« ForrigeFortsett »
wash-stands, bureaus, and carpets in each room, also the furniture of 32 bedrooms in the Tabor Opera-House building, on the upper floor; three billiard tables and fixtures; bar fixtures; other office and kitchen furniture; and all the other personal property of Streeter in those buildings. The defendant also proved that he afterwards rented the undivided one-half of the property so sold from Jacque at the rate of $275 per month, and that from the time of the sale until this suit was brought such rent amounted to the sum of $5,575. The defendant also offered to prove by his own statement that, prior to the sale of this property for taxes, Streeter frequently notified him not to pay any taxes on his part of the property owned by them in common, either real or personal, and that he had declared that if he did pay such taxes on his half of the property, he would not allow it to him in their transactions as partners, nor would he pay it to him, but the court refused to allow the introduction of this testimony. This being all the evidence, the court charged the jury that the plaintiff was entitled to recover the rent according to the contract, as to the amount of which there was no controversy. They were therefore directed to find a verdict for the sum of $7,113.44, which was done.
It was the duty of Chapin, who was in possession of the property and in use of it at the time, to have paid the taxes. The $315 of taxes for which the distraint was made was, notwithstanding the payment of one-half of the original amount by Chapin, a joint liability upon the property of the firm. So much of the property as was necessary to pay the taxes should have been sold; being personal property, the proceedings under distraint contemplated a seizure by the treasurer, and when a sale was made a delivery by him to the purchaser. Again, this being the joint or partnership debt of both, the payment of one-half of it by Chapin did not discharge him from the obligation of paying the other half to the treasurer of Lake county. The sale, therefore, was a sale for the payment of his debt, a debt for which he was as liable to the county as Streeter, and which the officer was as much bound to make out of his property, or out of that of the partnership, as he was out of that which belonged to Streeter. Being in the exclusive possession and control of it during the term of the lease, by virtue of his own written contract, it was his duty to have paid this tax, and thus protected the property from sale. Through this possession, and the rent which he was paying monthly to Streeter, he had the means of protecting his own interest, and securing the repayment to himself of Streeter's half of the taxes. The obligation which he was under to protect that property by the payment of a debt for which he was personally liable is clear.
This obligation was not satisfied or discharged by the statement of Streeter to him, that if he paid Streeter's half of the taxes he would not allow it to him. Streeter could not thus make a law for the conduct of this partnership property, and governing the rights growing out of the contract of lease; nor would this statement of his, if it had been permitted to be proved, have discharged Chapin from his obligation to the county to pay the taxes levied on this property. Instead of paying the taxes, as appears from the evidence, Chapin, under a sale of this property which it was his duty to have prevented by such payment, and without any disturbance of his possession, or any attempt to disturb it by force or by legal proceedings, has voluntarily paid to Jacque over $5,000 as rent upon that which the latter pretended to buy for the price of $106.
The following authorities, if any are needed, support this view of the subject: Section 2250 of the General Laws of Colorado provides that "all taxes levied or assessed upon personal property of any kind whatsoever shall be and remain a perpetual lien upon the property so levied upon, until the whole amount of such tax is paid; and if such tax shall not be paid on or before the first day of January next succeeding such levy, it is hereby made the duty of the county treasurer to collect the same by distress and sale of any of the per
sonal property so taxed, or of any other property of the person assessed." See, also, Stockwell v. Brewer, 59 Me. 286; Frost v. Parker, 65 Iowa, 178, 21 N. W. Rep. 507; Eberstein v. Oswalt, 47 Mich. 254, 10 N. W. Rep. 360; Meyer v. Dubuque Co., 49 Iowa, 193.
The judgment of the circuit court is affirmed.
FLORENCE MIN. Co. v. BROWN.
1. SALE-DUTY TO DELIVER-OFFER OF PERFORMANCE-INSOLVENCY.
Shipments of iron ore, as required by a contract of sale, were made from the place of delivery, until, by reason of the apprehended insolvency of the vendee, the vendor suspended further shipments. At that time the vendor had at the place of delivery the balance of the ore, which, by the contract, was to be subject to its order until forwarded, but did not offer to make any further shipments, and did not give notice of its readiness to do so; nor did the vendee corporation, nor its receiver, who meanwhile had been appointed, call for the ore, or offer cash in payment. The vendor, in pursuance of an order to present claims, filed its claim for the difference between the contract price of the undelivered ore and its then present value. Held, that the vendee's insolvency did not release the vendor from offering to deliver the property, and that the evidence justified the conclusion that the contract had been rescinded.
