to is this language: "Neither of said parties of the first or second parts shall by reason of any 348] thing *herein be personally liable for or on account of any moneys procured, advanced, or used by said trustees in the purchase of said property, nor for any expenses or charges in or for the execution of the trust herein created." The trust herein created, as shown by the previous language of the agreement, and that made contemporaneously with it, was the purchase by the trustees, Man and Wilson, of all the property, the securing of a perfect title, the creation of a corporation, the conveyance to it of the property thus purchased, and the distribution of the stock, or, as the duty was expressed in the agreement First. To the payment of the expenses and charges of said sale and purchase of said property, the establishment of said corporation, and the execution by said Man and Wilson and their said associates of the trusts hereby created. "Second. To the repayment of any moneys by said trustees procured or advanced and used in the purchase of and payment for said property to the extent authorized and limited by said agreement of even date herewith." odds and ends of closing out this transaction was to become of the balance that would remain *in his hands after paying the [350 creditors, and whether it was intended as a gift or otherwise, he testified: With reference to the obligations assumed "To the payment of the expenses and by him in case the sale to the English syndi. charges of said sale and purchase of said prop-cate was carried through, when asked what erty." This means, of course, all the expenses and charges. All the express liens had passed into the foreclosure decree, and had been provided for in the agreement by specific appropriations of stock; and the scope of the general "Out of that balance, whatever it was, I language here used was obviously to cast upon was to pay for receiver's certificates, for bonds, Man & Wilson, as trustees, the duty and the for trustees' commissions. I was to pay counburden of removing every charge or incum-sel fees to Alfred Russell, whatever they might brance which in law or equity could, as a consequence of the legal proceedings, rest upon the property. Such duty and burden passed, by the clear language of the agreement, from Man and Wilson to Wilson, as the recipient of the residuum of the stock. The parties of the first and second part were respectively the creditors named, and Dickinson. Upon them, by the provision above quoted, none of the expenses or charges of the execution of the trust were to fall. Necessarily it follows that whatever had to be paid was to be paid by Wilson, and out of the stock which was coming to him as his portion. Nor is this strange. The sums which the creditors were to 349 receive, whether *in cash or in stock, by one or the other of the agreements, were for securities of the old corporation, whose form and amount were specified, and which were to be surrendered by them to the trustees, Man and Wilson. In other words, they agreed to receive a certain specified sum for the securities which they turned in, and the figuring as to the amount was, in most cases, carried to the very cent. While the consideration for the one tenth transferred to Dickinson is not in terms expressed on the face of these contracts, it clearly appears from the testimony that it was the services rendered by him in bringing the litigation to a close, the equity of redemption belonging to the mortgagor corporation, and the satisfaction of claims in behalf of some of the stockholders. As for Wilson, there was no specific statement in detail as to items and amounts of all the consideration for the money or stock to be paid to him. Evidently the be, and I was to pay $38,000 under and in pursuance of the agreement I had inade with Dickinson of February 27, 1877, in reference to his obligation to Meddaugh & Driggs. Whatever was left was for my own compensation." And further, with reference to the same matter, appear these questions and answers "Q. In case there was a deficiency and the balance which was expected to remain applicable to that purpose should not be sufficient to pay and discharge the whole amount of all of the several claims so provided for, by whom was the remainder to be paid? "A. By myself. That was a responsibility and risk that I assumed. "Q. If there should turn out to be an unexpended remainder of said balance after the discharge of all of said claims, what were you to do with such balance; was it to be kept by you for your own benefit, or to whom was it to go? "It was to be my own, for my own benefit." It is admitted that the written stipulation in the last contract did not express all that he agreed to do in consideration of the stock transferred to him. Thus he testifies, referring to that contract: "A. I have stated what my liability was under that contract, and there were things undoubtedly to be provided for not specifically mentioned in that contract. For instance, no mention is made of receiver's certificates, or of bonds, or of stock. The trustees' commissions were provided for, I think; and there was no mention of my compensation." And again: "A. There was no other written agreement to which I was a party, but it was understood that I was to pay or take care of certain bonds and receiver's certificates and the claims that I 351] have enumerated. The charges of the trustees and compensation to them were provided for in the agreement." And when asked between whom was that understanding and when was it made, he answered: "A. It was made before the agreement of April 9th, and was between the members of the syndicate, Mr. Davis individually, and my self." The written promise