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ogy between the two cases holds good, and APPEAL from the Circuit Court of the United

what would be constitutional or unconstitu

tional in the one case would be constitutional
or unconstitutional in the other.

States for the District of New Hampshire. The history and facts of the case sufficiently appear in the opinion of the court.

Messrs. J. W. Fellows and Frank W. Hackett, for appellee, in support of the motion to dis Mr. F. A. Brooks, for appellants, contra.

Mr. Chief Justice Waite delivered the opin [515 ion of the court:

In the present case, the tax (if it was a tax)
was laid upon the goods before they had left
the factory. They were not in course of ex-miss.
portation; they might never be exported;
whether they would be or not would depend
altogether on the will of the manufacturer.
Had the same excise which was laid upon all
other tobacco manufactured by the plaintiffs
been laid on the tobacco in question, they
could not have complained. But it was not.
A special indulgence was granted to them, in
common with others, in reference to the par-
ticular tobacco which they declared it to be
their intention to export. With regard to that,
in order to identify it, and to protect the gov-
ernment from fraudulent practices, all that
was required of the plaintiffs, was to affix a
twenty-five cent stamp of a peculiar design to
each package, no matter how much it might
contain, and enter into bond either to export
it according to the declared intention, or to
pay the regular tax, if it should not be ex-
ported. In this view of the case, the plaintiffs
not only had no ground of complaint, but they
were really the objects of favorable treatment
on the part of the government, which, on the
slight and easy conditions referred to, accepted
their declared intention to export the tobacco
in question, before it was commenced to be ex-
ported, or put in the way of exportation.

On both grounds we are satisfied that the
plaintiffs are without any cause of action, and
the judgment of the Circuit Court is affirmed.
True copy. Test:

James H. McKenney, Clerk, Sup. Court. U. S.

ALEXANDER BRUCE AND WILLIAM
SHEPARD, Appts.,

D.

MANCHESTER AND KEENE RAIL-
ROAD.

(See S. C. Reporter's ed. 514-516.)

This suit, at the time of the decree appealed from, was by Alexander Bruce, a citizen of Illinois, and William Shepard, a citizen of Massachusetts, against the Manchester and Keene Railroad, a New Hampshire corporation, to collect interest due on certain bonds of the railroad by the foreclosure of a mortgage made to trustees to secure a series of bonds, amounting in the aggregate to $500,000. There were other parties, both plaintiff and defendant, when the suit was begun, but a discon tinuance was entered before the decree as to all but these. The bill was filed in behalf of the complainants and all other like creditors, not citizens of New Hampshire, who might come in and contribute to the expenses, but no such creditors had come in or connected themselves with the suit in any way at the time of the decree. The Railroad filed an answer, and upon final hearing the bill was dismissed. The record shows that the complainant Bruce owned bonds for $7,500, on which interest was past due and unpaid to the amount of not more than $3,000, and Shepard $1,000 of bonds, on which not more than $400 of interest was due. After the bill was dismissed the complainants, Bruce and Shepard, took a joint appeal, which the Railroad now moves to dismiss because the value of the matter in dispute does not exceed $5,000.

This motion must be granted. The case comes clearly within the rule established in Elgin v. Marshall, 106 U. S. 578 [Bk. 27, L. ed. 249], in which it was decided that the matter in dispute, on which our jurisdiction depends, is "the matter which is directly in dispute in the particular cause in which the judg ment or decree sought to be reviewed has been rendered" and that we are not permitted, "for the purpose of determining its sum or value, to

Jurisdiction-matter in dispute-value, how estimate its collateral effect in a subsequent suit

determined.

1. The matter in dispute on which the jurisdiction
of this court depends is the matter directly in dis-
pute in the particular cause in which the judgment
or decree sought to be reviewed was rendered, not
including its collateral effect in a subsequent suit
2. Where a suit is brought to recover the interest
on bonds only, the amount of interest determines
the jurisdiction, irrespective of the value of the
principal of the bonds.
3. This principle holds true in case of a bill in
equity to collect interest on certain bonds by a
foreclosure of a mortgage, notwithstanding that a
collateral effect of the action might be the sale of
the mortgaged premises and the summoning of
other bondholders before the master for the pur-
pose of determining their interest in the proceeds.
[No. 759.]

between the same or other parties.