2. ASSIGNMENT-EQUITABLE-CHECK UPON FUND.
A check not drawn against any particular fund does not, of itself, operate as an equitable assignment of funds deposited to the drawer's credit.
Appeal from the Circuit Court of the United States for the Northern District of Ohio.
The defendant, Brown, is the receiver of Brown, Bonnell & Co., an Ohio corporation. In pursuance of an order for the presentation of claims, the Florence Mining Company presented a claim against Brown, Bonnell & Co., and from an order confirming the report of the special master therein, brings this appeal.
Harvey D. Goulder and Geo. D. Van Dyke, for appellant. F. J. Wing, for appellee.
FIELD, J. In February, 1883, three corporations, namely, the Lake Superior Iron Company, and the Jackson Iron Company, created under the laws of Michigan, and the Negaunee Concentrating Company, created under the laws of New York, filed a bill, in chancery in the circuit court of the United States for the Northern district of Ohio, against the defendant, Brown, Bonnell & Co., a corporation created under the laws of Ohio, alleging that they were creditors of the latter corporation, and designating the amounts of such indebtedness-that owing to the first two named corporations, consisting of certain promissory notes of the defendant, and that owing to the last-named corporation, being a judgment against the defendant in the circuit court rendered on that day. The bill purported to be filed, not only on behalf of the complainants, but also on behalf of all other creditors, whom it represented to be so numerous that it was impossible to make them parties. It alleged that the defendant was insolvent; that it had long been engaged in the business of manufacturing iron, and had erected blast-furnaces, rolling-mills, and cokeworks, and had opened and operated coal mines; that its plant was of great value, as was also the good will of its business; and that it employed at least 4,000 persons in its mills and works. It also alleged that vexatious litigation had been commenced against the defendant, and more was threatened; that such litigation was accompanied by attachments and seizures of property, and the threatened litigation would also be accompanied by like attachments and seizures, and they would give to the creditors who were pursuing them undue advantage over those complainants whose claims were not yet due, and work them irreparable injury; and that if such litigation should be further insti
tuted, and the property of the defendant be attached, there was danger that it would be to a great extent destroyed, and its long-established business broken up. It therefore prayed the appointment of a receiver to take charge of the assets and property of the defendant, and for further relief. The defendant appeared at once to the bill; and thereupon, pursuant to the complainant's motion, Fayette Brown was appointed receiver of its assets and property.
In March, 1883, a supplemental bill was filed, setting forth that the property of the defendant was of such a peculiar nature that great and irreparable loss would be caused to the complainants and other of its creditors, unless its property should be preserved by the receiver in its entirety as a business during the time required to liquidate and adjust its affairs; that the Negaunee Concentrating Company, one of the complainants, had recovered judgment against the defendant prior to the filing of the bill; that its recovery gave to the company a lien upon all the real estate of the defendant within the jurisdiction of the court; that execution had been issued upon said judgment, and had been returned unsatisfied; that other claims for liens and priorities of payment had been made by creditors of the defendant, both secured and unsecured; and that many claims were made, the justice of which was doubtful, and many which were unliquidated. It therefore prayed the appointment of a special master to ascertain the priorities of liens and the rights and claims of creditors generally, and report to the court his findings.
The court thereupon made an order requiring all the creditors of the defendant to file their claims in the office of the clerk, by petition stating their amount and nature; and in July following it appointed the special master prayed to determine the rights of the several creditors of the defendant who had, in accordance with its previous order, filed their claims with the clerk, and to marshal the liens and priorities of such claims. Among the claims filed with the clerk pursuant to this order was one presented by the Florence Mining Company, a corporation of Michigan, for an amount alleged to be due to it upon a contract with Brown, Bonnell & Co. for the sale of certain iron ores. Among the transactions had under the contract, a check was given to the Florence Mining Company by Brown, Bonnell & Co. shortly before its failure, upon the Importers' & Traders' National Bank of New York, on account of a cash payment then due, which check, it was contended, operated as an equitable assignment of certain moneys then in the bank to its credit.
