texas was to enable the party suéd to resiSt a reeovery against him of the
interest whlch he had èontraeted éo pay, and it was, in its nature, a pénal
statute Inflicting upon the lender a loss and forfeiture to that extent. Such
has been the gênerai, If not uniform, construction placed upon such statutes.
And ,lt li^s been quite as generally decided that the repeal of such laws, with-
out à sàvlng clause, operated retrospectlvély, so as tO eut off the défense
for the future, even in actions upon eontracts previoùsly niade. And such
iaws, operating with that efCect, hâve been upheld, as agaibst ail objections,
on the ground that they deprived parties of vested rights or , impaired the
obligation of contracta. The very point was so decided in the following
cases: Gurtls v. Leavltt, 15 N. Y. 9; SaVlngs Bank v. Allen, 28 Conn. 97;
Welch V. Wadsworth, 30 Conn. 149 [79 Am. Dec. 239]; Andrews v. Russell, 7
Blackf. 474; Wood v. Kennedy, 19 Ind. 68; Town of Dahvllle v. Pace, 25 Grat.
1 [18 Am. Rep. 663]; Parnîelee y. Lawrence, 48 Hl. 331; Wobdrufl v. Scruggs,
27 Ark. 26 ![11 Am. Rep. 777]. Anfl thèse décisions rest upon solid ground.
Indepéndent ' of the nature of the forfeiture as a penaltyi which is taken
away by a repeal of the act, themore général and deeper principle on which
they are to bésupported lis that the right of a défendant to avoid his contract
is glven to hîlti by statnte, for purposes of its own, and' not because it affects
thé mèrlts^ lof' Its obligations; and that whatevér the statute gives, undersuch
cireumstances, as long as it remains In fleri, and not réaiizéd by having passed
Into a comîrtéted transàctlonv may, by a subséquent statute, be taken away.
It Is a privilège that 'befem^s to the remedy, and forms no élément in the
rights that inhere in thé cdntrâct. The bénëfit which he has received as
the considération of the 'cbntract, which, cbntrary to law, he actually niade,
Is just groundjfor ImpoBlng upon him,' by Subséquent législation, the liàbil-
ity which hé Intended to Ifiour. That principle has bèeh repéatedly announ-
ced and adted upon by mie Court. Eead v. Plattsmouth, 107 U; S. 568 [2 Sup.
et. 208, 27 L. Ed. 414]? and 'See Lewis V. McElvain, 16 Ôhio; 347; Johnson v.
Bentley, Id. 97; Trustées r. MeOaughy, 2 Ohio St. 152; Sâtterlee v. Matthew-
son, 16 Serg:'& R. 169; Idi» In error 2 Pet 380 [7 L. Ed. 458]; Watson v. Mer-
oer, 8 Pet. 88 [8 L. Ed. 87^. The right wlileh the curative or repealing act
takes away in such a case Is the right in the party to avoid his contract — a
naked légal right which It is nsually unjust to insist upon, and which no
constitutional provision was ever desîgned' to protect. Cooley Constitutional
Limitations, 378, and etfseS eited. The caèe of Smith v. Glanton, 39 Tex.
365 [19 Aïn. Rép. 31] 'Clted and relled on by counsel for the appellant, we
cannot accëpt as a settlement of the law of Texas to thé contrary. The opln-
Idn dues not consider thé question^ but dismisses It,' on "thé assumption that
the fact thiàt the action was brought béfore the adoption of the Constitution
which eontalned the repeal of the uéury laws prevènted the application of
the rule. It Is our opinion, -therefore, that the défense tjf usury cannot avail
the appellant' by reason'Ot the constitutional repeal of the statute, on the
dontlnued existence .of wiliéh aïone his défense résted."
' See, als6,; McEfoom v. Scottish Inv. Cd., 15^3 U. 'Si 318, 14 Sup. Ct.
855, 38 h: td^'yzg; Talbot V. Sioux Çity Natl, Bank, 185 U. S. 172,
22 Sup. iÇt., ê,Î2j 46 ly Ed. 857;; Berniîiserv. Firjnaii, 22 Wall. 170,
UNITED STATES V. 8TINS0N. 907
22 L. Ed. 'jÇA ; Farmers', etc., Natl. Bank v. Dearing, 91 U. S.
35, 23 L. Ed. 196; National Exchange Bank v. Moore, Fed. Cas.
No. 10,041.
The rate of interest carried by the note and mortgage in suit does
not seem to be obnoxious to the rate allowed by section 255 of the
act of Congress of June 6, 1900, supra. But, if so, the demurrer was
not the appropriate method of raising the question of usury as to it,
since it was directed to the bill as a whole, and the bill was framed for
foreclosure as to the principal sum secured by the mortgage as well
as the interest. American B. L. & L Sav. Assn. v. Haley (Ala.) 311
South. 88; Reed v. Moore, 19 Tenn. 80; Reynolds v. Roudabush,
59 Ind. 483; Sujette v. Wilson, 13 Or. 514, 11 Pac. 267; McDaniel
V. Pressler, 3 Wash. St. 636, 29 Pac. 209 ; Nichols v. Stewart, 21 111.
106. As a matter of fact, however, the court below only allowed the
appellee interest at the rate of 8 per cent, per annum, as is shown by
its decree.
As what has been said disposes of the only question raised by the
single assignment of error presented on the appeal, it résulta that the
judgment appealed from must be afBrmed. Judgment afïirmed.
TJNITED STATES v. STINSON et al.
(Circuit Court of Appeals, Seventh Circuit. October 6, 1903.)
No. 829.
1. Ukited States— Actions by— Equitable Ebtopfel.
The substantial considérations underlylng the doctrine of estoppel
apply to goveriiment as well as to indlviduals, and when the United
States Invokes the powers of a court of equlty, whose duty it is to pro-
tect the rights of others as well, such considérations should be given
welght.
S. Public Lands— Suit for Cakcellatiok op Patents— Supficiency of Evi-
dence.
In a suit by the United States to cancel patents to 14 quarter sec-
tions of land Issued to the same number of pre-emptors, who had made
their final proofs 40 years prior to the commencement of the suit, and
thereafter conveyed to défendants, the government clalmed that the
entries were fraudulent, and that the requisite settlement and improve-
ments had not in fact been made. Six or more of the entrymen were
dead, and the testimony of only four of those remalnlng was taken;
two belng introduced by plaintIfC and two by défendant. Such wit-
nesses, as well as défendant, were old, and, for the most part igno-
rant, men, and their testimony showed that thelr memorles were uncer-
tain and unreliable as to the transactions in question. It further ap-
peared that défendant had continued to hold the land, which had be-
come valuable, had pald a large amount In taxes thereon, and that he
had become Insolvent with a large indebtedness, his property belng In
the hands of a recelver. E«U, that under such circumstances, and espe-
cially in view of the length of time since the patents were Issued and
the death of so many of the patentées, the govemment was not entltled
to ask the cancellation of such patents, except upon clear and fuU proof
of ail the facts entering into the pre-emption transactions, and that the
évidence adduced was insufflcient.
1 1. Estoppel against state or United States, see note to State T. Jackson,
L. & S. B. Co., 16 0. C. A. 353.
See Estoppel, vol. 19, Cent. Dlg. { 152.
908 125 FEDERAL EBPORTEB.
Appeal from the Circuit Court of the United States for the Western
District "of Wisconsin.
The facts are stated in the opinion of the court.
John:B. Sirnmons and M. C. Burch, for the United States.
A. 1,. Sanborn and Robert Bashiord, for appellees.
Before JENKINS, GROSSCUP, and BAKER, Circuit Judges.
GROSSCUP, Circuit Jùdge. The suit in the Circuit Court was to
set aside patents upon fourteen quarter sections of land in Douglas
County, State of Wisconsin, issûed by the United States severally to
fourteen grantees, at différent ïîriiés from Decembër isth, 1855, to
March 25th, 1865. The pafents wére issued in pursuance of préemp-
tion by the severalpaténtees, the dates of settlement named in the
affidavits running from August i7th, 1854, to June iith, 1855, and the
dates of proving up ruhning from Gctober 24th, 1854, to June 22nd,
1855. Each of the quartçr sections, on or about the date when pfoven
up by the preemptor, vvas conveyed to appellee, James Stinson ; who,
following such conveyânce, entered into possession, and has con-
tinued in possession uritil February iQth, 1900, when reseivers were
appointed at the instance of his creditors. In the receivership pro-
ceedings debts amounting to upwards of fîve hundred and eighty
thousand dollars hâve been prçiven 'against Stinson, about two hun-
dred aqd fifty thousand dollar? of which are the claims of depositors
of a bank operated by Stinson. The lands in suit constitute the main
part of the assets available for the payment of thèse debts — debts
presumably incurred, to some extent at least, upon the crédit that the
apparent pwhership of thèse lands gave to Stinson.
,,The cpniteiifcion of the goverjiment is, that the lands were not pre-
empted in accOrdance either with the-Jetter or spirit of the préemp-
tion law; that there was no actual settlement in person by the pre-
erill^tôr ; that no dwellings within thé meaning of thé préemption law
wexe._erectpd:;: that the pretendedi préemptions .wer« ii;i evjbstanee the
carrying out.only, of an arrangement with Stinson,- wkereby Stinson,
under 'the'fdrnîB of préemption, ébtàined titleto lands that in rio other
way çoul4'J,Ji'4^.^,,beè'ri piirchased.by.hïm, îrôjth. the, gOyerhment ; in
sfiort, thàf ,fhç pi-etendeâ préemptions were in badîailhjintended at
tbe time, hottfor the settlement and use' of the prefemptûrs, but as a
part ofStinsOn's schènië , in land Spéculation. '','''; ■".'
'TestimCi,ny''#a,s 'subiîiit|ed.,t^nding to â:how thc: ti-uth'fof'.thés'e aver-
rtj^nts. Wha|t'cpnçlusio^ît^^P^ld hâve been reaçhed hadîthis suit been
commenced;-.'and the fevidffifice submitted, -within' such ai;|)eriod after
tbe préemptions as' .wouf^' hâve 'enabled' thé ' court to' hâVé' dWtained
ari adéquate ^JJi.oVif'Ie^ge 91'^ facts, itîs riot necessaiy, in the view
wç;take o|'t}iîs,'casertQ[St3te«: .-i' -i !.1 ■•', .!-„■.. - 1,0 ," :■ ir ■■,■':'.''
i The suit- was not ibégun until Febtuary, i895,;'ai peiiiod: ofnéârly
forty: yearè'iïtftéir'thë' pi-éëmptors eriterëd/the larids ^tt*^, tft'e gpyérn-
rrl'èht issuëd iti-'t>atén'ts:' ■Mèantînîë.th^,jiild^.)yi|g;;fp;i:iï
the City of,Superior,_witliin-.whûse corporate limitk-tiie lands ar« lo-
cated, has grown/withr unaisualîïapidity^^have spniwg int&'tiriudùkl^
value. Meantime, also, Stinson h5i,s pajd iajces art^'Q^ïi'tjngj' t4j"iô^^^
UNITED STAXES V. STINSON. 909
than seventy-two thousand dollars, and there are now unpaid taxes,
presumably colorable liens in favor of the state and its several mu-
nicipalities, amounting to nearly as much more. Besides, creditors
hâve come into the transaction — creditors whose only knowledge
respecting the lands was that Stinson held the title by patent, and had
for forty years been in its undisputed possession and enjoyment.
Thèse facts alone would make it incumbent upon the government to
présent a convincing case — a case that left no considérable doubt that
a fraud had been practiced as alleged. But other facts are added.
At least six, and perhaps seven, of the original preemptors hâve
died. Of the seven living, the testimony of three, for some reason,
has not been taken. Of the four others, two hâve been examined
upon the part of the government, and two upon the part of the dé-
fense. Thus, out of fourteen parties, other than Stinson, to the orig-
inal transaction, only four hâve been heard.
The testimony reveals that at least three of thèse four were orig-
inally, and are now, ignorant men, unable readily to understand the
questions put to them or to convey their own answers. Of thèse
four, one was, when called as a witness, seventy-seven years old, an-
other seventy-four, and another sixty-five. They speak from a mem-
ory displaying uncertainty at every point — a memory on which lapse
of time, and advanced years, hâve contributed to lay infirmity. Nor
has Stinson himself escaped thèse conséquences. At the âge of sev-
enty-seven he is called upon to ransack his memory for events that
happened when he was yet young.
At common law there was no bar by limitation, to the bringing of
actions. But this, in time, led to such instances of great injustice,
where witnesses to the transaction had died, or papers had been mis-
laid or destroyed, that to prevent them, and render more certain the
tenure of property, statutes of limitation weré enacted. Though
founded on substantial considérations, the efïect of such statutes is
to ûx, more or less arbitrarily, a time beyond which an action shall
not be brought. To the extent that the barrier thus set up fails to
adjust itself to the equities of each case, the limitations are artificial.
Lâches is the name given in courts of equity to sUch delay as under
ail the circumstances of a transaction make the claim sued upon a
stale one. Though founded partially upon the same considérations
that underlie the statutes of limitations, it is, in its practical applica-
tion, intended as a spur to speedy inquiry. The doctrine of lâches is
less artificial, in that it adjusts itself more readily to the circumstances
of each case. But, in an important sensé, it remains artificial ; for one
of its chief objects — an object not whoUy growing out of the efïect
of the lapse of time upon the availability of évidence — is to bring
causes of dispute to an early adjustment, not because of considération
alone of loss of évidence, but because it is to the interest of society
and property that known disputes shall be quickly settled.
Thèse barriers, to the extent that they are thus artificial, cannot
be set up against the government. It has not hitherto been supposed
— at least no législative action has been taken on such supposition
— that government needed the spur intended, as between individuals,
to bring controversies to a speedy close; or that government would
910 125 FEDERAL BBPOBTBB.
press Jclaims that oug-ht not, by the iobliferation of adéquate sources
of évidence through lapse of time, to be pressed. But when the gov-
ernment.sçeks: its rights at the hands of a court, equity requires that
the rights: ' of iothers as well, should be protected. Carr v. United
States, 98 U. S;j438, 25 h. Ed. 209. The governmerit may not in con-
science ask a' court' of equity to set Onfoot an inquiry that, under the
circumstances of thecase, would be an- unfair or inéquitable inquiry.
The substantial: considérations uriderlying the doctrine of estoppel
apply to ;goveimment as:rvvell as td individuals. Ghope v. Détroit
Plank Road Corppany, 37 Mich. 195, 26 Am. Rep. 512; Common-
wealth V. André, 3 Pick, 224. i. .
A decree such as is invoked in the case Under considération should
never be entered unless ail the facts entering into the préemption
transactions hâve been gathered with the nicest kind of accuracy.
In a case necessarily turning largely upon -questions of motive and
intention, no data is adéquate unless reasonably complète. Courts
are disinclined to set aside, upon proof resting wholly in memory,
solemn deeds that hâve not been questioned for such a lapse of years
— especially when the parties are dead. Mayor of HuU v. Horner,
Cowper Rep. iio; United States v. FHnt, 4 Sawy. 58, Fed. Cas. No.
15,121 ; United States v: Arredbndo, 6 Pet. 746, 8 L. Ed. 547; Opin-
ion of Attomey General Black, 9 Op. Atty. Gen. (U. S.) 204.
In the very nature of this case the data brought toour attention
is and must remain incomplète. True it is that Stinson is still alive;
But the fact of physical death in the cases noted is not a distinction
that is controUing.; Memory obliterâted, or nearly obliterated, is, for
the purposesof helpfulitestimony, as much gone, as the merhory of
one physicâlly dead. Thç^ controlling fact is that the court has no
longer a: reliable source from which to obtain facts upon which to
/ound a decree. In the very nature of this cause no adéquate data
can be obtained. Whatever impression the évidence actually submit-
tpd may hâve left, the faict remains^ — a fact that détermines the equities
of this suit— !-that the transactions under review are so remote, and
the sources of testimony so depleted by death and time, that there is
np longer opportunity to put, with reasohable certainty, one's fînger
upon thetruth. A case thus sapped of any possible satisfactory re-
sults from inqijîry should not be entertained at ail, except for reasons
much more cog«nt than any hère disclosed.
The decree pf the Circuit Court will be afïirmed.
THACKEEAT V. SAX^EHNEB. 911
TfiCACKERAY v. SAXLEHNER.»
(Circuit Co^rt of Appeals, Seventh Circuit October 6, 1903.)
No. 951.
1. Trade-Marïs— Infkingbment— "HuNTADi" Waters.
The name "Hunyadi" having been established by complalnant as a
valid trade-mark for natural bitter waters f rom Hungary, its use by de-
fendant to designate bitter waters manufactured by Mm in accordance
witb a secret formula Is an infringement, and complalnant Is not es-
topped to malntaln a suit for such infringement by the faet that through
lâches she was so estopped as against certain importers of other Hun-
garian waters who had used the naime for a number of years, where
défendant began its use subsequently and after complalnant had com-
meneed a vigorous assertion of her rlghts.
Appeal from the Circuit Court of the United States for the North-
ern District of IHinpis.
The suit in the Circuit Court was brought by the appellee, widow of An-
drew Saxlehner, deceased, and successor to his business, a résident of the
city of Budapest, and a subject of the Kingdom of Hungary, against the ap-
pellant, a citizen of the statei of Illinois, résident of Cbicago, to enjoin ap-
pellant from uslng the word "Hunyadi" as a name for waters manufactured
and sold by appéllant, and from uslng a style of bottle, capsule, and label
similar to that used by appellee for her "Hunyadi Janos water. Upon the
hearing in the Circuit Court, a decree was entered flnding for appellee, and
enjoining appellant from uslng the name "Hunyadi" in connection with his
waters, and from selling or offering for sale any such bitter water in bottles,
and under labels, in imitation so closely in gênerai appearailee of appellee's
Hunyadi Janos bottles and labels as to be calculated to deceive the public.
From this decree this appeal is prosecuted.
The further facts are stated in the opinion of the Court.
John G. ElHott, for appellant. ;
Antonio Knauth, for appellee.
Before JENKINS, GROSSCUP, and BAKER, Circuit Judges.
GROSSCUP, Circuit Judge. The appellant manufactures in Chi-
cago, according to a recipe not disclosed, the bitter waters to which
he attaches the name of Hunyadi Geyza. His business was not in ex-
istence prior to the décision of the Suprême Court, in Saxlehner v.
Eisner & Mendelson Company, 179 U. S. 19, 21 Sup. Ct. 7, 45 L. Ed.
60, nor has he ever been, so far as the record discloses, an importer
of natural bitter waters from Hungary. Whether, under thèse cir-
cumstances, appellee is entitled to restrain his use of the word "Hun-
yadi," is the principal question presented.
It is stipulated that the facts set forth in Saxlehner v. Eisner &
Mendelson Company, supra, are to be taken as the facts in the case
under considération. Without transcribing into this opinion the
statement at large, it is sufificient to say that in 1862 Andréas Sax-
lehner, predecessor of appellee, discovered at Budapest, Hungary, a
spring named by him "Htinyadi,"' in honor of a Hungarian hero of
♦Rehearing denled November 18, 1903.
H 1. Lâches as a défense in suit for infringement of trade-marlî or trade-
name, see notes to Taylor v. Spindle Co., 22 C. G. A. 211; Kichardsoû v. D.
M. Osborne & Co., 36 C. 0. A. 613.
912 ISS'^BDBÏEAI, RÉjt'éRTEift.
the fîfteenth century; that under an,,or.der of the municipal council
of the place wherè tiié- wells ■'#eT'e lôcated,' he subseguently sunk
other wells, and began to expdrt the watërs to Européan: countries
and the United States ; that fpj:.; this purpose he adopted a novel
style of bottle of straight shape,,T|vit;}i short neck, ,tp which was at-
taçhed a., Epetal G.apsùfe- bearing ihe inseription : (translated) "Hun-
yadi Janos rbi,tter water of Buda"; as also 'a pèculiar label covering
the boiy of the bot'tjeidivided intb'three Ipii^itudinal panels, the
middî^. t?pè'df, which' bpfè the suppp's^^^ pf^the herp, with the
name ÏJ^yadji Janos witten in large letters on the top— the color of
the:mi(Wl«--pand beiiiga reddish browh, and the.Pther panels white;
and the*%atèri' in this kih'd of bottièsi :has found its way tP the United
States to the extent of about Pne million bottles a year, and is known
at large, as HunyadiVvàter.' ; ' ■
In 1872 another water from the same locality was, under an order
of th^p ^Mwijster of Agriculture of HLungary, put upon the market
under the iname of "Hunyadi MatyâS'',' and under that nâme found
its Way^îitpj^ihe Utïited States. C)thei; waters .firom the same locality,
knowij-'aà,"'H;ùnyadi..Àrpad", and "Eftinyadi Josef" and the like, came
under therpermissionjinamed upon the market, including the market
of the United Statesv ;':'■■: ■ ' .
Agairtst ëpiîie of th|^sé;;jnippfters,' stiits were brought in 1886 in
the .Circuit , Court ;df the Uriited States and in the State Courts of
New Vork» by, the Apollinaris Company ,1 Limited, of London, the
distributing agents of Saxlehner; in sothe of which suits ex parte
injunctions were içsued, and in oth(érs the sùits withdrawn for want
of jurisdiction ; but in 1888 the pending injunctions were dissolved,
and the suits discontinued. In ail of thèse suits the défendants
thereto seem to hâve relied upon the fact, that under the laws of
Hunga^yj as the laws then were, they could rightly use the word
"Hunyadi", provided they annexed thereto as a suffix, a word dif-
férent from "Janos." Subsequently, however, the laws of Hungary
were changjcd, so that in 1895 Saxlehner was enabled to register the
name "Hunyadi" as a; tfade mark* ■ and to procure the cancellation
of the pther trade marks inçprpôrating that name. Under this
changed law of Hungary the casé : c^: Saxlehner v. Eisner & Mendel-
son Compaiiy, supraj w^p brought in ,1897.
As we, read the decifiiPfl in that cause, the Stipreme Court held,.
that appeilçe had a rightful monopoly of the use of the word "Hun-
yadi", and that there had been no such abandonment as made it a
generic teri^i, usable at the, pleasure of any one engaging in the
sale of bittgrjvaters; but that, owing,to lâches— her failure to bring
suit against -cesrtain importerjsengaged in the importation of natural
bitter wa^èrs/. from. Hungary — appellee was estopped, as against
them, from maintaining. her suit, The defeat of appellee, and the
succe^s oi.h|si; opppnçnts,, in the càsë,:lwas grounded, not vïpon aban-
donment, but upon estoppel — an estoppel growing out of the fact
that the importers defending had beèh àllowed, dtiring the period of
appellee^s âcquiescence, a period pf'ttine years, to build up à business
in the iittp'ôttatiori and sale of natiii^al tlungarian waters in the mar-
kets of the United States.
INGRAM V. WILSOÎT. 918
But the estoppel named will not avail the appellant în the case
tinder considération. He was not engaged in the sale of his waters
until after appellee had commenced vigorously to assert her right
to the exclusive use of the word "Hunyadi." He entered the market,
therefore, with this name upon his manufactured water, not under
the implied permission, but against the earnest protest, of the owner
of the name. Nor is appellant's case in other essential respects like
that of the importers of natural bitter waters from Hungary. Such
importers, though giving to the public water other than that from
appellee's springs, give genuine native Hungarian water of a char-
acter almost identical with that of appellee, and at a price measured
by the cost of bringing it from Hungary to the United States. Ap-
pellant oflfers a manufactured water of whose contents the public has
no knowledge, and at a cost ruinous to the importation of the genuine
water. The Suprême Court never meant, in our judgment, to throw
around such a competitor, the protection of the estoppel indicated,
or expose the public to a device under which they would drink the
waters of Lake Michigan, doctored after appellant's recipe, in the
belief that they were drinking the natural waters of Hungary.
It is unnecessary in the view thus taken to go into the case turn-
ing upon the similitude of bottles, capsules and labels; for if appel-
lant is enjoined from the use of the word "Hunyadi", the other
questions become practically unimportant.
The decree of the Circuit Court is affirmed.
INGRAM V. WILSOh.
In re INGRAM.
(Circuit Court of Appeals, Eightli Circuit November 2, 19<^)
No. 1,882.
No. 84, Original.
L Bankbuptct— Ordbrs— MoDB dp Revibw.
An order made by a court of bankruptcy, on pétition of 8 créditer, dl-
rectlng the sale of property which had prevlously been set apart to the
bankrupt as a homestead, is not one from which an appeal is expressly
autborized by section 25 of the bantruptcy act, but Is one made in the
course of a bankruptcy proceeding, and revlewable on pétition to révise
under section 24.
& SaME— JUKIBDICTION Oï BaNKRDPTCT COURT.
The homestead of a bankrupt, exempt from his gênerai debts under
the laws of the state, does not pass to his trustée, and the court of
bankruptcy Is without power to order its sale because a particular cred-
Itor may hâve the right, under such laws, to subject it to the payment
of his debt.
Appeal from the District Court of the United States for the South-
ern District of lowa.
On Pétition for Review.
If 1. Appeal and review in bankruptcy cases, see note to In ro Bsgert, 43
0. 0. A, ».
■125 F.— M
9H 125r|rEtDBBAL: RB^OBTEB.
■J.' L.'Psi|ri6h,!for appçllatit./- :; .■; - ^■■■^-■■-'f :)th it;-'^
Howar^ J, Çj^rk (A. Ai Mcivaugliljn, on the brief), for;.app.eHefe.
fBeforelSANSORN, THAYER. and VAN DEVANCER. Circuit
Judges.' • , "' '■'■-'■■■' ■ ■■■ ■ "■'- ^-'''
THAMER, Gircuit Judge. Thèse. are bânkruptcy c^ses, one of
vvhiich comçs before us on appeal froman order made by the District
Court andîtheibtber is an original proceedingwhieh was commenced
in this court by a pétition for review. Both of thèse cases involve
the same question, the pétition for review having been liled because
Ingram, the ! petitioner and appellanty;i*Wais uncertain whether the
order made by the lowert court slioùldbe brought: before this court
for review by; appeal or by a pétition for review. .
Adalaskà: O. Ingram^ : the appellant and petitioner, was adjudi-
qated a b^nkrupt on December 27, 1899. Af ter the commencement
of bankruptcy proceedings certain real property belonging to the
baiîkrupt, toi wit, lots m, 112, 141, and 142 in the town of Mt. Ayr,
in the State of lowa, were claimed by the bankrupt as a homestead,
and as exempt: tmder the, laivs of the istate. On Januarly 30, 1900,
thisudaim. was sustained; and; the aforesaid property was set aside
to the bankrupt as exempt ;by an order made in the course of the
bankrtiptcyjptoceedingsJ î At a later date, to wit, on or about Sep-
tember 19, 1902,' George W. Wilson, the'appellee, presented a péti-
tion to the bankrupt court whereinhealieged, in substance, that he
was the holder of a note in the sum of $4,000, which was executed
by the bankrupt on November 10, 189^, which had been duly proven
and allowed as a debt of the bankrupt in the course of the bankruptcy
proceedings, on which certain paymerits had been made before bank-
ruptcy proceedings were inaiAgurated,.,and upon which certain divi-
dends had also been paid oiit of the bankrupt's estate in the course
of such p''tic&dirig?S','trût thât the sànie had not been fully paid and
discharged, and that a balance;;remained due thereon. Wilson fur-
ther alleged that Ingram bec^me pqsses§ed of the real property afore-
said, which had been set asiaë'tô hini as exempt, long after the ex-
écution and delivery of the last-mentioned' hôte, and" that' ufldertîie
lâ'ws df thê Stâte ôt lowa,' wliere said pi'opprty waS lo'càted, and where
thé bankriipt re's.idçd, tiièJhohiestead proîîerty of thëidebtop.was; lia-
ble for the p^yhismt of ail hisdebts^accraed.or existing ; prior to the
acquisition of the; property cohstituting- 'the: homestead. ' He accord-
ingly prayed the bankrupt court to make an order tïiréctirig the trys-,
tee, in bankru|)tçy,to take, pôs^essiôà' bî the afbres4.ï,4,,prpperf;y con-
stituting the Iil0|nèst:ea4, and to se.ll the same, and apply the proceeds
to the extingjiishment :of the balance duc on the aforesaid notte in
favorof Wilsbft'. StibseqUently, on December iS, 1902, the, bank-
rupt court granted the petitioner's prayer by directing the trustée in
bgnlçruptjty tel i|r9çeed,t®t,F41:,at publiCf auction aftd for- cash the real
estate constituting the bankrupt's homestead, theretofore set aparté
to him as exempt, and out of the proceeds , of the saîe to pay to
Wilson, the petitioner, the sum of $2,583.10, being the amount found
to be'dite on;the petitioner's note, tog<èth*r;with iïiterest thei-'eon at
the rate of 8 per cent, per annum from December 12, 1899, and' tb
DîGEAM y. WILSOU. 915
pay tKe Kalarice of th'e proceeds of the sale oftHe liomestead to the
bankrupt. The présent appeal, as well as the pétition for review,
challenge the validity of this order.
Two questions were argued before this court, and hâve been sub-
mitted to us for décision. The first is whether the order below was
an order made in the course of bankruptcy proceedings, and review-
able on an original pétition for review filed in this court, rather than
by an appeal from the order ; and the second is whether the bankrupt
court had jurisdiction to entertain Wilson's pétition for the sale of
the homestead, and to make the order to that eflfect which is now chal-
lenged.
The first of thèse questions is of no great importance now, since
the principal question in the case is before us for détermination ei-
ther by virtue of the appeal or the pétition for review. We are of
opinion, however, that the order in question is an order made in the
course of a bankruptcy proceeding, which this court is empowered
to revise on a pétition for review by virtue of section 24 of the bank-
ruptcy act of July I, 1898, c. 541, 30 Stat. 553 [U. S. Comp. St. 1901,
P- 343ï]' It is not one of those cases in which an appeal in the or-
dinary form is expressly authorized by section 25 of the bankrupt
act. For that reason we are constrained to hold that it is review-
able by an original pétition for review.
Relative to the second question stated above, it is to be observed
that since the question was argued in this court it has, in efïect, been
decided by the Suprême Court in the case of Lockwood v. Exchange
Bank, 190 U. S. 294, 23 Sup. Ct. 751, 47 L. Ed. 1061. It was there
held, in a case which arose in the state of Georgia, that under the
bankruptcy act of 1898 the title to property of a bankrupt which is
generally exempted by the law of the state in which the bankrupt
résides remains in the bankrupt, and does not pass to the trustée;
that the bankrupt court has no power to administer such property,
even if the bankrupt has, under a law of the state, waived his exemp-
tion in favor of certain creditors ; and that the fact that the act con-
fers upon the bankruptcy court authority to control exempt property
in order to set it aside does not mean that the court can administer
and distribute it as an asset of the estate.
In the case in hand, the property which is involved was generally
exempt under the laws of the state of lowa, the same being the bank-
rupt's homestead. By virtue of those laws (Code lowa 1897, §
2976) it could only be sold on exécution "for debts contracted prior
to its acquisition," and even for such debts it could not be sold ex-
cept "to supply a deficiency remaining after exhausting the other
property of the debtor liable to exécution." No creditor of the
bankrupt other than Wilson had, as it seems, any interest in the
homestead, inasmuch as the facts which he alleged as a basis for the
order only showed a right personal to himself to hâve this property
subjected to the payment of his claim after ail the other property of
the bankrupt had been exhausted. This right, existing only in favor
of one creditor, did not cause the title of the homestead to vest in
the trustée in bankruptcy, nor did it confer any greater authority
upon the bankrupt court to administer upon it by ordering its sale
916 125fBS)KEA^,-RpP0B«rBB.
and the distributÎDnjofjitS'jprocçeds thànijwhere, as in the case cited,
a single creditor had acquit^ the right to sell exempt property by
force of a private contract which had been entered into' in accord-
ance with the laws of the stâtie of Georgia. As the title to the prop-
erty in question was never yested iii thé trustée and never beCâme
subject to administration by the bankrupt court, we are of opinion
that that court \vas without powèr to order the sale of the home-
stead, and that its order to that efïect was erroneous, if not void. A
créditer like Wilson^ who has the right, under certain conditions,
to subjeçt the h^mesteadito the paynient of his debt, must seek such
relief as he is entitled to under local laws in the 'courts of the state;
and if a discharge of the bankrupt from ail his debts, when granted
by the bankrupt court, will stand in the way of his obtaining relief,
that court, after administering upon ail the assets subject to its con-
trol, may withhold the bankrupt's discharge until a reasonable time
has elapsed to enable Wilson to assert his rights in the proper forum.
The order of date December i8, 1902, directing the sale of the bank-
rupt's hornestead and the application of the proceeds in the manner
heretoforè stated, is hereby vacated and annulled, and it will be so
certified to the bankrupt court. •
The appeal in case No. 1,882 will be dismissed, withOut the allow-
ance of costs to either party in that proceeding.
H. D. WILLIAMS COOiPBllAGB coi. v> SCOFlELD et al,
(Circuit Court of Appeals, Eighth Circuit. Noyember 2, 1903.)
'...il''./ . . ■; Nfli. liSSli : ■ ;
L AppiîAt — Review of lNSTR0CTtoSs'— Sufficiency of Excbftions.
■ An exception takenlnôgross' tt) tiie refusai of nuinerous instnjictions
;asj|e^ Will net be npticefl (On appeal if soώ of tlie Instructions tefused'
w^re .^rroîieo,ij's,,pr spperfluqup-, ■, : •; -jt ' .!: i :
2. Sales— C'6i|STB,ifÇT)[0iî ofCqnt|ract. , •
Défendant cbptracted tO 'fûmish plàlntlffs, who were dealers in oll,
' wlth their entiFe requiremétrt's for ne#ttkrrels for a Certain year, at
specifled pricea. PlaintifEs weue accustofioèd to {)urchasé' barrels firom
their customers after they were ernptjed.i and use tbera,. Hgàin. flieW,
that such contract did not' require tUem rtp purchaseï secpndljind barrels
insteàd of ordèrmg new biles;, whèh théy were cpinpelled, to pay njore
than the eontractî prifeé théref or, but tbàt they -vfere entitlëia to call on
def endajjt^ for Suefi! numba" of'nêw barrelà as they réquîréd ih condilct-'
ihg their busiiiess, in, the, prdipary and bpslnesslike way. Mr '^ :'< ;
In Error'to the iÇit^uit Gcitii't of thé''tJiiîtéd States'for the Ëastèrii'
District 'Of MiissOufil'"' ; ■■' ::'■'■■ = ' '• '■-•;'■■ ■ •■ ^\' ^ ;' ' ' ;-^
D. W."*S.obért (,'É,.lS. Robet|, on tÙe- brief), for pifwntiff.'in eirror.
Richard A, jonès' (Nathan iprankàhd David/W. .V^^jles, on the-
briefj, for ''défehdàrits in erroK ', ; : ' ■ ,: ■»//"'''' '' --
Beforé ^iXi^B^RNi TRAITER,; and VAN ' DEVANTER, Circuit'
Judges. ; ,\l . ;:'■: >f-"; ,)■.•': ii,;'" .;)j;- :■:■ ■.;■ : 1.-.! .'(-à ''■;u-;:.ln(-n ■■
TîïAjYÉRj! Circuit Judge. ,., This^cà^e was befpre thisi court on, â
formér,pçç?i'sJ,oii on a writ of érror which was sued outby the H. IJ.
H. D, WILLIAMS COOPERAGE CO. T. SCOFIELD. 917
Williams Cooperage Company, the présent plaintifï in error. H. D.
Williams Cooperage Go. v. Scofield et al., 53 G. C. A. 23, 115 Fed.
119. The former hearing resulted in a judgment of reversai for rea-
sons fuUy stated in the opinion. The second trial, which was con-
ducted in substantial conformity with the views that were expresscd
in our previous décision, resulted in a second verdict in lavor of Sco-
field et al., the plaintiffs below, whereupon the H. D. Williams Coop
erage Company, the défendant below, sued out another, the présent
writ of error. The circumstances which gave rise to the contro-
versy are fuUy stated in our former opinion, to which référence is
hereby made, and this fact obviâtes the necessity of any further state-
ment.
On the présent occasion the plaintifï in error coraplains principally
of the refusai of one of four instructions which it requested the trial
court to give. An inspection of the record discloses, however, that it
did not take an exception on the trial to the refusai of the particular
instruction which it now insists should hâve been given, but that it
took an exception in gross to the refusai of the four instructions.
This court has held on at least two occasions that an exception taken
in gross to the refusai of numerous instructions will not be noticed
on appeal if some of the instructions so refused were erroneous or
superfluous. The same reasons which hâve influenced the courts to
hold that they will not notice an exception taken in gross to an
entire charge or to a long excerpt from a charge embodying several
propositions of law, if any of the propositions are sound, applies'
with equal if not greater force when a long list of instructions enun-
ciating différent propositions of law are asked and refused, some of
which are unsound or superfluous, and an exception is taken in gross
to the refusai of ail. Hodge v. Chicago & Alton Railway Company,
121 Fed. 48, 52, 57 C. G. A. 388; Railway Company v. Spencer, 18
C. C. A. 114, 71 Fed. 93; New Éngland Furniture & Carpet Com-
pany V. Catholican Company, 24 G. G. A. 595, 79 Fed. 294 ; Priée v.
Pankhurst, 3 C. C, A. 551, 53 Fed. 312; Association v. Lyman, 9 C.