Submitted Mar. 22, 1886. Decided April 5, 1886.

NOTE.-Jurisdiction of Supreme Court; dependent on value of matter in controversy. See Gordon v Ordon, 23 U. S., bk. 7, 592, note.

between the same or other parties." Although
complainants exceeds $5,000, the suit is brought
the principal of the bonds owned by one of the [516
to recover only the interest, which is less.
These complainants are in no way authorized
to represent the other bondholders. They sued
for themselves and all others in like situation
who might join with them, but no one saw fit
to join. They were allowed to proceed alone,
and the payment to them of their interest would
have been a bar to the further prosecution of
the suit. So, if a decree had been rendered in
their favor without others joining in the suit,
either by petition or by proof before a mas-
ter or otherwise, it would have been satisfied
by the payment of the amount found due to
them, and no further proceedings could there-
after be had. It is true, if such a payment
should not be made, and a resort to a sale of
the mortgaged property should be necessary to

382]

5831

date of the note Winston had received and was
in possession, as part of the assets of the part-
nership, of forty bonds for $1,000 each, of the
City of Atchison, subject to the payment of the
partnership debts and, after such payment, for
distribution among the partners; that a short
time before the date of the note, the partners
had appointed the defendant a trustee to settle
the partnership affairs; that when the note was
given the partnership affairs had not been set-
tled and were not settled at the time of filing the

coret what was due to them, the other bond- tain rauroad therein named; that prior to the
holders would have an interest in the proceeds
and could be called in before a master for that
purpose, but that would be only one of the collat-
eral or indirect effects of the decree not to be
considered in determining our jurisdiction. On
the case as it stood when the bill was dismissed,
the only matter directly involved was the right
of Bruce and Shepard to have the mortgaged
property sold to pay the several amounts due
them respectively for interest on their bonds.
This is all that has been denied. It follows that
the matter in dispute here is less than our juris-plea; that at the time of the making of the note,
dictional limit.

Dismissed.

Winston turned over to defendant the bonds above mentioned, and estimated that there would be due him, as a partner in the firm, from James H. McKenney, Clerk, Sup. Court, U. S. its assets, the sum mentioned in said note; and

True copy. Test:

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WILLIAM L. SCOTT ET AL., Exrs. c? MIL- share of said Winston, on account of said bonds,

ON COURTRIGHT, Deceased.

(See S. C. Reporter's ed. 582-591.)

in a settlement among said partners;" that the
defendant executed the note accordingly, as
trustee of the partnership and not as his indi-
vidual note, and the plaintiff acquired title to

Promissory note-parol evidence-champertos the note with knowledge of these facts.

contract.

1. Evidence tending to show that a promissory note was not intended by the parties to be such is inadmissible in an action at law brought by the holder on such note.

2. Such evidence is inadmissible in an action at law to show want of consideration where the question of the alleged want of consideration involves the settlement of a partnership and the matter amounts to an equitable defense.

3. A champertous contract cannot be set up in bar of a recovery on the cause of action to which it relates.

[No. 187.] Argued March 23, 1886. Decided April 5, 1886.

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Statement by Mr. Justice Woods: This was an action at law brought by Milton Courtright against James N. Burnes, the plaintiff in error, upon the note of the latter made at Chicago, and dated October 10, 1872, whereby he promised to pay, thirty days after date, to the order of F. H. Winston, $7,333, at the Cook County National Bank, in Chicago. Courtright, by indorsement and transfer, became the owner and holder of the note.

The defendant pleaded four pleas. The first of these was a general denial of the averments of the petition.

The second plea was in substance as follows: that when the note was made, the plaintiff Courtright, the defendant Burnes, the said Winston, and one Campbell had been, and were, partners in a contract for building a cer

NOTE-Notes and bill; parol evidence as to. See
Bank of U. 8. v. Dunn, 31 U. S. bk. 8, 316, note.

Evidence as to consideration: defenses. See Mc-
Donald v. Magruder, 28 U. 8. bk. 7, 744, note.
Parol evidence: applicability to written contracts
generally. See Bradley v. Washington, A. & G.
Packet Co., 38 U. S. bk. 10, 72, note.