These matters were considered by the special master, who took testimony respecting them, and heard counsel thereon. He reported the amount due the Florence Mining Company, deducting from the price for the whole ore which was to be delivered the value of the quantity undelivered, estimated according to the contract price, and he reported against the alleged equitable assignment. Exceptions to his report were overruled, and the report was confirmed. To review this ruling the case is brought here on appeal.
The contract between the Florence Mining Company and Brown, Bonnell & Co. was made on the thirteenth of February, 1882. By it the Florence Mining Company agreed to sell to Brown, Bonnell & Co. 30,000 gross tons of Florence iron ore, of its standard quality, deliverable at Cleveland and Ashtabula, during the season of navigation of 1882, at the docks of the New York, Pennsylvania & Ohio Railway Company, or of the Lake Shore & Michigan Southern Railway Company, and as near one-sixth of the total quantity per month as practicable; "said ore to be paid for by the said Brown, Bonnell & Co. at the rate of $5.75 per ton, in eight equal payments of $21,562.50 each, payable on the fifteenth days of May, June, July, August, September, October, November, and December next, respectively, in cash, all in funds par, in Cleveland or New York, making a total of one hundred and seventy-two thousand five hundred dollars, ($172,500.) The said ore is to be consigned to Florence Mining Company, and to be subject to their order until forwarded from docks. It is further agreed that promissory notes of Brown, Bonnell &
Co., drawn at four months from date, on which a cash payment is due, with interest at the rate of six per cent. per annum added into the face of note, (making $21,993.75,) may be substituted for either of the above cash payments, except the last two, due in November and December next, which are to be paid only in cash. Said Brown, Bonnell & Company, for the abovenamed consideration, hereby agrees to buy, receive, and pay for said ore as above mentioned."
The Florence Mining Company had the ore on the docks designated by November 1, 1882. It was all consigned to the company, as provided in the contract, and no part of it was delivered to the vendee except upon the order of the company, which continued the owner of the ore not delivered. Shipments to the vendee were during this period--that is, from the date of the contract until November 1, 1882-suspended, at the vendee's request, for about two months, but at other times shipments were made as the ore was wanted. Prior to February 19, 1883, the vendor had delivered to the vendee 20,762 tons of the ore, and had the remaining 9,238 tons on hand, when the vendee became insolvent, and the receiver of its assets and property was appointed by the court. On the day previous to this appointment, the vendor, having reason to fear the insolvency of the vendee, ordered the suspension of any further shipments of ores. No shipments to the vendee were subsequently made, nor did the vendor offer to make any, or give notice that it was ready to deliver the ore. The statement of its agent that he asked the receiver to buy ore of the company does not show any offer to deliver the ore under the contract, nor was it intended as such proof. In its petition setting forth its claim, filed with the clerk of the court, the company alleged that it was at all times ready, willing, and able to perform the contract on its part, but that the vendee, by reason of its insolvency and the appointment of a receiver, was unable to take and pay for the ore remaining undelivered. These allegations were not admitted before the special master; but, if true, the fact would not constitute any performance of the contract on its part without an offer to deliver the balance, or, at least, without notice to the vendee or its receiver of a readiness to do so; The insolvency of one party to a contract does not release the other from its obligations, provided, always, the consideration promised, if money, be paid, or if the consideration be the note or other obligation of the insolvent, money be tendered in its place. The mining company contended that it should be allowed the difference between the contract price of the undelivered ore, $5.75 per ton, and the market price for it at the time of the appointment of the receiver, which was only $4.50 per ton, making a difference of $11,577. This contention rested, as we have seen, solely upon the fact of the insolvency of the vendee before the whole of the ore was delivered; but that fact, if excusing the delivery of the balance without payment, did not release the company from offering to deliver the property in performance of the contract, if it intended to hold the purchasing party to the contract. It could not insist upon damages for non-performance of the contract by the other party without showing performance, or an offer to perform it, on its part, with an ability to make good the offer if accepted.