C. A. 104, 60 Fed. 498, When counsel, on the trial of a case, merely
say, as in the présent instance, that they except to the court 's action
in refusing a séries of instructions, they assert in substance that ail
of the instructions were proper and ought to hâve been given. . The
only question, therefore, which such an exception fairly présents on
appeal is whether such contention, that ail of the instructions asked
ought to hâve been given, is well founded. We are of opinion that
counsel should challenge the attention of the trial judge to each sep-
arate proposition of law which they see fit to submit, when numer-
ous déclarations of law are requested, and that they should obtain a
distinct ruling on each proposition, âs well as the allowancé of an ex-
ception with respect to such action as may be taken, provided they
intend to take advantage of such action on appeal. The practice that
is sometimes pursued, of tendering a long list of instructions to a
trial judge, and, after^ they are refused, ' saying, "we except to the
court's action," without pointing out to the trial judge the particular
propositions of law that are deemed important, and securing an ex-
press ruling' thereoii,; tends to occasion error that might- otherwise
918 ' 125 FBDBÔiAt BHPOETBR. -^
be avoided; â«d ought to be discouraged. Some of the instructions
which werei.,Fefased in the présent instance were clearly unnecessary,
because thè' Substance thereof wâs embodied in the gênerai chargé.
Gounsei foïr' the plaintiflf in error do not even contend on appeal that
ail of them ôught to havè been given, or that a material error was
committed in not-giving them. They insist, however, that one of
the instructions embodied a proposition of law which should hâve
been given. Thàt instruction was as foUovi^s :
"The court Instruets you that, Under the agreemeiït between the plaintiffs
and the défendant, the défendant was not obllged to furnlsh the plaintiffs
wlth ail of the harrels which they needed for their business during the year
1899, but only wlth the new barrels which plaintiffs needed, and that the
burden of proving the number of new barrais which the plaintiffs needed Is
upon them, and. If théy hâve falled to prove the number of new barrais as
distlnguished from the^ number of secôndhand barrels needed and used by
them after the défendant refuaed to make further dellveries, your verdict
must be for défendant."
The contracta for the breach of which this action was brought
against the cooperage company, bouhd it to furhish the plaintiffs be-
low with' their "entire requirements ^ * * * for nevv barrels dur-
ing the year 1899." It had been the usual practice of the plaintiffs,
when they sold barrels containing oil, tô repurchase the barrels, when
they were emptied, from their custOmers, although the latter, as it
seems, were under no obligation to sell them to the plaintiffs if Jhey
saw fit to use them themselves or sell them to other persons. The
instruction in question enunciated the proposition that the plaintiffs
could not recover if they had failed to prove the number of "new bar-
rels needed and used by them" aftef the cooperage company had re-
fused to furnish barrels as ordered. Counsel for the cooperage com-
pany contend that the plaintiffs had no right, undër the contract, to
call on it to furnish them with new barrels simply because the price
of new barrels, as fixed in the contract, became less than the price
demanded by their customers for secôndhand barrels. They fur-
ther urge, in substance, that, tO entitle plaintiffs to recover, it was
their duty to show how many secôndhand barrels they might hâve
obtained by paying the enhanced price, and that they were only en-
titled to recover damages on accounit ôî the new barrels in excess of
the number of secôndhand barrels that might hâve been bought,
which they "needed or used." We cannot as sent to the foregoing
proposition. Aside from the fact, heretofore mentioned, that a
proper exception was not taken to the refusai of the aforesaid in-
struction, we think that it was properly refused. In îts charge the
trial court instructed the Jury that, if they found the cooperage conl-
pany was guilty of a breach of contract as charged in the complaint,
they should assess the plaintiffs' dartiages "at that artiount or sum of
money that you find they were reasonably ànd necessarily required to
expend, over and above the contract price as fixed in the contract
read to you, in ôrder to secure eittier new barrels, or others of no
greater value than the new barrels èotttracted for, to meet their rea-
sonable business requirements daring the term of the contract in
question." We are of opinion that this instruction was founded
upon a correct view of the contract, and that it prescribed the correct
NEWHALX, V. m'OABE HANGER MFG. 00. 919
rule for the assessment of the plaintiffs' damages. By the provisions
of the agreement the cooperage company had bound itself, in sub-
stance, to supply the plaintiffs with such new barrels as they found
it necessary to purchase during the year 1899 to meet the ordinary
requirements of their business, and to furnish them at a certain fixed
price. It is probably true that the cooperage company did not ex-
pect that the plaintiffs would order new barrels from it, provided they
could obtain suitable secondhand barrels at a less price, but they did
not bind the plaintiffs to buy secondhand barrels in lieu of ordering
new barrels when they could be obtained at any price. It is fair to
présume that the contract was entered into on the assumption that
the plaintiffs would conduct their business in the ordinary way, and
that new barrels would be ordered whenever the contract price was
less than the market price of old barrels. In that event their busi-
ness requirements would demand the purchase of new rather than
old barrels because they were cheaper. If this was not the view
which was entertained when the contract was entered into, the oppo-<
site view, that new barrels should not be ordered when secondhand
barrels could be obtained at any price, ought to hâve been clearly
expressed. We are of opinion, therefore, that the lower court was
right in declaring the measure of damages to be such a sum as was
necessarily expended by the plaintiffs in excess of the contract price
in securing new barrels, or others of no greater value, that were
needed to meet their reasonable business requirements during the
year 1899.
We iînd no occasion to reverse the second judgment in favor of
the plaintiffs in this case, and it is accordingly affirmed.
NEWHALL V. McCABB HANGER MFG. CO. et al.
(Circuit Court of Appeals, Second Circuit. October 3, 1903.)
No. 144.
1. Patents— Suit pok InïRingement— Preliminaky Injunction.
A preliminary Injunction should not be granted in a suit for infrînge-
ment of a récent patent which bas never been adjudicated, where there
is no proof of public acquiescence, and on the showlng made there ap-
pears to be a fair question as to invention, anticipation, construction, or
Infringement.
8. Samk— Thermal Dook-Closikg Appabatus.
An order granting a preliminary injunction against infringement of
the Kingsland patents No. 680,415, claims 4 and 5, and No. 680,458, claina
20, each covering a thermal door-closing apparatus, reversed, on the
ground tbat the patents were unadjudicated and imder the proofs there
was serious doubt of infringement.
Appeal from the Circuit Court of the United States for the South-
ern District of New York.
Appeal from an order of the United States Circuit Court for thé
Southern District of New York granting an interlocutory injunc-
tion in a, suit for infringement of complainant's patents Nos. 680,415
and 680458, granted August 13, 1901, to O. H. Kingsland.
For opinion below see 117 Fed. 621.
Sf2ô ' 125 pbdBrai; kepgetér.
'Thomas Ewiny:, Jr., for ap^pellaiîtâ.
F. S. Uuncarij for appelléë. ' '
Before WAtLACE. LAÔOMBE, àrid TOWNSEND, Circuit
Judges.-; ' . , '
TOWNSEND, Circuit Judge.' Thé patents in suit relate to door-
closing apparatus s6 construçtèd as to operate automatically in case
of fircv Thëy cover generally an ordinary self-clôsing fire door and
thermal fuse, in combination with a sliding catch or boit so arranged
that, While normally holding ^aid door open, the boit is releasable
by heat'ànd permits the door to close by it? own weîght.
Thè bill was filed within ohe. year after thé issuance of the patents
in suit, they hâve liever been litigated, and there is no proof of public
acquiesceilce. Complainant, hôwever, relies upon a décision adverse
to the défendant McCabe in interférence proceedings between him
and thé , patentée, Kingsland, ànd on alleged bad faith on the part
of said défendant in procuriiig the patent under which the alleged
infringing devices are manufaçtured, and contends that there is no
question either as to the Validity of the patents in suit or their in-
fringemënt. In Reed Manûfacturing Corripany v. Smith & Win-
chester Company, 107 Êed. 719, 46 C. C- A. ôoi^a case where a simi-
lar claim was made on behalf of a recéntly issued patept which had
not been adjudicated, this court said, concerning the efïect of a dé-
cision in interférence proceedings, as follows:
"The patent is a very récent one, and there Is no such proof of long-con-
tlnued acqtiieseence by the public as would raise a prima facle case iu the
patentee's favor. Under such clrcumstances It is the practlce In this cir-
cuit to refuse preliminary Injunction where there has been no adjudication
snstaining the patent, if there appears to be any falr question as to inven-
tion, anticipation, construction, or Infringement. Dicljerson v. De La Vergne
Refrigerating Machine Co. (C. 0.) 35 Fed. 143."
The allégations in complainant's affidavits relied on to support said
charge of bad faith are to the effect that said Kingsland, being an in-
specter of fire doors and appliances in the employ, of the New York
Fire Board of Undèrwriters, having rejected certain fire-door locks
made by the défendant company and applied by the contracter to a
certain building*, told said contractor that he (Kingsland) had de-
vised a new fofn^'of look which obviated the objections to defend-
ant's lock, and explained to said contractor certain features of its con-
struction and i opération ; and that èaid contractor thereupon re^
ported said conversation to défendant McGabe, and "stated that said
Kingsland wa,S 'getting up a fire-door lock which did away with the
use of a sprihg, àrid that it would be necessary for MeCabe to supply
déponent with a fire-door lock without a spring in order to pass in-
spection." Said Kingsland allèges that thereafter hé again inspect-
ed the fire dqprs in said building, found that they Were equipped with
locks manufàètôred' by défendant and like those hereih claimed to
infringe; that hé approved the same, and "was givën to understand
that James T. -MeGabè Was willing to pay him a royalty on each of
the locks that fflight be tpànufactured by said McCabe and his com-
pany of the same construction," but that àlthough hé (Kingsland) re-
NEWHALL V. m'cABE HANGER MFG. CO. 921
fused to make any such arrangement he received from the défend-
ant Company, on March 9, 1900, a check for $10 for similar locks
used on another building which he had inspected, which check he re-
turned. Prier to the sending of said check, complainant and défend-
ants had filed the applications, on which the patents hère in contro-
versy issued, and after the sending of said check said interférence
was declared. The défendant McÇabe allèges in his afïîdavit that
he received no suggestion from Kingsland or said contractor that
Kingsland was gettina: up any new lock, and makes statements which,
if credited, show that said payment was merely made in order to avoid
compétition with Kingsland, as inspector for the board of under-
writers, on such locks as he had to pass upon.
We fail to discover in complainant's afïîdavits any allégation which
shows such conduct on the part of défendant McCabe as should de-
prive him of the right to défend aeainst this application. It does
not appear that said contractor disclosed to défendant the invention
of the patent in suit. Defendant's right to devise a new form of lock
to obviate Kingsland's objections was not aflfected by the mère fact
that Kingsland was getting up something with the same end in view.
And whatever opinion may be entertained as to the attempted pay-
ment of $10 to Kingsland as inspector, we do not perceive how such
attempt can afïect the issues herein, especially as the patents in suit
were not granted until nearly a year and a half thereafter.
The question herein, then, is whether the Circuit Court fairly ex-
ercised its discrétion in granting a preliminary injunction, in view
of the rule that such injunction should be refused when there is a fair
doubt as to invention, anticipation, construction, or infringement.
It would serve no useful purpose to discuss at length the state of the
prier art as disclosed in defendant's afïîdavits. It appears, however,
that said Kingsland, in his prior patent, No. 576,733, described and
claimed a fire-door apparatus from which, accordin^g to Kingsland's
afHdavit and those of complainant's experts, the patents in suit are
chiefly differentiated by the utilization of the pressure of the door
to insure the removal of the boit from the path of the door. It does
not appear that the opération of defendant's lock dépends upon any
such pressure, and the court below refused an injunction on claim 10
of patent No. 680,415, which in terms covers this arrangement. The
claims as to which infringement is alleged are as follows:
Patent No. 680,415.
"(4) The combinatlon. -with a self-closing door, of a sliding boit capable
of being manually moved in the path in which it slides, and a device compris-
ing a thermal fuse for holding it in that path, releasable by beat for per-
mitting the movement of the boit ont of that path.
"(5) In a thermal door-closing apparatus, a self-closing door, a thermal
fuse, a bar extending across the Une of travel of the door and capable of
being manually withdrawn out of said line of travel, a locking device con-
nected with said thermal fuse for holding the bar in said path when the
fuse is intact, and permltting the movement of the bar out of said path when
the fuse is broken."
Patent No. 680,458.
"(20) The combinatlon, with a self-closing door, of a sliding boit capa-
ble Of being manually moved in the path in which it slides, and a device
922' 125 E-EIDISBAL BEPOETKB,
for holding it ln;<lïat path, releasàble by beat, for permlttlng the moyement
of the boit pîJt of; that patli,''
Claim 4 oPNo: 680,415, and çlaim 20 of No. 680,458, are practically
identical, aliid the spécifications and dràwings ôf the two patents seem
to relate tO t;h^ samé construction, so fax as the issues herein are con-
ceriied. ïï'woUîd séem that the only possible novel élément covered
by thèse clàinis is the locking device for holding the sliding bolt in its
path. Thîs device is radically différent in construction frein that
used by défendant. The sitnplicity of d*âftendant's construction, in
view of a prier art, pf which thé court rnight'almost take judicial no-
tice, is atonC'é suggestive ôf invalidity of the patent under which it
is construçted and of noninfringeinent bf âiiy pâtented construction,
especialiy ones sp lirnited by thë prior ârf and so complicated as
those of the patents in suit. '
It is unriècéssary to discuss the other contentions of défendant.
The affidavit^ and exhibits raise suçh a sërious question as to in-
fringement that, under the rûlè alreàdy statèd, we think the applica-
tion for a prelîminary injunctibn should hâve been refused.
The order appealéd from îâ reversed, with costs. '
NATIONAL PHONOGEAPH CO. v. LAMBSET CO. et ai.
LAMBERT 00. et al. v. EDISON PHONOGRAPH 00.
(Oircutt Coiirt of AppealsiSeVenth Circuit October 6, 1903.)
;„ Nos. 974, 075. ,,
1. Patents— lNï'BlNGiiMENT-*-PHON06HA.M Blankb.
The Edison patents No< 382,418, for a phonogram blank havlng a taper-
ing bore tbroughout its length, and No. 414,761, for a slmilar blank havlng
a rlbbed Inner surface, both had for their piir^ose the production of a
phonogram blank readily removable from the cylinder, and at the same
time havlng a uniform or practically uniform contact with the cylinder
throughQut tts length, which Wfts an important considération, since at the
tIme bla;jkP were made of wak or other soft materlal. Nelther of such
patents is Infrlûgéd by phonograms which are reproductions In celluloïd,
by means of ihèlds, of original records, intended to be fltted on the
cylinder of: thë phpnograph of the purchaser, and havlng a taperlng bore,
but making contact with suçh cylinder onlyat elther end by means of
concentric rlbs. Such dupllcàte records are a separate commercial product,
and also lack the chlef feature of the blanks of the patent, which is the
practically continuons contact with the cylinder throughout their length.
Appeals from the Circuit Court pf the United States for the North-
ern Division dfthè Northern District of Illinois.
R. N. Dyer and Edmond Wetmore, for- National Phonograph Co.
and Edison Phonograph Co.
Thomas F. Sberidan, for Xambert Co. apd ànother.
Before JENÇINS, GROSSCUP, and BAKER, Circuit Judges.
GROSSCUP, Circuit Judge. The two suits above entitled were
separately brought in the Circuit Court, and from the decrees therein
entered separate appeals are prosecuted to this court. They are so
closely related, however, both in fact, and in the law applicable to thé
NATIONAL PHONOGEAPH 00, V. LAMBEET CD. 923
facts, that they were heard together, and wiU be disposed of în a
single opinion.
The first suit was brought on lelters patent No. 414,761, issued
November 12, 1889, to Thomas A. Edison for improvement in phono-
gram blanks ; and the second upon letters patent No. 382,418, issued
May 8th, 1888, to Thomas A. Edison aiso for improvement in phono-
gram blanks ; the fîrst resulting in a decree sustaining the validity of
the patent, but finding the appellees not guilty of infringement ;
and the second in a decree sustaining the validity of the patent, and
finding the appellants guilty of infringement — the appellees in the
first suit being the appellants in the second. To reverse thèse de-
crees, the several appeals are prosecuted.
The material part of letters patent No. 382,418 is as follows:
The object I hâve in view is to produce a cylindrical phonogram blank or
phonogram which can be readlly placed upon the phouogram-cylinder of a
phonograph, and will center itself, and wlll also be adapted to retain its place
upon the phonogram-cylinder by friction alone. This I accomplish by pro-
Tiding the cylindrical phonogram blank or phonogram with a tapering bore
adapted to fit over a similarly-tapered phonogram-cylinder. The phonogram-
blank or phonogram is provided wlth a cylindrical recording surface. Blanks
or phonograms of the full length of the tapering phôflogram-cylinder of the
phonograph can be used as -well as those of shorter length, the tapering bore
centering the blank or phonogram, and adapting it to be pushed onto the
phonogram-cylinder until it binds thereon with sufflcient friction to hold It in
place.
I propose to make thèse phonogram-blanks the entire length of the phono-
gram-cylinder, and also to divide such fuU-length phonogram-blanks into parts,
so that sectional phonogram-blanks will be produced, which will be, for illus-
tration, one-fourth, one-half, and three-fourths the length of the fuU-size
phonogram blanks. AU of thèse sectional phonogram blanks, as well as the
full-sized phonogram-blank, will hâve the tapering bore, so that they can be
pushed upon the tapering phonogram-cylinder until they bind, and the instru-
ment can then be adjusted to them for recording and reproducing.
I do not claim herein a phonogram-blank having a recording surface of
wax, or a wax-like material, nor such a surface mounted upon backing of
tougher material, such matters being covered by my application for patent,
(Case No. 734, Sériai No. 252,964,) flled October 21, 1887.
What I claim is —
1. A phonogram-blank or phonogram having a bore tapered throughout its
length, substantially as set forth.
2. A phonogram blank or phonogram having a cylindrical recording-surface
and a tapering bore, substantially as set forth.
3. A phonogram-blank or phonogram having a cylindrical recording-surface
of wax or wax-like material and provided with a tapering bore, substantially
as set forth.
The material part of letters patent No. 414,761 is as follows :
My invention relates to cylindrical blanks for receiving sound-records în
the phonograph, made of wax or wax-like or slmilar materials, and designed
to be placed on the cylinder of the phonograph for receiving and reproducing
the sound-record. Heretofore thèse cyllnders hâve been made wlth a smooth
inner surface fitting closely upon the cylinder of the phonograph. I bave
found that several advantages arise from providing the interior of the cylin-
drical phonogram-blank with ribs, flanges, or projections, and it is in this
that my invention mainly consists. This construction makes It easier to re-
move the molded blank from the mold in which it is formed, enables the in-
jurions effects of contraction or warping of the cylinder to be readily re-
moved, and prevents any bad efCect from the accumulation of dust on the
cylinder of the phonograph, I prefer to form a spiral rib on the interior
surface of the blank.
§24 125 ï'BDElRÂi:. REj^ObTEB.
: I flfaa It eaeter to remove.such a blankfrom the core than one havlng a
smooth Inner surface, since by sllghtly turnlng or screwing the same It can
be readily,-wttb.iirawn.
In ihe proCess of moldlng the blank while the matferlal Cbols It sometlmes
becoiBes «ïohtfaéted or warj^d' On Its inner surface, so that it does not fit the
phonogjFàin^cjllnder truly, and in this case It has to be rèamed ont to remove
the Irreguiàritles. Thia bas îo be allowe^ for In making the blanks, and when
the blank is made witii ,ft smopth Inteirlbr the whole Inner surface often has
to be eut In brder to maié It trtie, and th'ls Is a matter of some difflculty and
meurs â irlsk of injury to thë 'blank. Where. the blank la formed with an In-
ternai rib, or rlbs and such ■watping occurs, it is only necessary In order to
remove It, to eut away the edges of the rlbs, and thus a blank havlng a true
iniier surface can be formed wlth less labor and expense and waste of ma-
tërial than wh^re the smooth' fforface Is usèd. I make the rlbs always deep
enough to allow for the reamlng out of the cyllnder. Another advantage is
that whea ïhé blank is placèd on the phonogram-cylinder any particles of dust
or othpr foreign substance which may be on the cyllnder einter and remain
in the spaees between the rlbs, tnstead of çomihg betwëeU the blank and the
cyllnder, Where they might pfevënt the blank from àssuming a true position
and restihg evenly thereori.
What I Clatcf} Is—
1. A tubular phonogram-biatk provided wlth Internai rlbs or projections,
substantlally as set forth.
2. A tabular ^honogram-blank haying an Internai spiral rib, substantlally as
set forth.
The following patents were put into' the recotd, either as antici-
pations, or other data material to the case :
No. 70,113, Oct. 22, 1867, A. S. Phillips.
No. 170,178, Nov. 23, 1875, L. F. Locke.
No. 200,5'2i, Feb. 19, 18^8, T. A. Edison.
No. 277,097, May 8, 1883, J. R. Abbe.
No. 309,288, Dec. 16, 1884, G. Birkmann.
No. 341,214, May 4, 1886, C. A. Bell et al.
No. 341,288, May 4, 1886, S. Tàinter.
No. 375,579, bec; 27, 1887, C. S. Tainter.
No. 380,535, April 3, 1888, C. S. Tainter.
No. 382,419, May 8, 1888, T. A. Edison.
No. 393,463, Nov, 27, 1888, T. A. Edison.
No. 393,967, Dec. 4, 1888, T. A. Edison.
No. 397,856, Feb. 12, 1889, G. H. Herrington.
No. 399,264, Mar. 12, 1889, G. H. Herrington.
No. 399,265, Mar. 12, Ï889, G- H. Herrington.
No. 406,571, Juiy 9, 1889, T. A. Edison.
No. 421,450, Feb. 18, ,1899, C. S. Tainter.
No. 464,476, Dec. I, 1891, G. H. Herrington.
/;,No. 488,191,, 'Dec 20, i§92, T. A. Edison,
We do not feel called uppn to pass upon the validityof either of
thèse patents. The phonogram of défendants below, as we construe
the patents, infringes the claims of néither of them. A single réf-
érence to the state of thé art makes this manifest.
At the time Edison took out the first patent named, phonogram
blanks were made of wax, or a wax like substance, a material more
or less soft and 'capable of being melted at relatively low tempéra-
ture. Cellulpid .records, more or less, fiçxible under pressure, were
not then known.
NATIONAL PHONOGBAPH CO. V. LAMBERT CO. 925
Prior to the Edison patents phoriogram blanks were made with a
cylindrical bore, adapted to fit over a cylinder that, at the inner end,
increased in diameter, so that, a push upon the phonogram would
cause its inner end to grip the cylinder at some point on its enlarging
exterior; and the enlargement being graduai, or in the form of a
taper, the cylinder adapted itself to such variable diameters of the
phonogram as was brought about by température or other caus.es.
Edison, for reasons perfectly obvious as we see it now, substi-
tuted, for this character of a cylinder, a cylinder having a uniform
taper throughout, and fitted this with a phonogram having a cor-
respondingly tapering bore. This enabled him to fit the phonogram
upon the cylinder so that it gripped or bound, not at one end only,
but throughout its length; manifestly with two objects in view —
that the soft material out of which the blank was then made should
hâve a securer base ; and that with a base secure throughout its
length, the blank could be more readily withdrawn from a tapering
than from a concentric cylinder. Thèse were the underlying con-
cepts of the first patent.
But phonograms, thus fitting closely upon the corresponding cylin-
der, were found to hâve disadvantages ; among them the fact that
contact of surface throughout their length, made it more difficult to
withdraw the blank from the cylinder. Hence in patent No. 414,;-
761, Edison substituted a phonogram blank, the interior of which
was provided with ribs, flanges or projections, preferably spiral.
This enabled the operator, where warping occurred, to remove it by
cutting away the edges of the ribs, leaving a blank having a true
inner surface; but retained at the same time the advantage of prac-
tical continuons contact throughout the length of the phonogram ;
for such would be the efifect were the ribs spiral, or even concentric
at very short intervais. The second patent is an improvement only
on the first, and makes no prêteuse of departing from its underlying
purpose, namely, a close contact throughout the length of the joint.
The phonograms of défendants below are not eut upon the cylin-
der. They are but reproductions in celluloïd, by means of molds,
of original records. They are a separate commercial product, sold
independently of the cylinder, and intended to be fitted on the cylin-
der of the phonograph owned by the purchaser. To this end — the
bore being tapering because the cyHnder is tapering — an edged con-
centric rib is placed at the extrême inner or larger end of the phono-
gram gripping the inner end of the cylinder; and another edged
rib, at the extrême outer or smaller end of the phonogram, causes a
close contact to be made between that end of the blank and the outer
end of the cylinder. There are no intervening ribs, and, owing to
the character of the material used, there is need of none. The use
of thèse two ribs is but the fitting of the blank, in the simplest and
most obvious way, to a tapering cylinder.
But the celluloïd blank with its end ribs does not dépend upon
uniform contact throughout the length of the cylinder, or contact at
sUch iiîtervals as to be practically uniform, as its distinctive me-
chanical basis or concept. Had wax, or a wax like substance, re-
926 O 125 FBDBÏKAÏi BHPORTBE.
maiiiedatbe; only material out of which phonograms coùld be made,
the fofm: of phonograin -of défendants belowwould hâve been im-
p'racticable, It îs in fact practicable, nbt by adopting the mechan-
ical conception pointed out in the patent; but by introducing a new
character of material not before known. It is this discovery of a
new mataîial that inakes it possible to disregard the previous neces-
sity of closfe contact, and at the same time enable the blank to be
readily taken off, for only the single inner rib grips the cylinder.
Thus the real means that brings about successful opération of the
phonogram df défendants belôw is not the adoption of the Edison
idea, but the' introduction inito the art of a nesy substance. Uniess
the ribsjwere employed as'indicated, there could be no adaptation
of thèse independently made blanks to thé purchasers' phonograph,
and this liongstep in the-aft-*— the making of blanks of celluloïd, in
multiple byiriieans of molds, thus iniménsely cheapening them —
would bel almost uselêss. '! ' ' ■■<
The decree of the Circuit Court in caâe No. 974 will be afifirmed,
and the decree of the Circuit Court in case No. 975 will be reversed
with the direction to dismiss the bill for want of equity
ELBCTEIO SMEiLTING & ALUMINUM 00. v. PITTSBTJRG REDUCTION
■ V,. !.,• .. '■:' CD. ., .•
(Circuit Court of Appéals, Second Circuit. October 20, 1903.)
'■■'No.i36.' ■ . ', ■
1. Patents— Infotnqbmbnt—Phocess foh Réduction of Aluminium Ores.
The Bi-^dlpy patent, No.t 468,148, for a process of separating metals
from àeir highiy rèfraçtory ores, relating especially to aluminium ores,
the essentlal featiii^s of wMch are, flrstl' dispenâlng with external beat,
and, second, the; use of the same eledtrlc" cBrrént to produce and maln-
tain fusion: and electrolyzei the ore, was, not anticipa ted,. and Its clalms
are entltled to , a libéral , construction. The Hall process, covered by
, patent No. 40o;t66, in whl^h cryôlité Is used as a fusing bath for alumlna,
whlle an Imptovement tipon; is aiso ah infringement of,tîle Bràidley pro-
' cess, when practiced without the use of external beat for fusing the ore.
2. Samb— Anxioipation.
The çxperlpjents made-.by Sir Hupiphrey Davy In 1807, in whlch be
decomposed small pièces pf potash or soda rendOTsd conductive by
moisture,'by iislrig an electrlc curtént to effect botb fusion and dècompo-
sltion^ i whlle' Intérestlng as «xperiments, cannot be beld an anticipation
of the Bradleyi process' fo* , the reductldn of aluminium ores, in view of
the facts that tlie maternais ,operated: upon were Wibolly dlfCerent, and
that for 75 years, with such, expèriments before ttem, chemists and
electriclans wëre unable to make thé posslbilities suggieéted thereby pràc-
tically aipailablé for the séparation of aluminium fromîts ores. More*
over, att^rppts of Davy himself to separatè alumlna by means slmilar to
\ those employed with soda and potash w«re unsuccessf ul.
8. Same— Process. ,
A process Is not an anticipation of one subsequeutly patented, unî'ess,
; If inventèd latfer, It wottld bave been an Inftingement. ^
4 SaMI!— PRIOB.PtfBLlCATlOW^lNDEÏ'INITENESS OF t)KSOaiPTiON.
An article descrihing,^ very gênerai terms a process of some unknoyn
Inventer; for tlie réduction of aluminium, as explained at a meeting !of
mining éliilnëèi^s by Onë who had not seen it practiced, but spoke from
■LEOTEIO 8MBLTINO A A. CO. V. PITTSBUHÎÏ BEDTJCTION CO. 927
faearsay only, Is not such a publication as constltutes an anticipation
of a proeess subsequently Invented and patented by another.
IL Bamb— Evidence of Invention.
The fact that a large number of processes for the séparation of alu-
minium from Its ores were patented, In ail of whlch external beat waa
used to fuse the ore, and maintain it in a fused state, some of the appli-
cations havlng been made after that of Bradley, on which patent No.
468,148 was issued, for a proeess, now excluslvely used, in which both
fusion and electrolysis were produced by the same electric current, is
persuasive évidence, not only that the Bradley proeess was not antlcl-
pated, but that it involved invention.
Ol Same— Infringement— Construction of Claihs.
The claims of the Bradley patent. No. 468,148, for a proeess for the
réduction of aluminium, in which the same electric current is used to
fuse and electrolyze the ore, are not llmlted to a proeess In whlch a
current of twice the ordlnary etrength Is used, by the statement in the
speciflcatlon, in descrlbing a particular case lllustratlng the proeess,
that a current about twice as strong was employed as was used when
the fusion was produced by external beat; ndr is infringement avoided
where the increased effectiveness of the current is obtalned by reducing
the résistance, instead of Increasing the strength of the current
1. Same— Prookss— Use of Différent Appabatds.
A patent proeess cannot be appropriated because the infrlnger prac-
tlces it wlth new, enlarged, and Improved apparatus,
8. Same— Construction of Claims.
In the construction of a generlc proeess patent, every phenomenon
observed during opération and every minute détail described in lllustrat-
lng the proeess in the spécification is not to be read Into the claims as a
limitation, to avoid a charge of infringement.
Appeal from the Circuit Court of the United States for the Western
District of New York.
Appeal from a decree dismissing bill filed by tj;ie complainant for
the infringement of two letters patent granted to C. S. Bradley, the
patent in controversy on this appeal being No. 468,148. The opinion
of the Circuit Court will be found in m Fed. 742.
F. H. Betts and E. N. Dickerson, for appellant.
T. W. Bakewell and Thomas B. Kerr, for appellee.
Before WALLACE, LACOMBE, and COXE, Circuit Judges.
COXE, Circuit Judge. The patent in controversy was granted
February 2, 1892, to Charles S. Bradley for an improvement in pro-
cesses for separating, by the electric current, aluminium from its ores
or compounds.
The spécification states that the difficulty with the proeess thereto-
fore in vogue was that it was carried on by subjecting the fused ore
to the action of the electric current in a crucible placed in a heating-
furnace. It is said that by this proeess the fused ore fluxes with the
crucible and the fluorine gas liberated attacks the material of the cruci-
ble and destroys it. The main object of the invention is to prevent
thèse disastrous results by dispensing with the external application
of heat to the ore, which is accomplished by employing an electric
current of greater intensity than is required to produce the electrolytic
décomposition alone. In this way the ore is mairitained in a state of
fusion by the heat developed by the passage of the current through
the melted mass. The cuirrent performs two distinct functions.
FirStj iti'keeps tîœ ore meited by having a portion of îts electrical
energy coriVérféd iiito heâtyi âïid secbhdi ît effects the desiréd èlec-
trolyticg,! décomposition, bywhich meatiS the heat;, beirtg pfddnceiî
in thé oreiiis^f, is concèniràted at exàctjy the point wliere it is re-
quired to ikeep the ore in-a state of fusion. ,
Bradley dispenses with the crueible ànd uses a heap of the Ore îtself
to cohstit'utp. the vessel in'iyhiéh the-re'ifufctiontakes place, which is
not déstroyf4 as was theijefeuçible and àdmits of the process being
continuons, nothing being required but;the charging of fresh ore as
fast as the réduction goes^^on either frora without or from the sides
dr wâils of thé héap itsèlî.'^,::; - „ , ' '
The patent çontains six'i Çlaims, the first three béirig intended to
cover the proeess as appliedi to the se:paration of metals from any
highly refractor'y ores or corïjjiounds. Of this group claim one may
be.takeri'as"an,é,jf^înple., i'-T^Çj^^^^ ' ■■•'""'■>''
"(1) The process ofisepanating or dissoclatlng metals frora , thelr highly
refractory ores or compotiiids, Bonconduct©rs;in an unfused state, of which
the ores and compounds of aluffltnium are a type, whlch consists In fusjng
the; refractory , ore;: pr compouijd progresslrely by a source o£ hçat concentrat-
ed directly upon It .rathçr;t;Wn by an exterjjal f^irnace and AS it becomes
fused effecting electrolysis by passing an electrie, curren^; therethrough be-
tween termlnal^Vrbich a.rSînîaint^jned in circuit with the fused bath, where-
by^tihe procès» iSvreiidered continuons, substantially as set foctb*"
The last three claims afierilimited to the apphcation of the process
to separating aluminium from its ores or compounds. Of this group
daim four may be taken as an examplé, as foUows :
(4) The process of separating or dissoeiating aluminiuioa f rôrh ita ores or
ibitipounds, coiisisting In ftisiàg ànd maintaining the fUsion and electro-
lyti'cally decompbsing tltè oi*è or éompôUnd by the passage ' x>t thé electric
current thertthrough, substantially as set forth."
The Circuit Court found that the claims weré npt ififringed and dis-
missed the bill. The complainant assigns error, contendîng that the
court erred in placing a nârrow coiistrùctîdn upoh the claims, and in
holding that- thé défendant'» procîessdid not infringé» The com-
plainant aiso contends that the court erred in holding that the success
ôf defendant's process was due to the invention of Hall and not to
Bradley and insists that the court should not hâve. foUowed the rul-
ings and deèision of the.Circuit Court :for the Northern District ©f
Ohio in an action pending between the défendant and Cowles Elec-
tric Smelting 6î Aluminutn 'Company, but should hâve followed the
décision of the; 'Circuit Court of Appeals^Jor the Sixth Circuit in thé
suit of Lowryagainst the said Cowles Company. î^ ■
The questions determinedîn the Ohio basé are not'îinvolved in the
présent conti'oversy. Lowry v. Cowles Co. (C. C.) 68 Fed. 354, re-
versed on apped» 79 Fed. 331, 24 C. C. A. 616. Although both parties
quote from thèse opinions^ in aid oftheir présent contentions we think
it âdvisable to be guided solely by the fatts appearirig in the présent
record. The question actually decided in that case was one of titfë
and though the lÈOurt ttiade use, téntatively, of expressions which, con-
sidered apart from the coiitext, may bé regarded as applicaible herCj
yet it is qûite obvibus thàt there was no intention to do more than dé-
KMOTEIO SMELTING « ▲. CO. ▼. PITTSBUBO REDUCTION OO. 929
cide the narrow question involved. Indeed, the Circuit Court of Ap-
pcals says so explicitly, at page 630, in thèse words :
"We are not required to pass upon the valldity of the patent» Involved In
tbla suit, or any of them. iXhere is no issue of that klnd before us."
Thèse opinions, and others which hâve been delivered during the
protracted litigations over the Bradiey and Hall patents, are helpful
upon many of tfae propositions now under discussion, but they cannot
be regarded as controlling to such an extent as to justify the court in
dispensing with an independent investigation of the issues arising
in the présent controversy.
The application for the patent in suit was filed February 23, 1883,
which may be taken as the date of Bradley's invention. Prior to this
date it was known that matais contained in ores which are conductors
could be separated therefrom by electricity, but the problem of sepa-
rating metals from nonconducting ores by this method had not been
solved. The compounds of aluminium at ordinary température are
nonconductors. It had, therefore, been the custom to place thèse re-
fractory ores in a crucible, apply external beat until the ore was melted
and then pass an electric current through the melted mass. In this
way a pure product was obtained in small quantities, but as the
spécification states, the intense beat soon destroyed the crucible and
the process could not be worked upon a successful commercial basis.
This controversy relates solely to the séparation of aluminium from its
ores ; three of the claims are designed to cover the process when so
Hmited and the remaining claims relate to highly refractory ores of
which the compounds of aluminium are a type. The défendant is en-
gaged in producing aluminium. The investigation may, therefore,
be confîned to this one métal, for if the patent, when so Hmited, be
valid and if the claims cover the defendant's process it matters not
what else they cover or fail to cover.
We start, then, with the undisputed fact that prior to Bradley's
invention no one had ever succeeded in separating aluminium from its
compounds solely by the use of electricity, or, in other words, no one
had dispensed with external beat.
The référence principally relied on to anticipate or limit the claims
is the description of an experiment made by Sir Humphrey Davy
in 1807 and published the foUowing year in "Philosophical Trans-
actions of the Royal Society of London." T>zvy tried several experi-
ments on the electrization of potash rendered fluid by heat and only
attained his object by employing electricity as the common agent for
fusion and décomposition. A small pièce of potash, which had been
exposed for a few seconds to the atmosphère for the purpose of
producing moisture, was placed on an insulated dise of platina, con-
nected with the négative side of the battery of the power of 250 of
6 and 4 in a state of intense activity ; and a platina wire, communi-
cating with the positive side, was brought in contact with the upper
surface of the alkali. The potash soon began to fuse at both îts
points of electrization. There was a violent effervescence at the up-
per surface ; at the négative surface there was no libération of elastic
fluid ; but small globules having a high metallic lustre, like quicksilver,
125 F.-^9
appeared,j;59rg,e.9l wbich ibumefl wîth explosion and bright flame as
soon as they wçre fornifid, Qthçff| reHiained,, were mereïy tarnished
^nd„wçi:ç,f|»all:^,covered witll a white film. ,Nupierç)us,eîxperiments
sodn shoWsÇdîhat thèse globyïe? aï sodium and potassium were the
substances of which Davy was in searcli. Here^ then, was an in-
ter-eàtiïîg' ejtperîiïietit but notHing more. It was not made with the
ores 6î aîumitiiiinl, but wîth rttinùté pièces of soda and^tash which
were rendèiréd'tonductive by 'môiâture induced by pfeyioùs exposure
to the atmoSJ)lièfe.
