In New York Life Ins. Co. v. Statham, 93 U. S. 24, 30, 23 L. Ed. 789, the court said:

“It must be conceded that promptness of payment is essential in the business of life insurance. All the calculations of the insurance company are based on the hypothesis of prorapt payments. They not only calculate on the receipt of the premiums when due, but on compounding interest upon them. It is on this basis that they are enabled to offer assurance at the favorable rates they do. Forfeiture for nonpayment is a necessary means of protecting themselves from embarrassinent. Unless it were enforceable, the business would be thrown into utter confusion. It is like the forfeiture of shares in mining enterprises, and all other hazardous undertakings. There must be power to cut off unprofitable members, or the success of the whole scheme is endangered. The insured parties are associates in a great scheme. This associated relation exists whether the company be a mutual one or not. Each is interested in the engagements of all; for, out of the coexistence of many risks arises the law of average, which underlies the whole business. An essential feature of this scheme is the mathematical calculations referred to, on which the premiums and a nounts assured are based. And these calculations, again, are based on the assumption of average mortality, and of prompt payments and compound interest thereon. Delinquency cannot be tolerated nor redeemed, except at the option of the company. This has always been the understanding and the practice in this department of business. Some companies, it is true, accord a grace of 30 days, or other fixed period, within which the premium in arrear may be paid, on certain conditions of continued good health, etc. But this is a matter of stipulation, or of discretion, on the part of the particular company. When no stipulation exists, it is the general understanding that time is material, and that the forfeiture is absolute if the premium be not paid. The extraordinary and even desperate efforts sometimes made, when an insured person is in extremis, to meet a premium coming due, demonstrates the common view of this matter. The case, therefore, is one in which time is material and of the essence of the contract. Nonpayment at the day involves absolute forfeiture, if such be the terms of the contract, as is the case here. Courts cannot with safety vary the stipulation of the parties by introducing equities for the relief of the insured against their own negligence."

In Mutual Life Ins. Co. v. Hill, 193 U. S. 551, 559, 24 Sup. Ct. 538, 541, 48 L. Ed. 788, the court said:

"Under those circumstances the insured failed to pay, and continued such failure for four years prior to his death. Yet, notwithstanding his failure to perform his part of the contract—and performance by the insured underlies the obligation of the insurance company to perform on its part—this action was brought to compel the same performance by the company that would have been due if he had performed. It is simple justice between two parties to a contract containing depending stipulations that neither should be permitted to exact performance by the other without having himself first performed. It is true cases arise in which one party is enabled to take advantage of some statutory provision and exact compliance from the other without having himself first complied, and courts may not ignore the scope and efficacy of such statutory provisions, but, nevertheless, a judgment for failure to perform against one party in favor of the other, when the latter was the first delinquent, is offensive to the sense of righteousness and fair dealing. We have had before us a series of cases coming from the same jurisdiction in which, when the insured had for a series of years neglected to pay their insurance premiums or perform their parts of the insurance contract their heirs or beneficiaries have, on their deaths, sought to obtain judgments against the insurance company for the amounts which would have been due on the policies if the insured had performed their stipulations in respect to the payment of premiums. Courts have always set their faces against an insurance company which, having received its premiums, has sought by technical defenses to avoid payment, and in like manner should they set their faces against an effort to exact payment from an insurance company when the premiums have deliberately been left unpaid."

The judgment of the Circuit Court is affirmed.


(Circuit Court of Appeals, Ninth Circuit. June 19, 1906.)



Where complainant appropriated certain water rights and began the construction of a ditch, flume, and pipe line in 1901, its right to acquire , a right of way over certain mining claims located in 1902 was not affected by the fact that the ditch was not completed over such located ground until after such location, provided proper diligence was used in constructing the ditch.

[Ed. Note. For cases in' point, see vol. 48, Cent. Dig. Waters and


Under Alaska Code, c. 22, § 204 (31 Stat. 522), declaring that the right of eminent domain may be exercised in behalf of the following public uses, to wit, canals, ditches, flumes, aqueducts, and pipes for public transportation, supplying mines and farming neighborhoods with water, and for roads, tunnels, ditches, flumes, pipes, and dumping places for working mines, a corporation organized for the purpose of working mines and maintaining an artificial waterway had power to condemn a right of way for the purpose of carrying water to work mining claims owned by it, claims owned by others, and for private and public uses.

[Ed. Note.-For cases in point, see vol. 18, Cent. Dig. Eminent Do


Where a corporation entitled to condemn a right of way over de fendants' mining claim for a water ditch or flume constructed the ditch over defendants' land without instituting condemnation proceedings, or paying damages for such right of way without objection or protest on defendants' part for a period of two years, and defendants thereafter refused to sell a right of way, but offered to sell their entire claims, they were not authorized to treat the construction of the ditch as a trespass, and destroy the same in the ordinary course of their mining


Where complainants constructed a water ditch or flume across de fendants' mining claims without objection, and without condemning the right of way to which they were entitled, defendants being only entitled to damages for the construction of such ditch, complainants were entitled to an injunction restraining defendants from continuing to destroy the same pendente lite in the course of defendants' mining operations.