was, therefore, by his own admission not the full measure of his ob ligations. In 1880 there was a Congressional investigation, having reference mainly to the transac tions of Davis, as receiver of the Ocean National Bank. On that investigation the defendant was a witness, and testified as follows: "As against the stock still in my hands there are outstanding claims-at least one, and perhaps more on the part of persons who claim that they were employed by the syndicate and that money is due to them, and that they are to look to me for it. One claim is made by Meddaugh & Driggs, who were counsel in the bankruptcy proceedings. They claim to be entitled to $34,000 ($38,000) for their profes sional services, and they have threatened to bring suit against me for it. I do not think they are entitled to that under the agreement that was made with them, but if there was any liability to them under that agreement with them which I signed I am the person on whom it rests. It was for the purpose of providing for these contingencies that this amount was fixed in the way it was." And again, responding to this question: "Q. Out of that $395,000 I understand that you were to pay the expenses of litigation, and whatever money was due Mr. Russell under his agreement with those people?" He answered, “Yes, sir." And still again, when asked for what he received the stock, after naming some things, he said: "In addition to which was the liability that I came under to pay all the charges that any one had against this syndicate, as it has been called." Could language be used to more clearly affirm that his agreement was, as he understood it, to pay among others this claim 352] of *plaintiffs, which, as we have seen, was equitably a charge upon the property, and of course, therefore, against the syndicate? Another matter: In the spring of 1878, Alfred Russell, whose name appears in the stipulation signed by the defendant, not having received the payment which he expected, prepared to commence a suit against defendant. The latter was advised of this fact, and on April 1, 1878, he wrote to him a letter, containing this statement: I "My obligation, as I understand it, is to pay to you whatever stock you are entitled to under any agreement that you may have with the so-called syndicate. You and Mr. Davis do not agree as to what that agreement was. have no knowledge of it except as I learn of it from others. One thing, I believe, is admitted, and that is if the English negotiations had gone through, of the $587.967, which was to come into my hands, $50,000 was to be paid to you in cash. The English negotiations did not go through, and no $587,967 came to me. Instead of that, the conditions of the agree ment of April 9, 1877, take its place. Instead of $587,967, I am to receive $395,000, or so much of the capital stock as is the proportion between that sum and $1,600,000-that is to say, I now have $395,000 to pay to the same persons who were to have been paid $587,967. Are you entitled to receive precisely the same sum or amount of stock as if I had $587,967, or should you submit to a pro rata reduction, just as I and every one interested in the fund will submit to? My own opinion is that you are fairly entitled to the same proportion of the $395,000 that you were to receive of the 587 M, and should unhesitatingly say that such was your just due. If you were to receive the sum which I have already mentioned, I would not hesitate, on my own responsibility and without the approval of any of the syndicate, to make a declaration of trust in your favor to the effect that you are entitled to the same proportion of the stock which I received as you were to receive under the original agreementthat is to say, your share in the whole capital stock is diminished in the rate that 587 M has to 395 M. This would easily be expressed in figures." *Herein is an express declaration, made[353 within a year of the signing of the last agreement, that out of the stock received under that agreement he was to pay the same persons who were to receive payment out of the moneys which he would have received under the first agreement, and an argument therefrom that, as he was to receive under the latter agreement less than under the former, the parties to receive payment should proportionately scale down the amounts they should be satisfied with. In the bill filed by Russell was a copy of a memorandum, which he alleged had been made by Davis, the receiver of the Ocean National Bank, who was clearly, as shown by the testimony, a leading spirit in the negotiations, as follows: 100 bonds and 10 certificates.- $30,699 091 Int. acc't since Jan. 1, 1871, and certificates since May 8, 1874, other interests equal cost of. Int. on 50 bonds am't to prin. cost 20 certificates 12,136.16 call, total for both 24,470 791 12,844 631 70,000 00 Certificates par 10%, etc.. 76,000 00 Bal, certificates and int., int.10% 63,700 00 Man trustee Hubbell. 