In a wôffk on klu'mimurii, pùbliShed by Tissier itJ 1658, it is stated
that, in 1807, Davy undertook to décompose alurfiihià b/ the battery,
as he hàd dèc'bmposed pbtash ànd sbda, "but he fâiled completely."
In fact, Dâ-v^ himself adniits that his experiments in this regard were
■vivithout subStàntial results. His methpd was incapable of producing
results upbn a commercial scàle; ïîe had no conceptioh of progress-
ive feedingor bf a fused bath, oir régûlating the stren^h of the elec-
tric curfent. The expèKmëntwàs ùiidbubtedly a brilliant one, but it
can no'mbi'e'be regarded î^'s an ariticiï>ation of the Biradley process
thàn it could'bè regàrded as an infringement if made tcï-day for the
first ti'me.-^-^Thaît'è'uCh â claim'of infrîngement might be asserted is,
perhaps.concéivâblè, but that it could bè sustained is 'àtn unthinkable
propositibri.' ' ;
Davy suggested the possibility of pi'pdticing métal from certain ores
conductivè in a fused state, and this hint, for it was hàrdly more, un-
doubtedly set the chemists and electricians thinking, just as the dis-
corèry of, Franklin put the idea of thé telegraph into the brain of
Morse and' as the discovefy of Watt made possible the inventions of
StephënSôn à'hd Fultori; Jùdgedby its practical results, the contribu-
tion of Da:vy 'was not as yaluable as ît now appears whpn read in the
light of subséquent achièvetnent. For three-quarters of a century
chemists and electricians ail oyer the world, wjth Dàvy's work before
thëtti, wère.endeavoririg to find à method of producing aluminium
commet cially, and thëy iall failed. After Davy's expenment no fur-
tïïér efïort df the inventive facùltiës was required, says the défendant.
Ail that a manufacturer needed tp do was to operate the Davy
process on a large :5cafe' 'To dp this np expert knowledge was re-
quired. jArid yét triarifflaî:turers not only, but the most learned
spécialists of the âge, permitted this treasure of inestimable value to
remain in plain yiew before them'and would not évep stoop to pick
it up. The fact thàt Dalvy's experîment was permitted to lie dormant
during 76 ye^fs pf intense adtivity in Chfemistry, elêçtficity and met-
alliirgy is aîmPst conclûsive évidence that the défendant has greatly
èverèstiinated its irtiportance. ,
Duvivier*s experimént of 1854 has even less beâHrig upon the prés-
ent controversy. A smalî pieëe of disthene was exppsed to the elec-
tric flame, tindoubtedly ah electric arc, disengaged from a carbon
liôint about as Large as a drawing pencil. It was meltéd at the end
of three or fpur minutes 'ând the aluminium, freed from its oxygen,
show.ed it'feelî àt f |iê surface' ôf the mblten material. A small globule
set on the buter èdge fîattëned out as it cpoled and, when scratched
with the pbiht bf a knife, it showed' silvér Avhite ànd in hardness it re-
ELECTEIO SMELTING « A. CO. V. PITTSEURG REDUCTION 00. 931
sembled pure silver. That this was aluminium is not shown and can-
not be shown, as the only test to which it was subjected was the one
above stated. The entire description is meager and uncertain and by
no means as definite and satisfactory as the prier experiment of Davy.
The Siemens British patent of 1879 also describes the use of an
electric arc for the fusion of metals, but electrolysis cannot be so ac-
complished.
The United States patent to Bail and Guest, of January, 1881, is
for an improvement in "electrical carbonizing apparatus." It does
not relate to the séparation of aluminium, or any other métal, from
its ores by electricity.
Faure's French patent, of 1880, describes an invention the object of
which is "the manufacture of metallic sodium, of the cyanides, hy fix-
ing atmospheric nitrogen, and in gênerai the treatment, at high
température, of alkaline salts or metals." He employs electric arcs
and external beat to produce high températures, and secures the
sodium by chemical reaction.
The British patent to Lane Fox, of 1878, is for "improvements in
the application of electricity to lighting and heating purposes," and
discloses nothing more than the Bail and Guest patent, supra. It has
no application to electrolyzing refractory ores.
The article printed in the "Transactions of the American Institute
of Mining Engineers," in May, 1882, describes the process of some
unknown inventer as it was explained to the Institute by Prof. Howe.
Assuming this to be a "pubHcation" within the meaning of the law it
is toc indeterminate to be of value as an anticipation. Prof. Howe
did not prétend to hâve any peréonal knowledge of the facts and
merely gave a brief statement of what had been told him. That he
had référence to an arc process is évident from the following lan-
guage : "A voltaic arc is then thrown across from another électrode
against the carbon crucible," which is described as the cathode. It
seems to be conceded on ail hands that the use of an arc constitutes
"a radical and fatal departure" from the process involved in this con-
troversy. The person who actually practiced the method of pro-
ducing aluminium described by Prof. Howe may hâve accomplished
something of practical value and he may not. No one knows. Had
he donc so it is, perhaps, fairly inf érable that something more would
hâve been heard of it in the art of electrolysis. The name, at least,
of so eminent an inventer would not hâve been permitted to remain
long in obscurity. It might hâve taken time and persuasion but,
eventually, his reluctance to being enrelled among the immortals
would hâve been overcome.
The court understands that the foregoing are ail the références
relied on by the défendant to anticipate the Bradley claims. This
supposition may be inaccurate because, in the multitude of exhibits
and maze of contradictions with which this ponderous record abounds,
perfect accuracy is well-nigh impossible. It is thought that they de-
scribe the only instances where, in the prier art, there was an attempt
to dispense with external heating and to utilize the electric current
for the double purpose of fusion and electrolysis. That they do not
anticipate, or materially restrict, the Bradley patent seems self-evident.
932 .(Yj K \ 125 FEDERAI. EEPpBTEB.
Exten4jed'diseussion on this point is rendered unnecessary for the rea-
son that lailure to prove anticipation is found by the Circuit Court
and- is; bflrdly disputée! by the défendant.: :
The : principal expert for tije défendant, Dr. Chandler, whose répu-
tation for learning and, abilify is well known to the courts, although
of the opinion that slight modifications pf the previous methods would
produce the Bradley process, nevertheless admits frankly:
"J de? not recall any one process which, wiien applied to the ore of alu-
mlnluiio, would wlthout àny modiflcation whatevér hâve produced aluminium,
in whlcll process both the fusion and the eleetrolysis would hâve been ac-
complished by the electric current"
Not only did the elettricians of the earlier art fail to produce
aluminiurti by electricity alone, but the Wrecks which strew the path-
way, which Davy pointed but nearly a century ago, ofifer mute but
impressivè proof of the genius of the man who first surmounted its
mkny Obstacles and reachéd the destination in safety. Indeed, after
numerous abortive attempts and repeated failures the electrical world
seemed to hâve settled down into the belief that aluminium could not
be prodliçed by the sole agiency of electricity, Accordingly the effort
of iftveritors Was directed to the perfection of processes in which
external beat was employéd to melt the ore and keep it in a fused
State. The record abounds, in such instances. Patent after patent
is introduc;ed claiming new mèthods of separating aluminium from its
ôfêB, but in éVery instance external fire is used to fuse the bath and
inaifttain it în a fused condition. Many of thèse inventions were long
àftef the introduction of dynamos, and they continued to be made and
practiced forseveral yeats after the Bradley invention. Indeed, so
strongly was" the inventive ttend towards the employnient of external
beat that eyen the defendant's inventor, Hall, could not be induced to
dispense with its use until 1889. Wheli the defendant's works were"
Started at Pittsburgh, in December, 1888, the pots were built to be ex-
ternally heated and they Were so heated for some time thereafter.
"The Hall patent of Aprîl 2, 1889, which was applied for July g, 1886,
; three years aftèr the Bradley application, was for improvements in the
"process ofréducing aluminium by eleetrolysis." In this patent ex-
ternally heated crucibles are shown in the drawing and described in
the spécification.
Sînce the Bradley invention aluminium, which fôrmerly was re-
garded as pne of the preçious metals, has bècome as <iommon as cop-
per. and brass and its pr'ice has been reduced from $15 per pound to
25 cents per pound. We do not intend tô intimate that this marvelous
change was duc, solely to Bradley's invention, but sirapily, at this time,
to emphasize ihe fact that it took place after Bradley's invention.
If he has doné nothing to produce this resuit he is, of course, entitled
to no considération wliateVer, but if he has contributed something he
is entitled to protection tothé extertt of that contribution, be it much
or little.' ' ' ;
We hâve proCeeded thus J^ar to the conclusion that we are dealvng
with a patent which disÇlôses a mérîtorioUs process for producing
aluminium in large quantities, the essential features of which are, first
ELECTRIC SMELTING * A. CO. V. PITTSBUEG EEDIJCTION 00. 933
dispensing with external beat, and, second, the use of the same electric
current to produce and maintain fusion and electrolyze the ores of
aluminium. We are unable to discover anything in the prior art de-
scribing this process or anything closely approximating thereto. The
patent is, therefore, not anticipated and its claims are entitled to a
libéral construction.
The judge of the Circuit Court, after careful and painstaking re-
search, reached the conclusion that Bradiey had made a valuable
invention, but he failed to grant relief to the complainant upon the'
theory that the process which the défendant uses was an entirely
separate invention, neither dépendent upon nor subsidiary to the in-
vention of Bradiey. In this we think there was error. Hall's
achievement should be considered in the light of an improvement up-
on Bradley's fundamental discovery. There can be little doubt that
the defendant's process is a valuable one and that to it is largely due
the cheap aluminium of the présent day. There is not the least dis-
position to detract from the merits of Hall or minimize his contribu-
tion to the art. Indeed, it may be conceded that, if the novel features
so introduced be secured by a valid patent, he can hold the monopoly
against ail, Bradiey included. This concession does not permit him,
however, to appropriate the broad invention. He does not acguire
the right to use the Bradiey process simply because he has improved
that process. He is entitled to enjoy what is his, but in so doing he
cannot appropriate the property of another. The record discloses
nothing unusual in this regard. It is rarely that an invention develops
ultimate perfection in the hands of the inventer. The test of actual
use discovers defects to be remedied and suggests improvements to
be made. If the inventor produces a new and useful resuit he does
not lose his reward because he, or some one else, subsequently renders
it more useful. This proposition may be made plain by an analogy
taken from a kindred art. It is not perfect ; no analogy is, but it will
serve as an illustration. Charles F. Brush was the de jure inventor
in the United States of a secondary battery having its électrodes
mechanically coated with active material, as distinguished from the
électrode coated by the slow and expensive process of electrical dis-
intégration discovered by Gaston Planté. The électrodes first used
by Brush were crude and incapable of commercial work. The lead
powder was held in place by blotting paper tied by a string, and the
battery succeeded, after charging, in developing a current of only
sufficient strength to ring a call bell, but the principle was thus estab-
lished which has since been utilized to propel heavy vans and railway
carriages. Although Brush had made the broad invention Faure
made the important discovery that the active material could be placed
on the supports in the form of a paste, paint or cément and to this
improvement the commercial efïicacy of the invention was due. Al-
though the Brush patents were subjected to fierce attack during their
entire existence it was never thought that they could be invalidated
or ignored because Faure had discovered a method of carrying out
the invention which was far superior to anything discovered by Brush.
No one could use Faure's improvement without infringing the broad
patent of Brush and no one could use the improvement without in-
934 . 7 125 FBDBEAIj EEPOBTEB.
fringing the patent of Faiire. : When worked together success was
assuredi
We hâve, then, a valid patent with claims which, on their face,
clearly cover thé infringing pfocess and yet the principal défense is
nonihfrîngement ; the contention being that when thèse claims are
construed in the light of the description and the prior art there is no
infringêment.
Considérable time has been devOted, in the court below and in the
briefs, to ai considération of the patent to Hall, under which the de-
fendant is said to operate. It is thought this discussion is irrelevant,
for the reason that the patent was not granted until 1889 and does
not disclose the procesS which the défendant uses and of which the
complainant complains, The process patented to Hall adopts ex-
ternal heat to produce fusion, the spécification showing and describ-
ing an iron or steel carbon-lined crucible which is "placed in a suitable
furnace, B, ;and, subjected to a sufficient heat to fuse the materials
placed thereîni" It was only when the défendant abandoned the "fur-
nace, B," and adopted the Bradley method of fusing by means of the
electric Gurferit that the charge of infringêment was made. It seems
évident that the défendant may iîractice the invention of the Hall
patent with perfect impunity so fatras the Bradley patent is concerned.
Neither is it important to détermine whether Hall knew of Bradley's
invention whén he made the discovery which induced him to dispense
with his melting pots. It is enough that it was at least three years
after Bradley's invention. Whether Hall was an independent in-
venter or appropriated Bradley's idea, is utterly immaterial.
What the défendant does is this : It uses a séries of métal pots,
the sidesand bottom of each being lined with carbon, connected in
séries with a direct current generator, each pot holding about 450
pounds of molten bath matérial. The bottom. carbon lining is the
cathode and a group of carbon cylinders, three inches in diameter,
suitably suspended on copper stems and connected with the positive
pôle of the dynamo is the anode. : Suitable conductors also extend
from the métal shell of the pot to the négative pôle of the dynamo.
The bath matérial consists of a compound of fluoride of aluminium,
fluoride of sodium and some fludride of calcium. Alumina is added
when the bàth is in a molten condition and it is asserted that it dis-
solves freely upon being stirred in the bath. The electric current is
sent through the solution by raising slightly the carbon rods and the
alumina is decomposed, the métal going to the négative électrode at
the bottom of the pot. The oxygen goes to the anode and escapes
in the foi-m of carbonic oxide gas^ As the alumina is decomposed
the bath is charged with fresh quantities, thus tnaking the process
continuous. No external fire is used. When a new pot is started
the method usually adopted is to ladle into it the liquid matérial from
an old pot, but soraetimes a new pot is started from cold materials in
which case thé anodes are short-circuited for several hours and the
current brings their ends and the adjacent parts of the lining to a red
heat, the double fluoride is piled around the anodes and left for several
hours until the compound is melted by the heat conducted from the
lining. The alumina is then added and the process goes on as before.
ELECTRIC SMELTINQ & A. ÇO, V. PITT8BURG REDUCTION CO, 935
To a layman this seems impressively similar to the description in the
Bradley patent, but it is not surprising that skilled scientists, familiar
with every détail of the art, hâve been able to point eut discrepancies.
That différences exist cannot be denied; that they are material is
strenuously denied. To use an expression more familiar to lawyers
than to electricians, the complainant contends that there has been a
failure to "distinguish on principle" the defendant's process from the
process of the patent. Speaking generally, it is thought that most of
the points at variance relied on can be traced directly to the improve-
ment introduced by Hall, namely, the use of cryolite as a solvent for
alumina. Were it not for this change it is hardly probable that in-
fringement would be denied. But the change of materials does not
create a new process but a new way of working the old process. The
complainant's position regarding thç Hall process, as used by the de-
fendant, is sententiously stated in one of the briefs as follows:
"We contend that the process actually practiced by défendants is that of
Hall minus the Impracticable external heating feature shown by Hall, and
plus the désirable and emlnently successful internai heating feature of Brad-
ley."
Hall starts by fusing cryolite and maintaining fusion by means of
the electric current ; so does Bradley ; at least in the example given
in the patent cryolite is the ore mentioned. If no other ore were
added by Hall the processes up to this point would be identical. But
Hall found that alumina, which is just as much an ore of aluminium
as is cryolite, dissolves readily with cryolite as a solvent or flux, and
he was thus enabled to produce a more efficient and cheaper electro-
lyte. The Bradley process is not confined to cryolite or alumina;
it relates to ail ores or compounds of aluminium and ail other re-
fractory ores of a like type. CryoHte is mentioned as an illustration
in the spécification, but it might as well hâve mentioned alumina or
any other similar ore. That there is nothing in the patent, or out
of the patent, requiring the limitation of the claims to cryolite seems
too plain for debate. The process may be used with cryolite alone
or alumina alone or with both together, whether applied synchron-
ically or successively. In either case the essential features of the
process are appropriated.
Again, it is argued that the claims are limited to an electric current
twice as strong as that formerly employed when external heat was
used and that défendant does not use such a current, and therefore,
does inot infringe. We are not satisfied that this proposition has
been established. The patentée says :
"In order to accomplish this object, I employ an electric current of greater
strength or intensity than what would be required to produce the electrolytic
décomposition alone."
And, again :
"I employ, as I hâve already stated, an electric current suffieiently power-
ful not only to affect the electrolytic décomposition of the ore treated, but
also to develop by its passage the heat required to keep the ore fused."
The meaning of this is obvions. A current must be employed suffi-
eiently powerful to do the work in hand and, as more work is required,
936 i 125 FHDBBAL EEPORTER,
the current ïnustbe of greater strength than that used when electroly-
sis alone was required of it. No amount of scientific theory can over-
throw the plain fact that when additibnal work is required additional
power must be provided. If one horse is to carry the load of two he
must be stronger than «ither of those whose place he takes. He need
not necessarilyibe "twice as strong/' although such a standard of com-
parison would be a wise one to follow. After a féw trials his owner
will know whât changes to make in harness and load in order to econo-
mize "horse power." So a currerit which is to fuse, maintain fusion
and electrolyze must be of greater power than one whose sole voca-
tion is to electrolyze. It has two additional burdens laid upon it which
require expenditure of energy, relieved of thèse there is more strength
for electrolysis, .
The patentée says fûrther:
"I bave found that by using an electrlc current about twlce as strong
as would be employed to perfotm a given amount of electrolytic work in the
ordlnary way In externally heated crucibles, I am enabled to keep the ore
fused according to my Invention without the application of any external beat
whatever."
It must be remembered that he is hère illustrating his invention "as
applied in one particular case to the extraction of aluminium from its
ore cryolite," by the simple and embryonic apparatus shown in the
drawings. There is no attempt to state a hard and fast rule applica-
ble to ail cases alike without référence to the size of the containing
vessel, the quantity and character of the ore, and the amount of loss
produced by conduction and radiation. The patentée, as required to
do by statute, is simply giving those familiar with the art the informa-
tion, which he has found to be of value, that, in the circumstances
stated by him^ the current should be not twice as strong, but "about"
twice as strong as in the old method. He is not attempting to inform
the skilied electrician what current will be required if some other ore,
or combination of ores, be used or if the process be employed with
pots of much larger capacity, upon an immense scale and under différ-
ent conditions. There is not a word in the claims limiting them to a
current double the old capacity, and we are unable to perceive any
reason why the claims should be eviscerated by importing into them
the statemeHts of a formula intended only as an illustration. The
patentée undoubtedly does say that, as compared with the old method,
a more powerful current is employed, but he does not say that this
resuit can only be produced by increasing the voltage. It may be
accomplished by decreasing the résistance of the bath, and this is ap-
parently what the défendant has done. The gênerai manager of the
défendant says:
"We hâve never made at any one time a radical change In voltage. We
hâve, however, as we improved our practice, slowly lowered the résistance,
enabling us to get the required current d^nsity with less voltage."
Even if it be admitted that défendant has not raised the voltage,
infringement cannot be avoided for the reason that the same resuit
has been reached by increasing the size of the bath and of the élec-
trodes and in this way decreasing the résistance. In one case the
BLECTRIC SMELTING A A. C!0. V. PITTSBXJBG EEDTJCTION 00. 937
voltage is increased and in the other the résistance is decreased, both
embody the essence of the invention.
Again, it is said that the patent provides that the heat must be gen-
erated in the fused ore itself and that the claims can be evaded by any
one possessing sufficient intelHgence to generate a portion of the heat
elsewhere. It is admitted that in the defendant's process some heat
is generated in the fused ore and that in the Bradley process some
heat is generated by the résistance of the électrodes. The fact that
the défendant has made mechanical changes in the containing vessels
and thus gets a greater proportion of heat from the électrodes than
from the fused ore is a mère incident of the new construction and im-
material upon the question of infringement. A patent ed process
cannot be appropriated because the infringer practices it with new,
enlarged and improved apparatus.
The suggestion that the défendant does not use the Bradley process
because it does not regulate the strength of the current by raising and
lowering the e. m. f. of the generator, as provided in the spécification,
applies only to the sixth claim where the régulation of the current
is made an élément. The proposition is, however, untenable from any
point of view, for the reason that défendant does regulate its current,
not, it is true, in the précise manner described in the patent, but in
a manner clearly its équivalent.
The argument based upon the alleged distinction betvveen "fusion"
and "solution" is supported by considérations too technical and re-
iined for practical adoption. The proof leaves no doubt as to what
the défendant actually does and it seems to us a matter of no moment
whether the réduction of the alumina to a fluid state is described as
"fusion," "solution" or "fiuxing." If the défendant had added fresh
quantities of cryolite to the bath it vvould hâve followed the exact
formula of the patent and the liquéfaction would hâve been properly
denominated as "fusion" or "solution." The fact that the "fresh ma-
terial," or "fresh quantities of the ore or compound," happene* to be
alumina instead of cryolite does not, in the eye of the patent law,
change the nature of the process, even though one may be "fused" and
the other "dissolved."
Various other limitations upon the claims are urged by which the
défendant seeks to avoid infringement. They are of the same gênerai
nature and proceed upon the same initial fallacy, namely, that in a
generic process patent every phenomenon observed during opération
and everj minute détail described must be read into the claims and
that the least departure from the claims as so construed avoids in-
fringement. Neither position is tenable. In a patent like Bradley's
the claims should be as broad as the invention and, even if unnecessary
and unreasonable limitations are incorporated in the claims, the court
should interpret them liberally and not permit a défendant to escape
who reaches the same resuit by analogous means, though he may em-
ploy additional éléments and improve mechanical appliances.
In Ventilating Co. v. Fuller & Warren Co., 57 Fed. 626, 6 O. C. A.
481, the court says:
"The actual invention, If In conformity -witb the language of the claims,
should control In the construction of patents. A strict construction snould
938 ,o:;i «jiï':-,.!" ^: .125 FEOBBAL .RBPOBTBE.
not be reisortçd;t(i4f it becomea * lin^l^ation upon th« actual Invention, unless
such construction is required by the , claim, it being understood that the con-
struction shoulft. not go beyond and èïilàrge the limitations of the clalm."
In Tîlghman V. Proctor, loaîÛ.iS. 7o7> 26 L. Éd. 279, the court says,
at page 733, 102 U. S., 26 L. E4. 279 :
"It is probably true, as conténded for by défendants, that by the use of
a small portion of lime, the prpcess çan be performed with less beat than if
none Is use^; ' It may be an Imprpyen^ent to use the lime for that purpose;
but the proceës, rëinains substantiaûif thè. same. The patent cannot be evaded
In that way.'' '
It is asserte^ that the Bradley process is not operative. Having
found that the défendant is usiiigthe process and it appearing that
the annual joutput of its works is now over seven milHon pounds, it
seems unnecessary to enter upon an extended discussion of this propo-
sition. There is, however, ample proof that the patented process when
practiced experinientally produced aluminium and there is also proof
that practicàlly the same process was commercially operated for short
periods both in this country ânçl in Europe. The owners of the pat-
ent hâve not attempted to operate under it of late years, but the rea-
sons are obyious. Some of the more important of thèse reasons are
as follows: The protracted litigation over the title, the suit based
upon the Hall patent, the présent suit and the impossibihty of com-
mercial compétition with the défendant without using the so-called
Hall improvernent or some other improvement equally cheap and
effective. The cryolite alumina eleetrolyte cannot be used so long
as, the décision sustaining the talidity of the Hall patent rçmains
undisturbed..
, To attempt a discussion pf ajlthe questions mooted in the briefs
would extend this décision beyond ail reasonable length and would
serve no bénéficiai purpose. Éven were it possi|3le to do so it is surely
unnecessary to'foUow ail of the ^excursions of the experts into the oc-
cult realms oî electro-chemical .spience. Some of thèse trails seem to
vanish into thin air, others are lost in a désert of technicalities and of
others still it istrue that he who attempts to travel them is quite likely
to find himself wandering aimlessly "through caverns measureless to
man." ^ ,
Although the appeal .included both patents the argument has been
confined wholjy to Nd. 468,14^.
It folloiys ih^t the decree, iij so far as it relates to letters patent No.
464,933, must lie aiBrmed with the costs of this appeal, and in so far as
it relates to No. 468,148 the decree, is reversed with the costs of this
appeal. aprid.the.cause is rpmanded to the Circuit Court with instructions
to enter a decree in favor of the CQmpIainant for an injunction and an
accounting,. with costs.
4EMAT JIOVINO PICIUBH CO. Y. EDISON MFO. OO. 339
àEMAT MOVING PiarUEB CO. T. EDISON MFQ. CO.
(Circuit Court of Appeals, Second Circuit July 24. 1S030
No. 184,
L Apphai.— Appeaiablb Ordkrs— Contikdancb of Inteblocutort Injunctiok.
Under section 7 cf tlie act creating the Circuit Courts of Appeals, at
amended by Act June 6, 1900 (eliapter 803, 31 Stat. 660 [U. S. Comp. St
1901, p. 550]), wliicli provides for an appeal from any Interlocutory order
or decree granting "or continuing" an injunction, an order made on an
application for reargument of a motion for an Injunction and a motion
to vacate, overrullng both sald motions and continuing tlie injunction pre-
viously granted, is appealable, although the original injunction was not
formally vacated, but merely suspended pendlng the disposition of sucli
motions.
t. Patents— Suit foh Infkingbmœnt— Prkuminakt Injunction.
"Where the défense of license Is set up in a suit for Infrlngement of
a patent, and the évidence oftered on the hearing of a motion for a
prellmlnary injunction is of such contradictory character that the validlty
of such license cannot be determined therefrom, an Injunction should
not be granted untll final hearing.
Appeal from the Circuit Court of the United States for the South-
ern District of New York.
See 121 Fed. 559.
Edmund Wetmore and Richard N. Dyer, for appellant
Melville Church, for appellee.
Before WALLACE, TOWNSEND, and COXE, Circuit Judges.
TOWNSEND, Circuit Judge. The appeal herein is taken from an
order continuing a preliminary injunction previously granted to re-
strain défendant from infringing complainant's patent, No. 586,953,
issued July 20, 1897, to Jenkins and Armât, for improvements in
phantoscopes.
Complainant contends that the order is not appealable, because the
court continued the original injunction instead of first formally va-
cating and then continuing it. Section 7 of the Evarts act, as amend-
ed by the act of June 6, 1900 (chapter 803, 31 Stat. 660 [U. S. Comp.
St. 1901, p. 550]), provides for an appeal from "any interlocutory
order or decree granting or continuing" an injunction. In the case
at bar the original injunction was suspended pending a hearing on a
motion to show cause why the same should not be vacated, and there-
after the court, in its disposition of said motion, entered the following
order :
"Ordered, that the motion for rehearlng or reargument of the motion for
preliminary injunction and the motion to vacate the order for preliminary
Injunction are denied, and that the preliminary Injunction heretofore granted
is continued."
% 1. Review of Interlocutory decree granting or continuing Injunction ta
Circuit Court of Appeals in patent cases, see notes to Flsher v. Browne, 3
C. C. A. 572; Southern Pac. Co. v. Earl, 27 a a A. 189; New York, N. H.
& H. R. Co. V. Sayles, 32 0. C. A. 484.
\ 2. See Patents, toL 38, Cent Dig. 8 489.
940 125 FBDHKAI, BEPOBTEK.
The objection is technical and formai, and, in view of tlie language
of the act, and of the fact that the action of the court was'in accord-
ance with the settled practice in this circuit, should not be sustained.
It is dofttended that an order continuing an injunction, in order
to be appealable, must hâve some additional effect upon the rights
of the parties. Even if this be so (a question which we do not dé-
cide), we think the order herein sâtisfies the statute as thus construed.
The original injunction, absolute in terms, was only granted until
the further order of the court. Thereafter, a motion for rehearing
having been filed, the court suspended the injunction, The motion
for rehearing having been argued upon new proofs, and having been
denied, two new orders were entered, the one continuing the in-
junction, the Qther suspending its opération pending the appeal from
the order of continuance. In thèse circumstançes, a new state of
facts having been presented and the rights of the parties having been
determined . atiew thereunder, the practical efifect was the same as
though the court had originally vacated the order instead of suspend-,
ingit.
The appeal raises the single question of the validity of a license
to défendant." It appears from the affidavits and exhibits that on
March 25, 1895, Jenkins, one of the patentées of the patent in suit,
having fîled certain applications for patents for a phantoscope and
some new mçthods of photography, assignedto Arniat, the pther pat-
entée of the patent in suit, a "ône-half interest in the stereopticon or
projecting phantoscope, as distinguiçhed from the cabinet form of the
instrument," and in any improvements to or patents therein. The
assignment further provided for the "promotion" of said invention
by Armât, "sâid promotion to consist in personal efforts on the part
of thé partyof the second part tb dispose of said invention to the
best possible adyantage." On August 28, 1895, Jenkins and Armât
filed their joint application for the patent in suit. On May 14, 1896,
Jenkins executed an agreement to the American Graphophone Com-
pany purportihg to grant to ît "the exclusive right to make, sell,
use and operatè-ithe inventions of the party of the 'first part relating
to a processand application knbwn as 'Phantoscope,' includîng in
said'term âriy àhd àll prbces^es, àpparatus, devices or applianCes for,
Qf in any "tïïarùîef relating to, the exhibition of photographie repré-
sentations Of moVirig or other objects, such exclusive licénse to ex-
tend to ail itivîèntions of the above character in which thie said party
of thé first part 'tioW lias, or may hereafter hâve o.r açquiire, any right
br interest." Oh Décember 24, 1902, said grantee licenSed the de-
fendant to use the inventions embraced in said grant from Jenkins,
specifically ihciuding therein a liCènse Under the patent in suit. But
bfl May i^, 1896, Aritiat, clàiiriing to act under the authority of said
contract of March 25, 1895, executed an assignment of the entire
right of Jenkins. and Armât in the inventions relating to the phanto-
scope, incL^ding the application:' for the patent, in ' suity to parties
through whomthé complainant claims title.; Upon thèse and other
fàcts the coraplainarit contended'that, as Jenkins . hac}" no légal title
to the joint invention when he executed said Jicens'e, tihe patjsnt there-
for not having then issued, and lid title to the patent after issue, by
ARMAT MOVING PICTURE CO. V. EDISON MFG. CO. 941
reason of said Armât assignment of May 15, 1896, prior to the issu-
ance of said patent, the attempted license by Jenkins to the grapho-
phone Company was void. The court, in disposing of the question,
held as follows:
"The défense of license from some one who, It is claimed, bas some in-
terest in a patent sued upon, is one to be made eut by défendant by a fair
prépondérance of proof. In this case there seems not to be sufficieût identi-
fication of the Invention of the patent in suit to Armât and Jenkins with
the invention of Jenkins himself, which was the subjeet of his contract
with the graphophone company. It is thought, tlieref ore, that tlie moving
papers do not présent sufflcient reasons for modifying the injunctlon already
granted, and the motion for rehearing is denied.
"The order of déniai should itself contain a clause continuing the Injunc-
tion, so that, if défendant décides to appeal, ail the papers used on original
hearing and on application for rehearing may be brought before the appel-
late court."
It would serve no useful purpose to discuss the further statements
in the affidavits herein, from which it appears, inter alia, that Jenkins,
while in the employ of the graphophone company, attempted to ratify
the Armât assignment, so as to destroy the efifect of the prior Ucense
to it, and that the Suprême Court of the District of Cokimbia has
held that the attempted assignment of Jenkins' interest by Armât was
void. It is not clear, and cannot be satisfactorily determined upon
the conflicting afïidavits, that Jenkins, by his contract with Armât
of March 25, 1895, empowered Armât to divest him (Jenkins) of his
interest in the invention in suit. It does not appear what the dis-
tinction is between the "projecting phantoscope" as distinguished
from the cabinet form. And it is impossible to détermine whether
the assignment from Jenkins to the graphophone company "of ail
inventions of the above character in which the said party of the first
part now has, or may hereafter hâve or acquire, any right or interest,"
did or did not include the interest of Jenkins under the joint appHca-
tion, without the testimony of witnesses as to the relations and situa-
tion of the parties and their understanding of the scope ofsaid as-
signment. It is sufiScient to say, therefore, without passing on any
of thèse questions, that the uncertainty as to said agreements, and
the contradictory character of the afifidavits, leave the question of
license in such serious doubt that we think no injunction should issue
except aftër an opportunity has been given to résolve said dpubt upon
final hearing.
The order is reversed, with costs.
942 [12{^ FBDBaAL BaPQilTElB. ;
GBWEQIB FKOST 00. ^t >I. v.: GRAND ALL WBDGÉ 00. et al.
<,01rcùlt Court of AppealB,. Second Circuit. October 21, 19034
No. 195.
1. Patents— 'Vaupitt and, Infsjngbweht— Hosb Suppokp^brs.
Tbe Gôrtbu patent, iNoi., 852,470, for a hose supporter, held not an-
ticipâtes ^Bttitlea to a broad construction, and iiitriiigéd, on revlew of
an prder grantlng à pr^llrainai^y injuiiction, ànd op a considération of
certalû aUjEiged antlcipâtory patents not before the court in prlor sults.
Appeal frôrri the Circuit : Court o| the United States for the South-
ern District of New York, r
Appeal from an order oljthe United States Circuit Court for the
Southern District of New York granting an interlocutory injunction
in a suit for infringement of complainant's patent. No. 5S^A7^>
granted to Robert Gorton, December 31, 1895.
For opinion below, see 123 Fed. 104.
W. P. Preble, Jr., for appellants.
A. D. Salinger, for appellees.
Before TO^yNSENDàndCOXE, Circuit Judges, and THOMAS,
District Judge.
TOWNSEND, Cii'ctiit Judge. The first daim of the patent, the
one involved herein, is as fbllows:
"(1) In a hqse supporter, tîie comblnatldn of the webblng, the loop havlng
an openliife large ât one end and narrower at the other, the button supportlng
plate, and the button composed of the central support and the surrounding
mbber portion, Bubstantially as set forth."
The history of the art to which the patent relates, the scope of the
invention, and the status of the patent in view of prior constructions,
hâve been fully discussed iii the opinions at circuit and on appeal
sustainiiig the vâlidity of said claim. George Frost Co. v. Cohn (C.
C.) 112 Fed. 1009; Id., 119 Fed. 505, 56 C. C. A. 185. The Circuit
Court of Appeals in its opinion held, inter alla, as follows:
"It seèmÉi obvions thât the clalm In controversy is not to be llmited to a
hose supporter the button, shanicof which is made of rubber or surrounded
with a rubber i^urface, and that it Includes one In which the shank Is made
of or surrounded wltb any fibrous or yieldlng material; and that a button
made of or covered wlth félt, flbër, cloth, or leather Would, when combined
with the other parts, Infringe the clalm."
. In the Cohn Case the shank of the infringing button was sur-
rounded by rubber. In the case at bar the shank and head of de-
fendants' button is surrounded by cotton webbing.
Counsel for défendants herein hâve introduced 29 United States
patents and 2 British patents, ail prior to the patent in suit, which
were not before the court in the Cohn Case, and contends that the
conclusion of the court, quoted above, as to the scope of the patent,
was not necessary to the décision in the Cohn Case, and that the
character of the new évidence is such that, if it had been presented
on the former trial, the court must hâve reached a différent conclu-
sion. The new évidence does not affect the conclusion of the court
GEORGE FK08T OO. V. GKAKDALL WEDGE CO. 943
in tlie Colin Case that the claim in suit covers a button surrounded
with fibrous nlaterial olher than rubber. Of the 31 new patents, four,
namely, those , to Gifïord, Yarrington, Cushing, and Knight, illus-
trate a jaw type of clasp, substantially similar types of which were
before the "court in the Cohn Case. As to this class of devices the
Court of Appeals held as follows :
"We bave not ovërlooked the prlor patents, showlng a devlce having a pair
o£ jaws faced with springy or elastic material, which are pressed against
the intervening fabric to hold it between them. * * • Thèse patents are
of inslgnificant vaine as anticipatory références, or as suggesting the adapta-
bility of the material for the new occasion of its use."
The patents cited above confirm this view. Thus, Yarrington, of
which défendants' counsel says, "on this patent alone the Gorton
patent should be held invalid," shows "two spring pressed clamping
arms, each being provided with a block of rubber," which are nor-
mally pressed together by said spring so as to bear against the article
to be supported. The two devices are totally dissimilar in object,
construction, function, and resuit. In Yarrington the amount of
tension neçessary to prevent the fabric from slipping is determined
by the resiliency of the latéral spring pressure against the soft rub-
ber pads. In Gorton there is no such tension to prevent slipping,
but the fabric is locked between the firm shank and its loop. The
stated object of the rubber pads in Yarrington is to obviate the lia-
bility of "spring pressed clamping arms, the same being provided
with teeth or serrated edges," to puncture or tear the fabric. Gor-
ton's object in using rubber was to perfect his lock by providing a
yielding surface to which the garment would cling. In Yarrington
the rubber permits the garment to slip; in Gorton the rubber abso-
lutely prevents the locked garment from slipping between the lock
of rigid button and loop. The remaining patents above cited and
the Williams supporter, also of this class, are open to the objections
stated, and need not be discussed.
Of the remaining patents introduced by défendants, those to Gen-
gembre, Ferris, Crandall, and Parry were chiefly pressed on the ar-
gument. Défendants' counSel says as follows: "The Gorton but-
ton (so called) was invented and patented by Gengembre in 1864."
Gengembre shows a button adapted to revolve in order "to prevent
it from becoming irregularly worn during the process of passing it
into and out of a buttonhole,^' provided with a shank encompassed
with rubber "to £rotect the buttonholes of the cloth from contact
with the shank," etc. There is no suggestion of the inventive con-
ception of Gorton — ^the adaptability of rubber to grip or clamp a
fabric when exposed to strain.