Champerty and maintenance. See Lewis v. Bell, 5. S., bk. 15, 203, note; McMicken v. Perrin, 59 U. S., bk. 15, 504, note.

By the third plea it was averred as follows: that the note sued on "was and is wholly without consideration, and is null and void; and that said note is based upon and grew out of transactions relating to the business of said partners; that said partners are interested in the same and are necessary parties to a suit relating to said note; and the amount due in said note. if any, cannot be ascertained until a final settlement of said partnership can be had."

The last plea was that the suit was prosecuted under an agreement between the plaintiff and George W. DeCamp his attorney, whereby the latter undertook to prosecute the suit and to pay all the expenses incident to its prosecution, in of the amount recovered.

The parties waived a trial by jury and submitted the issues of fact as well as of law to the court, which made a general finding for the plaintiff and entered judgment thereon in his favor against the defendant Burnes, for $11,401.60, who thereupon sued out this writ of error. After the record was filed in this court Courtright died, and the executors of his last will were made defendants in error in his stead.

Mr. B. F. Stringfellow, for plaintiff in
error.

Messrs. S. M. Brainard and G. W. De
Camp, for defendants in error.

Mr. Justice Woods delivered the opinion of the court:

The bill of exceptions shows that upon the trial of the case the defendant, to sustain the issue on his part, offered evidence tending to show that "Winston, the payee and assignor of the note sued on." Courtright, "the plaintiff," Burnes, "the defendant, and one Campbell, were the contractors for the construction of the Chicago and Southwestern Railroad, as partners, and that Winston was entitled to an interest of two fifteenths in such contract; that

[584]

[585]

Winston had charge of the execution of the contract and possession and control of the assets arising from the contract; that after the completion of the road, in October, 1872, Winston delivered to defendant forty bonds of the City of Atchison for $1,000 each, which had been received and were then held by him as part of the assets under such contract; that the bonds were delivered by Winston to and received by defendant as the trustee for the parties in interest in the contract, and that at the time the bonds were so delivered defendant gave to Winston the note sued on."

The defendant also offered evidence to show "that the note sued on when given was not intended by him the maker, nor by Winston the payee, as a promissory note; but was only intended and so given by him and received by Winston as a memorandum of the then estimate of the value of the estimated interest of Winston in the Atchison bonds then delivered as part of the profits of the aforesaid contract for the construction of the Atchison Branch to be accounted for on a settlement between the partners to such contract; * * * that the only consideration of the note sued on was the transfer by Winston to defendant of the interest of Winston in the Atchison bonds, as part of the profits of the contract for the construction of the Atchison branch;" and "that upon a settlement of the partnership accounts, between said Winston and his partners in the contract for the construction of said Atchison branch, the said Winston would have had no interest in the profits of said contract, having received more than his share thereof prior to the giving of said note."

To all of which evidence so offered plaintiff objected as incompetent and irrelevant; and the objections were sustained by the court, and the evidence excluded. The exclusion of the testimony so offered is now assigned for error by the defendant.

So far as the evidence excluded was offered in support of the second plea, it is plain that it was inadmissible. Its purpose was to vary and contradict by an alleged contemporaneous verbal agreement the contract which the parties had reduced to writing. It was offered to show that a promissory note in the usual form was not intended by the parties to be a promissory [586] note, but was a mere memorandum, by which the maker promised nothing, which gave no rights to the payee, and was to all intents and purposes vain, futile and of no force or effect whatever. It is not necessary to cite authority to show that the evidence was inadmissible for such a purpose.

The counsel for defendant, not strenuously insisting that the evidence was admissible to support the second plea, insist that it was competent to prove the third. They argue that as want of consideration may be shown in defense of an action on a promissory note, the evidence should have been received.