Nor did the vendee or its receiver call upon the vendor for the balance of the ore, and offer cash in payment. Its non-action for the enforcement of the contract, and its silence on the subject, was evidence that it desired to rescind the contract; and the action of the vendor, its suspension of further shipments to the vendee, and subsequent failure to deliver the balance of the ore, or to call upon the vendee to comply with the contract, was evidence that it also desired to rescind the contract. The master was therefore justified in holding that the contract was in fact rescinded by the consent of both parties. Numerous cases have been cited to us upon the conduct which a vendor should pursue to preserve his rights under a contract for the sale of goods on credit, when he has refused to proceed with its performance upon learning of
the insolvency of the vendee; but they exhibit so much difference of judicial opinion on the subject that it is difficult, if not impossible, to reconcile them. Some of the divergences of opinion may perhaps be traced to the different position of the vendor, where he has sold the goods on credit, the title passing immediately, but has stopped some of them in transitu, and where he has merely contracted to sell the goods, the delivery to be made by installments, and payment made with each delivery, the title only then vesting in the vendee. However this may be, we do not deem it necessary to go over the cases, in an attempt either to reconcile or explain them. We rest our present decision on the fact that the conduct of vendor and vendee in this case justified the conclusion that they both assented to the rescission of the contract.
Upon the second point, as to the alleged equitable assignment of the funds in the bank against which the check was drawn by Brown, Bonnell & Co. and given to the Florence Mining Company, we do not think there can be any serious question of the correctness of the master's decision. The check was not drawn against any particular fund. There was, indeed, no fund out of which it could have been paid. There was only a little more than one-fifth of its amount on deposit at the time to the credit of the drawer. The notes sent to the bank for discount at the time the check was given were never discounted, and were returned to the sender. They were not to be used for the payment of the check unless discounted.
An order to pay a particular sum out of a special fund cannot be treated as an equitable assignment pro tanto, unless accompanied with such a relinquishment of control over the sum designated that the fund-holder can safely pay it, and be compelled to do so, though forbidden by the drawer. A general deposit in a bank is so much money to the depositor's credit. It is a debt to him by the bank, payable on demand to his order; not property capable of identification and specific appropriation. A check upon the bank in the usual form, not accepted or certified by its cashier to be good, does not constitute a transfer of any money to the credit of the holder; it is simply an order which may be countermanded, and payment forbidden by the drawer, at any time before it is actually cashed. It creates no lien on the money which the holder can enforce against the bank. It does not of itself operate as an equitable assignment. Judgment affirmed.
MATTHEWS, J., did not sit in this case or take any part in the decision.
UNION INS. Co. PHILADELPHIA v. SMITH.
(January 30, 1888.)
1. MARINE INSURANCE-SEAWORTHINESS SUBSEQUENT DAMAGE.
In the insurance of a vessel upon a time policy, the warranty of seaworthiness is complied with if the vessel is seaworthy at the commencement of the risk, and the fact that she subsequently sustains damage, and is not properly refitted at an intermediate port, does not discharge the insurer from subsequent risk or loss, provided such loss is not the consequence of the omission.
LIMITATION OF LIABILITY-LOSS BY BROKEN MACHINERY-PROXIMATE CAUSE. In an action upon a policy of marine insurance on a tug-boat, in which it was provided that the company should not be liable for loss occasioned by the breaking of any part of the machinery, it appeared that the tug broke her shaft, and was taken in tow by another tug, and, while being towed, sprung a leak and sunk. Held, that the insurer would not be released from liability because of the existence of one of the excluded causes, unless the loss was shown to be due to that cause.
3. SAME ORDINARY CARE-TOWING DISABLED TUG PAST PORT.
In an action upon a policy of marine insurance on a tug, it appeared that the shaft of the tug broke, and, being taken in tow by another tug, she was towed past two ports of repair on her way home, and then sprung a leak and sunk. Held, that it was proper to instruct the jury that permitting the tug to be towed in that condition past two ports of repair would not of itself constitute a breach of the policy, but it was for them to consider whether the master was guilty of a lack of ordinary care, and also whether the condition of the vessel was the cause of her ultimate loss.