The Circuit Court of Appeals in the Cohn Case, discussing the
prior uses of rubber, said, concerning the Allen patent of 1883, iden-
tical with Gengembre so far as concerns the issues herein, as follows :
"It has also heen used for buttons in order that its elasticity would permit
the button to yield easily to sudden pressure and yet not abrade the fabric
of the buttonhole, as in the Instance of the collar stud of the Allen patent.
But in none of its prlor uses had it been employed as the member of a device
between which and another member a portion of the fabric was to, be
944 125 FEDERAL REPORTER.
clamped. The instances of the prjor use of such a material do not necessarily
suggest its adaptablUty to do the work required of a buttpnlp a hose or
garment supporter more efflciently than one of métal."
We think it unnecessary to add ailything to the foregoing state-
menfc: of the well-séttled kw applicatile to constructions thus widely
differing in the resuit sought to be ;accompIished. The Ferris pat-
ent, introduced by défendants' e:^pertwithout discussion, seems to
cover 3. device like that of the Walker- patent considered in the Cohn
Case. ' In"the Crandall patent foifia fabric holder thëre, is no state-
mentofthè material ofwhichth'è' holding spool is made, and it is
not attached to a base plate, as in Gorton. The Parry patent shows
a small rubber bail without aay shank and a soft leather tab. The
Coiîrt ôf Appeals in the Cohn suit construed the claim in suit as cov-
ering ,a çlasp consisting of a button with a firm shank made of or so
surrounded by any yielding material that in connection with its pro-
portionedirigid loop it would hold the fabric firmly without slipping
or ahfasiôn tinder strain, and would be adapted for fabrics of différent
thicknesses.
Upon this review of the orderoî the court below it is unnecessary to
fînallypass upon the relevancyof the four patents last cited to the pat-
ent in suit,, Taken together, they may remotely suggest the grip or
lock characteristîc of the patented device, but they fail to show or sug-
gest the 6rm shank or rigid loop which are essential in the patented
construction. We concur in the conclusion of the court below that a
comparison of the prior patents introduced herein with those consid-
ered in the Cohn suit does not justify the assumption that their prés-
ence therein would hâve induced a différent construction of the pat-
ent in suit. V
The order is afifirmed, with costs.
HENRY HUBER CO. v. J. L. MOTT IRONWORKS.
(Circuit Court of Appeals, Second Circuit September 14, 1903.)
No. 81.
1. PATSlNTS-rlNFRINGEMENT— BATi-WATER HeATBES.
The Beaumont patent, No. 555,033, for a hot-water bath flxture. In
View lof the prior art and the doubtful utility of the structure, is entitled
only to a narrow construction of its claims, coVering only the détails of
construction, chief of which are the independently controlled steam valve,
and a pair of valves, one for the watt-r and the other for the steam pipe,
connected for simultaneous opération. Claims 1, 2, and 6 construed, and
hfid not inf ringed.
Appeal from the Circuit Court of the United States for the South-
ern Distritt of New York.
For opinion below sec 113 Fed. 599.
This cause cornes before this court upon appeal from a decree-
of the United States Circuit Court for the Southern District of New
York dismissing bill for infringement of patent No. 555,033, granted^
HENET HUBEE CO. V. J. L. MOTT IKONWORK8. 945
February i8, 1896, to complainant, as assignée of Thomas C. Beau-
mont, for a hot water bath fixture.
Walter S. Logan, for appellant.
W. P. Preble, Jr., for appellee.
Before WALLACE, LACOMBE, and TOWNSEND, Circuit
Judges.
TOWNSEND, Circuit Judge. The patent in suit relates, so far
as this appeal is concerned, to the class of water-heating devices
wherein the water is heated by steam in pipes so arranged that the
steam does not mingle with the water. The stated object of the
alleged invention is to avoid ail danger of scalding by providing means
for controUing admission of water and steam so "that the steam can-
not be turned on without also turning on water, while the flow of
steam may be regulated, independently of the flow of water to a
greater or less extent." The means employed to accomplish this
resuit are described generally as foUows :
"The improved apparatus bas a compound valve for controUing the ad-
mission of water or steam to the water-heatlng and steam passages, eonslst-
ing of a Shell having steam and water passages through it, a pair of valves
connected together, and adapted to close the steam and water passages, re-
spectively, and an Independent valve adapted to close the steam passages
only, so that steam can flow only when both valves are open, and cannot be
turned on without thereby opening the water valve."
The only claims involved in this appeal are the first, second, and
sixth, which are as follows :
"(1) The combination with a water-outlet passage of a compound valve
for controUing the admission of water and steam thereto, consisting of a shell
having two distinct inlet-passages for water and steam, a pair of valves
connected for simultaneous opération, and adapted to close, respectlvely, the
steam and water passages, and an independent valve adapted to close the
steam passage, whereby steam can flow only when both valves are open,
and cannot be turned on without also turning on a stream of water to be
heated.
"(2) The combination with a water-outlet passage of a compound valve for
controUing the admission of water and steam, consisting of a shell having
two distinct steam and water inlet-chambers and outlet-seats therefrom, a
valve-stem and two valves carried thereby, the one closlng the steam-outlet
seat, and the other the water-outlet seat, and an independent stem carrying
a valve closing the steam-outlet seat, whereby the former stem controls the
flow of water, and both control the flow of steam, so that the steam cannot
be turned on without also turning on a stream of water to be heated."
"(6) The combination of a valve-shell, B, formed with steam and water
Inlet chambers, c and d, and outlet-seats, h and 0, therefrom, valves, I and
p, closing against said seats, respectlvely, a valve-stem, J, carrying both
said valves, and formed in two sections screwed together, with a valve, p,
between them, and a valve, i, swiveled on the section, q', by means of a
coupling nut, T', engaging the head, t, of this stem-section."
The first two claims cover generally, and the sixth specifically,
a construction comprising a hollow shell divided into two chambers,
one of which is connected with a steam, the other with a water,
supply. Thèse connections are controlled by a compound valve,
consisting of a pair of valves on one stem operated simultaneously
by the handle of one screw, and an independent valve on a separate
125 F.— 60
9é6ï - 125 FBDBEAL EfflPORTEE. : ;!
Stem controlling- the supply of steam, and operated by àiïother; ahd
indépendant handle and screw. When the stem carrying the two
valves is screwed out, it opens the valve Connecting with the cold-
water passage, and permits cold wateip to flpw out thrpugh the
faucet. B,y the same opération the other valve Connecting with the
steam châttiber is unseated, but steam cannot enter the chamber
until the other independent valve controlling the steam supply is
opened. Ail the valves are normally closed. By means of this
arrangement the danger of scalding in opening them under ordinary
conditions is reduced to a minimum, provided the valve joints are
tight.
There hâve been three distinct stages in the progress of the art
of water heating. In the fîrst devicés, cold water was heated by
mixing it with hot water; later devices mixed it with steam; and the
still later class of devices, to which the patent in suit belongs, ac-
complished the resuit by the external application of beat. The con-
struction and arrangement of the earliest devices showS. that their
inventors had the same object in viéw as that of the patent in suit.
Thus Baldwin, in his patent of 1854, showed a three-way cock so
connected with the cold and warm water pipes of a shower bath as
to admit cold and warm water mixed, or cold and warm water sep-
arately, and the drawings and normal position of the valve handle
indicate an arrangement in which no warm water could flow until
after the cold water had beèn fully turned on. Mattson, in his
patent of 1864, provided for such mixing of water> a^nd its delivery
by a pump at any température desired ; such température being reg-
ulated by a leyer, and indicated by a scale. And Blessing, in 1879,
showed how by first elevating a valve stem cold water alone could ^
be obtained, and how a further élévation produced a mixture of
cold and hQt water at any desired température. The patent provided
for a further élévation whiçh hot water only was desired, but this \vas
merely an additional possible advantage in the use of said apparatus..
The foregoing patents illustrate the means used in the devices of the
first or water-iïiixing stage pf the art for p'rotection against Scalding.
Burnett, in 1881, applied to t^e art in its second stage — that of inr.
jecting the steam into cold water — an apparatus confessedly similar,
except in mechanical détails, to that of the patent in suit, and the re-
by confessedly accomplished in this claSs of devices the stated object
of said patent. Thàt this is so appeàrs from an inspection df the
patent, and from the déclarations of Beaumont in the Patent Office
when the original claims of the patent in suit were rejected on réf-
érence to the Burnett patent. In thèse circumstânces, it becomes
unnecessary to consider the later Tobey and Sciiaflfstadt patents,
which are relevant merely as illustrating the development of the
third stage of the prior art, where water is heated by steam without
mixing with it. They show that this idea was not hew wîth Beau-
mont. Burnett shows that a device wherein you cannot turn on
steam without having the cold water come at the satrie time was old.
The still earliëraft shows practicable devices to prèvènt scalding.
In view of th^se circumstânces, and of the fact that the apparatus
of the patent in suit is of doubtful utility, ahd does not appear ever to
STANLET EULE <b LEVEL CO. V. OHIO TOOL CD. 047
have been put on the market, the claims can only be so interpreted
as to cover détails of construction. Chief among thèse is "the steam
valve, J, for independently controlling the admission of steam," and
"a pair of valves connected for simultaneous opération." Defend-
ant's device is operated by a single handle only, on a stem carrying
a single valve Connecting with the water supply. Another valve, on
a separate stem, connects with the steam supply, and is normally
closed by a spring. Its opération dépends entirely upon the opération
of the water valve, but between the two there is "play enough to al-
low valves to open and close at différent times." When the handle
is turned, it lifts the fîrst valve from its seat, and opens the cold-
water passage. If the handle be ftirther turned until its stem presses
against the dépendent stem of the steam valve, it will open the steam
passage. Therefore defendant's device lacks the "pair of valves con-
nected for simultaneous opération," and the "independent valve
adapted to close the steam passage," of the first claim. For the same
reasons, the second claim is not infringed. The sixth claim, which
is confined by its letters to a spécifie construction of valve stem, is
not infringed by the radically différent construction adopted by de-
fendant.
The decree is affirmed, with costs.
STANLEY RULB & LEVEL CO. v. OHIO TOOL 00,
(Circuit Court of Appeals, Second Circuit October 3, 1803.)
No. 125.
1. Patents— Inpringembnt— Plane Irons.
The Schade patent, No. 473,087, for a plane Iron, construed, and held
not infringed.
Appeal from the Circuit Court of the United States for the North-
ern District of New York.
This cause is brought hère by appeal from a decree of the United
States Circuit Court for the Northern District of New York dis-
missing bill for infringement of complainant's patent No. 473,087,
granted to Edmund Schade April 19, 1892, for a plane iron.
For opinion below see 115 Fed. 813.
Chas. P. Mitchell and J. P. Bartlett, for appellant.
Chas H. Duell and W. A. Megrath, for appellee.
Before LACOMBE and TOWNSEND, Circuit JudgeS.
TOWNSEND, Circuit Judge. The only contribution to the prîor
art furnished by the patentée was the idea of placing in an ordinary
plane iron a circular enlargement of the slot near its lower instead
of its upper end. It would seem that this mère transposition involved
only the exercise of ordinary mechanical skill, as found by the court
below, especially as the prior art showed such circular slots and sug-
gested such transposition. Thus, the Smith patent of 1878, for plane
MS Ïâ5 FEDERAL lîÉPOETBE.
irons, sfktèd aS follows: "A drcuîar enlargebent of the sIotB near
one or the other end; but this is not claimed hère as origiiial." But
it is showri in support lif the contention of invention that such trans-
position involved advaritages in the use, and prolongation of the life,
of thè plane iron, and 'that the patented plane is of gréât utility and
has bêen commercially sùccessful. '■
We do ript deem it ijecessary to discuss or détermine the question
of patentable iioyelty. If it be assUmed that the patent is valid, the
issue of infrîngement hèrein is disposed of by the limitations intro-
duced into the single daim, whichis as foUows:
"In a plane, the combination of a plane iron having a longitudinal slot, 4,
with the circular enlargement at its lo-wer end, said slot extending up near to
the upper end pf the bit "Wlthout any enlargement at said upper end, and a
laterally adjusting lever having a projecting part fltted to vrork in the upper
end of said slot, substantially as described, and for the pùrpose specifled."
In thè spécifications and drawings the patentée describes and shows
a circular slot, and emphasizes the importance of circular shape, as
follows^-: ' ' • ■'
"Ey-înftking the circular enlargement at the end of the slot, vchlch is near-
est the cutting edge, I am enabled to make the plane irons by pressing them
out t'rom sheet steel, and to harden and temper them to a point up to or
beyond the lower edge of this circular enlargement with less liability of
cracking the plane irons at this point, so that fewer irons are lost In harden-
ing and tempering, and they are less liable to become cracked or broken at
said point after they are put into use. This is because there are no angular
notches at the lower end of the slot from wMch a crack will stàrt."
It thttSiîiE^ppears that the patentée contemplated the use of his cir-
cular slôt enlargement on the lower end of sheet-steel plane irons,
designed to be hardened and tehipered after said slot had been
punched, and that by his circular construction he proposed to ob-
viate the objections attendant.-upon the; use of angular, notches. The
plane irons manufactured by défendant belong to an entirely différent
class. They consist of wroughtvirpn bodies proyided withthin stpps
or facings'ô'f steel weldéd to sâid bodîes and, serying to form the
cutting edgeof the plane iron., The slçt enlargemérits are hexagonal
in shapey and are punched in said Wrbught-iron .bodies. Thg plane
ircn requîreS no tempering af ter sâid slot has been punched, and
there', ïs thërefoi:e no aitëhdant difhculty by reason of cracking at
the angulki* notches, sûch as was foundîn the class of irqns described
in the patent in suit. In thèse cifcumstances, it would be clearly out-
side the scope of the allegëd invention to broaden said claim so as to
exclude the word "circular" therefrom, and to include a distinctly
différent clf^Sî'of deviçea, /Which succe^sfully employ ' the angular
notches, with the use of which the patentée souglit to dispense.
The decr«e is afRrmed, with costs.
UNITED STATES V. SEVERINO 9i9
UNITED STAÏES v. SEVERIXO.
(Circuit Court, S. D. New York. November 3, 1903.)
1. Natuhalization— Pbrjuht in Statk Couht— Jurisdiotiok op Fédéral
Court— Status op Statk Tuibunal.
Under Const. art. 3, § 1, providlng that the judicial power of the
United States shall be vested in one Suprême Court and in sucli Inferior
courts as the Coiigress may ordain and establish, and that the judges
shall ho!d office during good behavior, and shall receive a compensation
which shall not be diminished during their continuance in office, state
courts acting in the naturalization of aliens pursuant to the authority
given by Congress remain state tribunals, and do not become in any de-
gree courts of the United States; and hence a perjury committed in
such proceedings is an offense against the state, and not the fédéral
soverelgnty, and, in the absence of statute conferrlng jurisdiction on
the fédéral courts, is exclusively a matter of state cognizance.
2, Same— Statuts: Giving Fedkral Courts Jurisdiction,
Act July 14, 1870, c. 254, 16 Stat. 254 [U. S. Comp. St. 1901, p. 3654],
entitled "An act to amend the naturalization laws and to puuish crimes
against the sanie," etc., provides (section 1) that "in ail cases where
any oath or affidavit is made or taken under or by virtue of the law
relatlng to the naturalization of aliens or in any proceedings under
such laws" any person who knowingly swears falsely shall be pun-
ished, etc. Section 4 made the provisions of the act applicable to ail
naturalization proceedings before any court, and provided that "the
courts of the United States shall hâve .lurisdiction of ail offenses un-
der the provisions of this act in or before whatsoever court or tribunal
the same shall hâve been committed." When iucorporated into the Re-
vised Statutes of 1875, section 1 of this act became section 5395 [U. S.
Comp. St. 1901, p. 3654], being placed in the chapter entitled "Crimes
against .Justice," while the other sections were distributed elsewhere.
Section 4 became section 5429 [U. S. Comp. St. 1901, p. 3670], and, with
the portion of this section above quoted omitted, was made applicable
only to sections immediately preceding, thus excluding section 5395.
Held that, notwithstanding the changes on revision, section 5395 still
conferred on the fédéral courts jurisdiction of a perjury committed In
naturalization proceedings in a state court, in the procédure prescribed
by Congress.
8. Same— lÎKQuiREMEXT of Statb Statutk.
Laws N. Y. 1895, c. 927, p. 742, provides, in addition to the procédure
prescribed by Congress in the naturalization of aliens, that an appli-
cation in the form of a pétition, accompanied by an affidavit of soqie
citizen who may or may not afterwards be a witness, shall be flled 14
days before final action, etc. BeM, that perjury in the making of tliis
affidavit was not punishable in the fédéral courts under Rev. St. § 5395
[U. S. Comp. St. 1901, p. 3654], punishing perjuries occurring in natural-
ization proceedings; section 711, cl. 1 [U. S. Comp. St. 1901, p. 577]
giving United States Circuit and District Courts jurisdiction of ail crimes
and offenses cognizable under the authority of the United States.
Henry L. Burnett, U. S. Attv., and Clarence S. Houghton and
William S. Bail, Asst. U. S. Attys.
Ullo & Ruebsamen (Lorenzo Ullo, of counsel), for défendant.
THOMAS, District Judge. By chapter 927, p. 742, of the Laws of
1895, the state of New York enacted laws for the naturalization of
aliens in the courts of that state in conformity to the rule of naturali-
zation established by Congress, and also added provisions to those
contained in the Revised Statutes of the United States, tit. 30 [U. S.
Comp. St. 1901, p. 1329]:, and, among other things, that there should
950! 125 FEDERAI, BBPOETEE.
be filed with the court, at least 14 days prior to the hearing for naturali-
zation, <an application that "shall be in the form ' of a pétition, sub-
scribed and verified by the oath of the applicant, and shall be filed in
the cjourt tp which it is presented at least fourteen days before final ac-
tion thereon shall be had"; and that "simultaneously with the présen-
tation and filing of the pétition herein prescribed ahd provided for,
there shall a,Iso be fîled aii; affidavi): of à person, who nlùsr bé a citizen
of the United States,, ^^idwhomay ormay not be a persQn ■\vhom the
petitioner intends tosummon as awitness at the final hearing upon his
application lo be admitted to becortie a citizen of the United States,
which saiij. affidavit shall Iset forth the fUll nàme, résidence ahd occupa-
tion of tliie àfBaht, and that the affiant is a citizen of the United States
and is persopally well acquainted with the petitioner, and that the
said petitioner will hâve resided for fîve years within the United States,
and one year within the State ôf New York, immediately preceding the
return'dâyJtif the pétition." The proceeding in the court is initiated
by filing:tlu.6 pétition, and upon it ail subséquent proceedings are based.
In the présent action thé défendant was indicted for committing per-
jury in the âfïidavit accom^anyihg sUçh pétition, wherein, as charged,
he knowingly and falsely swore that hewas personally well acquainted
with the petitioner, and that "the said petitioner will hâve resided for
five years within the United States, and one yéar within the state of
New York, immediately pt-eCeding the return day of the pétition." The
proceeding was in the Coùhty Court of tlie county of Dutchess, in the
state of New York. Upon the trial the défendant was found guilty,
and now moves for a new trial.
There arç two questions involved :
First. Whéther a défendant, by committing any perjury in a nat-
uralization proceeding in the court of a state, ofïends the statute of the
United States, to wit :
"Sec. 5395 [page 3654, U. S. Comp. St. 1901]. In ail cases where any
oath or afBdavit is made or taken under or by vlrtue of any law relating
to the naturallzatlon of allens, or In any proceedings under such laws, any
person taking; or maklng siich oath or affldavit who knowingly swears false-
ly, shall be punished by Imprlsonment not more than five years, nor less
than one year, and by a fine of not naore than one thousand dollars."
Second. Even if section 5395 includes false oaths in a naturalization
proceeding in a court of the state of New York, does ît relate to the
preliminary oath of a witness to the pétition, which is demanded only
by the State Statute?
"Title 30, Rev. St. [page 1329, U. S. Gomp. St. 1901] , among other
things provides : .
"Sec. 2165. An allen may be admitted to become a citizen of the United
States in the (ollowlng manner and not otherwise: First. Be shall déclare
on oath, beforé à Circuit or district court of the United States, or a district
or suprême court of the terrltories, or a court of record of any of the
States, having «Sômnaon-law, jurisdiction, and a seàl and clerk,- two years, at
teast, prior to bis admission, that it la bona fide bis intention to become a
citizen of tjie XInfted States," etc. j
From the fédéral statutes relating to naturalization two inferences
hâve been drâwn : First. That the state courts, while engaged in nat-
uralization proceedings, become fédéral courts, or fédéral agents, and
UNITED STATES V. SEVEEINO. 951
that perjury committed therein is a crime against justice in a fédéral
court, and is punishable only in such court. This view is illustrated in
People V. Sweetman, 3 Parker, Cr. R. 358 (1857), where the General
Term of the state of New York held that a witness who had committed
perjury in a naturalization proceeding could be punished only in a
fédéral court, under the fédéral statute denouncing perjuries. The
opinion denominates the state court an agent of Congress for the pur-
pose of naturalization.
In the Matter of Ramsden, 13 How. Prac. 429 (1857), Mr. Justice
Hoffman discussed the relation of the state courts to the subject, and
summarized his view as foUows :
"The poveer of législation upon tbis subject existed in the States prior to
the Constitution. The législation would hâve been executed in the ordinary
tribunals of justice. The power bas been superseded by an act of Congress
passed under the Constitution. Congress adopt the state tribunals as the
agents to exercise the power, as they would bave performed it before.
The concurrence of the state Législatures, expressed or falrly Implied, adds
the sanction of the state to this délégation of power. Whether such tribu-
nals are bound to act may admit of controversy. That their acts are law-
ful if they do so, seems undeniable."
The Word "agents," as used in the Sweetman and Ramsden Cases,
cannot mean that the state courts become other or less than courts,
inasmuch as a proceeding in naturalization is recognized as a judicial
proceeding in a court. Spratt v. Spratt, 4 Pet. 406, 7 L. Ed. 897 ; Ex
parte Frank Knowles, 5 Cal. 300. If the doctrine of the Sweetman
Case be adopted and applied to the action at bar, the county court, up-
on the filing of the application, became, as to the proceeding initiated
by it, a court of the United States. The perjury, when committed,
offended a court of the United States, and an indictment could be
found in the proper fédéral court, but not in a state court.
There is another view, to the efïect that courts entertaining nat-
uralization proceedings remain courts of the state, so that persons
committing perjury in such proceedings may be punished under the
laws of the state, although it is neither denied nor affirmed that such
persons could be punished also under the laws of the United States.
This view is illustrated by the décisions in Rump v. Cornfnonwealth,
30 Pa. 475 (1858) ; State v. Whittemore, 50 N. H. 245, 9 Am. Rep.
196 (1870) ; and thèse décisions are expressly approved in the opin-
ion in In re Loney, 134 U. S. 372, 376, 10 Sup. Ct. 584, 586, 33 L,.
Ed. 949, where it is said :
"The décisions in the Suprême Court of Pennsylvania and of New Hamp-
shire, clted for the appellaut, holding that the judiciary of a state bas juris-
diction of perjury committed in a proceeding for naturalization before a
court of the state, under authority of Congress, tend ratber to support than
to oppose our conclusion; for they were put upon the ground that the pro-
ceeding for naturalization was a judicial proceeding in a court of the state,
as it doubtless was. Eump v. Commonwealth, 30 Pa. 475; State v. Whitte-
more, 50 N. H. 245, 9 Am. Rep. 196; Spratt v. Spratt, 4 Pet. 393, 408, 7 L.
Ed. 897."
According to this view, the state court, while entertaining such pro-
ceedings, remains a part of the sovereignty which created it, and does
not become a fédéral court. The fédéral courts in instances hâve en-
tertained actions to punish witnesses charged with perjury in nat-
952 125. FEDERAL BEPOETEU.
uralization proceediogs inustate courts. In United States v. Lehman
(D. C.) 39 Fed. 49 (1889), it was held that a person acting as a wit-
ness as to the résidence of the applicant; pursuant to Rev. St. § 2167
[U. S. Comp. St. 1901, p. 1332], and swearing falsely in regard there-
to, was liable to the penalty prescribed in section 5424 [U. S. Comp.
St. 1901, p. 3668], which relates, among other things, to "falsely
making, forging, or counterfeiting * * * any oath, * * *
or other instrument, * * * required or authorized by any law
relating to or provided for the naturalization of aliens." The ques-
tion now under discussion was not raised, but it will be seen later
that section 5429 [U. S. Comp. St. 1901, p. 3670] gives the fédéral
court such jurisdiction over offenses included in section 5424. The
décision was on demurrer to the indictment. Later (United States
V. Lehman [D. C] 39 Fed. 768) it was concluded that the ofïense
of perjury is punishable not by section 5424, but by the above-quoted
section 5395 of the Revised Statutes [U. S. Comp. St. 1901, p. 3654],
which, as will appear, section 5429 does not include.
In United States v. Power, 14 Blatchf. 223, Fed, Cas. No. 16,080
(1877), Judge Benedict decided that the city court of Yonkers, N.
Y., had jurisdiction of naturalization proceedings. The question
arose upon an indictment found in the Circuit Court of the United
States for perjury alleged to hâve been committed by the défendant
in the city court. The jurisdiction of the Circuit Court was not
questioned.
Thus far it appears that the General Term of the Suprême Court
of the State of New York held that fédéral courts had exclusive ju-
risdiction of perjuries committed in state courts in naturalization
cases, because they become fédéral courts or agents of Congress;
that Mr. Justice Hoffman, of the Superior Court of New York,
also regarded state courts as agents adopted by Congress ; that
the courts of two states hâve held, with the approval expressed in In
re Loney, supra, that the state courts had jurisdiction, as the pro-
ceeding was in a court of the state; and in the cases of Lehman and
Power an unchallenged jurisdiction was exercised. In Re Loney,
134 U. S. 372, 10 Sup. Ct. 584, 33 L. Ed. 949 (s. c. [C. C] 38 Fed.
ici), Loney was arrested for trial before a state tribunal on a charge
of perjury, alleged to hâve been committed in testifying as a wit-
ness in a contest for a seat in the House of Représentatives of the
United States. The contention in behalf of the state jurisdiction
was that, as the oath was taken before a notary public, a state oifi-
cer, the state court had jurisdiction. But it was held by the fédéral
courts that, although he was a state ofïicer, he had no jurisdiction
to administer an oath in the matter before him, except pursuant to
the law of the United States, and therefore that he was a person
compétent to take an oath, and authorized so to do by the law of
the United States. Hence the case was within the gênerai section
5392, Rev. St. [page 3653, U. S. Comp. St. 1901], relating to per-
juries. In the opinion Mf. Justice Gray says :
"But the power of punishïng à witness for testifying falsely In a judicial
proceeding belongs pecuUarly to the govemment In whose trihunals that
proceeding is had. It is essentlal to the Impartial and efficient administra-
UNITED STATES V. 8EVERIN0. 953
tlon of justice In the tribunals of the nation that wltnesses sbould be able
to testify freely before them, unrestrained by législation of the state, or by
fear of punlshment in the state courts. * • * A witness who glves bis
testimony, pursuant to the Constitution and laws of the United States, in a
-case pendlng in a court or other judicial tribunal of the United States,
whether he testlfles In the présence of that tribunal or before any magistrate
or olBcer (elther of the nation or of the state) deslgnated by act of Con-
gress for the purpose, is àccountable for the truth of hls testimony to the
United States only; and i)erjury committed in so testifying is an offense
against the publie justice of the United States, and within the exclusive
jurisdiction of the courts of the United States, and cannot, theref ore, be
punished in the courts of Virginia under the gênerai provision of ber stat-
utes."
In this very opinion is found the statement, earlier quoted, that a
naturalization proceeding severally in the courts of Pennsylvania
and New Hampshire "was a judicial proceeding in a court of the
state." It will be observed that in the Loney Case the proceeding
and purpose and subject-matter tliereof were entirely fédéral, and
that a person belonging to a designated class of Union officiais in
the state was adopted and empowered by Congress to take évidence
to be returned to the House of Représentatives of the United States.
In the action at bar the case is différent. No department of the
national government was related to the record or proceedings that
were taken in the county court. The proceeding began and ended
in that court. In the Loney Case the person taking the évidence
to report became a fédéral officer. But the state court cannot be-
come a fédéral court for the purpose of naturalization.
Section 8, art. i, Const. U. S., empowers Congress to "establish
an uniform rule of naturalization, and uniform laws on the subject
of bànkruptcies throughout the United States." This means that
Congress should make uniform rules whereby aliens may become
citizens of the United States and of the state where they réside.
Amendment 14, Const.; Gassies v. Ballou, 6 Pet. 761, 8 L,. Ed. 573_;
Slaughter House Cases, 16 Wall. 36, 21 L. Ed. 394; Boyd v. Thayer,
143 U. S. 135, 12 Sup. Ct. 375, 36 L. Ed. 103. Article 3, § i, of the
Constitution, provides :
"The judicial power of the United States shall be vested in one Suprême
Court, and in such inferior courts as the Congress may trom time to time
ordain and establisli. The judges, both of the suprême and inferior courts,
shall hold thelr offices during good behavlor; and shall, at stated times, re-
çoive for their services, a compensation, which shall not be diminished dur-
ing thelr continuance In office."
The présent inquiry is not whether Congress could confer jurisdic-
tion in naturalization proceedings upon the state courts ; but whether
in so doing it vested judicial power in an authorized fédéral court.
The Constitution vests the judicial power of the United States in the
Suprême Court and inferior courts such as Congress may "ordain and
establish." Congress did not "ordain and establish" the County Court
of the county of Dutchess. Const. art. 3, § i, plainly refers to an in-
ferior court that owes its life to an act of congress. But look farther
at this section. It provides that "the judges, both of the suprême and
inferior courts, shall hold their offices during good behavior; and
shall, at stated times, receive for their services a compensation, which
954: 125 FEDERAI/ mEPOKTBE.
shall nbt be dimînished dtiring their continuance in office." This
me^ilé tlîat the fédéral power shall appoint the judges (article 2, § 2),
supervise théir behavior, and remove tïiem for bad behavîor ; and that
it shall maice compensation for their services, and shall not diminish
the same during their continuance in office. The section does not
mean th?Lt Congress can couvert intô a fédéral court a state court,
ordained airid established by a state, which can act on the subject dele-
gated only by sufïerance of the state, and whose judges are paid and
removable'il^ the state alone. To assert that the County Court of
the county of Dutchess was a fédéral court is to ofifend article 3, § i,
of the Constitution of the United States, in every sentence and phrase
therenf. In State v. Whittemore, supra, it is said:
"In the présent case the oath was taken to be used In a proceeding in a
state court, "whose oflElcers were appolnted solely by state authorlty. The
proceeding was, In one sensé, under the laws o( the United States; but it
was carried pn In the state court only by the sufferance of the state. The
state Is uhder no obligation to furnish tribunals to aid in the administration
of the nàtùralization laws of Congress. and may prohibit Its courts from
entertainlng jurisdiction of applications for nàtùralization. Stéphen's Péti-
tion, 4 Gtey, 559; Beavln's Pétition, 33 N. H. 89."
This opinion further quite properly calls attention to the spectacle
of a court of the state dépendent upon the officer of another jurisdic-
tion for prosecuting perjuries committed in its court. In Rump v.
Commonwealth, supra, thé learned judge said:
"Although such cases arise under the Constitution and laws of the TJnited
States, yet, because thèse are part of the law of the land, and merely give
the rule for the exercise of our admitted state functions, cur state courts
may entertain this jurisdiction."
It is conduded that state courts, while entertainlng jurisdiction in
nàtùralization proceedings, remain state courts, and that perjury com-
mitted by a witness in such a proceeding is punishable by the sover-
eignty whose justice it offends (that is, the state court) ; and that the
fédéral court cannot entertain jurisdiction in the absence of a fédéral
statute conferring it.
An attempt will not be made at this time to discover a maintain-
able theory whereby Congre§s was enabled to permit the state courts
to share with the fédéral courts jurisdiction in matters of nàtùraliza-
tion. That it had such ability has been doubted rarely. Indeed, the
Suprême Court bi Californîa considered that the exclusive jurisdic-
tion must be vested in the state courts. Ex parte Frank Knowles, 5
Cal. 305. While the législative âuthority is vested exclusively in Con-
gress (Kent's Commentaries, vol. i, 396, 400; Chirac v. Chirac, 2
Wheat. 259, 4 L. Ed. 234; Houston v. Moore, 5 Wheat. 49, 5 L.
Ed. 19; U. S. V. Villato, 2 Dali. 370, Fed. Cas. No. 16,622, i L. Ed.
419; Boyd V. Thayer, 143 U. S. 160, 12 Sup. Ct. 375, 36 L. Ed. 103),
the state courts could be permitted to share jurisdiction for the ad-
mission of citizens td the political bodies of the United States and
of the state of résidence, unless it should be concluded that it was a
judicial power exclusively vested in the courts of the United States.
It has been decided that the judicial power is of such a nature that it
may be committed to the state courts. In the Matter of Ramsden, 13
UNITED STATES V. SEVEKINO. 955
How. Prac. 429 (1857) ; Ex parte Frank Knowles, S Cal. 305. This
phase of the subject may be left at this point for a discussion of the
question whether Congress did provide a statute for the punishment
in the fédéral courts of perjuries committed in courts of a state in nat-
uralization proceedings.
Therefore the next inquiry is whether section 5395 is applicable
to perjuries in state courts. This leads to the discussion of a ques-
tion made the more obscure by the manner in which the federaf
statutes hâve been enacted, revised, and repealed. At the first
view there would be hésitation in concluding that Congress intend-
ed to punish perjuries in naturalization proceedings, committed in a
court foreign to its governmental jurisdiction, against another and
independent sovereignty, thereby making its pénal statutes applicable
to offenses committed against the justice of a separate state. But
it is precisely what at a time, and for a tinie at least, it did do in
plainest terms by Act July 14, 1870, c. 254, 16 Stat. 254 [U. S. Comp.
St. 1901, p. 3654]. The first four sections relate specificaliy to
naturalization. In 1875 they were embodied in the Revised Stat-
utes, as follows :
Act of 1870. Kevised Statutes.
Section 1 Section 5395
" 2 " 5424
" 5425
" 5426
" 5427
" 3 " 5428
4 " 5429
See Rev. St. (Ed. 1878) Référence Index, p. 1149 [U. S. Comp.
St. 1901, p. 3831].
The language and provisions of the sections of the act of 1870,
as carried into the Revised Statutes [.U. S. Comp. St. 1901, pp. 3654,
3668-3670], are practically the same, with the exception of section
4, which, in the act of 1870, was made applicable to the three sec-
tions which preceded it, while, after being carried in part, but shorn
of certain definite language, into the Revised Statutes, it was made
applicable only to sections 5424-5428, inclusive, formerly sections 2
and 3 of the act of 1870. This excluded section 5395, formerly sec-
tion I of the act of 1870, from its provisions. The doubt occasioned
by this change will appear from the language of section 4 and the
use made of it in the Revised Statutes. Section 4 reads :
"Sec. 4. And be It further enacted, that the provisions of this act shall
apply to ail proceedings had or taken, or attempted to be had or taken,
before any court In which any proceeding for naturalization shall be com-
meneed, had, or taken, or attempted to be commenced; and the courts of
the TJnited States shall hâve jurisdiction of ail offences under the provisions
of this act, in or before whatsoever court or tribunal the same shall hâve
been committed."
In the Revised Statutes, section 5429 [U. S. Comp. St. 1901, p.
3670], as substituted for section 4 of Act July 14, 1870, 16 Stat. 255,
c. 254 [U. S. Comp. St. 1901, p. 3670], reads as follows:
"Sec. 5429. The provisions of the flve preceding sections shall apply to
ail proceedings had or taken, or attempted to be had or taken, before any
956 125 FBQEBAL BBPORTBS.
coprt In whleh any proceedlng for naturalization may be commenced or at-
tempted to be commenced."
The histpry is this: Until 1870 Cbngress had enacted no spécial
statute relating to perjuries in naturalization proceedings. In that*
year it did enact section i of the act of July 14, 1870 (16 Stat. 254,
c. 254 [U. S. Comp. St. 1 901, p. 3654]), covering the subject of per-
juries in such proceedings, and two other pénal sections, relating
in other respects to naturalization. Section 4 was sufficiently broad
to give the: fédéral courts jurisdiction of offenses denounced by such
sections, whether arising in a state or fédéral court. In 1875 Con-
gress enacted pénal sections 5395, 5424, 5425, 5426, 5427, 5428, 5429
in place of sections i to 4 of the act of 1870. By section 5429 it
made sections 5424-5428 applicable to "ail proceedings had or taken
or attempted * * * before any court in which any proceeding
for naturalization may be commenced or attempted to be com-
menced." This excludes section 5395. Is this clear évidence that
Congress did not intend that section 5395 should longer apply to
perjuries in courts other than fédéral?
Section i of the act of 1870 in language and substance is sub-
stantially embodied in section 5395 ; but to section i as it existed
section 4 was added. That section is in part re-enacted su as to ex-
clude section 5395. Hence, in terms, section 5395 stands as section
I in the act of 1870 would hâve stood without the help of section 4.
But the act of July 14, 1870 (chapter 254) was "An act to amend
the naturalization laws, and to punish crimes against the same, and
for other' purposes." The naturalization laws (title 30), thus amend-
ed, related to proceedings before state courts as well as fédéral
courts. Hence section i should be construed as amendatory of
title 30, and applicable to state courts mentioned therein, irrespective
of section 4, which is technically surplusage, but practically a useful
aid to interprétation. This conclusion is helped by the language of
section 5395, which provides :
"In ail cases where any oath or affldavit Is made or taken, under or by
vlrtue of any law relating to the naturalization of alieas, or In any proceed-
ings under sucli laws, any person • • • who knowlngly swears falsely
* * • shali be punished," etc.