As a general rule want of consideration is a defense to a promissory note, but it is not always a defense which can be made at law. It frequently requires the aid of a court of equity to give it effect. The plea, to support which the defendant contends the evidence of want of consideration was admissible, clearly sets up an equitable defense. It alleges that the note sued

on is based on the "transactions relating to the business of said partners." Referring, therefore, to the preceding plea, which states the business of the partners, as we are authorized to do, we learn that the partnership business had not at the time of filing the pleas been settled or the interest of Winston therein or in the bonds been ascertained. The plea under consideration further avers that the members of the partnership were interested in the said business and were necessary parties to a suit relating to the note; and that the amount due thereon, if anything, could not be ascertained until the final settlement of the partnership. It is plain, therefore, that the defense set up by the plea is not the legal defense of want of consideration; for the plea admits by implication that there may be something due on the note, but the equitable defense that the amount due on the note, if anything, is dependent on the amount coming to Winston from the assets of the partnership, which cannot be ascertained without a settlement of the partnership affairs in a suit to which all the partners are necessary parties. And yet having so pleaded, the defendant insists in argument that in a trial upon the promissory note in a court of law, and without the presence of two of the four partners, evidence is admissible to settle the partnership, and to prove, without making Winston a party to the suit, that there is nothing due him out of the partnership assets. The pleading and the contention of the defendant appear, therefore, to be contradictory and inconsistent.

Plainly the relief, if any, to which the facts set up in this plea entitles the defendant is an injunction to stay the suit at law upon the note until a settlement of the partnership and an ascertainment of the amount, if anything, coming to Winston out of the assets of the partner ship. This is a remedy which a court of equity only can grant. But the defendant insists on a verdict and judgment in his favor, without settlement of the partnership on which, as he asserts, the validity of the note depends.

Under the jurisprudence of the courts of the United States a court of law can no more take cognizance of an equitable defense than a court of equity can entertain a suit upon a purely legal title. "The Constitution of the United States," says Mr. Chief Justice Taney, in delivering judgment in the case of Bennett v. Butterworth, 11 How. 669 [52 U. S. bk. 13, L. ed. 859], "in creating and defining the judicial power of the general government establishes this distinction between law and equity, and a party who claims a legal title must proceed at law.***But if the claim is an equitable one, he must proceed according to the rules which this court has prescribed regulating proceedings in equity in the courts of the United States."

So in Thompson v. R. R. Co. 6 Wall, 134 [73 U. S. bk. 18, L. ed. 765], the court referred to Bennett v. Butterworth, and cited with approval and adopted the following extract from the opinion in that case: "Although the forms of proceedings and practice in the state courts shall have been adopted in the circuit courts, yet the adoption of the state practice must not be understood as confounding the principles of law and equity, nor as authorizing legal and equitable claims to be blended in one suit."

So in the case of Jones v. McMasters, 20 How.

[58

8 [61 U. S. bk. 15, L. ed. 805], which was an action at law for the recovery of the possession of land, it was held that when the grant from the government on which, the plaintiffs relied was regular in form, it was not proper by way of defense, to go behind the survey and location; that, if they were voidable for irregularity 588] or other cause, the question was not one for a court of law in an action to recover possession, but for a court of equity to reform any error or mistake.

89]

ery, is not considered or punished as a crime.
But in many of the States champertous con-
tracts are considered void. This is the case in
Missouri where the present case was tried, the
supreme court so holding, on the ground that
the common law had been adopted by statute
in that State. See Duke v. Harper, 66 Mo. 51.
The defendant now as us to go a long step
beyond this ruling.

The question raised by the present assign-
ment of error is not whether a champertous
So in Foster v. Mora, 98 U. S. 425 [Bk. 25, L. contract between counsel and client is void, but
ed. 191], it was said that "In actions of eject-whether the making of such a contract can be
ment in the United States Courts, the strict set up in bar of a recovery on the cause of
legal title prevails; if there are equities which action to which the champertous contract re-
would show the right to be in another, these lates.
can only be considered on the equity side of
the federal courts." To the same effect see
Greer v. Mezes, 24 How. 268 [65 U. S. bk. 16,
L. ed. 661]; Watkins v. Holman, 16 Pet. 25,
and Bagnell v. Broderick, 13 Pet. 436 [41 and
38 U. S. bk. 10, L. ed. 874, 235]; Bank of Ham
ilton v. Dudley, 2 Pet. 492 [27 U.S. bk. 7, L. ed.
496]. See also Peeler's Law & Equity in U. S.
Courts, chap. 1, and note 26, pp. 28, 29.