10,500 00 "My Dear Mr. Russell: "In the memorandum referred to in your bill a sum appears which is to be paid to Meddaugh & Driggs, and which makes up in part the 395 M which was to have been paid to me. I have 354] *rec'd and now enclose a copy obtained from Mr. Dickinson of my agreement with Meddaugh & D., from which you will see that I was to pay them only in the event of the success of the English negotiations and the payment to me of the cash. I send you this to show that the mem. could not have been in tended to definitely fix the disposition of the stock that was to be issued to me. If that mem. is conclusive then M. & D. have a right to a portion of the stock which I bold, and that liability I can never admit, because I never assumed it. I am willing to pay and to act upon the assertion of your right to so much of the stock in my hands as I designated in a former letter. Have you anything to offer or suggest as to a method of settlement? Will you state (abate) anything of your first demand? I am very anxious that you should have your stock without any delay. Delay may be injurious to both. Write to me at your convenience. Let us make an effort at adjustment before it is too late." Do not these letters tend to show that the claim now made that plaintiffs were not to be compensated out of the stock transferred under the last agreement to defendant was an afterthought, springing from the fact that the defendant had noticed, or had his attention called to, the omission of their names in the stipulation in that agreement? How easily that the defendant would be led to such a conclusion! His obligation was expressly to the creditor's syndicate (so-called) and Dickinson. His promise was to save them harmless. Whatever debt rested against the property, or could be made a personal obligation of theirs, growing out of the transaction, he was to discharge. The less he had to pay in this direction the larger were his own profits. At first he recognized his liability to the plaintiffs, spoke of it in the way that might be expected as one of the things that he had to take care of, but discovering himself, or having his attention called to the omission of plaintiffs' names from the stipulation, he proceeded to insist upon his non-liability for their claim. Another matter throws light upon this. It appears that the corporation as finally organized 355] bad stock of $4,000,000-*40,000 shares of $100 each. The number of shares transferred to the defendant was 8387 shares. Of these he issued and transferred in satisfaction of various claims which he recognized, including those to Russell, 4640 shares, leaving in his hands 8747 shares, in respect to which he testifies: "The remainder of the stock was owned by me, and I have issued no other shates, except temporarily for use in borrowing money in my own private transactions." For what was this balance of stock given to Wilson? It must be remembered that these creditors were not claiming any general amounts; they figured to a cent the sums which each except the Ocean National Bank was to receive. Each, evidently, was anxious to secure for himself as much as possible. Nego tiations were carried on for months-even into years. All the liabilities, conceded and doubtful, must have been known to them. Davis, the receiver, testifies "we knew how many bonds and receiver's certificates Mr. Wilson had and represented." It is not to be supposed that they would throw away anything, or make generous donations to any one. While of course it was reasonable, and to be expected, that they would leave for the defendant, who assumed the general residuary liability, a margin above all obligations actually known, in order to compensate him for the risk as well as to pay him for his services, it is not to be supposed that they were so ignorant of the situation, so misunderstood the real obligations growing out of their negotiations and foreclosure proceedings and all the litigation, as to give to him stock amounting, according to the value then placed upon it, to the sum of $175,000 and over. Evidently they understood, and he understood, that that surplus stock represented other obligations than those he has provided for. And while he testifies to having purchased some receiver's certificates and bonds with his own money, he shows no investment in excess of a few thousand dollars. Indeed, the significance of the testimony in this respect is chiefly in its indefiniteness and omissions. As a witness in this case he testified that Mr. Girard and himself at first bought 40,000 certificates for between $25,000 and $30,000, and that the *money that the two expended and paid [356 into the hands of the receiver for bonds amounted to between $50,000 and $60,000 in cash. In the list of persons to whom stock was issued he names Edwin Girard as receiving 1026 shares. An entry made in his memorandum book at the time the receiver's certificates were purchased shows that one half of the cash was paid by him and one half by Girard, and his statement of the manner in which the subsequent purchases were made indicates that such purchases were on their equal account. During the Congressional investigation, he was asked this question: “Q. I want to get at how you came into possession of 3694 shares of this valuable stock. What did you give for it?" To this he replied, "I will give you the figures as near as I can. I got possession of that stock by paying, in the year 1874, $25,000, and between $35,000 and $37,000." And then, after one or two intermediate questions-there appearing to have been some interruption-the question was again asked, "For what did you receive this stock," and his reply was, "I am telling you. When you interrupted me, I had gone so far as to say that it cost me $37,000, and the costs of the suit were $2000 or $3000 more, in addition to which was the liability that I came under to pay all the charges that any one had against this syndicate, as it has been called." It may be noticed that the $25,000, which he here says he paid in 1874, was, as shown by the memorandum referred to, paid by Girard and himself in equal proportions. Again, he testifies that in fixing the amount of $95,000, $10,000 was estimated for his services and $20,000 for those of the trustees, Man and Wilson, and it appears that Man received a certificate of stock of 203 shares as compen. sation for his services. He testifies that "the stock to Edwin Girard was for receiver's certificates and bonds which the contrary, his truthfulness doubtless