An oath required by title 30, Rev. St. [page 1329, U. S. Comp.
St. 1901], is taken in "any (a) proceeding under such laws." Ex-
cept for sijçh laws it could not be taken, nor, if falsely and know-
ingly taken, côuld it be the basis of a charge of perjury. Considering
this language that the act of 1870 is by the terms of its title amenda-
tory of the naturalization laws, that the ofifense of perjury in nat-
uralization proceedings in any court was made cognizable by the
fédéral courts by the act on which the revision is based, it is con-
cluded that section 5395 is applicable to perjuries committed in
naturalization proceedings in the state courts, when the oath is re-t
quired by the fédéral statute. This conclusion is reached notwith-
standing the fact that section 4 of the act of 1870 was only in part
carried into the Revised Statutes, and such part made applicable to
ail the new sections except section 5395. This probàbly arose from'
the fact that it would not broaden, although it would make more
UNITED STATES V. SEVERINO. 957
definite, the terms of section 539 s, and from the further fact that
section 5395 was placed under the chapter relating to "Crimes against
Justice," while the other sections were distributed to the chapter
relating to forgeries, frauds, etc., thereby separating sections that
had theretofore fallen under a common title.
Whatever view may be taken of the foregoing discussion, the false
oalh taken in the case at bar was not one authorized or demanded by
the fédéral statute. It was an oath added by the state law as a con-
dition précèdent to the exercise of the jurisdiction tendered by the
fédéral statute to the state tribunal. It is true that in the Southern
and Eastern Districts of New York a pétition verified by an appli-
cant must be presented as the initiatory step in naturalization pro-
ceedings, but such fédéral courts are permitted to establish each its
own rules of practice, not inconsistent with certain other rules and
statutes, and such rules hâve the full force of law. Section 916, Rev.
St. [page 684, U. S. Comp. St. 1901]. The state law requires a simi-
lar application, but demands that it be accompanied by the affidavit of
a person who can and shall testify to such résidence of the applicant
as must be proven on the return day to entitle him to naturalization
pursuant to the fédéral statute. There is nothing in the fédéral stat-
utes that requires the preliminary oath that was violated, and, tested
thereby, it is extrajudicial and immaterial. The witness whose affida-
vit accompanies such patition may or may not be the witness who
shall be présent in court, nor was the défendant at the tinie of making
or fîling such oath doing an act stated or contemplated by the fédéral
statutes.
The question now is whether section 5395, Rev. St. [page 3654, U.
S. Comp. St. 1901], contemplâtes an oath or affidavit which is com-
manded by a state statute and is not demanded by the United States
Statutes ; that is, does the United States undertake to punish a breach
of its own law and also any breach of the law of the state ? Does the
state law become also a fédéral law because it pertains to a court that
is enabled to enforce some other cognate fédéral law? Had the de-
fendant donc the précise thing for which he has been convicted pré-
viens to the passage of the state act, he would hâve done an act re-
quired by no statute, fédéral or state, and could not be punished. The
state statute has since placed upon him the necessity, and to that stat-
ute, and to the government creating it, he alone owes duty in taking
the steps commanded by that statute. United States v. Grottkau (D.
C.) 30 Fed. 672, decided that the Revised Statutes of the United States
(section 5395), which provide for punishment by fine and imprison-
ment where any person knowingly swears falsely in an oath or affida-
vit made or taken under any law relating to the naturalization of
aliens, are to be construed to refer to oaths which the naturaHzation
law requires or authorizes a party to take ; and that where the oath is
extrajudicial, and not required or authorized by law, perjury cannot be
assigned. Whatever disagreenient there may be with the conclusion
that the oath in that case was extrajudicial, and related to immate-
rial matter, although it accords with the décision in In re , 7
Hill, 137, 139, there can be no doubt that, if it was extrajudicial, no
action for perjury could be based upon it.
958 125 FBDEBAL RSlPORtEB.
The Coflténtion of the government is that section ^395, Revi St.
ïpagie 3654, U. S. Comp. St. 1901]', means'that a person shall be guilty
of perjury-who violâtes any law of the United States or any law of a
State byswearing falsely respecting any matter required by either of
such laws. By the statutes of the United States the Cifcuit and Dis-
trict Courts hâve jurisdiction, exclusive of the courts of the several
states, "of ail crimes and ofifences cOgnizable under the authority of
the United States." Reyi St. § 711* cl. i [U. S. Comp. St^ 1901, p.
577]. The laws of the United States do not niake it an offense to
testify as the défendant did iii the présent instance, nor did the stat-
iite intend to command that it wduld punish any person who commit-
ted perjury in a state court in référence to any matter that the Légis-
lature of that State had required to be proven or should in the future
require to be proven in naturalization proceedings. It was a mat-
ter that related entirely to the practicé of the court, and was not sub-
stantively conttected with any duty which the fédéral statutes imposed
upon thé State court or witnesses in that court. This suggested in-
corporation of the State law into the fédéral law, both as to past and
future, for: the purpose of making infraction thereof punishable by
the United States, is not approved.
The exclusive power of Congress to establish a uniform rule of nat-
uralization has not been considered in the présent connection. But, if
it be claimed that the requirement of the state statute was an addi-
tion to the existing law relating to naturalization, it would be a sufifi-
cient answer that the state has no power to enact it, as it was deprived
of such power by the fédéral Constitution, as the cases already cited
illustrate. But it is not neeessary to hold that a state, as a condition
of allowing its courts to entertain naturalization proceedings, may not
regulate its practicé and punish suitors who knowingly violate by
false oaths the requirements of its statutes relating thereto, provided
the "rule of naturalization" enacted by Congress is not varied. It is
enough that the new requirement does not become a part of the féd-
éral law, and that any disobedience thereto must be punished by the
sovereignty off ended. What the défendant did he did in a court or-
dained and establishéd by the state of New York and its Constitution,
respecting a matter prescribed by such state, and unprovided for in
the fédéral law, before a judge neither appointed nor compensated
by the United States, but by the state, and holding his office for a
term of years, and not during good behavior, and in no wise account-
able or owing officiai duty to the United States.
It foUows from'the foregoing views thât a new trial must be sfrant-
ed.
BRYCa -r. SOUTHERN RY. CO. et al.
(Circuit Court; D; South Carolina. November 27, 1903.)
Cakriebs— Injdrt to Passensee— Parties— Servants— Joindbb—Pleadikg.
Where an englnéer aM conductor ot a railroad train were Joined ■WWii
the ralltoad cOmpany as défendants In an action for injuries to a pas-
Benger from the derallment of the train, the averment of the accident
and Injuries resulting therefrom to the plaintifE, thoughsuflacient tO;Con-
BRTCE V. SOITTHEEN EY. (X>. 959
stltute a cause of action against the rallroad company, was Insufficlent as
agalnst the englneer and conductor.
a. Same— IjIability of Servants.
Servants of a rallroad company In charge of a train on which a pas-
senger was injured are not personally liable to such passenger for the
injuries sustained unless the Injury resulted from the misfeasance and
positive wrongs of such servants.
On Rehearing.
For former opinion, see 122 Fed. 709.
SIMONTON, Circuit Judge. This case now cornes ug on a mo-
tion for rehearing the order refusing to remand the cause. The im-
portance of the question involved, and the weight of the arguments
of counsel upon the motion, demand and hâve received most carefui
considération. The whole question has been studiously reviewed.
The cause of action is injury to a passenger upon the Southern
Railway arising from the derailment of one of its trains. The de-
fendants to the action are the corporation itself and the conductor
and engineer of the train. The complaint prays judgment against ail
the défendants. It charges that the accident occurred from the nég-
ligence of the défendant company, and further charges that at the
time and place when and where the plaintifï was injured as aforesaid
the défendants Edward Bird was the engineer and James Harling
was the conductor, servants of the said Southern Railway Company,
in charge and control of said train respectively as engineer and con-
ductor of said train, and that the négligence of the said Southern
Railway Company défendant was done by and through its said serv-
ants and other of its servants then and there in its employment, and
said négligence was the joint négligence of ail the said défendants.
It is clear that, so far as the Southern Railway Company is con-
cerned, the allégations of the complaint are sufficient to hold it re-
sponsible for the accident if they be established. This railway com-
pany is' a common carrier of passengers. It is bound by contract
with the plaintifï, a passenger, to carry him safely. He was not
carried safely, and the policy of the law throws upon the carrier the
burden of proving that the failure of its contract did not arise from
négligence of any agents of the corporation. The Suprême Court
of South Carolina, in Steele v. Railway, 55 S. C. 389, 33 S. E. 509,
74 Am. St. Rep. 756, states the rule and its reason very clearly:
"The reasons for the rule are: First. The contractual relation hetween
the carrier and passenger, by which it Is Incumbent on the carrier to trans-
port with safety; hence the burden of explaining failure of performance
should be on the carrier. Second. The cause of the accident, if not exclu-
sively withln the knowledge of the carrier, is usually better known to the
carrier, and this superlor knowledge makes It just that the carrier should
explain." (Evidently the court proceeds upon this idea. The knowledge of
every agent of the carrier, not only as to the conductor of the train as the
agent in control of the train, but as to the condition of the roadbed by the
other agents whose duty it is to keep up the roadbed, Is In law the knowl-
edge of the carrier.) "Thtrd. Injury to a passenger by a carrier is some-
thing that does not usually happen when the carrier is exercising due care,
hence the fact of injury afCords a presumption that such care is wanting,"
960 125 FÏ3DERAL REPORTER.
This rule, as has been said, is phe created and eStabliçhed by the
policy of the law. Carriers are cïôtHéd with important privilèges.
They serve the public. In the çxercisÇ'bî thèse privilèges ?ind this
service th^ are held to a responsibility much more strict' than that
imposed upon individuals. If an injury occur to one of the public,
who has entered into contract with the carrier, the law demanda
from thé carrier an explanation and excuse for it. The bare tact
of the breach of the contract puts the carrier on the défensive. The
assertion in the complaint that ithe injury' arose from négligence of
the carrier is enough to require an explanation and défense at its
hands.. ' ' ^
But this complaint goes farther. It àeeks damages not only from
the Southern Railway, but also from two individuals, it^ servants,
and basés its demand upon the àltegation of négligence on the part
of thèse servants with bther of the servants of the railway company
then and there in its employmentj, ,whiçh négligence was the joint
négligence of ail the said defendalits. The facts constituting such
négligence upon the part of thesé tw6' individuals and other of the
servants of the railway company tlien and there in its employment
are not set forth. There was hère no contractual relation between
the plaintiff and thèse two men; nt^ presumption of law arising from
the policy of the law against them. They are called upon to défend
themselvçs, and can be called upon to défend themselves only in
the same wây as if the carrier was not a party in the suit with them.
The rule in the suits against individuals for injury is stated in Shear-
man & Redfield on Négligence (ad Ed.) § 5. The mère fact of an
injury havihg been suffered is not enOugh to establish a charge
of négligence against thé person causîng the injury. No one is re-
sponsible for an injury caused purely by inévitable accident while
he is engaged in a lawful business, even though the injury was the
direct conséquence of his own act, and the mjured party was at
the time lawfuUy employed, and in' ail respects free from fault. "Still
less can a charge of négligence be sustained by the bare fact of the
injury, when at the same time it is said that the négligence was also
the négligence of other servants beside themselves." The same au-
thor, at section 12, says :
"The burden of proof In an action upon négligence resta upon the party
charging it. * * * It is not enough for him to prove that he has suflfered
loss from some event which happened upon the defendant's premlses, or even
by the act or omission of the défendant. He must also proye that the de-
fendant by such act or omission violated à duty resting upon hlm. [And
If he must _prove, he must flrst allégé.] There is a Class ôf cases which con-
stitute au apparent exception to the rule; such as actions against a carrier,
etc. But thege cases are not real exceptions. The défendant in such cases
is under a î)Ositive obligation to delîyer safely the thing committed to
him, except under pecullar circumstànces beyond his control. His failure
to deli ver safely puts him prima facle in the wrong, and it is for hlm
to prove tiiie exçeptional circuiUstances which excuse him. But, when no
spécial relation exists, the presumption is that the défendant has complied
with ail the obligations wiilch rest equally upon every man, and if he has
not the plaintiff must prove It. He must, for this purpose, prove facts from
which it can be ascertaîned with reasonable certainty wbat particular pré-
caution the défendant ought to bave taken, but did not takô. And he must
BRTCE V. SOUTHERN RT. CO. 961
also prove facts from which It can fairly be Inferred that the defendant'a
négligence caused the injury complained of."
And, as has been said, if he must prove thèse facts he must fîrst
allège them.
It must be observed that a personal liability is sought to be thrown
on thèse two défendants simply from the fact that an injury was oc-
casioned to the plaintiff by reason of the joint négligence of the car-
rier, of thèse two défendants, its servants, and others, the servants
of the carrier, then and there in its employment. The facts upon
which this conclusion is based are not stated. How can thèse two
men prépare their défense until they are informed where they were
négligent? Was the train running at an inordinate speed? Was
the engine taken on the run in a defective condition, which shpuld
hâve been known to the engineer, the défendant ? Was the roadbed,
track, or were the rails, defective from any négligence of others
the servants of the carrier? For such charges they could prépare
themselves, and could seek an escape from présent liability. And
to a knowledge of such facts they were entitled. It is true that in
Danner v. Railroad, 4 Rich. Law, 336, 55 Am. Dec. 678, the judge
delivering the opinion says that the mère proof of the injury in a
suit against the engineer would be prima facie évidence that the act
was done willfully. That was a case against a railroad company.
It held as a matter of évidence that the burden was on the company
to prove that there was no negHgence on its part or that of its
agents. And that, too, is a rule based on public policy. And even
then the rule is of limited application. See Wilson v. The R. Rd.,
10 Rich. Law, 53 ; Richardson v. R. Rd., 55 S. C. 334, 33 S. E. 466.
This expression of the judge is clearly obiter dictum. So also in
Stokes v. Saltonstall, 13 Pet. 181, 10 L. Ed. 115. The court says
that there was a presumption of négligence against the driver of a
stage coach when the coach was upset. But that was a suit against
a carrier, and, the accident having happened, the policy of the law
presumed negHgence in the carrier whether the act was his or his
agent's. And then, too, the fact on which the négligence was based
was stated — the unskillful driver. The case also turns upon the
contract of carriage, a warranty that, so far as human foresight or
skill can go, the passenger would be carried safely. That warranty
was broken, and the burden was on the carrier.
There is another point of view in considering this question : Should
the facts constituting the négligence be alleged when it is sought
to make thèse two agents, the conductor and the engineer, person-
ally liable jointly with their principal? An agent or servant is not
alvvays personally liable to third persons for négligence. When he
is charged with négligence the facts must be stated wherein the nég-
ligence consisted — 'whether in the omission of an act he should hâve
done, or in the commission of an act he should not hâve done.
Judge Story, in his work on Agency (çth Ed.) §§ 308, 309, states the
law on this subject, which comes with ail the authority of his name :
"We come, in the next place, to the considération of the liability of agents
to third persons in regard to torts or wrongs done by them In the course
125 F.— 61
962 125 S'BDBBAIi BBFOBTEB.
of theit àgency. • ♦ • And hère the distinction ordlnarlly Is taken be-
tween acts of mlsfeasance, or posltfvé wrongs, and nonfeasance, or mère
omissions of duty, by private agents, ♦ * * Tbe master Is always liable
to third persôns for the misfeasances and négligences and omissions of duty
of bis servants in ail cases wlthln tbe seope of bis employment. So a prin-
cipal is also liable to third persons for like misfeasances, négligences, or
omissions of duty of bis agent; leaving bim to bis remedy oTer against tbe
agent in ail cases wben the tort is of such a nature as that he is entltled
to compensation. * * • The agent Is also liable to third persons for hls
own misfeasances and positive wrongs. But he is not liable to third persons
for hls own npnfeasances or omissions of duty in tbe course of bis employ-
ment. H;Î8 Jl^billty in thèse latter cases is solely to bis principal. * • ♦
Hence tbé général maxlm is to ail such négligences and omissions of duty
in the Càéè' of private agëncy, respondeat superlor. * * • The distinction
tbus propounded between mlsfeasance and nonfeasance between acts of di-
rect positive vrongs and mereneglects of agents as to tbeir Personal llability
therèfor may seem nlce and artiflcial, and partakes not a Uttle, perhaps, of
the subttetles and overrefliiement of the old doctrines of the common law.
It seems,' however, to be founded on this ground: No authority whatever
from a superlor to an inferlor can furnlsb tbe latter a just ^efense for bis
own positive wrongs or trespasses, for no man can authorlze another to do
a positive wrong. But Ib respect to nonfeasances, or mère neglects in the
performance pf duty, tbe tesponsibllity therèfor must arise from some ex-
press or impUed obligation between particular parties standing in privlty of
law or contract with each otber, and no man is bound to answèr for any such
violations of duty or obligation except to those to wbom be bas become di-
rectly bpund or amenable for bis conduct."
It would seem, therefore, that the conclusion heretofore reached in
this case that, in order to require the two défendants, Edward Bird,
the engineer, and James Harling, the conductor, to answer person-
ally in this case, . something more than the charge of négligence or
joint négligence with the railway company must be made. The
facts upon which this charge is made must be stated.
The motion to remand after rehearing is refused.
WILSON V. FREEDLET.
(Circuit Court, D. Vermont November 17, 1903.)
1. Conthacts—Breach— Eléments of Damasb— Verdict— Form.
Wbere, in an action for breach of contract, plalntiff's damages were
alleged under four beàds — for defendant's f allure to supply water, for
defendant's fallure to provide a derrick, for failure to transport coal,
and for denylng an option to do certain additional work — a verdict
flndlng In favor of plalntiff, and flnding a spécifie sum of damages
separately under eacb of such beads, was not erroneous.
2. Same— Evidence.
In an action for breach of a quarry contract, évidence held insufflcient
to support a verdict in favor of plalntifC for not furnishlng water and a
16-ton derrick, as provlded by the contract.
8. Samb— Work and Labor— Quasi Contract.
Wbere a contract for the quarrying of marble requlred plaintift to
uncover and quarry not less tban 50,000 cubic f eet during the year 1901,
and that, If he uncovered more tban such amount, he should bave an
option of quarrying it on tbe same terms, and, by reason of hls failure
to quarry the amount requlred, he forfeited hls right to tbe option, but
be did certain additional uncoverlng whicb was bénéficiai to défendant,
tbe owner of tbe quarry, plalntifC was entitled to recover for tbe bene-
fit so conferred.
WnSON V. FBEEDLBT. 963
Motion to Set Aside Verdict.
Orion M. Barber and James L,. Martin, for plaîntiff.
Fred M. Butler and James K. Batchelder, for défendant".
WHEEI/ER, District Judge. The défendant owns a marble quar-
ry on the side of a mountain, which was supplied with water from a
Harwood spring higher up, through a three-quarter inch pipe about
two-thirds of the way, and a half-inch pipe the rest of the way, and
a derrick at the head of a gravity railroad, by which quarried blocks
of marble are taken to his mill at the foot of the mountain below.
He contracted in writing with plaintif? for uncovering good marble
in a part of the quarry in 1901, and quarrying and delivering on
cars not less than 50,000 cubic feet of marble (2,000 cubic feet in
April, and 6,000 in each month after), in blocks of "random sizes,"
at 45 cents a foot, monthly, with a déduction of 10 cents a foot for
any deficiency in any month; and he agreed to furnish a derrick
for the use of the plaintifif at the head of the railroad, "sufficient to
handle blocks of 16 tons weight"; to furnish a supply of running
water at the quarry, equal to two-thirds the amount that could be
obtained by a three-fourth inch pipe ail the way from the Harwood
spring, and to transport promptly by the gravity road supplies re-
quired by the plaintifï ; and that, "if the plaintiff uncovered more good
marble than the 50,000 feet required, he should hâve an option of
quarrying it upon the same terms." The plaintifï uncovered in the
spring what was estimated to be necessary for quarrying the 50,000
feet required, and quarried and delivered up to December 31, 43,707
feet, from the price of which there was deducted, without objection,
10 cents a foot on 31,231 feet for monthly deficiencies. The de-
fendant required the plaintifï to quit December 3ist, and denied his
right to quarry further under the option. This suit is brought for
damages for not supplying water, for not furnishing a i6-ton derrick,
for not transporting supplies promptly, and for not allowing the op-
tion.
As to not furnishing water, the plaintifï testified:
"Q. Did that cause you any delay? A. Yes, sir. Q. How — to what extent?
A. In the month of March we were shut down eight days, in May we were
shut down four days, and in the balance of the season we were shut down
a day at a time for not less than 10 days ail told — the balance. Q. Making,
in ail, how many days' loss? A. Making, in ail, 22 days. We quarried an
average of about 200 feet a day on the average, and It would hâve made a
différence in our output through the year of about 4,400 feet. Q. You say
you could hâve gotten out that amount more if he had complied with the
contract In this respect? A. Tes, sir; very easily gotten It out. Q. And the
amount of loss to you In that failure to quarry that amount is how much?
A. I lost a profit on 4,400 feet at 15 cents a foot, which would be $660. I
pald damages 10 cents a foot, which would hâve been $440; and the repairs
that I was compelled to make on the boiler, in the shape of flues, and labor
In putting them in, amounted to $225 more. I put In 100 new flues, and 50
flues that had been taken out, and a new pièce welded onto the end. ïhe
new flues cost $1.25, which would be $125, and the old flues cost 50 cents
apiece to hâve a new pièce welded on. Q. Making a total of how much?
A. The work of putting them In cost about $75, making a total of $225 on the
flues. Q. And how much ou the other? A. Making, ail total, |1,325."
964 125 FBDBRAL REPORTER.
As to the derrick, the plaintiff testified:
"Derrick not capable of hoisting 16 tons. Small — only 6 guys. Mast not
Sound. Changed the power. We wére compelled to get out blocks much
smaller. Could not measure to the Ilmlt We quarried 619 blocks In the
year of thls contract, and the average 619 blocks was 70 cubic feet to the
block. T,t we had been able to break our blocks, with the idea of being able
to handle 16 tons at the wheelhouse, I don't think — ^in fact, I know — there
would bave been no trouble In maklng our average 100 feet to the block,
and, Instead of having 619 blocks, we should hâve had about 182 less. Q.
Now, on that 182 less, what would hâve been the gain, or what was the loss
per block? A. 437 blocks at 100 feet would hâve made the same amount
which we quarried wlth 619. * • ♦ • 1,002 feet which we lost at 45 cents
per cubic foot, $491. On thls 1,092 feet, we were obliged to pay damages of
10 cents a cubic foot under the contract for the deficiency, which, at 10 cents
a foot -^fould hâve been $109.20. Then the extra expense of quarrying and
handling 182 blocks, which would not hâve been necessary if we had had
sufflcient power, I placed at $1 a block, $182. The total foots up $782.20.
Q. That includes that 10 cents a foot? A. Yes, sir. Q. That includes the
$109.20 of the forfeiture that you had to pay? A. Yes, sir. * * • Q.
Were any of those smaller-slzed blocks that were referred to quarried that
way for convenience to you? A. No, sir; It was an inconvenience to us — the
extra trouble of sphtting, drilllng, and handling thèse blocks. It was a great
inconvenience and great loss. Q. Ih splitting some of those large blocks so
you could handle them, dld you occasionally get trouble f rom not splitting
straight? A. Oh, yes. Q. And In that way made smaller-sized blocks? A.
Yes,. sir; that was my loss."
As to failure to transport supplies, the plaintiff testified :
"We had coal at the mill in December that was not delivered. By reason
of our being short of coal, we had to leave off ail of our overtime, and were
troubled a great many days; obliged to shut off our steam; didn't hâve coal
to furnish steam to do our work. By reason of thls shortage, there was
1,000 feet left in there the Ist day of January, which we did not take out,
and which. If we had had coal as we should hâve, would bave been a very
easy matter to take out. Surface of block was 694 square feet when it was
stripped. Q. You say when you got through there at the end of the year
there was 1,000 feet left In that block? A. 1,000 cubic feet; yes, sir. Coal
was taken up the last two or three days of the year. Q. You say you lost
the quarrying of that 1,000 feet. How much damage was that to you, or
any way that you may state it, if you hâve a way of your own of statiug
the damage, by his failure to comply wlth thls clause? A. Leave out the
damage at 10 cents a foot. Q. State that with the other, but state it so we
can see just what there is of it? A. The stripping costs 15 cents a cubic foot
in that tunnel, and the quarrying costs about the same — about 15 cents a foot.
Of course, I didn't hâve to quarry it. I hâve charged up the stripping at 15
cents on a thousand feet, would be $150 I pald for the stripping. The profit
I would hâve made if I had quarried It would bave been 15 cents more,
which would be another $150, and I was charged damages on that 1,000
feet at 10 cents a foot, made another $100, and also the drawing of the coal
away cost $7, making $407."
As to déniai of the option, the plaintiff testified, calling uncovering
"stripping," and uncovered good marble, not quarried, a "block":
"In order to get pay for stripping, I was obliged to quarry out the blocks.
Q. Now, what did it cost to strip that block? A. I hâve figured that the cost
of stripping stone in thèse tunnels is 15 cents a cubic foot, and the size of
this tunnelwas 1,332. In comparison with the other tunnels which we hâve
drlven there, it would hâve given us 26,640 feet That is, if thls tunnel
turned out the same proportion. Q. I was gettlng at the stripping first. A.
The stripping on this amount of stone at 15 cents a foot would be $3,996.
Q. You never had any opportunity, or did you hâve any opportunity — What
was said about your quarrying out that block of marble that you stripped
WILSON V, FREEDLET. 965
which cost $3,906? A. He refused to allow me to take It out — to continue
there. Q. Did you hâve your machinery there ail ready to do It? A. Yes,
sir; had a derrick tbere, hoisting power, railroad graded in. The rails were
net laid. Except to transfer them from the other part of the quarry, every-
thing was ail ready to put the machines in there and go to quarrying. Q.
New, Mr. Wilson, if you had l)een permitted to quarry out that block that
you stripped as you describe hère, how many feet, as near as you can esti-
mate, is there of it, and what would hâve been the profit? A. The number
of feet 1 estlmate at 26,640. I get this from the rate that the stone In other
parts of the quarry turned out from the same amount of stripping. The
profits on it would hâve been — I had already put in 15 cents a foot for
stripping, but outside of that I would hâve had 15 cents a foot profit. Q.
When you say 'profit,' just what do you mean by that? A. I mean that; after
paying the expense of the stripping and quarrying this out, I would hâve
had 15 cents a cubic foot left, after paying ail the expenses of the quarrying.
Q. The net profit, you say, would hâve been 15 cents a foot? A. Yes, sir."
And as to the shortages the plaintifï's foreman testified :
"Q. You say you were the foreman there, and had charge of that when
"Wilson wasn't there. Now, let me ask you, supposing you had had plenty of
good water from the Harwood spring, and no trouble about the fuel, and
the hoisting power at the derrick had been sufïicient, how many more feet
of marble, if any, do you think you could hâve quarried out there before the
last of December than you did quarry? A. 10,000 feet."
A quarryman of long expérience in that vicinity testified that it
is cheaper to get out blocks of large sizes, and, on cross-examination,
that those of 8, lo, and 12 tons are of usual sizes. The largest block
quarried by the plaintiiï was 13 tons. There is no other évidence
making the plaintifï's claims any more definite as to right of action
or damages.
The défendant claims that the option ended with the year 1901,
and that the plaintifï lost ail right to it by not quarrying the 50,000
feet within that year according to the contract, and by not quarrying
within the year what would be left uncovered after quarrying the
50,000 feet. The court held that, as the plaintiiï had not fulfilled his
part of the contract by quarrying the full 50,000 feet vi'ithin the year,
he would not be entitled to the option to be exercised at the end
of the quarrying the 50,000 feet within the year unless the plaini"
liff's failure to fulfill was caused by the défendant, in not fulfiUing his
part of the contract, by not supplying water, not providing a 16-
ton derrick, and not taking up coal, and submitted the question
whether he was so in fault, and whether that caused the plaintifï's
failure to fulfill, to the jury, with instructions, if it was, to find for the
plaintifï as to the option, with damages for the conséquences. The
jury returned a verdict for the plaintiff in the usual form in actions on
contract, but finding damages separately, under the direction of the
court, for failure to supply water, $885 ; for failure to provide derrick,
$600; for failure to transport coal, $307; for denying option, $8,351.66.
The défendant has moved to set aside the verdict because of its
form, as against the évidence, and for excessive damages. The ver-
dict covers ail the issues in the case, it difïers from a gênerai verdict
only in distinguishing the damages, and it conforms to fréquent
practice. Its spécial features are of advantage in tracing the find-
ings, and neither injure any one, nor furnish any grounds for set-
ting it aside.
966 125 FBDBBAL REPORTEE.
The rulings and instructions seem now to be correct, but an im-
portant question arises on the face of the verdict — whether there
\yas àny sufficient évidence thatthe deficiency of 6,293 feet out of
the 50,000 was due to the failure of the défendant to perform his
parts of the contract. The figures show that the jury followed the
plaintiff's statements and estimâtes as to the extent and consé-
quences of the depriyation of water, which would account for 4,400
feet of the deficiency. But the greatest deficiency occurred in March,
While the plaintifif had ail the water that came to the quarry from
the Harwood spring, instead of t?i(^o-thirds, and while he was uncov-
ering and not quarrying.. If that loss of time, then, was due to the
deficiency of water, the statement that the loss of time then in un-
covering delayed the whole work for the same length of time during
the season, without fault of the plaintifï intervening, js whoUy con-
jectural. Loss of time in uncovering is not shown to hâve been
of the same détriment as in quarrying, and in either case the deficien-
cy caused would be left to be made up at the same profit by an. ad-
équate increase of force, and the true damages for the interruption
woùld be what such increase of force would properly cost, of which
no évidence is given. The statements of delay and loss in consé-
quence of the deficiency of the derrick are still more conjectural.
The derrick furnished was sufficient for what appear to be ordinary
random sizes. The handling of greater blocks is shown to be more
than proportionally difïicult and expensive. The practicability of
increasing the average from 70 cubic feet to 100 is a conjecture, and
that it would be a gain in either time or profit is a further conjecture
founded upon the first. The statements as to delay and loss from
failure to transport coal are, in view of the near end of the time in
which the plaintifif could do anything more, and of the situation of
the 1,000 feet of marble ail ready to be quarried, more definite and
better founded; but, if adéquate and well founded, they would not
be sufficient for placing the deficiency of 6,293 feet in the plaintifï's
perforniance to the fault of the défendant. The finding of the jury
placing the fault upon the défendant, based, as it is, upon inconipe-
tent évidence as to the other 5,293 feet, cannot be sustained. The
fault must be substantiâlly that of the défendant, and not materially
that of the plaintifï, to entitle the plaintifï to the option without ful-
filling on his part. Thèse considérations show that the damages
found for not furnishing water and for not providing a i6-ton derrick
are toc large, and also that there is no place in thèse findings be-
low which thèse damages can be said, upon the évidence, to be well
founded. The jury appârently went to the full extent of the plain-
tifi^'s statements of his claims in thèse respects, because there was
no place to stop at. Thèse damages, therefore, appear to be ex-
cessive, and to be without compétent évidence to show that they are
to any extent well founded. Upon thèse views, the verdict must be
set aside, unless it is corrected by remission down to what is well
founded. The uncovering was donc with the concurrence of the
défendant, and, as it is necessary to the bénéficiai use of the quarry
by the défendant in taking out the good marble, and the plaintiff
cannot get any benefit from it otherwise, he seems to be entitled to
EX PARTE o'nEAL. 967
recover what he has in that way benefited the plaintiff by increasing
the value of the quarry. This, without question, upon the évidence,
is about one-half of the damages found for denying the option. The
other one-half and the damages for not transporting coal, seem well
enough founded to stand. If the plaintifif remits the rest, the motion
should accordingly be overruled ; if not, the verdict should be set aside.
If plaintifï remits within 20 days the $885 damages for not supply-
ing water, the $600 damages for not providing derrick, and $4,175.83
of the damages for denying the option, the motion to set aside the
verdict is to be denied; if not, the motion is to be granted.
Ex parte O'NEAL.
(Circuit Court, N. D. Florida. November 10, 1903.)
1, Haeeas Corpus— Record— Sopplbmental Facts.
In a habeas corpus proeeedlng to obtaln relief from Imprisonment
for contempt, the petitioner is entitled to supplément the record by al-
leging such addltional facts as tend to show that his misbehavior was
not a contempt. As to how far, see Eix parte Cuddy, 9 Sup. Ot. 703, 131
V. S. 280, 33 L. Ed. 154.
2. Contempt- FEDERAL Court— Ofpicbrs — Résistance.
Where relator was charged with contempt In resistlng an oflBcer of
a fédéral District Court in the exécution of orders of sach court, It
was immaterial whether at the time of the résistance the court was
actually in session, with the judge then présent, or whether the place
of résistance was some distance from the actual place where court
was usually held, so long as it was not in the actual présence of the
court, or so near thereto as to embarrass the administration of justice.
8 Same— Trustée in BANKRUPTcr— Assault— Contempt- District Court-
JURIâDIOTION.
Under Bankr. Act July 1, 1898, c. 541, § 2, 30 Stat. 545 [U. S. Comp.
St. 1901, p. 3420], providing that the District Courts of the United States
sltting in bankruptcy are continuously open, and section 63 (30 Stat.
563 [U. S. Comp. St. 1901, p. 3448]), declaring that a trustée in bankruptcy
is an officer of the court, such court has jurisdiction to summarily try
and détermine the merits of a proceeding to punish relator for an as-
sault on a trustée in bankruptcy in the performance of his duties as
such, as a contempt of such court.
4. Same— Habeas Corpus— Circuit Court— Review.
Where a fédéral District Court had jurisdiction to punish relator for
an assault on a trustée in bankruptcy as for a contempt, alleged errors
and Irregularities in such proceeding could not be reviewed by the
Circuit Court on a writ of habeas corpus.
Habeas Corpus.
W. A. Blount and C. H. Laney, for relator.
E. A. Angier, U. S. Atty.
PARDEE, Circuit Judge. The petitioner, W. C. O'Neal, was
convicted in the District Court for the Northern District of Florida
on a charge of contempt of court, in committing an assault upon an
officer of said court, and thereupon was sentenced to imprisonment
in the county jail at Pensacola, Fia., for the term of 60 days. This
conviction was immediately foUowed by a writ of error to the Su-
968(î 125 EIDBBIEAL RBEOBTEB.
preme Court bfithe United States, based on a certified question as
to jurisdiction. In dismissing the writ of errer, the Suprême Court
»aid.,:
"Jtirisdlctlon over the person and jurisdiction over the subjeçt-matter of
contempts were not challenged. The charge was the commission of an as-
sault on an pfflcer of the court for the purpose of preventing the discharge
of his dùties as such offlcer, and the contention was that on the facts no case
of contempt was made ont In other words, the contention was addressed
to the merlts of the case, and not to the Jurisdiction of the court. An er-
roneous conclusion in that regard can only be reviewed on appeal or error,
or In such approprlate way as may be provlded. Loulsvll-le Trust Company
y. Comlngor, 184 U. S. 18, 26 [22 Sup. Ot 2Ô3, 46 L. Ed. 416]; Ex parte Gor-
don, 104 U. S. 515, 26 II. Ed. 814. And whlle proceedlngs In contempt may
be sald to be sui generis, the présent Judgment Is in effiect a judgment in a
criminal case, over which thls court has no jurisdiction on error. Section
6, Act March 3, 1891, c. 517, 26 Stat. 827 [U. S. Comp. St. 1901, p. 549], as
amended by the act of January 20, 1807, c. 68, 29 Stat. 492; Chetwood's Case,
165 U. S. 443, 462 [17 Sup. a. 385, 41 L. Ed. 782]; Tlnsley v. Anderson, 171
U. S. 101, 105 [18 Sup. et. 805, 43 L. Ed. 91]; Cary Manufacturing Company
V. Acme Flexible Olasp Company, 187 tJ. S. 427, 428 [23 Sup. Ct 211, 47 L.
Ed. 244]." lO) U. S. 37,, 38, 23 Sup. Ct. 776, 777, 47 L. Ed. 945.
The case is hère presented upon the record propér as submitted
to the Suprême Court, and upon a further showing of alleged facts
which petitioner claims do not contradict the record, to wit:
"That the place at which took place on the mornlng of October 20, 1902,
the affrày between A. Greenhut and petitioner, in which Is alleged to hâve
occurred the assault by petitioner upon the sald A. Greenhut, for which the
sald District Court has sentènced petitioner as for a contempt, was the office
In the store of the sald Greenhut, and was a part of the building occupled
by him as a wholesale girocery store, and that his office was used by hlm
for the ptUT)Ose of conducting the sald grocery business, and was used in
connection with his position as trustée only because it was his place of busi-
ness, and therefore more COnvenlent for him. That the sald building was at
sald tlme, and is now. No. 104 East Government Street, In the clty of Pensa-
cola, and distant from the United States courtroom, and the building in
which it was and Is beld, not less than four hundred feet, and separated
therefrom by an Intervenlng street and an Intervening alley, and by more
than a block of brick business houses, and was not in any way connected
with, or used In connection with, the sald court or courthouse, or any of the
fvmctlons or dutles of the sald court, or of the Judge thereof. That the sald
District Court was not In session In the clty of Pensacola on the sald 20th
day of October, nor had been for months before the sald date, and that no
session thereof occurred thereafter until November 7, 1902, and that the
Judge of sald court was not on the said date In sald state, nor had he been
therein for months prlor thereto, nor dld he corne therein until the 6th day
of November, A. D. 1902." ; .
As to claimed authority to supplément record as to facts, see Ex
parte Cuddy, 131 U. S. 280, 9 Sup. Ct. 703, 33 L. Ed. 154.