If the defense set up in the plea under consideration could be made effectual in an action at law, it would render obsolete in the equity courts of the United States that great head of equity jurisdiction under which injunctions are granted to stay proceedings at law. "The occasions," says Mr. Justice Story, “on which an injunction may be used to stay proceedings at law are almost infinite in their nature and circumstances. *** Thus, an injunction is sometimes granted to stay trial; sometimes after verdict to stay judgment, sometimes after judgment to stay execution, and sometimes after execution to stay the money in the hands of the sheriff," etc. Story, Eq. Jur. §§ 885, 886, and sce $$ 881, 882; Eden, Injunctions, chap. 2, p. 3. Waterlow v. Bacon, L. R. 2 Eq. 514; Hibbard v. Eastman, 47 N. H. 507; Hopkins v. Fechter, 47 Miss. 331; Tommey v. Ellis, 41 Ga. 260.

We must answer this question in the negative. It was wisely said by the Supreme Court of New York, in the case of Thalhimer v. Brinkerhoff, 3 Cow. 623, that "The right litigation may be abused, and proper remedies for groundless and vexatious litigation must exist; but the remedies for the abuse of this right should be such as not to impair the free use of the right itself. As the justice or injustice of the claim cannot be known before the termination of the cause, the checks upon unjust litigation must in general consist, not in excluding the suit or the suitor from the courts, but in redress following the decision of justice upon the merits of the case."

This is in accord with the views of this court.
The precise question under consideration was
decided in the case of Boone v. Chiles, 10 Pet.
177 [35 U. S. bk. 9, L. ed. 388]. That was a
bill in equity to establish the title to a tract of
700 acres of land in Bourbon County, in the
State of Kentucky. Among other defenses it
was alleged that an agreement in writing had
been made between Boone, the plaintiff, and
one Engles, by which Engles undertook at his
own expense to prosecute a suit for the 700
acres in dispute; and as a consideration for his
trouble was to have one half of the land, and
that the suit was prosecuted under that agree-
It is clear, therefore, that the matters set up ment; that it was, therefore, a case of cham-
in the third plea were proper for the consid-perty and maintenance forbidden by law, in
eration of a court of equity, and that they could
not be set up as a defense in a court of law.
All the evidence offered to prove them was,
therefore, properly excluded.

It further appears from the bill of exceptions that in support of the plea that the plaintiff had made a champertous agreement with his counsel for the prosecution of this suit, the defendant offered evidence which tended to prove a contract made by the plaintiff with his counsel, George W. De Camp, by which the latter agreed to prosecute the suit and defray all the expenses thereof, in consideration of which he was to receive a certain proportion of the sum recovered. The court, however, did not give effect to this plea and overruled a motion made by the defendant to dismiss the action on the ground that the plaintiff had made such champertous contract. This action of the court the defendant assigns for error.

At common law and by statute both in England and in many of the United States, champerty was a criminal offense. But at the present time, in most of the States, to aid the the lawful suit of another with money or sers, in consideration of a share in the recov

which the court could give no relief. But the
court held that, although the English Statutes
which had been adopted in Kentucky punished
the offense and declared the contract for main-
tenance void between the parties, the right of
the plaintiff was not forfeited by such an agree-
ment, and it might be asserted against the de-
fendants whether the contract with Engles was
valid void. The same rule has been declared
in other American cases. Whitney v. Kirtland,
27 N. J. Eq. 333; Robison v. Beall, 26 Ga. 17;
Allison v. C. & N. W. Railroad Co. 42 Iowa, 274.

So in Hilton v. Woods, L. R. 4 Eq. 432, it was
strenuously urged that the bargain between the
plaintiff and Mr. Wright, under which the suit
was instituted, amounted to champerty and
maintenance, and consequently disqualified the
plaintiff to sue, and that the court was bound
to dismiss the bill. But the Vice Chancellor
said: "I have carefully examined all the au-
thorities which were referred to in support of
this argument, and they clearly establish that
whenever the right of the plaintiff in respect of
which he sues is derived under a title founded
on champerty or maintenance, his suit will on
that account necessarily fail. But no authority

[590]

[591]

[516]

was cited nor have I met any, which goes the length of deciding that when a plaintiff has an original good title to property he becomes disqualified to sue for it by having ventured into an improper bargain with his solicitor as to the mode of remunerating him for his professional services in the suit or otherwise." There was, therefore, a decree for the plaintiff, though without costs.