[Ed. Note.-For cases in point, see vol. 27, Cent. Dig. Injunction, $ 102.) Appeal from the District Court of the United States for the Second Division of the District of Alaska.

This is an appeal from an order dissolving a temporary restraining order, and refusing to grant an injunction pendente lite. The suit was commenced September 18, 1905. The complaint, among other things, alleges, in substance, that plaintiff was and had been since February 27, 1902, a California corporation, doing business in Alaska, and had complied with all the laws of the United States relating to foreign corporations doing business in Alaska; that by its charter “plaintiff was and is authorized and empowered, among other things, to own and operate mines and mining claims within the district of Alaska, to own and appropriate water and water rights for private and public use, and to build canals, ditches, flumes, and aqueducts, and to lay pipes for supplying its mines with water, and for the general use of the public in the district of Alaska"; that since June, 1902, it had been continuously engaged in said business, and was at the times mentioned in the complaint “the owner of, in the possession of, and entitled to the possession of, a ditch, flume, and pipe line extending from Nome river to Anvil creek, in the Cape Nome precinct, district of Alaska ; that the construction of said ditch, flume, and pipe line was commenced in the year 1901 by plaintiff's grantors, and completed by plaintiff in the year 1903”; that the capacity of said ditch from Nome river to Hobson creek was 2,100 miners' inches of water, and from Hobson creek to Anvil creek 5,000 miners' inches, and the construction cost, including laterals and pipes, exceeded $350.000; that since said ditch was completed in 1903 plaintiff had continuously used all the available waters of Nome river to the full capacity of said flume and pipe line from the intake on Nome river, some 30 miles, to Anvil, Glacier, and Dexter creeks and vicinity, where the water was used partly in working placer mining claims owned and leased by plaintiff, and partly farmed out for hire to be used by other persons, corporations, and the public generally for mining purposes; that on September 11, 1905, “the defendants, their servants, agents, and employés, wrongfully and unlawfully, at a point on plaintiff's ditch between Divide creek and Dorothy creek, both tributary to Nome river, by means of water under pressure above plaintiff's ditch, washed out, broke, and destroyed plaintiff's said ditch, without any right whatever upon the part of the defendants so to do"; that plaintiff repaired its said ditch, and commenced again to use the same, and that defendants threatened to again destroy it at the same and other points; that the use of the water in said ditch at the points where the same was destroyed was $5,000 per day, and if interfered with plaintiff would be damaged $5,000 per day; that said damage was irreparable and a continuing one, and the defendants were insolvent; that the plaintiff had no plain, speedy, or adequate remedy except by injunction, enjoining the alleged wrongful acts of defendants.

The complaint also contained the following additional averments: "That the climatic and other conditions in and around that portion of the district of Alaska wherein plaintiff's ditch, flume, and pipe line is situated are such that the lands therein lying are valuable only for mining, and are useful for no other purpose whatsoever, and mining is the one, sole, exclusive, and only productive industry in and around the aforesaid portion of the district of Alaska; that the aforesaid ditch, flume, and pipe line of plaintiff is the only available one for conducting the said waters of Nome river to the mining localities aforesaid, and many of the mines in said locality owned and operated by plaintiff and the public generally are entirely dependent upon said source of water supply, and without the same would become utterly worthless and unprofitable as mining claims; that plaintiff is under contract for the furnishing of water from its said ditch, flume, and pipe line to numerous consumers, and will render itself liable in damages to said consumers if prevented from obtaining a supply of water from Nome river through its said ditch, and will also be prevented from working, sluicing, and hydraulicing the placer mining claims owned and leased by said plaintiff.”

Upon the filing of said complaint, accompanied by affidavits supporting its allegations, the court issued an order for the defendants to show cause why an injunction pending the determination of the action should not be granted, and in the meantime the defendants were enjoined from interfering with said ditch. No answer was filed to the complaint. A hearing was had upon affidavits and depositions of the respective parties, and upon such hearing the court dissolved the temporary restraining order, and refused to issue an order of injunction pendente lite. Only three of the mining claims which defendants owned were located in the month of March, 1902, the other claim, the Moonshine, was not located until after the completion of the plaintiff's ditch. Other facts are stated in the opinion.

The statute of Alaska, which is referred to in the opinion, reads as follows: "The right of eminent domain may be exercised in behalf of the following public uses *

canals, ditches, flumes, aqueducts, and pipes for public transportation, supplying mines and farming neighborhoods with water. * * * (5) Roads, tunnels, ditches, flumes, pipes, and dumping places for working mines.” 31 Stat. p. 522, c. 22, § 204.