In my opinion, the additional facts offered to supplément the rec-
ord do not materially change the status of the case, nor do they in
any wise extend the jurisdiction of this court upon this writ. The
charge of contempt against the relator is based upon the fact that he
unlawfuly assaulted and resisted an ofïicer of the District Court in
the exécution of orders of the court, and in the performance of the
duties of his office under such orders; and in that respect it would
seem to be immaterial whether at the time of the résistance the court
was actually in session, with a judge présent in the district, or wheth-
■X PABTB O'NEAIi. 969
er tHe place oî résistance was 40 or 400 feet from tHe actual place
where the court was usually held, so long as it was not in the actual
présence of the court, nor so near thereto as to embarrass the ad-
ministration of justice.
Under the bankruptcy act of July ï, 1898, c. 541, § 2, 30 Stat. 545
[U. S. Comp. St. 1901, p. 3420], the District Courts of the United
States, sitting in bankruptcy, are continuously open ; and, under sec-
tion 63 (30 Stat. 563 [U. S. Comp. St. 1901, p. 3448]), and others
of the same act, a trustée in bankruptcy is an ofïicer of the court.
The questions before the District Court in the contempt proceeding
were whether or not an assault upon an ofïicer of the court, to wit,
a trustée in bankruptcy, for and on account of, and in résistance of,
the performance of the duties of such trustée, had been committed
by the relator; and, if so, was it, under the facts proven, a contempt
of the court whose ofBcer the trustée was? Unquestionably, the
District Court had jurisdiction summarily to try and détermine thèse
questions, and, having such jurisdiction, said court was fully autlior-
ized to hear and décide and adjudge upon the merits. Ex parte
Savin, 131 U. S. 267, 276, 277, 9 Sup. Ct. 699, 33 L. Ed. 150. ,
This brings us squarely to the question whether, upon this writ
of habeas corpus, the inquiry can Se extended by this court so as
to revievT, as upon writ of error, any irregularities of the District
Court in the proceedings, or to détermine, as upon appeal, the real
merits of the case. I hâve examined with care the décisions of the
Suprême Court of the United States in Ex parte Cuddy, 131 U. S.
280, 9 Sup. Ct. 703, 33 L. Ed. 154, Ex parte Mayfîeld, 141 U. S. 116,
II Sup. Ct. 939, 35 L. Ed. 635, and in In re Watts & Sachs, 190 U.
S. I, 23 Sup. Ct 718, 47 L. Ed. 933, and in many other cases, and
do not find that either or any of them control or détermine the ques-
tion in favor of such claimed jurisdiction. Whatever an appellate
court may hâve power to do in regard to supplementing the record,
as held in In re Cuddy and in Ex parte Mayfield, or upon certiorari
and habeas corpus to examine the merits of the case, as in Ini re
Watts & Sachs, I am forced to follow, as I did in Ex parte Davis
(C. C.) 112 Fed. 139, the Suprême Court in United States v. Prid-
geon, 153 U. S. 48, 62, 14 Sup. Ct. 746, 751, 38 L. Ed. 631, wherein
it is declared:
"TJnder a writ of habeas corpus, the Inquiry Is addressed, not to errors,
but to the question whether the proceedings and the judgment rendered
therein are for any reason nullitles; and, unless It is aflirmatlvely shown
that the Judgment or sentence under whlch the petitloner Is conflned 11 voW,
he Is not entitled to hls discharge."
This court has no appellate jurisdiction over the District Court
for this district, and if it should attempt to go beyond the rule de-
clared in United States v. Pridgeon, and assume authority to look
into the merits wherein judgments hâve been rendered in the Dis-
trict Court in contempt cases, it would be, from my standpoint, an
unwarranted assumption of jurisdiction, decidedly tending to scan-
dai in judicial proceedings.
In dealing with the proceedings against petitloner in the District
Court, the Suprême Court said that an erroneous conclusion in re-«
^70 125'»HDi5RAL REPORTEE.
gard 'to tteeiliferits can only bereviewed on appeal or error, or in
such ap|)ifdp1"iate way as may be proviçied. As shown above, the
writ of habeas corpus is not an appropriate way proyided. The Su-
prême Court further said that the judgment in thïs présent case
is in effect a judgment iri a triminal case, over which that court had
no jurisdiction on errbr. The court did not say that no other ap-
pellate court had jurisdiction on error.: In In re Paquet, 114 Fed.
437> 52 C. C. A. 239, thé Circuit Court of Appeals in this circuit
held that that court had no jurisdiction to issue a writ of prohibition
in a certain contempt case then pending in the Circuit Court of the
Northern District of Florida, but intimated that possibly a writ of
error might lié in such ^ caSes where final judgment of conviction
had been rendered; but wheth'ér the petitioner hère has' or had a
remedy by writ of error from, or by appeal to, any appellate court,
is immaterial on this inquiry, and I am satisfied that this court has no
jurisdiction to review the petitioner's case by any remedy provided
by law.
The writ of habeas corpus is dischârged.
Circuit Judges McCORMICK and SHELBY sât with me and
heard argument in this càsie, and they concur in this opinion.
HYDE V. YICTORIA LAND 00. et al.
(Circuit Court, E, b. Wiscbnsin. , November 16, 1903.)
1. Fédérai- Courts— Jurisdiction— Statutes.
Act Aug, 13, 1888, c. 866, I 1, 25 Stat. 433 [U. S. Comp. St. 1901, p.
508], declaring the jupigdîction of fédéral circuit courts, limits the juris-
diction as to actions : removed from state courts, as weH' as to actions
origlnally begun In the circuit court.
S. Removal of Causes— District to Which Cause may bb Rbmovbd.
Act Aug. 13, 1888, c. 866, § 3, 25 Stat. 435 [U. S. Comp. St. 1901, p.
510], providlng that a cause removed from a state court shall be trans-
ferred to the circuit court to be held in the district where such suit Is
pending, should be coiSistrued to mean the district withln the territorial
limits of which the suit Is pending In the state court.
8. SAME— ESTABLISHMENT 0^ DISTRICTS— StATB LEGISLATION — EfFECT.
Where the boundàrleS of a fédéral judicial district were established
by act of Congress, such districts could not be affected by subséquent
state législation organlzing new counties, and changing county Unes so
as to change the district to 'whlch sults brought In the state courts of
such eonntles might be removed.
4. Sake.
Where, by reason of the subséquent organization of new counties
after the establishment of fédéral judieial districts in the state, one of
the counties was in ttvo fédéral districts, a suit origlnating in the state
courts of such county, and removablé to the fédéral courts, could be re-
moved to either fédéral district, without regard to the district In which
tliC' county seat of the county was located.
5. Same— Parties— CiTizBNSHip—FoEMAL Défendant.
Whére a suit was broùght to set aslde certain land contracta against a
nonreSident défendant, and the register of deeds of the county in wMcïi
the suit was brought was joined for the mère purpose of restraining him
from recordlng such , contrficts pending the litigatlon, such offlcer was
ï 1 See RemoVal of Causes, vol. 42, Cent. Dlg. § 81.
HTDE V. VICTORIA LAND CO. 971
a mère formai party, and the fact that his cltizenshlp was the same as
that of plaintiff did not prevent the noncitizen défendant from removlng
the cause to the fédéral court
6. Same— Amoukt in Conthovbrst.
Where, on motion to remand a cause removed to the fédéral court,
the removal pétition stated that the amount in controversy exceeded
$2,000, and it was alleged in the complaint that land contraets sought
to be set aside were of greater value than $2,000, a contention that
the matter in dispute did not exceed $2,000 in value was without merit.
In Equity. On motion to remand the cause, which was removed
from the circuit court of Oneida county on appHcation of Victoria
Land Company, as a nonresident of the state
John Barnes, for plaintifï.
Wilson & Mercer, for défendants.
SEAMAN, District Judge. The motion to remand is urged upon
three contentions: (i) That the cause, if removable under the acts
of Congress, cannot be removed to tlie Eastern District of Wisconsin ;
(2) that the défendant Mr. McLaugliHn is a citizen of Wisconsin, and
is not a mère nominal party, but an indispensable party for relief un-
der the complaint; (3) that the amount involved in the controversy
is not within fédéral jurisdiction. If either of thèse propositions is
supported by the record, it is obvions that this court cannot entertain
the suit. But I am of opinion that neither is tenable, and that the
several objections must be overruled upon the following grounds, re-
spectively :
I. The first objection rests on thèse fact s : The suit was pending
in the circuit court for Oneida county, and involves alleged interests
in numerous tracts of land situated in Oneida, Forest, and Vilas
counties. In 1870 (Rev. St. § 550 [U. S. Comp. St. 1901, p. 443])
the District of Wisconsin was divided into the Eastern and Western
Districts, and the act of Congress named the counties as then organ-
ized, which were set apart to the Western District, and declared the
Eastern District to "include the residue of said state." Neither of
the above-mentioned counties was then organized, but they were sub-
sequently formed out of several existing counties by state législa-
tion at varions sessions, with varions changes of boundary from time
to time. As now organized, the territory of Oneida county extends
into both Western and Eastern Districts ; the eastern tier of five
townships, in range 11, being in this district, while the larger portion,
including the county seat, is in the Western District. The whole of
Forest county is in the Eastern District, and ail of Vilas county is in
the Western District. Under this anomalous territorial condition,
counsel for the plaintiff contends that the location of the county seat,
where the state court is required by statute to hold its sessions and
keep its records, is controlling over ail other circumstances to ascer-
tain the fédéral district which may take jurisdiction on the removal
from the circuit court for Oneida county. The ground urged for the
IT 6. Jurisdiction of circuit courts as determined by the amount in con-
troversy, see notes to Auer v. Lombard, 1& C. 0. A. 75; Tennent-Stribling
Shoe Co. T. Eoper, 36 C. C. A. 459.
972' 125 FEPERAL REPORTER.
reffloval to thîs district, instead of the Western District, is this: The
lands in controversy are mainly, though not whoUy, within the terri-
torial limits of the Eastern District, and the plaintiff résides at Apple-
ton, in such district, so that a suit between the parties, founded on
diverse citizenship, must be brought in that district (Act Aug. 13,
ï888, c. 866, § I, 25 Stat. 433 [U.S. Comp. St. 1901, p. 508]), as in-
stanced in the cross-bill filed by the défendant for affirmative relief.
No authority is cited which upholds either of thèse tests under the re-
moval acts (Rev. St. § 629 [i U. S. Comp. St. 1901, pp. 508-510]),
and Ihave found none wherein this or any analogous question ap-
pears to hâve arisen. Jurisdiction of the cause on removal dépends
alone on the provisions of the acts of Congress referred to. The
primary test is whether it is within the original jurisdiction of the
court, as defined in the first section [i U. S. Comp. St. 1901, p. 508],
which is a limitation as well on actions removed. Mexican National
R. R. V. Davidson, 157 U. S. 201, 208, 15 Sup. Ct. 563, 39 L. Ed. 672.
If the record shows the requisite diversity of citizenship, and that the
matter in dispute excéeds the value of $2,000, the subject-matter of
the présent suit is plainly within the cognizance of this court. In
such event the cause is removable, within the act of Congress, and
the fîling of due application for removal terminâtes the jurisdiction of
the State court, with or without an order therein removing the case ;
and fédéral jurisdiction does not dépend upon the existence or regu-
larity of any order of removal (i Desty, Fed. Prac. [9th Ed.] §
iio, p. 547; Kanouse v. Martin, 15 How. 198, 14 L. Ed. 660, and 5
Rose, Notes U. S. Rep. 316), so that I deem it questionable, to say
the least, whether the cause can be remanded to the state court upon
the sole ground that it was not sent to the proper fédéral district.
Laying aside that question, however, I am satisfied that the case is
within the jurisdiction of this court, if the right of removal from the
state court is established. The only désignation of the court to take
jurisdiction on removal appears in section 3 of the act as amended
(Act Aùg. 13, 1888, c. 866, 25 Stat. 435 [i U. S. Comp. St. 1901, p.
510]), namely, "the circuit court to be held in the district where such
suit is pending." This means that the proper district "is the district
within the territorial limits of which the suit is pending in the state
court." Knowlton v. Congress & Empire Spring Co., 13 Blatchf.
170, Fed. Cas. No. 7,902. The territorial limits of the Eastern and
Western Districts of Wiscionsin are fixed by the act of Congress re-
ferred to (Rev. St. § 550 [U. S. Comp. St. 1901, p. 443]), and are,
of course, unaffected by the subséquent state législation organizing
new counties and changing county Hnes. The county of Oneida
was thus organized with dne portion of its territory in the Eastern
District, and the other portion in the Western District ; and the
suit brought in the circuit : court for Oneida; county was pending in
that county as a teiritorial whole, not alone on the county seat or
any separgte portion, so that it was thus pending within the terri-
torial limits of both fédéral districts. As that is the only jurisdic-
tional requirement under the act of Congress, no other test can be
imposed, ati'd thé two districts sd embracing the county hâve con-;
HTDB r. VICTORIA LAND 00. 973
current jurisdîction of a suit removable therefrom, în so far as the
subject-matter is within the original cognizance of both. The cir-
cumstances which are referred to as influencing the order of removal
to this district furnish proper grounds for such order, though not
controlling for jurisdictional purposes. Jurisdiction thereupon rests
alone upon the rightfulness of removal from the state court as dis-
closed by the record.
2. The second contention is that the défendant McLaughlin is a
necessary party and a citizen of Wisconsin, and removal on behalf
of the noncitizen défendants is thereby barred. The suit is brought
for rehef against certain contracts held by the Victoria Land Com-
pany, and tendered for record, under which the noncitizen défend-
ants assert an interest in the lands described in the complaint, and
an injunction is sought to prevent recording such contracts as clouds
upon the title. McLaughlin is register of deeds, with no interest in
the controversy, but made a défendant for the sole purpose of re-
straining him, as such officer, from recording the contracts. It may
be assumed that he is a proper party to that end, and that circum-
stances are stated which indicate that recording cannot be prevented
without his présence as a party; but the register is nevertheless a
mère formai party, in no sensé interested in the sole matter of the
controversy, which is the vaHdity or effect of the contracts in suit.
So joined to restrain his mère niinisterial act of recording the instru-
ments, if they are held to be inoperative as contracts between the
parties thereto, the présence of this résident officer will not defeat
the right of the real parties in interest to remove the cause. Walden
V. Skinner, ici U. S. 577, 589, 25 h. Ed. 963; Barney v. Latham,
103 U. S. 205, 216, 26 L. Ed. 514, and 10 Rose, Notes U. S. Rep. 39;
Geer v. Mathieson Alkali Works, 190 U. S. 428, 435, 23 Sup. Ct.
807, 47 L. Ed. 1122; Lake St. El. R. Co. v. Ziegler, 99 Fed. 114, 39
C. C. A. 431. The only issue tendered by the complaint is whether
the contracts relating to sale of the lands described are enforceable,
and a decree thereupon would settle ail rights between the contract-
ing parties. Recording cannot afïect those rights, and, if material
in any view pending the suits, the temporary restraining order grant-
ed by the state court préserves the statu quo, while the issue upon
the contracts remains to be determined between the parties in in-
terest, unafïected either by the fact of recording or withholding
from record.
3. The remaining contention, that the matter in dispute does not
appear to exceed "the sum or value of two thousand dollars," is
without merit. The alleged value of the contracts is the amount in-
volved, and the pétition expressly states that it exceeds $2,000, which
is sufficient for the présent inquiry, under ail the authorities. More-
over, the allégations of the complaint in respect of the contracts,
and of the amounts paid and involved therein, are corroborative
of value in excess of the jurisdictional amount, if the contracts are
treated as enforceable. That being the matter in dispute, thc:
amount involved is sufficient to confer jurisdiction-
The motion to remand is overruled.
974 125 fede;bal rbfortbb.
ANNISTON IRON & STJPPLY CO. et al. v. ANNISTON ROLLING MILL CO.
(District Court, N. D. Alabama, B. D. November 28, 1903.)
No. 11.
J. Act OV Bankruptct—Prèpebbnce— Substitution op BECtrRixrES.
Where a manufacturing corporation pledges materiàls under agree-
ment tliat It may sell or use the same as It may need, and that in case
o£ such sale or use It will pay cash, or transfer Its équivalent in good
accounts, and the eompany tben disposes of the material, and withln
four months of its bânfctuptcy transfers accounts to the pledgee, a large
ainount of which was not retilized from the disposition of the material,
it constitutes a voidable préférence, and an act of bankruptcy; the trans-
action not amounting to a mère substitution of securlties.
2. SAMB!— ASSIGNMENT FOR BKNBPIT OF CREDITORS.
A direct transfer to credltors, -wlthout the intervention of a trustée, la
not an assignment for the beneflt of ereditors, constituting an act of
bankruptcy.
Invôluntary Bankruptcy.
Lapsley, Arnoled & Martin and Blackwell & Agée, for petitioners.
Knox, Aker & Blackmon, for défendant.
TOULfMIN, District Judge. The spécifie act of bankruptcy al-
leged in the pétition tô hâve been conimitted by the défendant, the
Anniston Rolling Mill Company, by which it is claimed it gave a
préférence to the Alabama National Bank of Birmingham, Ala., over
its other ereditors, is that the said défendant did, within four months
next preceding the filing of the pétition, transfer and assign to said
bank a large âmount of accounts due to it by a number of its debtors.
A further act of bankruptcy alleged is that within said four months
the defendaftt made a gênerai assignment for the benefit of its ered-
itors.
It appeared from the évidence in the case that on the 6th day
of Decembér, 1902, the Alabama National Bank of Birmingham,
Ala., loaned to the défendant $8,000, for which the latter executed
and delivered to the former its promissory note, payable on demand,
and at the same time, as security for the payment of said note, ex-
ecuted and delivered to said bank a pledge of a large quantity of
material, consisting of wrought, cast, and steel scrap pig iron, iron
ore, etc., being ail of the material then on hand at defendant's mill;
that prior tô this transaction, to wit, on November 6, 1902, the de-
fendant made a lease to said bank of a certain part of the land on
which defendant's mill plant was loeated, for the deposit of any
material the défendant might from time to time pledge to said bank,
and that the material covered by the aforesaid pledge was so de-
posited; that, at or about the time of the exécution of said note
and pledge, it was understood and ag^eed between the défendant
and said Alabama National Bank, by their respective présidents, that
the défendant shbuld hâve the privilège to sell or use any or ail of said
material, as might be needed by it in the opération of its mill, and
ANNI8TON IRON & SUPPLT OO. V. ANNI8T0N EOLLING MILL OO. 975
that, in case of such sale or use by the défendant, it would pay the
cash in settlement of its debt to the bank, or transfer and deliver to
the bank its équivalent in good accounts. It further appeared from
the évidence that the défendant did, from time to time, use or other-
wise dispose of said material; that it did not pay any cash therefor,
or on account of said note, but that on February 28, 1903, it trans-
ferred to the bank a large amount of open accounts against debtors
of the défendant. Each account was transferred in writing on the
account, as it appeared on the defendant's books, substantially in
thèse words: "1903, Feb. 28th, transferred to Ala. Nat'l Bank to
take place of material previously pledged to the bank." Of the ac-
counts so transferred, a large amount of them accrued prior to De-
cember 6, 1902, the date of the loan and pledge referred to. The
évidence tended to show that some of the accounts transferred were
for some part of the product or finished work of said material; but
which particular accounts were for such product or finished work, or
to what extent such product or finished work entered into said ac-
counts, or what amount of said accounts represented said product,
the évidence did not show. The évidence showed that on the 28th
day of February, 1903, the défendant was indebted to a large amount,
other than that to the Alabama National Bank, and that among
its other creditors were its operatives or employés, to whom it was
then indebted in the sum, of about $1,500, in the payment of which it
had but recently defaulted.
The first question presented is whether the transfer of the accounts
by défendant to the Alabama National Bank on the 28th day of Feb-
ruary, 1903, was a préférence given to said bank over the other cred-
itors of the défendant, within the purview of the bankrupt act, al-
though said transfers were made in compliance with the agreement
to that efïect theretofore made between the parties.
The said material was used and sold with the consent of the bank,
but there was no agreement that it was to be used or sold for the
benefit of the bank, and there was no covenant to account to the bank
for the proceeds thereof. If there had been, there is no identifying
the spécifie accounts representing such proceeds, and no such de-
scription of them that they can be identified. The accounts were not
substituted or exchanged for the material, as security for the debt to
the bank, contemporaneously with the use and sale of the material.
They were never actually pledged to the bank until the transfer on the
28th day of February, 1903. Before that time there was a mère
agreement to pledge. The accounts were never delivered to the bank,
or set apart and treated as its property, until that day. The pledge
was not completed until the date of the transfer. Besides, under the
agreement, the défendant had the option to pay to the bank the cash,
or to transfer and deliver to it the équivalent in good accounts. The
défendant did not exercise this option until the 28th day of February,
1903. Until the transfer of the accounts on that day, they were the
property of the défendant.
The contention of the défendant is that, by the transfer of the ac-
counts, they took the place of the material, as an exchange of securi-
Ô76 125 FEDERAL EBPOBTEB.
ties, and that théreforè siich transfer was not a préférence, withîn the
parview of the bankrupt act. An exchange of securities in four
months of the proceedings in bankruptcy is not a préférence, within
the meaning of the bankrupt law, if the security given up is a vaHd
one when the exchange is made, and if it be of equal value with the
security substituted for it, or of not greater value. Sawyer v. Tur-
pin, 91 U. S. 114, 23 L. Ed. 235. But, in my opinion, the facts in
this case wholly fail to show an exchange of securities. At the time
it was sought by the transfer of the accounts to substitute them for
the materi'al pledged as security for the debt, there was no material
to be substituted — no security for which said accounts could be ex-
changed. The efïect of the agreement permitting the défendant to use
or sell the pledged material was to withdraw the material so used or
sold from the opération of the pledge, and, so far as that material was
concerned, to merely obligate the défendant to pay its debt to the bank
with cash, or to transfer and deliver to it the équivalent in good ac-
counts, which obhgation was not performed until within four months
prior to the pétition in bankruptcy. In re Sheridan, 3 Am. Bankr.
R. 554, 98:Fed. 406; In re Bail, 10 Am. Bankr. R. 564, 123 Fed. 164.
1 find that the transfer of said accounts was not an exchange of one
species of property for another as a payment of, or as security for
the payment of, the debt due by the défendant to the Alabama Na-
tional Bank; that at the time of said transfer the défendant was
insolvent; that said transfer was made within four months preced-
ing the bankruptcy proceedings herein; that it gave a préférence
to said bank over other creditors of the défendant; and that it was
designed and calculated to hâve such efîfect. Johnson v. Wald et al.,.
2 Am. Bankr. R. 84, and authorities cited in note pages 84 and 85.
My opinion is that the gênerai assignment for the benefit of creditors
alleged in the pétition as an act of bankruptcy has not been main-
tained. A direct transfer to creditors, without the intervention of a
trustée duly appointed, is not an assignment for the benefit of cred-
itors. May v. Tenney, 148 U. S. 66, 13 Sup. Ct. 491, 37 L. Ed. 368;
Davis v. Schwartz, 155 U. S. 631, 15 Sup. Ct. 237, 39 L. Ed. 289.
An assignment directly to creditors, and not upon trust, is not a
voluntary assignment for the benefit of creditors. Burrill on Assign-
ments, § 122.
A decree declaring and adjudging the défendant a bankrupt is here-
with made and fîled.
BLOOM & HAMLIN V. NIXON. 977
BLOOM & HAMLIN v. NIXON et al,
(Circuit Court, E. D. Pennsylvanla. November 23, 1903.)
No. 18.
l. Musical Compositions— Copyright— Production — Imitation.
Plaintiffs were the owners and prpducers of a eopyrlghted song, whlch
was rendered during the performance of an extravaganza by an actress
who was required during the action to step to one of the boxes, single
ont a particular person, and sing the song to him alone, accompanied
by certain gestures, postures, and other artistical effects; she being as-
sisted In the chorus by a number of other actresses. Held, tiiat an imita-
tion of the actress while singing such song by another actress, in whlch
she, in good faith, attempted to mimic the postures and gestures of the
original actress, etc., and used the chorus of the song only as a vehicle
for the imitation, was not prohibited by Eev. St. § 4966, as amended in
1897 [3 TJ. S. Comp. St. 1901, p. 3415], prohlbiting any person from pub-
licly performing or represeutlng any dramatic or musical composition
for which a copyright had been obtained, wlthout the consent of the
proprietor.
Thomas W. Barlow, Nathan Burkan, and Henry P. Brown, for
complainants.
William Klein and George S. Graham, for défendants.
J. B. McPHERSON, District Jndge. The complainant Bloom owns
the copyright of a song entitled "Sammy," and the complainant Ham-
lin is the manager and owner of a musical extravaganza entitled "The
Wizard of Oz," and avers that he has an exclusive Hcense to per-
form and represent the song in public. The song was not composed
as part of the extravaganza, but was a later production, by other
hands, introduced because it was believed to be likely to attract.
The stage business to be used by the actress who was to sing the
song was prepared by Hamlin's stage director, and requires the ac-
tress to step to one of the proscenium boxes, single out a partic-
ular person in the box, and sing to him alone. A number of girls
are also brought upon the stage to sing the chorus, and there are
the usual gestures, postures, and other resources of the actor's and
of the manager's art. The song, aided by thèse accompaniments —
especially, as it seems, by the rather striking impertinence of making
one of the audience uncomfortable— obtained some popular favor;
and Lotta Faust, who is the most récent singer of the song, was re-
garded in the theatrical profession as having "made a hit." The
défendants are owners and managers of a musical comedy entitled
"The Runaways," and among the company is an actress named Fay
Templeton, who is said to possess unusual powers of mimicry. In
The Runaways she imitâtes the peculiarities and characteristics of
five actresses — among them, Lotta Faust singing the chorus of
"Sammy." Her performance is precedcd by an announcement that
it is an imitation of Lotta Faust singing her song "Sammy" in The
Wizard of Oz, and that only the chorus will be sung. Miss Temple-
ton is alone upon the stage, no chorus of girls being présent. It
is this mimicry that the court is asked to enjoin, and the question
for décision is whether such a performance is forbidden by section
125 F.— 62
978 125 FBDERAL RKI>ORTEB.
4966 of the Revised Statutes as amended in 1897 [3 U. S. Comp.
St. 1901, p. 3415], which imposes a Imbility in damages upon any
person "publicly perforraing or representing any dramatic or mus-
ical composition for which a copyright has been obtained, without
the consent of the proprietor of said dramatic or musical composi-
tion," and authorizes such performance to be stopped by injunction.
The first verse and chorus of the song will exhibit its qualityr
"Did you ever meet the fellow fine and dandy,
"Who can readlly dispel your 111s and woes?
I)id you ever meet the boy who's ail the candy
Where'er he goea?
That's the very sort of fellow l'm In love with,
He Is ail the daffodils of early spring,
And to me the flnest bliss is
Just to revel in hls kisses
When to hlm I sing:"
(Chorus)
" 'Sammy, oh, oh, oh, Sammy,
For you l'm pining when we're apart;
Sammy,- when you corne wooing
There's somethlng doing àround my heart
Sammy, oh, oh, oh, Sammy,
Oan't llve wlthont you, my dream of Joy;
Tell me, oh, oh, oh, tell me,
You're only mine, my Sammy boy.' "
As will, no doubt, be observed, this sounds the note of personal
émotion that is the characteristic 'of the lyric ; and I think counsel
are .agreed that there is nothing dramatic about either the words or
the musié. Assuming, for présent purposes, that a lyric is capable
of being "performed or represented" in the sensé that should be given
to those woi'às as they are used by the statute, the question remains,
is the song in fact being performed or represented? In my opinion,
the question should be ahswered in the négative. What is being
represented are the peculiar actions, gestures, and tdnes of Miss
Faust; and thëâe were not copyrighted by the complainant Bloom,
and could not be, since they were the subséquent device of other
minds. It is the personality imitated that is the subject of Miss Tem-
pleton's aèt, modified, of course, by her own individuality, and it
seems to me that the chorus of the song is a mère vehicle for carrying
the imitation along. Surely a parody would not inîringe the copy-
right of the work parodiedj merely becausè a f ew lines' of the original
might be textUally reproduced. No doùbt, the good faith of such
mimicry is iati èssential élément; and, if it appeared that the imita-
tion was a mère attempt to evàde the ownër's copyright, the singer
would propeirly be prohibited from doing in a roundabout way what
could not be âone directly. But where, as hère, it is dearly estab-
lished that tlié imitation is in good faith, and that the répétition of
the chorus is an ' ihcident that is due solely to the fact that the stage
business and the characteristics imitated are inseparably connected
with the particular words and music, I do not believe that the per-
formance is forbidden either by the letter or the; spirit of the act
of 1897. The owner of the copyright is entitled (upon the assump-
tion heretofore stated) to be protected from unauthorized public
OEEGON R. & NAV. OO. V. SHELL. 979
performance or représentation of the song, in order that whoever
might désire to hear "Sammy" sung in public would be obliged to
attend a performance of The Wizard of Oz ; and, as it seems to me,
he still bas that protection. The song is only sung publicly in that
extravaganza. Fay Templeton does not sing it, she merely imitâtes
the singer; and the interest in her own performance is due, not to
the song, but to the degree of excellence of the imitation, This is
a distinct and différent variety of the histrionic art from the singing
of songs, dramatic or otherwise, and I do not think that the example
now before the court bas in any way interfered with the légal rights
of the complainants.
For the présent, of course, I am guided by the ex parte afïidavits.
When the évidence comes to be put in, a dififerent case may be pre-
sented.
A preliminary injunction is refused.
OREGON E. & NAV. CO. v. SHELL et al.
(Circuit Court, D. Washington, S. D. December 3, 1903.)
No. 211.
1. United Statbs Cikcuit Court— Jueisdictioîj—Pkcdniary Limit— Railroab
RiGHT op Wat— Suit to Enjoin Trbspass and Corrbct Dbed.
The circuit court has no jurisdiction of a suit to correct an ambiguity
In the deed of a rallroad right of way, and to restrain the removal of
gâtes at a crossing in the inclosure thereof, where the value of the realty
and the damage accrulng to adjacent property from the road's construc-
tion are not shown to exceed $2,000; and the fact that animais may stray
on the track through the threatened openings in the inclosure, and cause
wrecks occasioning great damage, does not help the case, since, when
jurisdiction dépends on a partlcular sum, suits where the right Involved
cannot be calculated in money are not within It.
The complainant, a railroad corporation, claiming to own a right
of way ICO feet wide for each of two parallel Unes of railroad cross-
ing land owned by the défendants, under a deed describing the right
of way granted by the words: "A strip of land loo feet in width,
being 50 feet in width on each side of and parallel with the center
line of the main track of the Oregon Railway & Navigation Com-
pany's railroads as the same are staked out and located over and
across the lands of," etc. — commenced this suit to correct a sup-
posed ambiguity in said deed, so as to make the same more clearly
describe a right of way 100 feet wide for each of its two lines, and
for an injunction to restrain the défendants from removing gâtes of
the right of way fences opposite a crossing, the right of way having
been inclosed and the owners of the land having a prrvate way
across the tracks. The bill of complaint contains an averment that
the complainant's right to maintain said gâtes, which is disputed by
fl. Jurisdiction of circuit courts as determlned by the amount In contro-
versy, see notes to Auer v. Lombard, 19 C. C. A. 75; Tennent-StribUng Shoe
Oo. V. Roper, 86 C. a A. 459.
9S0 125 FEDEEAÎi REPORTER.
the défendants, îs necessary for safety in opération of its railroads,
and that the value thereof exceèds $2,000, and said averment is de-
nied by the défendants' answer. On final hearing. Findings and
deCreé' that the value of the matter in controversy is not sufficient,
and that the case be dismissed for want of jurisdiction.
Cotton, Teal & Minor and L. S. Wilson, for complainant.
T. P. Gose and C. C. Gose, for défendants.
HANFORD, District Judge (after stating the facts as above).
The jurisdiction of the court over this case is disputed on the ground
that the controversy does not involve anything exceeding $2,000
in value. The complainant contends that the subjecf of the contro-
versy is its right to inclose the right of way; that an open way
across its tracks by which animais may come upon the roadbed is a
menace to the safety of ail trains ; that accidents which may happen
by reason of collisions with animais which the utmost vigilance may
not prevent may cause personal injuries to and death of many of its
passengers and employés, and destruction of property of immense
value ; that the différence in value to it of an inclosed right of way
compared with an uninclosed right of way is very great; and that
the exact or proximate value cannot be calculated. This conten-
tion is strongly supported by uncontradicted évidence as to ail the,
facts involved. On the other hand, the défendants contend that the
question of jurisdiction is to be determiried by the application of the
rule that for the appropriation of the land required for its right of
way with full title and absolute dominion over it, including the right
to inclose it, the complainant will only be obligated to pay the rea-
sonable value of the land actually appropriated and the araount of
damages which the owners of the land may be entitled to claim by
reason of the construction and opération of the railroad; that if the
complainant prevails in this lawsuit the défendants will bnly lose the
amount of such value and damages, the aggregate amount of which
constitutes the pecuniary value of the subject of controversy; and
that the évidence does rtot prove said amount to be more than $2,000.
It is my opinion that in the mère statement of the two opposing
propositions the superior strength of the défendants' position, in
reason, is obvious; for if the court should grant a decree in favor
of the cornplainant for ail the relief demanded it will gain and the
défendants will Içise only the pecuniary advantage of having posses-
sion and complète control of the right of way, and the value thereof
cannot be greater than the amount which the complainant would
be obliged tp pay.to the défendants in order to acquire possession
and complète control, if it did not claim to be already entitled there-
to. The authorities also sustain the défendants' theory of the law.
18 Encyc. PI. & Pr. 270, n. 2; Security Company v. Gay, 145 U. S.
123, 12 Sup. Ct. 815, 36 L. Ed. 646; Glay Center v. Farme'rs' Loan
& Trust C6., 145 U. S. 224, 12 Sup. Ct. 817, 36 L. Ed. 685 ; Wash-
ington & Georgetown ,R. R. Co. v. District of Columbia, 146 U. S.
22,y, 13 Sup. Ct. 64, 36 L., Ed. 951; United States v. Wanamaker,
147 U. S. 149, 13 Sup. Ct. 279, 37 L. Ed. 118.
HARTFORD & N. T. TRANSP. CO. V. HUGHES. 981
The pleadings make an issue, and the burden of proof is upon tlie
complainant, and, as the case was tried only upon the complainant's
theory, no évidence was ofïered with respect to the value of the
right of way nor of the amount of damages caused by the railroad,
and the court is unable to make the findings necessary to sustain
its jurisdiction. Therefore the case must be dismissed.
Were the complainant's theory accepted the resuit would be the
same, for there is no certainty that trains will be wrecked in consé-
quence of the opening of the right of way fence at the particular
place in controversy, and it is not possible to even conjecture tfîe
amount of the damages if one or more such accidents should occur,
nor will closed gâtes afford absolute protection against accidents of
the kind apprehended. Hence the value of the right to maintain
closed gâtes cannot be calculated, and the case falls within the rule
that, where jurisdiction dépends upon a specified amount, jurisdic-
tion docs not attach to any case in which the right involved cannot
be calculated in money. i Encyc. PI. & Pr. 719; Kurtz v. Mofifîtt,
115 U. S. 498, 6 Sup. Ct. 148, 29 L. Ed. 458.
A decree will be entered dismissing the case, with costs.
HARTFORD & N. Y. TRANSP. CO. v. HUGHES et al.
(District Court, S. D. New York. November 12, 1903.)
1. WhARVES— LlABILITY OF OWÎJEKS FOR lîTJURT OF VbSSEL— OBSTRUCTIONS IN
BOTTOM.
It is the'duty of a wharfinger to ascertain the condition of the bottom
of the waters adjacent to his wharf which the public is invited to use,
and if there are any dangerous obstructions to remove the same, or, if
that cannot be done, to notify vessels using the wharf of their existence
and position; and a gênerai notice by the owners of a bulkhead to the
master of a vessel of the depth of water, and that he must be responsible
for any injury to his vessel while lying at the bulkhead, will not relieve
such owners from liability for an injury caused by a rock projecting
three feet from the bottom, of the existence of which the master was not
notified.
In Admiralty. Action to recover for injury of vessel at respond-
ents' bulkhead.
James J. Macklin, for libellant.
Alexander & Ash, for respondents.
ADAMS, District Judge. This action was brought by the libellant
to recover the damages caused its barge, the H. & N. Y. T. Co. No.
3, and the cargo of stone on board, of which it was bailee, by sink-
ing while lying at the respondents' bulkhead in the East river, at
Ravenswood, Long Island, on or about the ist day of July, 1895.
The barge was 123 feet long and about 28 feet wide, and drew,
when loaded as she was this day, 7 feet 4 inches forward and 8 feet
6 inches aft. The bulkhead had been constructed for two or three
months before the accident. It was 75 feet long and had a depth
of water of about 6 feet, a short distance ofï the face, increasing
towards the river.
982 125 FEDERAL BEPOUTER.
The barge was made fast àt about the height of the tide at 6 o'clock
in the mornjng and lay there, apparently without injury, through
one tide but at the next tide, she was injured by having a hole knock-
ed in her bottom by a sharp rock, which by a subséquent examina-
tion of the bottom was found to be projecting about 3 feet above
the bed of the river.
Shortly after her arrivai, the respondents, who were the con-
signées of the cargo, asked the captain to discharge it, as they were
in immédiate need of it, and they provided men for that purpose.