In Elborough v. Ayres, L. R. 10 Eq. 367, it was conceded that the fact that the plaintiff, in an action for malicious prosecution, had been maintained, would be no bar to the action, and the Vice Chancellor held that such maintenance would be no ground for the interference of a court of equity to prevent the action from going on, citing Vice Chancellor Wigram in Evans v. Prothero [1 De G. M. & G. 572].

The only cases to which we have been referred in which the rule insisted on by the defendant has been maintained were two cases decided in the Supreme Court of Wisconsin. Barker v. Barker, 14 Wis. 131, and Allard v. Lamirande, 29 Wis. 502.

We think, therefore, that, both upon reason and weight of authority, the court did not err in refusing to give effect to the fourth plea of the defendant, or in refusing to dismiss the suit because it was prosecuted under a champertous agreement between the plaintiff and his counsel.

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Although this court may have legal power on habeas corpus to discharge the petitioner, who has been convicted of embezzlement in a state court of the funds of a national bank, where no reason appears why the supreme court of the State may not review the judgment, it will not act in advance of the orderly course of proceeding for a review of the judgment by writ of error.

article 1, 8, pars. 5, 17, U. 8. Const. and of section 711, R. S. par. 1, and section 5209, R. S.

3. Because he was held to answer for and was convicted of an infamous crime as charged in the information, without presentment or indictment by a grand jury.

Mr. Edwin F. Conely, William E. Earle and Frank P. Guise, in favor of petitioner.

Mr. Chief Justice Waite delivered the opinion of the court:

This motion is denied on the authority of Ex parte Royall [ante, 868]. No reason is suggested why the Supreme Court of the State may not review the judgment of the circuit court of the county, upon the question which is raised as to the application of the statute, under which the conviction has been had, to embezzlements by the servants and clerks of national banks; nor why it should not be permitted to do so without interference by the courts of the United States. The question appears to be one which, if properly presented by the record, may be reviewed in this court after a decision by the supreme court adverse to the petitioner. The case as made by the motion papers is not one which, under the principles settled in Royall's Case, requires this court to act in advance of the orderly course of proceeding for a review of the judgment by writ of error. True copy. Test:

James H. McKenney, Clerk Sup. Court, U. 8.

ANTHONY W. DIMOCK, Piff. in Err.,

V.

REVERE COPPER COMPANY OF BOS TON, MASSACHUSETTS.

(See S. C. Reporter's ed. 559-566. Jurisdiction-discharge in bankruptcy pending suit-judgment thereafter-discharge no de fense to action on such judgment.

1. This court has jurisdiction to review a decision of a state court to the effect that a discharge in bankruptcy of the defendant was not a bar to the action.

Submitted March 22, 1886. Decided April 5, 1886. time judgment was rendered against him, as a dis2. Where a defendant had a good defense, at the charge in bankruptcy, and failed to present it to a

ON MOTION for leave to file petition for a the defenses which he might have made, the judg

writ of habeas corpus.

The petition in this case set out that the petitioner had been sentenced, by a state court of Michigan, for a term in the penitentiary of that State, and that he was now illegally con

ment is valid; and such defense cannot afterwards be set up in an action on the judgment. [No. 185.]

Argued Mar. 22, 1886. Decided Apr. 5, 1886.

fined in such penitentiary; that this imprison- IN ERROR to the 3upreme Court of the State

ment was illegal in this:

1. Because the petitioner was convicted, sentenced and imprisoned contrary to the Constitution of the United States and the laws of Congress.

2. Because the acts described and charged in the counts under which he was convicted (being embezzlement of the funds and property of a national bank by a clerk therein) are cognizable by the federal courts; and the jurisdiction to try the petitioner and to punish such crime is vested exclusively in said courts, the action of the state court being in violation of

of New York.

The case is stated by the court.

Mr. George Putnam Smith, for plaintiff in error:

It is immaterial that the form of the debt was changed after the institution of the bankruptcy proceedings, so that instead of a simple contract debt it became a judgment.

Betts v. Bagley, 12 Pick, 571; Clark v. Rowling, 3 N. Y. 216; Wyman v. Mitchell, 1 Cow. 316.

If, during the pendency of bankruptcy proceedings, a provable claim against the bank

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