W. H. Metson and Ira D. Orton (Charles S. Wheeler, of counsel), for appellant.

P. C. Sullivan (W. A. Gilmore, of counsel), for appellees.

Before GILBERT and ROSS, Circuit Judges, and HAWLEY, District Judge.

HAWLEY, District Judge, after making the foregoing statement, delivered the opinion of the court.

Did the court err in dissolving the temporary restraining order and in refusing to grant an injunction pendente lite? It is admitted that the preliminary order in the first instance was properly issued; that a clear prima facie case was established by the complaint and affidavits filed in support thereof. The rule to show cause why it should be dissolved was heard upon the complaint, and upon affidavits and depositions offered by the respective parties.

It is contended by the appellees that upon the facts presented at the hearing it affirmatively appears that the appellant constructed its ditch over the mining claims owned by appellees without proceedings had to condemn the right of way for a ditch over said claims, without agreement, license, or other legal right, and that appellant's entry upon and use of appellees' property being wrongful, appellant was a trespasser upon appellees' domain. The court below sustained this view, and further held upon the facts that appellees were the owners of valuable mining claims which were trespassed upon by appellant; that the injuries of which appellant complains were committed by the appellees while “in the usual and ordinary course of their mining operations, and upon the land owned by some of them,” and that they, being prior in point of time, were prior in right, and dissolved the restraining order.

It will be observed from the statement of facts that the location of the mining claims was made March 21, 1902, and that the construction of the ditch, flume, and pipe line of appellant was commenced in 1901 and completed in the year 1903. The rights aco ed by appellant did not depend upon the completion of the ditch, if proper diligence was used in its construction.

In Osgood v. El Dorado W. & G. Co., 56 Cal. 573, 581, the court, in construing the act of Congress of July 26, 1866, c. 262 (14 Stat. 251), relative to the prior appropriation of water on the public land, and the amendatory act of July 9, 1870, c. 235 (16 Stat. 217), said:

"The defendants' grantors, therefore, had the right to appropriate the water in controversy, and if they acquired a vested right therein prior to the issuance of the plaintiff's patent, the plaintiff's rights, by express statutory enactment, are subject to the rights of the defendant. This, of course, depends on the question whether the grantors of the defendant made a valid appropriation of the water, and this, in turn, on the question whether they gave proper notice of their intention to appropriate it, and, if so, whether they prosecuted the work in that behalf with reasonable diligence. If they gave sufficient notice, and prosecuted the work with reasonable diligence, there can be no doubt that, on the completion of the work, their rights related back at least to the commencement of the work."

In Flint & P. M. Ry. Co. v. Gordon, 41 Mich. 420, 430, 2 N. W. 648 (a

controversy as to the right of way for a railroad and the rights of a homestead entryman), the court said:

"The homestead entry vested no title in the defendant, but it gave to him under the law a right of possession which he might perfect by continued occupancy and improvement. If he failed so to perfect it, what right he had reverted to the United States. If he perfected it, he was entitled to a patent, which related back to the time when his entry was made, and took date with it. French v. Spencer, 21 How. 228, 16 L. Ed. 97; Shepley v. Cowan, 91 U. S. 337, 23 L. Ed. 424; Johnson v. Ballou, 28 Mich. 379. * * But in this case there is what seems at first blush to be a conflict of grants. The defendant made his entry first, but the complainant completed its road over the land before the defendant obtained his patent. To acquire the benefit tendered by the act of 1866, nothing more was necessary than for the road to be constructed. No patent is required in such cases, but the offer and the acceptance, taken together, are equivalent to a grant. The complainant, therefore, by accepting the offer of the government, obtained a grant of the right of way, which was at least perfectly good as against the government, and must be held to be perfectly good as against this defendant unless his patent antedates it by relation, or unless the equities springing from his possession and improvement would preclude any right being acquired adversely.”

These general principles are well settled. It may be that the record does not present this question sufficiently to have it determined, but, so far as the record goes, it tends to show that the appellant was prior in time and prior in right. We have simply referred to this matter for the purpose of directing attention to the fact that it was overlooked by the court below, and that the court proceeded upon an erroneous theory of the case.

Can appellant sustain its right to an injunction; it being shown that no proceedings were instituted by it to condemn the right of way for its ditch ? Appellees claim that appellant could not condemn the land for the purpose of working other mining claims owned by it, and for working mining claims owned by others, because it was but an individual private use, and was not for a public use.

The decision of this court in Miocene Ditch Co. v. Lyng (C. C. A.) 138 Fed. 544, 548, fully sustains the proposition that appellant could have exercised the right of eminent domain, and condemned the right of way over the land claimed by appellees. The court in that case, after stating that “the right of eminent domain can only be exercised in behalf of a public use authorized by law, and in the taking of property necessary to such public use the complaint or petition in such proceedings must show plainly and affirmatively the existence of the statutory authority for the public use, and the necessity of the property for such use," and after reviewing the authorities, and holding that the complaint was defective in not "showing a public need for the proposed ditch,” said:

« ForrigeFortsett »