Having ascertained, from the master, the draft of the barge, they
also notified him that there were only about 6 feet of water in the
berth and if she were injured there at low tide hé would hâve to be
responsible. They did not at the time know of the existence of the
rock but supposed the bottom to be of hard sand. The master said
he could not discharge at that time but would hâve to await the
arrivai of the superintendent of his company. When the superin-
tendent came subsequently, and while the barge was on the bottom,
during the lirst low tide, he had no men and did not attempt to get
any, as he had been accustomed to hâve the barge lie aground with-
out injury, but he directed the master to slacken up his Unes, so that
the barge would go further into the stream. This the master did
and at the next tide, the barge went oflf from the face of the bulk-
head so thât she was lying at her stern 10 or 12 feet off and at her
bow 2 or 3 feet ofif.
The examination of the bottom after the accident showed that the
rock which did the injury, was about 18 feet from the bulkhead, with
about 12 feet of water on it at high tide. The fall of the tide was 5
or 6 feet, depending somewhat upon local conditions, and it seems
clear that the change of position did not afïect the situation, because
if the barge had remained in the fîrst position, she would still hâve
been subjected to the danger, which she afterwards encountered and
caused her bottom to be punctured. How the barge happened to go
through the first tide without apparent injury is not adequately ex-
plained.
The question to be determined is, whether the notice given by the
respondents to the master, was sufHcient to relieve them of the lia-
bility, which ordinarily attends the failure of wharfingers to be famil-
iar with the nature of the bottom of waters adjacent to the wharves
which they hold out to the public for use.
The law is well settled and is stated by the Suprême Court, in the
following language:
"Although a wharfinger does not guarantee the safety of vessels comlng
to his wharves, he Is bound to exercise reasonable diligence In ascertaining
the conditions of the berths thereat, and If there is any dangerous obistruc-
tlon to remove it, or to glve due notice of Its existence to vessels about to
use the berths. At the same time the master Is bound to use ordlnary care
and cannot carelessiy run Into danger. Phlladelphia, Wilmington, etc., Rail-
road V. Phlladelphia, etc., Steam Towboat Co., 23 How. 209 [16 L. Ed. 433];
Sawyer v. Oakman, 7 Blatchf. 290 [Fed. Cas. No. 12,402]; Thompson v. N.
E. E. H. Company, 2 B. & S. 106, s. c. Exch. (1860) 119; Mersey Docks Trus-
tées V. Glbbs, L. R. 1 H. L. 93; Carleton v. Franconla Iron and Steel Com-
pany, 99 Mass. 216; Nickerson v. TIrrell, 127 Mass. 236; Barber v. Abendroth,
HARTFORD & N. T. TRANSP. CO. V. HUGHES. 983
102 N. Y. 406 [7 N. E. 417, 55 Am. Rep. 821]". Smith v. Bumett, 173 U. S.
430, 433, 19 Sup. Ct. 442, 43 L. Ed. 756.
In this case the court fiirther said (page 435, 173 U. S., page 444,
19 Sup. Ct., 43 h. Ed. 756) :
"In The Mooreock, 13 P. D. 157, défendants, who were wharflngers, agreed
with plaintiff for a considération to allow hlm to discharge his vessel at thelr
jetty which extended into the river Thames, where the vessel would neces-
sarlly ground at the ebb of the tlde. The vessel sustained injury from the
uneven condition of the bed of the river adjolning the jetty. Défendants
had no control over the bed, and had taken no steps to ascertaln vrhether it
■was or vras not a safe place for the vessel to lie upon. It was held that,
though there vs'as no vyarranty, and no express représentation, there was an
implled undertaking by défendants that they had taken reasonable care to
ascertaln that the bottom of the river at the jetty vras not in a condition
to cause danger to a vessel, and that they were Ilable. The judgment was
sustained in the Court of Appeal, 14 P. D. 64, and was approved by the House
of Lords in The Calliope (1891) App. Cas. 11."
It was further said (pages 435, 436, 173 U, S., page 444, 19 Sup.
Ct., 43 L. Ed. 756) :
"The Lord Chancellor remarked: 'In thls case the wharflnger, who hap-
pens to be the consignée, invites the vessel to a particular place to unload.
If, as it is said, to his knowledge the place for unloading was improper and
likely to injure the vessel, he certainly ought to hâve adopted one of thèse
alternatives: elther he ought not to hâve invlted the vessel or he ought to
hâve Informed the vessel what the condition of things was when she was
invlted, so that the injury mlght hâve been avolded.' Lord Watson; 'I do
not doubt that there is a duty incumbent upon wharflngers in the position
of the appellants towards vessels which they invite to use thelr berthage
for the purpose of loadlng from or unloading upon thelr wharf; they are In
a position to see, and are in my opinion bound to use reasonable diligence
in ascertalning whether the berths themselves and the approaches to them
are in an ordinary condition of safety for vessels coming to and lylng at the
wharf. If the approach to the berth is Impeded by an unusual obstruction
they must either remove it, or if that cannot be donc, they must glve due
notice of it to ships coming there to use thelr quay.' And Lord Herschell:
'I do not for a moment deny that there is a duty on the part of the owner
of the wharf to those whom he invites to come alongside that wharf, and a
duty in which the condition of the bed of the river adjoining that wharf may
be involved. But in the présent case we are not deallng, as were the leamed
judges in the cases which hâve beenclted to us, with the condition of the
bed of the river in itself dangerous — that is to say, which is siich as neces-
sarlly to involve danger to a vessel coming to use a wharf in the ordinary
way; and we are not deallng with a case of what I may call an abnormal
obstruction in the river — the existence of some foreign substance or some
condition not arising from the ordinary course of navigation.' "
The respondents were maintaining a bulkhead wharf for pubHc
use which they could easily hâve ascertained (as they did shortly
after the accident not only with respect to the rock in question but
others which were there) was in a dangerous condition for the use
of vessels drawing over 6 feet, and they took no sufficient steps to
become familiar with its conditions for such use, although they in-
vited the vessels there. If they had fulfilled their primary duty of
ascertaining the condition and had notified the master of the boat
of the existence of the rocks, and he had remained there with his
boat and sufïered the damage, the owner could probably not re-
cover but, in view of the circumstances. I do not consider that the
respondents can avoid the conséquences of their neglect to ascer-
984 125 FEDERAL REPORTER.
tain the condition of the bottom by ehdeavôririg to throw the re-
sponsibility of remaining at the bulkhead upon the Hbellant, when
nothing but a gênerai warning was gi'ven the master to the effect
that if anything happened he, not they, would be responsible.
There, should be a decree for the libellant, with an order of référ-
ence, but, in view of the long delay in bringing the case to trial, with-
out interest beyond the period of one year.
In re KANB.
(District Court, M. D. Pennsylvanla. September 15, 1903.)
1 Bankrupt— Faildre to Tckn Ovbr Assets to Trustée— Contbmpt—Void-
ABIiB PrIORITY.
A bankrupt cannot be adjudged In contempt for failure to turn over
to bis trustée, pursuant to order of the référée, money whlch, before tbe
proceedings were begun, had been pald out by him té creditors.
a. Same.
The sole purpose of a contempt proceeding agàinst a bankrupt for
failure to turn over assets to bis trustée is to reach and compel the sur-
render of ail property in bis actual control or possession, and not to
punish Mm for conceallng assets from bis trustée.
3 SaMB— SÙFFICIENCY OF EVIDENCE.
In proceedings agalnst a bankrupt for contempt for failure to turn
over to his trustée, on order of the référée, money traced into his hands,
it Is not a sufflcient aceounting by him for such money to say that he
gave It to bis wlfe, who bas spent It for the beneflt of himself and family.
On Exceptions to Report of Référée.
H. F. Maynard and C. C. Yocum, for bankrupt.
E. G. Herendeen and Joseph W. Beaman, for défendant.
ARCHBALD, District Judge. The référée found that the bank-
rupt had iîi; his hands $1,340, and prdered him to turn it over to his
trustée ; and, for the failure to do so, he has reported him in con-
tempt. Whether he is, or not, dépends on the correctness of this
fînding. The checks which the bankrupt received from Farley upon
the sale of his merchandise and accounts, amounting to $2,538.58, he
turned over to his attorney, Yocum, who had them cashed at once at
the Sayre National Bank, and paid out of the proceeds two overdue
notes, of $1,160, which were lying there. We are not concerned at
this time with the validity of the sale, nor the circumstances attend-
ing it, nor whether the payment to the bank was a voidable préfér-
ence. The bankrupt certainly has not got the $1,160 so turned over
to it, and hè cannot, therefore, be charged therewith. The only ques-
tion is as to the remainder. This was left with the bank, but was not
put to the crédit of the bankrupt, probably to escape checks which
were outstanding. This occurrence was on May 19, 1902, and on
May 23d a pétition in involuntary bankruptcy was filed against Kane,
on which an adjudication was had July 24th following. It would hâve
been obtained earlier, except that the bankrupt had withdrawn from
the district, and his whereabouts were not known. Somewhere about
June igth Yocum drew from the bank the money which had been left
IN EE KANE, 985
there, and took ît to Milville, N. ]., where Kane, as it seems, had been
staying with his wife's relatives, and gave it into Kane's hands. Out
of what was so received, Kane paid Yocum a bill for services of $50,
and gave hini $750 additional with which to settle a claim which his
brother Patrick J. Kane had against him. This was a debt incurred
a jrear or two previous, when Michael bought out his brother Pat-
rick's half interest in the business which they had been carrying on to-
gether. Yocum succeeded in securing a settlement for $600, and
turned over the $150 which he saved to the bankrupt's wife. It is
contended that the money so turned over to Patrick was to be held
by him for the benefit of the bankrupt, but there is not a shadow
of anything to sustain such an idea. It is true that Patrick says the
raoney was paid to him the evening of the sale, and that he spent it
ail soon afterwards on a wedding trip ; also that he gave a receipt for
it the same day ; and the receipt which is produced bears date of May
igth, in apparent accordance. But his story is very unsatisfactory in
many ways, which I will not stop to discuss ; and, contradicted as it is
by both Yocum and the bankrupt, I do not believe it. The date of
the receipt is to be explained either as a mistake of May for June, as
Yocum suggests, or a dating back for somc undisclosed purpose. As-
suming, as testified, that the money turned over to him was $1,340—
although the amount left with the bank was somewhat more than
this — and taking out that which the bankrupt paid to his attorney and
to his brother, there was left in his hands, including that returned to
his wife, the suni of $690. The only thing he has to say of this
is that he gave it to his wife, and th.at it has been spent for the ben-
efit of himself and family. This, however, is not a sufficient account-
ing for it, nor does it seem at ail probable. He stayed at Milville,
according to his story, about six weeks, and then got work at Phila-
delphia as a motorman, and went there to live, by which time his earn-
ings, as we hâve the right to assume, would largely support those dé-
pendent on him. He was only called to draw upon this money,
therefore, for a brief period ; and he was likely, from his reduced cir-
cumstances, to be somewhat saving of it. It is hardly to be believed
that by the middle of October, when he was examinée! before the réf-
érée, he had made away with the whole of it, as he testifies. Money
having been traced directly into his hands, he cannot swear himself
free from liability by any such gênerai and sweeping statement. The
limits of a proceeding of this character are, no doubt, to be recog-
nized and observed. It is not intended to punish the bankrupt for
concealing assets from his trustée, for which the law otherwise pro-
vides, nor for frauds or delinquencies of which he may appear to be
guilty. The sole purpose is to reach, and compel the surrender to the
trustée of, property belonging to the estate in the actual control or
possession of the bankrupt (Boyd v. Glucklick, 8 Am, Bankr. R. 393,
116 Fed. 131, 53 C. C. A. 451 ; In re Gerstel, 10 Am. Bankr. R. 411,
123 Fed. 166; Brandenburg, Bankruptcy, § 54), although for this the
power of the court is plenary (Mueller v. Nugent, 184 U. S. i, 22 Sup.
Ct. 269, 46 L. Ed. 405, 7 Am. Bankr. R. 224). Having regard to what
is involved, it is to be exercised with caution ; but, where a proper
case is presented by the évidence, the court is not to allow itself to be
986 125 FEDBBAL EBPORTBB.
deceived by évasions, nor deterred by the conséquences. In the prés-
ent instance, while I cannot sustain the finding of the référée that the
bankrupt had in his hands, at the time the order to turn over was
made, the $1,340 which was so required of him, I feel compelled to
find that he did hâve the greater part of the $690 left after deducting
the payments to his brother Patrick and to his attorney. Exactly how
much, to a dollar, this was, we may not be able to say; and the bank-
rupt, after having had opportunity, both before the référée and the
court, except the bare statemeht that he had spent it, throws no light
upon the matter. The only thing left is to estimate it ; and, allowing
for the time before he got work in Philadelphia, and taking into
considération that he took some money away with him (although not
much), it is fair to say that he must hâve had at least $600 at the time
of the hearing last October. This, I am constrained to hold, he must
now turn over to his trustée.
L,et an order be drawn requiring the bankrupt to pay to his trustée
the sum of $600, moneys of the estate in his hands, within 20 days
from the service of this order upon him, or, in default thereof, that
he be adjudged in contempt.
In re PISHBLATK CLOTHING CO.
(District Court, E. D. Nortb Carollna. November 28, 1903.)
1. Involohtabt Bankkuptct— Pbtitioning Crbditorb — Numbek — Compe-
TENCT.
Where one of the three creditors slgnlng an Involuntary bankruptcy
pétition had recelved a préférence wlthln four months prlor to the filing
of the pétition, whlch he had not surrendered, and was therefore dis-
quaMed from slgnlng the pétition, and there was no request for an
amendment of the pétition by including the names of other creditors, the
pétition will be dlsmissed.
In Bankruptcy.
C. F. McRae and Rountree & Carr, for petitioning creditors.
Iredell Meares, for bankrupt.
PURNELL, District Judge. This cause being before me on the
pétition of petitioning creditors and the verified answer of the bank-
rupt Company, it appearing that the International Shirt & Collar
Company, one of the three petitioning creditors necessary under the
bankrupt act to constitute the requisite number of creditors upon
which an involuntary pétition in bankruptcy can be maintained, has
received a payment on its claim within the prohibited period, to wit,
four months of the filing of the pétition in bankruptcy, and that
said payment constitutes in law a préférence, said préférence not
having been surrendered by said creditor. It further appears that
said petitioning creditors hâve not by pétition or proper motion
requested that said original pétition be amended by including the
names of other persons as creditors, bringing said pétition within
the provisions of said bankruptcy law, but the only request made by
EIKREM V. NEW ENGLAND BRIQUETTE COAL OO. 987
said petitioning creditors is that they be allowed to file a replica-
tion to defendant's answer, which request is as follows : "If the
court is of a contrary opinion, we respectfully ask time to file a repli-
cation to the answer of bankrupt."
Upon the foregoing facts it is ordered adjudged, and decreed:
1. That the International Shirt & Collar Company, one of the
petitioning creditors, has not a provable claim against the bankrupt
Company, as contemplated in the act; that it has received a préfér-
ence, which it has not voluntarily surrendered; and that creditors in
an amount as required by the act hâve not united in instituting the
pétition herein against the défendant bankrupt company.
2. The court must act upon the record as presented, and there is
nothing in the record as presented (and the statements in the veri-
fied answer must be taken as true), asking for leave to amend said
original pétition to conform to the provisions of the bankrupt law.
The court cannot try hypothetical cases. It may be stated this
is not a moot court, but sits under the law to try bona fide causes
actually existing and regularly instituted between parties — questions
raised and presented in the record. The seeming efïort on the part
of petitioning creditors to "fish out" an opinion upon a hypothetical
case cannot avail.
It is therefore ordered, adjudged, and decreed that the pétition
herein, for the reasons stated, be, and the same is hereby, dismissed^
at the cost of the petitioning creditors.
EIKREM Y. NEW ENGLAND BRIQUETTE COAL CO.
(District Court, D. Eliode Island. November 17, 1903.)
No. 1,103.
1, Shippino— Chabter Party— Liabilitt pob Frbight.
Under a charter party providing that the charterer shall provide a
fuU and complète cargo of sludge, he to pay $1.75 per ton for freight,
there can be recovery only for the amount shipped; there being no évi-
dence that the vessel could hâve prudently taken more of such a cargo,
or that the master erred in his judgment that that was ail she could pru-
dently carry.
2. Samb— Dkmdrragb.
Complalnant, on a libel for demurrage, Is not precluded from proving
the exact loading and dlscharging times by having previously presented a
bill for a smaller amount.
In Admiralty.
Matteson & Healy, for libelants.
Livingstan Ham, for claimant.
BROWN, District Judge. This libel is for freîght and demurrage.
The schooner James Duffield, described in the charter party as "of
the burthen of 178 tons, or thereabouts, registered measurement,"
12. Demurrage, see notes to Randall v. Sprague, 21 C. C. A. 337; Hager-
man v. Norton, 46 0. C. A. 4.
988 125 FBDBRAL BBFOBTBB.
was chartered for a voyage from Mantua Creek, N. J., to Providence,
R. I. The charterèr was to provide "a full and complète cargo under
deck oî sludge in bulk," and to pay therefor at the rate of $1.75 per
ton of 2,240 pounds ; the charterers to load, trim, and discharge the
cargo. The vessel carried 167 tons 1,690 pounds of sludge. The
claimant contends that this was not a full and complète cargo, and not
a substantial performance of the agreement. The respondent's argu-
ment is that, as the vessel could carry 250 or 260 tons of soft coal, and
as a cubic foot of soft coal weighs 51^ pounds, while a like quantity
of sludge weighs 625^ pounds, 304 tons of sludge could be put into
the same space as 250 tons of soft coal. By similar computations
based on other évidence, he reasons that 3225^ tons was the probable
sludge-carrying capacity of the vessel. But this argument is obvi-
ously unsound, since it considers only the amount of space in the hold
of the vessel, and disregards the facts that the sludge was of greater
weight per cubic foot than soft coal, and was not a solid substance,
but a substance described by the master of the vessel as "similar to
thick pitch, and very easy to run from place to place. It would keep
soft. It would not harden very solid in cold weather. I don't know
what to call it^ — ^whether liquid or solid. It would run." It was a
shifting cargo, and in fact did shift so that at one time on the voyage
the vessel had a list of some 12 inches. As the vessel was to receive
payment at the rate of $1.75 per ton for the amount carried, it was to
her advantage to take as large a cargo as possible. There is no évi-
dence to show that the Duffield could hâve taken prudently a larger
cargo of this peculiar substance in bulk, or that the master erred in
his judgment that between 167 and 168 tons was ail that the vessel
could carry safely.
According to the uncontradicted proofs, there was a delay of 4
days and 19 hours in loading, and a delay of 17 days in discharging.
For each day's détention the vessel was entitled to $16. While the bill
presented to the respondent, the New England Briquette Coal Com-
pany, was Somewhat smaller, this does not preclude the libelant from
proving the exact loading and discharging times ; and no évidence has
been offered to show any inaccuracy in the detailed statement annexed
to libelant's brief, nor is the accuracy of the figures questioned upon
the respondent's brief.
I fînd that the complainant is entitled to $348.66 for demurrage,
with interest from the date of filing the libel, and to $1.27 unpaid bal-
ance of freight.
In re BEA VERS.
(District Court, S. D. New York. October 24, 1903.)
Abrest— Persons LiabtjB— Second Akrest of Persok on Baii,.
A court which has In Its custody a person charged with a crime has ex-
clusive custody and jurisdiction until the question of his guilt or inno-
cence is determined; and a person arrested on a commissioner's war-
rant, and either in custody or held to bail pendiiig his examinatiou for
removal to another district to answer to a criminal charge, is not sub-
Jéet to a second arrest, for removal to a différent district, until the first
proceeding bas beeu terminated.
IN RE BEA VERS. 989
On Application for Writ of Habeas Corpus.
Morgan & Seabury, for petitioner.
Ernest E. Baldwin, Asst. U. S. Atty.
HOLT, District Judge. This is a writ of habeas corpus issued
upon the pétition of George W. Beavers, who allèges Ihat he has been
illegally arrested under an order of Samuel M. Hitchcock, Esq., a
United States commissioner. The petitioner was indicted by the
fédéral grand jury in the Eastern District of New York. A warrant
for his arrest was issued by the judge of the Eastern District of
New York, but he was not found within that district. An application
was thereupon made to Samuel M. Hitchcock, a United States com-
missioner in the Southern District, for a warrant for his arrest and re-
moval. A warrant was issued by the commissioner, under which the
petitioner was arrested and brought before him. The petitioner de-
manded an examination, and gave bail for his appearance before the
commissioner. Subséquent to the finding of the indictment in the
Eastern District of New York, another indictment against the peti-
tioner was found by the grand jury of the District of Columbia. A
bench warrant was issued by the Suprême Court of the District of
Columbia for his arrest under the indictment, but, not being found
within the District of Columbia, another application was made to
Commissioner Hitchcock, in the Southern District of New York,
for his arrest and removal under the second indictment. A warrant
on this second appHcation was issued by the commissioner, under
which he was arrested by the marshal of the Southern District of New
York, and brought before the commissioner. The petitioner there-
upon demanded an examination, and was again admitted to bail by
the commissioner. The bail given upon the second arrest under the
warrant issued upon the indictment in the District of Columbia subse-
quently surrendered the petitioner to the marshal for the Southern
District of New York, and thereupon the petitioner filed a pétition in
this court for this writ of habeas corpus, alleging that his second ar-
rest was illégal.
In my opinion, the fact that Beavers had given bail on the first ar-
rest, and was not in the actual custody of the marshal when the second
arrest took place, is immaterial. The gênerai rule is as stated by Mr.
Justice Sv/ayne in Taylor v. Taintor, i6 Wall. 371, 21 h. Ed. 287:
"When bail is given, the principal is regarded as dellvered to the custody
of his sureties. ïhelr dominion Is a continuance of the original imprison-
ment."
The question, therefore, in my opinion, is precisely the same as
though the marshal, while holding the petitioner under the original
warrant of the commissioner pending the examination as to whether
he should be removed to the Eastern District of New York, had re-
ceived the warrant of the commissioner issued on the indictment
found in the District of Columbia. I think that in such a case, al-
though the issue of the warrant was proper, it would be the duty of
the marshal not to exécute it, but to hold it pending the décision of
the commissioner in the proceeding for the removal of the défendant
990 125 FEDEItAL KEPOBTEE.
from this district to the Eastern District of New York. If, for any
reason, the commissioner should décide in the first proceeding that
the petitioner should not be removed, thèn it would be the duty of the
marshal to arrest him and hold him under the warrant in the second
proceeding ; but, until the first proceeding is determined, I think that'
no other arrest can be permitted. As is stated in Taylor v. Taintor,
i6 Wall. 370, 21 L. Ed. 287:
"It Is a prlnclple of universal jurisprudence that, where jurisdiction bas at-
tached to person or thing, it Is^unlesa there is some provision to the con-
trary— exolusiTe in effect until It has wrought its function."
If it was the duty of the marshal to arrest him under the second
warrant, it would be his duty to carry out the décision on the second
warrant, as it is his duty to carry out the décision on the first warrant.
If the tWo proceedings resuit ed in an order for the rernoval of the
défendant in the one case to the Eastern District of New York for
trial, and in the other case to the District of Columbia for trial, it is
obvious that no such orders could be complied with at the same time.
The only possible rule is that a court which has in its custody a per-
son charged with a crime has exclusive custody and jurisdiction
until the question of his guilt or innocence is determined, and, if he
is found guilty, until the period of imprisonment has expired. Taylor
V. Taintor, 16 Wall. 366, 21 h. Ed. 287; Matter of Troutman, 24
N. J. Law, 634; Matter of Briscoe, 51 How. Prac. 422.
My coriclusion is that the arrest under the second warrant issued
by the conlniîssioner should be vacated.
In re LE VAY.
(District Court. M. D. Pennsylvania. November 27, 1903.)
No. 326.
1. Bankbttptcy— Exemptions— TiMK and Manner ov Claimino.
While, under Bankr. Act July 1, 1898, c. 541, 30 Stat. 544 [U. S. Comp.
St. 1901, p. 3418], the rlght of a hankrupt to his exemption dépends on
the state law, hy which it is primarlly given, the time and manner of
obtaining it are necessarlly regulated by that act. Claim for Its allow-
ance in Involuntary proceedings is therefore in effective time if made by
the bankrupt In his schedules.
2. Same— Perishable Goods— Claim on Procbeds of Salb.
Where a claim to his exemption îs made by the bankrupt In his
schedules, the mère fact that meanwhile the goods themselves, which
he mlght otherwise bave clalmed, hâve been sold by a receiver under the
direction of the court as perishable, wlll not deprive hirn of the right
to corne m upon the proceeds, notwithstanding that under the state law a
debtor Is not entitled to his exemption out of the proceeds of a sale, but
must elect the goods he wishes to retain and hâve them set aside to htm.
8. PbrishabiiK Goods — Bale pF — Procepds— How Distributbd.
The sale of goods as perishable is for the beneflt of ail concemed; the
money realized standing instead of the property itself, agalnst which the
parties interested may assert their rights, the same as If the sale had
not taken place.
IN EE LE VAT. 991
4. Bankhttptct— Exemptions— Pkioritt—Costs and Expbnses op Receiter.
Where the bankrupt bas properly claimed his exemption, it cannot be
dimlnlshed by, or put aside In favor of, the costs and expansés made In
tUe proceedlngs, even wbere thèse hâve b-^pn Incurred In steps taken to
préserve the property, as by a sale of It by a receiver as perishable.
In Bankruptcy. On certificate from H. A. Fuller, Référée.
Chas. N. Loveland, for bankrupt.
W. N. Reynolds, Jr., for défendant.
ARCHBAIyD, District Judge. Thèse are învoluntary proceedings
instituted June i, 1903, against the bankrupt, who was carrying on a
millinery business. On suggestion that her stock, being adapted to
the season, was liable to serious détérioration unless speedily dis-
posed of, a receiver was appointed, and a sale of the goods ordered
as perishable. This sale took place on June igth, two weeks in
advance of the adjudication, and realized $140.50 — about one-fourth
of what it was appraised at ; and upon filing her schedules a few days
after the adjudication the bankrupt claimed the proceeds as part of her
$300 State exemption. Excepting a sewing machine, some jewelry,
and a few small personal eflfects, valued at $50, also claimed as ex-
empt, the money realized at the sale constituted the whole of her
property. The right to the proceeds of the sale was denied the bank-
rupt by the référée on two grounds : First, because it was claimed
too late, after the goods had been converted by a sale ; and, second,
because the costs and expenses of the référée and receiver, which
exhausted the fund, were entitled to priority.
It is held by the courts of Pennsylvania that an exécution debtor
is not entitled to his $300 exemption out of the proceeds of the sale
of Personal property by the sherifï, but that he must elect the goods
which he wishes to retain, and hâve them appraised and set aside to
him (Hammer v. Freese, 19 Pa. 255) ; and that, except under certain
spécial circumstances, a demand for an appraisement must be made
before the day of the sale, or the exemption will be considered waived.
Rogers v. Waterman, 25 Pa. 182; Diehl v. Holben, 39 Pa. 213. But
while it is no doubt true that the right of the bankrupt to his exemp-
tion dépends on the state law by which it is primarily given, the
analogies derived from the practice upon exécution process are not to
be carried too far. The time and manner of obtaining it in this court
are necessarily regulated by the bankrupt act, and it is there provided
that the bankrupt shall claim in his schedules the exemptions to which
he is entitled — section 7a (8), Act July i, 1898, c. 541, 30 Stat. 548
[U. S. Comp. St. 1901, p. 3425] — and that they are to be set apart
to him by the trustée, who is to report to the court the items and
estimated value thereof — section 47a (11), Act July i, 1898, c. 541,
30 Stat. 557 [U. S. Comp. St. 1901, p. 3439]. Where this course has
been pursued, it must be regarded as effective, and in time. The
mère fact that meanwhile the goods which he might otherwise hâve
claimed hâve been sold by a receiver, under the direction of the court,
because of their perishable character, will not deprive him of the right
S 4. See Beach t. Maçon Grocery C3o, (C. C. A.) 125 Fed, 513.
993 125 FBlJ&BAI. RlIPORTEiB.
to coiîie în upon the pr(icéeds. The sale of goods as perisfiable
is for the benefit of ail cpncerned, tlie money realized therefron»
standing in stead of the property itself, against which the parties in-
terested may assert their rights the saroe as if the sale had not taken
place. Taylor v. Carryl, 24 JP^. 259 ; Apreda v. Roraano, 24 Wkly,
Notes Cas. 124. It may be that the alleged bankrupt, for the pur-
pose of more fully preserving her rights, might hâve petitioned the
court in advance, and had the goods set ôfif to her under her exemp-
tion; but I do not see that she was bcmnd to do so; much less was
she to apply to the receiver, who had no aùthority to act if she had.
Neither is the bankrupt's claim to be put aside in favor of the costs
and expenses made in the proceedings. No doubt the adjudication
détermines that an act of bankruptçy had' been committed, which,
theoretically, justifies them ; but, evèn so, the bankrupt was entitled
to her exettiption, which, having been properly claimed, préserves to
her intact and undiminished whâteyer is çovered thereby. Property
that is exempt forms no part of the bankrupt's estate, nor does the
bankrupt court acquire any right to administer upon or distribute it,
even though its aid may be required to set it aside. Lockwood v.
Exchange Bank, 190 U. S. 294, 23 Sûp. Ct 751, 47 h. Ed. I061. The
title to that which is now claimed having, therefore, never passed
out of the bankrupt, even though temporarily in abeyance, cannot be
subjected to the costs made in the attempt to otherwise deal with it
(sections 62, 64b, Act July i, 1898, c. 541, 30 Stat. 562, 563 [U. S.
Comp. St. 1901, pp. 3446, 3447]), and this is true even though the
appointment of the receiver and the sale of the goods as perishable
would ordinarily be regarded as preservative steps taken in the in-
terest of ail parties. So far as the bankrupt was concerried, the whole
proceedings, as well as this part of them, were a useless interférence
with her afïairs. Conceding that an act of bankruptcy had been com-
mitted, it must hâve been évident from the start that the small stock
of millinery which she had, even if it realized $519, at which it was
appraised, was little more than enough to cover her exemption and
the probable costs, leaving bnly the barest fraction, if anything at ail,
for gênerai creditors. As it turned out, it has fallen far short of this,
and the expenses incurred must therefore be borne by those who
made them. They cannot be allowed to still further reduce the bank-
rupt's already scanty claim.
The report of the référée is set aside, and it is ordered that the fund
in the hands of the receiver be turned over to the bankrupt as part ol
her State exemption.
In re KUBTZ,
(District Court, B. D. Pennsylvania. November 23, 1803.)
No. 1,587.
BankktjptCY— Bkfbhbes— Ckrtification ov Question — Pbacticb.
On petltloj» of a credltor to a référée In bankruptcy to certify a ques-
tion presented, to the judge, the referee's transmission of the créditer'»
pétition for review, the notes of testimony and hls own opinion, to
the clerk, dld not constitute a compliance with Bankr. Rule 27 (89 Fed,
IN KE KURTZ. 993
xl), requlring that the référée In such case stiall certlfy to the judge the
question presented, with a summary of tbe évidence relating thereto,
and tlie finding and order of the référée tliereon.
2. SAME — ASSBTB— OWNERSHIP.
Where, at the time of fillng a bankruptcy pétition, the bankrupt had
a bank account standing in his name as manager, amounting to $348.02,
and he had been in the habit of depositing receipts from various sources,
some belonging to himself and some to others, in such account, for a long
period of time, and paying therefrom various items of indebtedness and
Personal expansés, and, after flling the pétition, he expended from such
account, for his private purposes, the sum of $270, it would be presumed
that the amount so expended was his personal money, and he would be
requlred to pay over such sum to his trustée.
In Bankruptcy.
D. McMullin and Frank R. Savidge, for bankrupt.
Coyle & Keller, for trustée.
J. B. McPHERSON, District Judge. It was charged before the
référée that when the bankrupt's pétition was filed he had in his pos-
session $348.02, deposited in bank to the crédit of "Samuel Kurtz,
manager," and that at least $270 thereof was his individual property,
which should hâve been scheduled and turned over to the trustée.
The référée was therefore asked to make an order requiring the
bankrupt to pay to his trustée the sum thus improperly withheld.
Testimony having been taken upon this application, the order was re-
fused after a hearing, and the referee's refusai is before the court for
review.
The referee's method of complying with the creditor's request for
a certification of the question presented is not to be commended. He
did not obey the plain command of rule 27 (89 Fed. xi), which re-
quires him, upon proper pétition for a review of any order, "forth-
with [to] certify to the judge the question presented, a summary of
the évidence relating thereto, and the finding and order ôf the
référée thereon," but merely transmitted to the clerk the notes of
testimony, his own opinion, aiid the creditor's pétition for review.
There is no attempt to certify the précise question that was ruled
upon, and there is no summary of the évidence relating thereto.
Both thèse provisions are important, and should be carefully observed.
The certification of the question prevents disputes among cotinsel
concerning the point presented and decided, and the summary of
the évidence is required in order to save the judge the labor of ex-
amining what is often a mass of testimony on many diiïerent ques-
tions, and of extracting so much as mav be relevant to the point im-
mediately in hand. The summary may also be valuable as showing
what évidence has been considered by the référée before coming to a
conclusion. In the présent case the absence of the summary is not
so important as it might be in others, because ail of the testimony has
some bearing upon the question before the référée ; but I take this
occasion to call attention to the rule, with the expectation that it will
be obeyed hereafter.
A careful examination of the testimony satisfies me that the order
asked for should hâve been made. The bank account referred to was
125 F.— 63
99i 125 FEDERAL BBFÔRTEB.
undoubtedly . treàted by the bankrupt as his individuel property, in
spite of the tact that it was labeled with his name as "manager,"
and in spite of the further fact that some of the money that went into
it was the incdme from real estate to which an insurance company,
of which he wàs seçretary and manager, held the légal title. Nom-
inally, he was, managing the property for the insurance company, but
he did what he pleasedivith the property and its income. During the
lo years of his apparent relation, he never rendered an account, and
was liever asked for one. The deposit in question contained his
owfi sâlary, rents from certain houses, proceeds from the sale of
gas made by a plant erected upon another part of the real estate,
mingled indiscriminately, and apparently not capable of being ac-
curately separated. From this ftmd he has been paying out money
for taxes and repairs, supplies tO the gasworks, and his own personal
expenses. On the day when he filed his pétition in bankruptcy, he
had $348.02 in this account. Of this sum, he has spent for his own
private purposes $270 since that <iate, and it is this amount which the
court is asked to compel him to restore, upon the theory that this was
presumàbly his individuel money, or he would hâve h^d no right to
spend it for his persopal advantage. The évidence satisfies me that
this position is weïl taken, and that the presumption that the bank-
rupt was not embézzlirig funds belonging to the insurance company,
but was. using his own money, has not been rebutted by any évi-
dence that was laid before the référée.
It is accordingly ordered that the bankrupt pay over to his trustée
the sum of $270, with interest from March 11, 1903, within 20 days
from the filing of this order. Service of a copy thereof to be made
immediately.
JBWISH COLONIZATION ASS'N et al. v. SOLOMON & GERMANSKL
(Carcult Court, S. D. New York. December 2, 1903.)
1. Fedkbal Courts— JuaisDiOTios—DivEBSK Citizknship—Amens— Limited
Partkbkship.
Wberé certain of the members Of a llmlted partnersbip organized un-
der the laws of New York were alieiis, and such partnersbip was joined
with a foreign corporation as a plalntitf in an action In the fédéral court
In New York against a flrm composed of citizens of New York, such lim-
ited partnersbip should nôt be treated, for the purpose of determlnlng
JurlsdlcOoh, as If It were a Corporatloh located In New York, but the
members thereof retain their indivldual rights as aliens eutitled to sue
In the fédéral courts.
t. TKADK-MARK8-r-LABBLS-*A<:TI0NB— PAHTIBS.
Where a blll by a corporation and a Umlted partnersbip for Infrlnge-
ment of certain trade-màrks and labels and for unfalr compétition showed
that both plaintiffs had an actùàl, though not an êqual, interest in the
use of the marks and labels, they were properly joined as plaintiffs' in
such suit
tl. Diverse cltlzenshlp as ground of fédéral jurlsdlctlon, see notes to Shipp
V. Williams, 10 Ç. a A. 249{ Mason v. Dullagham, 27 O. O. A. 298.
SOLOMON <l! 0EBMAI7SKI. 995
8. Same — Infeingement — TlKLAWPuii Compétition — Causes of Action —
JOINDER.
Where both the trade-mark and labels elaimed to be owned by plaîn-
tiffs were made use of by défendants in tlie «ime acts that would con-
stitute a violation of the rights of the plaintlffs as to both, plaintiffs were
entitled to join in a single suit In equity a cause of action for infringe-
ment of the trade-mark and labels and for unlawful compétition.
4 Samb— Validité of Tbadk-Mabk— Geogeaphical Kambs— Demukreb.
In a suit for infringement of certain trade-marks and labels and for
unlawful compétition, an objection that the trade-marks are invalid be-
cause consisting of geographical names, etc., cannot be considered on
demurrer.
In Equity.
Walter F. Rogers, for plaintiffs.
George Whitefield Betts, Jr., for défendants.
WHEELER, District Judge. The plaintiff the Jewish Coloniza-
tion Association is a corporation of England doing business at Paris,
in France. The plaintiff Carmel Wine Company is a fîrm in New
York organized and doing business in accordance with the statutes
of New York constituting limited partnerships. The plaintiffs Elias
Wolf, Lewin Epstein, Wolf Gluskin, and Izaak L. Goldberg are citi-
zens of Russia, and are the members of the limited partnership. The
défendants, Judah Solomon and Ascher L. Germanski, are the mem-
bers of the défendant firm, and citizens of New York. According
to the allégations of the bill, the colonization association is an owner
and dealer in wines and cognacs in Europe, and the Carmel Wine
Company is the selling agent of that corporation in this country.
The bill is brought for infringement and unfair compétition in trade
in the use of the plaintiffs' trade-mark and labels. The bill is de-
murred to.
One ground of demurrer relied upon is that the limited partnership
is a citizen itself of the state of New York, as if it was a corpora-
tion, and that, therefore, the défendants being citizens of New York,
this court has no jurisdiction, which rests in this case upon alienage
or diverse citizenship. It is not understood, however, that the mem-
bers of a firm constituted according to the statutes lose their indi-
vidual identity in the rights and business of the firm, as they do in
corporations, but it is considered that they retain their individual
rights, and act accordingly as such, and bind themselves individually
so far as they are bound by their acts at ail in this manner, and that
they, as citizens of Russia, are the plaintiffs, the same as if they
were dealing ordinarily in their own name. The plaintiffs are there-
fore ail aliens, and the défendants citizens of New York, and the
jurisdiction is well founded.
Another ground of demurrer is that the plaintiffs hâve distinct in-
terests in the trade-mark and labels, and therefore cannot be joined
in maintaining the suit, and that infringement and unfair compétition
cannot be prosecuted in the same action. The bill shows that the
tS. TJnfalr compétition, see notes to Scheuer t. Mnller, 20 G. 0. A. 165;
Lare v. Harper & Bros., 30 C. C. A. 376.
996 125 FBDBEAL REPORTEE.
plaintiffs hâve actual, although not equal, interests in the use of the
trade-mark and the labels, and that both the trade-mark and the
labels are made use of by the défendants in the same acts that would
cpnstitute a violation of the rights of the plaintiÊfs as to both. While
parties so situated might not be entitled to maintain an action at
ïaw, in equity ail those having interests involved in the suit may join
therein for the protection of such rights in the subject-matter as
théy may hâve, and that the same acts may be proceeded against
in one action, although the rights may be diverse — as, for example,
the infringeraent of separate patents by one machine.
The other ground of demurrer rehed upon, which seems to be
worthy of notice, is that the trade-marks and labels are themselves
of such a nature, geographical and btherwise, that they are not the
subject of rights to their exclusive use in this business. Whatever
there may be to this question should apparently be raised as a matter
of défense to the bill, and not by demurrer. Therefore the demurrer
should, according to thèse views, be overruled, and the défendants
be required to answer pver.
Demurrer overruled; défendants to answer over by January rule
day.
to re EUNKLE.
(Carcult Court S. D. New York. November 23, 1903.)
1. Defkaudino United States— Postal Feaod— Sufpicienct of Indictmbnt.
An IMlctment charglng that défendant, a contracter, conspired with
certain postal officiais, one of whom was charged wlth the duty of pro-
cwing supplies through; contracts let after advertisements or in open
màrket àt reasonable piices, to defraud the United States by having let
to him'a Contract Withoùt competitloii, at exorbitant priées, for articles
for which there was no immédiate neeessity, in pursuance pt which con-
spiraey thejirticles were purchased from défendant theteafter, and the
vouchet approved by one of the officiais, is sufflclent to charge an offense
under Rév. St. § 5440, tU^ S. Comp. S^. 1901, p. 3676], providing that If
two or moré pérsons consjtire to defraud the United States In any manner
or for any purpose, and one of them db any act to efCect the objecta of
the cpnsplraey, ail shallibe llable to a penalty, etc.
9. AbKKSTOF PpISONBB IN OTiHERlDlSTRIOT^ExAMINATION BBFORE COMMISSION-
ER— Indictmbnt AS> Prima Facib Case.,
Ai»' indlctment charglng on its face an offense against the govemment
constitutés a prima faèîe case on an examina tion before a United States
commissioner after accused's arrest in à district other than that in which
the Indictment is found, as autborized by Eev. St { 1014 [U. S. Oomp.
St. 1901, p. 716]. • : ; ,;
This matter cornes up on writs of habeas corpus and certiorari di-
rected to the marshal of the district who has the petitioner in cus-
tody under a warrant for removal issued by a District Judge of this
district directing his remoyal from the city of New York to Wash-
ington, D. C, to plead to an indictment.
Morris H. Hayman and Franklin Bien, for the motion.
H. A. Wisè, Asst. U. S. Atty.
T2. See Ôrlmlnal Law, vol. 14, Cent Dig. | 510,
IN EE RUNKLE. 997
LACOMBE, Circuit Judge. The petitioner, with two other per-
sons, Machen and McGregor, was indicted by the grand jury in
Washington for a violation of section 5440, Rev. St. U. S. [U. S.
Comp. St. 1901, p. 3676], which reads as follows:
"If two or more persons conspire either to commit any offense against the
Tlnited States or to defraud tlie United States in any manner or for any pur-
pose, and one or more of such parties do any act to effect the object of the
conspiracy, ail the parties to such conspiracy shall be liable to a penalty of
not more than ten thousand dollars or to imprisonment for not more than
two years, or to both fine and imprisonment in the discrétion of the court."
Upon an affidavit to the effect that such an indictment had been
found, and a certified copy of the indictment, a warrant was issued
by the United States commissioner for this District under section
1014, Rev. St. U. S. [U. S. Comp. St. 1901, p. 716], for the appré-
hension of the petitioner. Thereupon he was arrested and arraigned
before the United States commissioner, and demanded an examina-
tion. The prosecution offered in évidence a duly exempHfied and
certified copy of the indictment, and, having secured an admission
that the prisoner was the person mentioned in said indictment, rested.
The défendant moved to dismiss the complaint on the ground that
it "appears upon the face thereof the défendant was not guilty of any
offense that will warrant an indictment." He contended that the
indictment could not be considered to be évidence of the commis-
sion of the offenses charged therein, and demanded that the prosecu-
tion produce the witnesses specified in the indictment for the pur-
pose of cross-examination. Défendant, however, introduced no évi-
dence whatsoever, and offered to introduce none, on his own behalf.
The commissioner thereupon overruled defendant's objections, and
refused to require the prosecution to produce the witnesses specified
in the indictment. The subséquent disposition of the case bas been
stated supra.
Counsel for the petitioner now contends that the indictment fails
to allège any crime or act against the défendant, Runkle. It does
allège that at certain times therein specified one Machen was an
ofïicer of the United States, to wit, superintendent of free delivery;
that he occupied a position of trust in the Post Office Department,
and that during such period he was, among other things, charged
with the duty of letting contracts for postal supplies and approving
vouchers for the payment therefor; that one McGregor was, during
the period aforesaid, an officer of the United States, to wit, a clerk,'
and assigned to assist Machen ; that during the period aforesaid
Runkle, the petitioner, was a contractor desirous of furnishing ar-
ticles and supplies to the department of which Machen was superin-
tendent; that it was Machen's duty to procure such articles through
contracts let after advertisement, except in emergencies, and then
to procure the same in the open market, at reasonable priées. It
further charges that Machen, McGregor, and Runkle on a day cer-
tain, at the District of Columbia, unlawfully conspired to defraud
the United States by letting to said Runkle a contract without com-
pétition, at exorbitant priées, for articles for which there was no im^-
mediate necessity, and that in pursuance of such conspiracy such
d9S 125 FEDBBAL BŒPOBTBiB.
articles were purchased from Runkle thereafter, and as an overt act
in such conspiracy Machen approved the voucher for the pa)mient
of money to said Runkle for articles purchased as aforesaid.
The above averments are set forth at great length, with a multi-
tude of words, and conformably to the archaic methods of preparing
criminal pleadings which still prevail, but nevertheless careful exam-
ination and analysis show that thèse averments were specifîcally
and positively made. They certainly charge an offense within the
language of the section quoted, and if the averments be considered
as truthful statements of fact they sufïiciently indicate that the peti-
tioner is an ofïender against its provisions.
As to the effect of the indictment when presented as évidence of
the facts it recites, the practice in this district has been uniform for
many years. Judge Brown in Re Dana (D. C.) 68 Fed. 886, after
reviewing very many earlier décisions, says:
"The above are the only cases I hâve fotind in which the effect of an in-
dictment as évidence is considered. According to them an Indictment in an-
other district was admissible as prima facîe évidence, is not conclusive, and
cannot shut ont évidence of the défendant to show that no offense was com-
mitted by hlm within the district to which removal is sought"
The attention of the court has been called to no case requiring
any modification of this conclusion. The prima facie case made out
by the indictment, considered as évidence, has not been rebutted or
traversed by any évidence whatsoever presented on behalf of the
petitioner. Therefore, in accordance with the uniform practice in
this district, the commissioner properly held him, and the District
Judge properly issued the warrant for his removal.
The writs are dismissed.
MOESS v. FRANKLIN COAL CO.
(District Court, M. D. Pennsylvanla. November 23, 1903.)
No. 361.
1. Involcntart Bankruptct — Juhy Thial — When Demandable — Déniai.
That Pbtitioneks àke Cbbditors.
The only Issues on which a person against whom an Involuntary péti-
tion In bankruptcy has been flled is entltled of right to a jury trial are
with respect to hls insolvency and the acts of bankruptcy with which
he is charged. He is not entltled to one with respect to whether the peti-
tloners are in fact creditors, so as to be entitled to maintain the pro-
ceedings.
In Bankruptcy. Motion to lirait issues.
W, J. Hand, for petitioners.
W. S. Diehl, for respondent.
ARCHBALD, District Judge. The respondent, în its answer, dé-
nies that it is insolvent, or has committed the act of bankruptcy
charged; and further allèges that the petitioners are not entitled to
If 1. See Bankruptcy, vol. 6, Cent. Dig. § 140.
M0R8S V. FRANKLIN OOAL CO, 999
maintain thèse proceedings, not being in fact creditors. Upon ail
of thèse three issues it demands a jury trial. But as to whether the
petitioners are creditors, it is clear that it is not entitled to an^f,
unless the court sees fit to allow it. By section i8d of the bank-
ruptcy act (Act July i, 1898, c. 541, 30 Stat. 551 [U. S. Comp. St.
1901, p. 3429]):
"If the bankrupt or any of his creditors shall • * • controvert the
facts alleged in the pétition, the judge shall détermine as soon as may be the
issues presented by the pleadings without the intervention of a jury, except
In cases where a jury trial is given by this act."
Supplementing this, it is provided in section 19a that :
"A person against -whom an involuntary pétition has been filed, shall be
entitled to bave a trial by Jury in respect to his insolvency » * * and
any act of bankruptcy alleged in sueh pétition to hâve been committed, upon
filing a written application therefor, at or before the time wlthin which an
answer may be filed."
The combined resuit of thèse two sections is to give a jury trial
of right in the two instances named, but not in others ; the latter sec-
tion being entirely superfluous if it was demandable in every case.
Simonson v. Sinsheimer, 3 Am. Bankr. R. 824, 100 Fed. 426, 40 C. C.
A. 474 ; In re Christensen, 4 Am. Bankr. R. 99, loi Fed. 243. There
is nothing in section 19c in conflict with this. The right which is
there given "to submit matters in controversy, or an alleged ofïense
against the act, to a jury," according to the laws of the United States
then in force, or thereafter to be enacted, is simply a saving provision
preserving such right as to any criminal ofïense created by the act
as was necessary to meet the requirements of the Constitution ; but
leaving other controverted matters, outside of those raised by the
pleadings, which, according to section i8d, are to be determined by
the court, to be disposed of according to the prevailing procédure.
As was pointed out in Barton v. Barbour, 104 U. S. 126, 26 L. Ed.
6^2, with regard to the bankruptcy act of March 2, 1867, c. 176,
14 Stat. 517:
"In cases of bankruptcy many Incldental questions arlse In the course of
admlnlstering the bankrupt's estate, which would ordinarily be pure cases
at lavsf, and in respect of their facts trlable by jury, but, as belonging to the
bankruptcy proceedings, they become cases over which the bankruptcy court,
which acts as a court of equity, exercises exclusive control. * • • The
bankruptcy court may, and in cases peculiarly requiring such a course will,
direct an action or an issue at law to ald it in arriving at a right conclusion.
But this rests in its sound discrétion."
The motion is allowed, and the issues to be determined by the
jury are limited to the alleged insolvency of the bankrupt, and the
act of bankruptcy charged in the pétition to hâve been committed.
1000 125 FEDERAL EEPOEXEB.
MEMOEANDUM DECISIONS.
ALASKA MEXIOAN GOLD MIN. CO. v. BUENS. (Circuit Court of Ap-
peals.Ninth Circuit. October 16, 1903.) No. 954. Appeal from tlie District
Court of the United States for ttie First Division of tlie District of Alaska.
Malony & Cobb, for appellant. W. E. Orews and L. S. B. Sawyer, for ap-
pellee. Appeal dismissed, for failure to print record, under rule 23.
ANGLO-CALIFOENIAN BANK, Limited, v. EUDEY et al. (Circuit Court
of Appeals, Ninth Circuit.) No. 9J0. In Error to the Circuit Court of the
United States for the Northern District of California. Jesse W. Lilienthal,
for plalntifC in error. George W. Towle, Jr., for défendant in error. For
former opinion, see 123 Fed. 39. Pétition for a rehearing denied October 12,
1903. Motl6n to modify jfndgment argued and submitted October 19, 1903.
Judgment modifled October 20i 1903, as follows: "The judgment is reversed;
and the cause remanded to the court below for further proceedings not in-
consistent with the f oregoing opinion, with costs to the plaintifC in error."
A. P. OLZENDAM HOSIERY OO. v. LUCE et al. (Circuit Court of Ap-
peals, First Circuit. October 23, 1903.) No. 493, George R. Nutter (J. But-
ler Studley and Brandies, Dunbar & Nutter, on the brief), for plaintlfC in er-
ror. Charles B. Shattuck, for défendants in error. Before COLT and PUT-
NAM, Circuit Judges, and BROWN, District Judge.
PER CUIîlAM. The judgment of the Circuit Court is amended, so that it
will show a dlsmissal for want of allégations of the cltizenship of the défend-
ants in th^t court, without qosts, and, as thus amended, the judgment is af-
flrmed. Neithejr party recoifèrs, costs in this court
BEARDSLEY v. CITY OF LAMPASAS. (Circuit Court of Appeals, Fifth
Circuit. Novemb^r 23, 1903.) , No. . 1,260, In Error to the Circuit Court of
the United StaitpS for the Westèrh bistriCt of Texas. Ben B. Gain and J. C.
Chamberlain, foi: ;plaintifC in èrror. Robt. G. West, Thos. B. Cochran, and
Walter Acker,, for défendant; ili error. Before PAKIÏEE, -McCORMICK, and
SHELBY, Circuit Judges.
PEE CUEJAiM. The judgment of the Circuit Court is afllrmed.
BOTTSFORD et al. v: SHBA. (arciiit !Court of Appeals, Seventh Circuit.
October 7, IQQB,) N». 529, Appeal frpm tbe District Court;, pf the United
States for the Éastern District of Wisconsin. C. H. Van Alatine, for appe-
lants. H. W. Nlckerson; ÏOr'appellee. Èéfore WOODS, JENKINS, and
GROSSCUP, Circuit Judges.
PER CURIAM. This is a libel flled by Patrick Shea in the District Court
of the United States for the Eastern District of Wisconsin against the pro-
peller Osceola. The appellants intervened as owners and bonded the vessel,
■which was discharged from custody. The District Court entered a decree
for the libelant on the 4th day of March, 1898, from which the owners ap-'
pealed ^ this court, and the case was hère argued. We certifled certain ques-
tions therein to the Suprême Court of the United States, asking Its advice
thereon. The cause was there argued, and the mandate of the Suprême
MEMORANDUM DECISIONS. 1001
Court, this day flled hère, answers the first and thlrd questions submltted In
the négative, wlilch dénies the right of tlie appellee to any recovery. The
cause in the Suprême Court is reported sub nom. The Osceola, 189 U. S. 168,
23 Sup. et. 483, 47 L. Bd. 760. The mandate of the Suprême Court leares
nothing for us to do, except to proceed in conf ormity with the opinion of that
court. It Is therefore ordered that the decree of the District Court be re-
versed, and that the cause be remanded to that court, with the direction to
dismlss the libel.
CABLE V. ENGLBMAN et al. (Circuit Court of Appeals, Blghth Circuit.
October 12, 1903.) No. 1,994. Appeal from the United States Court of Ap-
peals for the Indian Terrltory. Morris & Hayes and Gilbert & Gilbert, for
appellant. H. M. Wolverton, John Guest, and Potter & Potter, for appellees.
Docketed and dismissed, with costs, pursuant to rule 16, on motion of coun-
sel for appellees
CENTRAL R. & BANKING CO. OF GEORGIA v. FARMERS' LOAN &
TRUST CO. OF NEW YORK et al. (Circuit Court of Appeals, Fourth Cir-
cuit. November 5. 1903.) No. 460. Appeal from the CSrcult Court of the
United States for the District of South Oarollna. Augustlne T. Smythe and
A. M. Lee, for appellant. Henry O. Ounningham and Henry A. M. Smith,
for appellees. Before GOFF, Circuit Judge, and MORRIS and KELLER, Dis-
trict Judges.
KELLER, District Judge. This case comes up on an appeal from a décré-
tai order entered on the 3d day of March, 1902, dismissing the intervention
of the Oharleston & Western Carollna Railway Company. In the record in
this case appears the elaborate opinion of the learned Circuit Judge who
trled this case In the court below, and as that opinion contains a full state-
ment of the material facts, and as Its conclusions are approved by this court,
we adopt that opinion (113 Fed. 405) as the opinion of the court herein. The
decree of the Circuit Court of the United States for the district of South
Carolina dismissing the intervention of the Charleston & Western Oarollna
Railway Company is affirmed.
CITIZENS' LIGHT & POWER CO. v. SEATTLE GAS & ELECTRIC CO.
(Circuit Court of Appeals, Ninth Circuit. September 15, 1903.) No. 974.
Appeal from the Circuit Court of the United States for the Northern Division
of tbe District of Washington. H. R. Clise, John B. Hart, Harold Preston,
L. 0. Gilman, and E. M. Oarr, for appellant. Samuel HllI, for appellee. No
opinion. It appearing that, slnce the taking of the appeal, the complainant
abandoned its proceedings against the appellant, etc., the order of Circuit
Court (123 Fed. 588) granting Injunction is reversed, with costs to the appel-
lant.
COLER v. CITY OF LAMPASAS. (Circuit Court of Appeals, FIfth Cir-
cuit. December 14, 1903.) No. 1,270. Appeal from the Circuit Court of the
United States for the Western District of Texas. Ben B. Gain, for appellant.
Kobt. G. West. Thos. B. (3ochran, and Walter Acker, for appellee. Before
PARDEE, McCORMICK, and SHELBY, Circuit Judges.
PEB CURIAM. As to the ownership or possession of the original water-
works in the city of Lampasas, the clalm of the appellant bereia is without
equity. The decree of the Circuit Court is affirmed.
DAU6HBRTY et al. y. BROWN. (Circuit Court of Appeals, Eighth Cir-
cuit August 17, 1903.) No. 1,972. In Error to the CSrcuIt Court of the
1002 125 rBDHBAIi BEFOBTBS,
United States ftw lie Western District o( Missouri. W. D. Tatlow, Cl W.
Hamlln, and John D. Porter, for défendant in error. Writ of error docketed
and dismissedi with costs^ pursuant to rule 16, ea motion of défendant la ec^
ror.
DIMMICK^^: tlNITED STATES. (Olreuit Court of Appéals, Ninth Cir-
cuit. October 27, 1903.) No. 887. George D. ColUns, for plaintlft In error.
Marshall B. Woodworth, for tbe United States. No opinion. Motion for »■
versai of Jadgment denled.
EDWARDS T. SOUTHERN BBLL TELEPHONE ft TBLEGRAPH CO.
(Circuit Court of Appeals, Fifth Circuit. October 17, 1903.) No. 1,292. In
Error to the Circuit Court of the United States for the Northern District of
Georgla. Reuben R. Arnold, for plaintiff in error. W. S. McHenry, for de-
fendant In error. Before PARDEE, McOORMICK, and SHELBY, Circuit
Judges;
PER CURLAM. Tbe Judgment of tbe Circuit Court is afflnued.
THE EUDORA. (Circuit Court of Appeals, Thlrd (îlrcult October 12,
1903.) No. 26. Appeal from the District Court of the United States for the
Eastern District of Pennsylvania. J. H. Brinton, for appellants. Horace L.
Oheyney, for appellee. Before ACHESON, DALLAS, and GBAY, Circuit
Judges. ;'
PER CURIAM:; In this case we çertifléa to the Suprême Court the fol-
lowing questions: First Is the act of Corigress of Decémber 21, 1898 (30
Stat 755, c. 28 [U. S. Comp. St 1901, p. 3079]), properly applicable tO the con-
tract in thls case? Second: Undèr tbe agreed statement of facts above set
forth, upon a libel fllefl by said seaméii, after the completion of the voyage,
agalnst the BrltiSh' vessel, to recover wàges ■which were not due to them
under the terms of tbelr contract or under the law of Great Brltaln, -were the
libelants entltled to a decree agalnst the vessel? The mandate of the Su-
prême Court (23 Sup. Cît. 821, 47 L. Ed7 1002)ohas come down to us, certlfylng
thftt In tbe opinion of that. court "tbe questions certlfled must each be an-
rwered In the affirmative." AcCordlligly "we hold that tlie District Court erred
In dlsmlsslng the Hbel. The decree <3 the, plstrlct Court (110 Fed. 430) Is re-
yersed, and the causé Is remanded to th^t court for furtber proCeedtngs lu
accordance vritb tbe opinion of the Suprême Court.
FARREL et al. ▼. BOSTON & M. OONSOL. COPPER & SILVER MIN. CO.
(rarcult Court of Appeals, Ninth Circuit October 5, 1903.) No. 965. Appeal
from the Circuit Court of the United States for the District of Montana. H.
A. Seymour and Jobn H. Hilleri fojr appellants. Upon motion of counsel for
appellants, tbe appeal la dlsmissed.
HARGADINE-McKlTTRICK DRY GOODS CO. et al. T. BRADLBY. (Cir-
cuit Court of ' Appeals, Eighth Circuit Séptember 19, 1903.) No. 1,965. In
Error to the United States Court of Apiieals for tbe Indlan Terrltôry. W. A.
Ledbetter, for plaintlffs In error. W. F. Bowman, for défendant in error.
Motion of plalntlfCs In error for leave to flle and docket record denied. Wrtt
of error docketed and dismlssed, wltb costs, pursuant to rule 16, on motipn
ot défendant tii erroh
HBMORANDUM DECISIONS. 1003
INSLEY V. GARSIDB et al. In re SHARIOK. (Circuit Court of Appeals,
Nintli arcuit. October 22, 1903.) No. 989. Malony & Cobb, for appellant.
Charles B. Marks and Lewis P. Shaekieford, for appellees. No opinion. De-
cree of court below aiBrmed, with costs.
THE JAMES TUFFT. (Circuit Court of Appeals, Ninth Circuit. October
14, 1903.) No. 992. Appeal from the District Court of tlie United States for
the District of Hawaii. T. C. Van Ness and L. A. Kedman, for appellants.
Upon filing of stipulation of counsel tlierefor, and upon motion of counsel, the
appeal is dismissed; T. McCants Stewart signing stipulation as counsel for the
appellee.
JOKGENSEN v. YOUNG et al. (Circuit Court of Appeals, Ninth Circuit.
NoTember 6, 1903.) No. 972. In Error to the District Court of the United
States for the First Division of the District of Alaska. John G. Heid and
A. K. Delaney, for plaintifC in error. R. W. Jennings and L. S. B. Sawyer,
for défendants in error. Motion of défendants in error to dismiss granted,
and cause dismissed.
KILPATEICK et al. v. SEVEEAIN. (Circuit Court of Appeals, Eighth Cir-
cuit. October 12, 1903.) No. 1,981. In Error to the Circuit Court of the
United States for the District of Nebraska. T. J. Mahoney, N. K. Griggs,
Alfred Haziett, and Fulton Jack, for plaintifEs in error. Smyth & Smith, for
défendant in error. No opinion. Reversed, at costs of plaintiffs in error, per
stipulation of parties, and remanded to the Circuit Court, with directions to
dismiss the case on the merlts, with préjudice to any further action thereon.
MBXIOAN CENT. ET. CO., Limited, v. EICHMOND. (Circuit Court of
Appeals, Fifth Circuit. November 23, 1903.) No. 1,291. In Error to the ar-
cuit Court of the United States for the Western District of Texas. Waters
Davis and T. A. Falvey, for plaintlff in error. Geo. E. Wallace, for défendant
In error. Before FARDEE, McCORMIOK, and SHELBY, Circuit Judges.
PBE CUEIAM. In this case we flnd no réversible error, and the judgment
of the Circuit Court is afflrmed.
In re MEYEE. (Circuit Court of Appeals, Ninth Circuit. October 16, 1903.)
No. 1,005. George D. CoUins, for petitioner. Motion for leave to flle pétition
granted, and pétition filed. Thereupon the pétition was denied. Further ap-
peal allowed to the Suprême Court.
MOBILE TRANSP. CO. v. CITY OF MOBILE et al. (CHrcult Court of Ap-
peals, Fifth Circuit. November 23, 1903.) No. 1,257. Appeal from the Cir-
cuit Court of the United States for the Southern District of Alabama.
Frederick G. Bromberg, for appellant. Harry T. Smith and Gregory L. Smith,
for appellees. Before FARDEE, McOORMICK, and SHELBY, Circuit Judges.
PER CÎURIAM. After a careful examination of this case and the very ex-
haustive briefs filed, we are of opinion that the leamed judge of the Circuit
Court rendered the proper décision, and his decree Is afflrmed.
MONTANA ORE PUECHASING CO. et al. v. BUTTE & BOSTON CONSOIi.
MIN. CO. (Circuit Court of Appeals, Ninth arcuit October 20, 1903.) No.
1004 125 FEDEÈkli 'EEÎ'ORTBB.
V
1;0(36. PettîlQn for writ of supersedeàs dlrected to the Circuit Court of the
United States for the District of Montana to stay exécution of decree, etc.
Jolin J. McHatton and Jalnes M. Denny, for petitioner. Crittènden Thornton,
for respondent No opinion. Pétition denied.
MOORE et al. T. DALTON et al. (Circuit Court of Appeals, Ninth Circuit.
October 28, 1903.) No. 1,009. In Brror to the District Court of the United
States for the First Division of the District of Alaska. Lorenzo S. B. Sawyer,
fôr défendants in error. Upon motion of Mr. Sawyer, causé docketed on cer-
tiflcate of the clerk of the District Court, under ruie 16, and dismissed.
MOOBE et al. V. DALTON et al. (Circuit Court of Appeals, Ninth Circuit
November 9, 1Ô03.) No. 1,009. In Error to the District Court of the United
States for the First Division of the District pî Alaska. Charles B. Marks, for
plaintiffs in error. L. S. B. Sawyer, for défendants in error. Motion to va-
cate judgment dlsmissing writ of error and to recall mandate denied
NATIONAL R. CO. OF MEXICO v. UNITED STATES. (Circuit Cîourt of
Appeals, Fifth Circuit. November 23, 1903.) No. 1,259. In Error to the Cir-
cuit Court of the United States for thé Eastern District of Texas. Thos. W.
Dodd, for plalntiflf in error. M. C. McLemore, for défendant in error. Before
FARDEE, McOORMIOK, and SHBLBT,: Circuit Judges.'
PER CURIAM. As by wrltten stipulation a jury was waived in this case,
the flnding of the court vras gênerai, and no bills of exceptions were taken
to the rulings of the court âvring the progregs of the trial. The record
présents no question to this court for review. Rev. St. §§ 649-700 [U. S.
Comp. St. 1901, pp. 525, 570]. The Judgment of the Circuit Court Is afflrmed.
NORTHERN PAC. RY. CO. v. DENSE. (Circuit Court of Appeals, Ninth
Circuit. November 16, 1903.) No. 920. In Error to the Circuit Court of the
United States for the Northern Division of the District of Washington.
James P. McElroy and B. ^. ^Grosscup, for plaintif!: in error. James Hamilton
Lewis, for défendant la, error. Pursuant to stipulation of couasel, cause dis-
missed.
NORTHERN PAO. RY. CO. v. PALMER. (Circuit Court of Appeals, Ninth
Circuit. November 16, 1903.) No. 919. In Error to the Circuit Court of the
United States for the Northern Division of the District of Washington.
J-ames F. McElroy and B. S. Grosscup, for plaIntifC in error. James Hamilton
Lewis, for défendant In error. Pursuant to stipulation of counsel, cause dis-
missed.
RUCKER, CtilleCtor, v. OOCO^CGLA CO. (Circuit Court bf Appeals, Fifth
Circuit. October 17, 1903.) No. 1,239. ' In Error to the CifcUit Court of the
United States for the Northern District of Georgia. E. A. Angier, Geo. L.
Bell, and C. D. Camp, for plalntiff in error. Reuben E. Arnold, for défendant
in error. Before FARDEE, McCORMIOK, and SHELBY, Circuit Judges.
PEU CUEIAM. As we flrid that the taxable character of Coco-Cola, under
the revenue act, wa« settled' ativersely to the United Statea in the former ad-
MEMORANDUM DECISIONS 1005
judicatlon (117 Fed. 1006, 54 C. C. A. 248), duly pleaded on the trial, the
record herein présents no réversible errer, and the judgment of tlie Circuit
Court is afBrmed.
In re SEAT BROS. DUNSON v. S. LOWMAN & CO. (Circuit Court of
Appeals, Fifth Circuit December 14, 1903.) No. 1,146. Appeal from the
District Court of the United States for the Northern District of Georgia.
John M. Slaton and Benj. Z. Phillips, for appellant. Wm. P. Hill, for ap-
pellees. Before PARDEK, McCORMIOK, and SHBLBY, Circuit Judges.
PER CTJRIAM. The décision in this case bas been withheld to await ac-
tion of the Suprême Court on appeal in Kahn v. Cône Export & Commission
Company, 115 Fed. 290, 53 C. C. A. 92, decided by thls court March 15, 1902,
on appeal from the District Court, whose opinion is found In 111 Fed. 518,
and whereln the same question of préférence was involved; and, said appeal
having been dismissed, we now afflrm the decree of the District Court in this
case (113 Fed. 969), .with costs.
SOUTHERN BANK OF STATE OF GEORGIA V. RUCKER, Oollector.
(Circuit Court of Appeals, Fifth Circuit. October IT, 1903.) No. 1,233. In
Error to the Circuit Court of the United States for the Northern District of
Georgia. George A. Mercer and M. M. Jackson, for plaintilï in error. E. A.
Angier, Geo. L. Bell, and C. D. Camp, for défendant in error. Before FAR-
DEE, McCORMICK, and SHBLBY, Circuit Judges.
PER OURIAM. The judgment of the Circuit Court is afflrmed.
SULLIVAN V. MILLIKEN. (Circuit Court of Appeals, Fifth Circuit No-
vember 23, 1903.) No. 1,229. In Error to the Circuit Court of the United
States for the Nortliem District of Plorida. John H. Jones and Thomas H.
Watts, for plaintiff in error. William A. Blount and A. C. Blount, Jr., for
défendant in error. Before PARDEE, McCORMIOK, and SHELBY, Circuit
Judges.
PER CURIAM. Since the argument of thls case we hâve carefully
examined the record and brlefs, and we bave eome to the conclusion that
no réversible error is shown by the record. The judgment of the Circuit
Court, therefore, is afflrmed.
SWBETSER, PBMBROOK & CO. v. ABBOTT. (Circuit Court of Appeala,
Eighth Circuit. September 7, 1903.) No. 1,939. Appeal from the District
Court of the United States for the Eastem District of Missouri. Nathan
Frank, for appellants. M. N. Sale, for appellee. Dismissed, pursuant to the
stipulation of the parties, at the costs of appellee.
THE TALLAHASSEB. THE SENATOR SULLIVAN. (Circuit Court of
Appeals, Second Circuit. November 7, 1903.) Nos. 179, 180. Appeals from
the District Court of the United States for the Bastern District of New York.
Eugène Carver. for appellant. Herbert Barry, for appellee. Before LA-
COMBE, TOWNSEND, and OOXB, Circuit Judges. No opinion. Afflrmed,
on opinion of District Court 117 Fed. 176.
TAYLOR V. DBCATUR MINERAL & LAND CO. (Circuit Court of Ap-
peals, Fifth Circuit December 14, 1903.) No. 1,115. Appeal from the (3ir-
1006 125 FBDBBAIj BBFOBTEiB.
cuit CJourt of tbe United States for the Northern District of Alabama. Mllton
Humes, for appellant ' ILawi'ence Cooper, for appellee. Dlsmlsséd, as per
stipulation.
UNITED STATES ex rel. JOHNSTOWN MIN. CO. T. CIRCUIT COURT
OF UNITED STATES FOR DISTRICT OF MONTANA et al. (Circuit Court
of Appeals, NInth Circuit. NoVember 9, 1903.) No. 1,011. Pétition for Writ
of Oertiorarl to Stay Execution of Order of Circuit Court. R. B. Smith, for
petitloner. Crittenden Thornton and J. F. Rlley, for respondent. No opinion.
Application denied.
UNITED STATES ex rel. MONTANA ORB PURCHASING CO. et al. v.
CIRCUIT COURT OF UNITED STATES FOR DISTRICT OF MONTANA et
al. (Circuit Court of Appeals, Ninth Circuit. October 20, 1903.) No. 1,007.
Pétition for Writ of Certiorarl to the Circuit Court of the United States for
the District of Montana. John J. McHatton and James M. Denny, for peti-
tioners. Crittenden Thornton, for respondent No opinion. Pétition denied.
AMERICAN ALKALI 00. t. SALOM. (Circuit Court, B. D. Pennsylvania.
December 11, 1903.) No. 67. Burr, Brown & Lloyd, for plSlntifl. Joseph O.
Fraley and Richard C. Dale, for défendant*
DALLAS, Circuit Judge. The learned counsel of the plalntifC, in their brief
in support of their motion for a new trial, asked "that the court wlll wrlte
an opinion whlch wlll not only détermine the law of this case, but wlll aiso
furnlsh counsel a guide as to the law in the many other cases dépendent upon
it"; and upon the oral argument I remarked that this request was in" ac-
cordance wlth my usual prâctice ànd would be complied wlth. But upon re-
flection I hâve corne to the conclusion that no practlcal resuit would be
attained by elther the réitération or retraction by myself of the views I en-
tertained upon the trial. As Is sald In the brief to whlch I hâve referred, the
court ruled upon a very obvlQus theory of the case, and no opinion other than
that of the appellate court oan leally détermine the law wlth respect to it,
or fumlsh a guide whlch could be çonfldently followed upon the trial of the
many others whlch are sald to be dépendent upon It. The plalntlft has pre-
sented and wlll be aUowed a blll of exceptions, and is therefore in position
to be heard by the Court of Appeals at its ensuing March term; whereas, if
a new trial were awarded, the cause could not be brought before that tribunal
by elther party untll the followlng September. This delay, I thlnk, should
be avolded. The plalntlff's rùle for a new trial Is discharged.
MORBHBAD v. STRIKER et al. (Circuit Court, S. D. New York. August
5, 1903.) John D. Townsend, James B. Ludlow, and Max J. Koehler, for the
motion. Louis Marshall and John F. Doyle, opposed.
LACOMBE, Circuit Judge. Bésides the papers speclflcally referred to, there
may be flled wlth this décision the varions affldavits submltted by the ex-
receiver, Barse, and also the aj^idavlt of Haskell, supplementary to hls tes-
timony. Counsel Cor respective parties wlll see to it that ail papers whlch
elther party conçoives bear upon :the question be recited in the order. There
is great conflict as to the facts between Barse and Haskell; but, as was In-
tlmated In the mémorandum flled lune 3, 1902, the court does not deem It
necessary to décide ail such quesHons. It clearly appears that Roser and
Haskell entered Into the cpntracts proceeded upon, and that the stock , sold
by order of the court passed Into the possession of Haskell. That he en-
tered Into some Improper agreement wlth Barse (If be dld so, Barse denlea
MEMORANDUM DECISIONS. 1007
it) that he should disregard the tenns of Ms contract, which was really wlth
the court, and become the instrument whereby Barse, recelver, should tum
over the stock without payment therefor to Barse personally, selllng the same
to outsiders for money not turned In to the court's offlcer, seems Immaterial.
(1) The application of Roser and Haskell to be relleved from their contracts
Is denied. (2) The exceptions to master's report are overruled. (3) The
master's report Is eonfirmed. (4) The order flled March 12, 1902, Is vacated
and set aside, and a new order in same terms (except as to leave to move
to be relleved) Is made as of thls date, so as to avold any question as to tlme
for appeal having explred. (5) Twenty days' tlme Is given (after entry of
order on thls décision) to comply wlth the provisions of the new order as to
payment. (6) And In the event of default exécution wlll Issue against the
estate of Roser, and against any property of Haskell, and attachment for con-
tempt against Haskell. (7) Should an appeal from thls order be taken within
said 20 days, exécution of said order will be suspended until décision of Cir-
cuit Court of Appeals.
In re BATES. (District Court, D. Connecticut.) Spécifications of Objec-
tions to Discharge.
TOWNSBND, District Judge. As to the first ground of objection, the
bankrupt testifled on hls examination tbat he paid $100 to hls attorney, while
in hls schedule he stated that no sums were paid to counsel. The référée
finds that the $100 was really paid by bankrupt's father, by check made to
the order of bankrupt's attorney, and delivered to the attorney either by the
father personally or by the hand of the bankrupt. The référée finds that
there was no intention to give false testimony in the case, and that the bank-
rupt was not under obligation to Include said $100 In hls schedule; and I
concur wlth the référée, and hold that no criminal Intent is to be inferred
from the facts brought ont. As to the other spécification, the descrlbing a
prlvate as a partnership indebtedness, I concur In the opinion of the référée
that It was an erroneous statement, from whlch the bankrupt obtained no
advantage, and which was purely due to oversight and mistake, and not due
to criminal Intent. The exceptions to the referee's report are overruled, and
the report is accepted, and the discharge granted.
End oir Casbs in Yoi* I8S,
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