comhe and I had bought together; $40,000 receiv-pelled this very omission and indefiniteness. er's certificates, $75,000 of bonds, and $10,000 It does not seem reasonable that a man of the of stock of the old corporation, my recollec- business capacity shown in these transactions tion is." by the defendant would have entered into any obligation of this character without knowing exactly, or nearly so, the items and amounts which he was to become charged with, and that if in the settling up of the affairs any item failed, wholly or in part, he would be able to disclose it exactly. And the fact that the testimony is so indefinite and unsatisfactory in these respects is additional reason for believing that it was part of the understanding of the parties that the plaintiffs were to be paid out of this stock transferred to the defendant. Putting this testimony together, it will be perceived that he retained 3694 shares as his own 357] property. Girard received *1026 shares on account of their joint purchases, and it is to be presumed that on like account he was entitled to the same number. 1026 from 3694 leaves 2668 shares. If Man received 203 shares he, as co-trustee, would be entitled to the same number, and for his subsequent services, according to his own statement of the estimate, another equal sum, or 406 shares for those two items. Subtracting that, there still remain 2262 shares for which no satisfactory explanation is given. It is true that when asked what was included within and covered by the $395,000 in the last agreement, he testified as follows: "A. $90,000, receiver's certificates; $40,000 trustees' commissions; $160,000 stock and bonds; $50,000 to J. Boorman Johnston and Company or Gordon Norrie on account of bonds; $25,000 or $35,000, I do not remember which, to Alfred Russell; $10,000 to defray the expenses provided for in the agreement, and $10,000 for my compensation. That must have made Russell $35,000 if these figures are right." This shows $300,000 out of $395,000 for bond, stocks and certificates, but the application of the stock transferred to him shows no such proportionate disposition thereof for such purposes. Another item of testimony is a memorandum said to have been made during the negotiations prior to the signing of the last contract, by one who was present, as follows: "What Davis must pay out of amo. which be receives on failure of English negotiations, viz, to Sept. 1, '75: Probable amo. required for Girard's bonds (75@ 43 M & int.). $60,000 required for 79 certif., 2d issue, May 8, 74, & int., Probable amo. 3 "A. P. Man's trus 89,000 say 4000 expenses preparing bonds. wagon road lands, 4700 acres; T. M. Davis' profit.. 140,500 $395,000" The last item therein is significant, especially taken in connection with the testimony given by defendant to the effect that of the $250,000 going to the Ocean National Bank only $150,Ŏ00 represented stock and bonds, and $100,000 was for compensation of the receiver, Davis. We must not be misunderstood as imputing to the defendant a lack of truthfulness, or suggesting that his testimony was false. On We have in our consideration of the case thus far endeavored to eliminate all matters of conflicting testimony, and to determine what are the fair inferences from the undisputed facts. There is, in addition to this, the direct testimony of witnesses that this claim of plaintiffs was embraced in the matters provided for by this last contract. Still, we do not care to notice in detail that testimony, for it is contradicted by witnesses apparently equally reliable, and upon that conflicting *#testimony [359 alone it could not be affirmed that the plaintiffs had established their case. In conclusion on this branch of the case, we think it may be affirmed that the property was in equity chargeable with the claim of plaintiffs; that the charge was not incorporated into the decree by virtue of a reliance upon the conditional promise; that the defendant became one of the purchasers and interested in this property with full knowledge of the consideration and the equitable obligation to the plaintiffs; that the arrangement between the parties in interest and himself resulted in fixing the amounts which they should receive absolutely and under no further liability for expenses or otherwise, while he, for the considerations named, assumed all the liabilities, fixed as well as unsettled, growing out of the perfection of the title to that property; that he at one time recognized this liability to plaintiffs as one of those assumed by him in this arrangement with the creditors and others interested, and that it still remains an undischarged obligation resting upon him, and is in equity a lien upon the stock of the new corporation in his hands. We have thus far considered only the question of the fact of liability. Upon that is the stress of the case, and to it was devoted most of the testimony, as well as of the argument. Having reached the conclusion that the defendant is under obligations to the plaintiffs, there remains the further question as to the measure of such liability. On the one hand, it may be said that the amount of the plaintiff's claim was by agreement fixed at $38,000, and that that was the sum which the defendant promised to pay in case the English negotiations were carried through. On the other hand, it is said that if those English negotiations had been carried through he was to have received $590,000 in cash, while under the arrangement as finally consummated he received stock representing only $395,000, and that, therefore, to that extent the claim of plaintiffs should be scaled down. We have heretofore referred to the fact that the evidence is unsatisfactory as to what was intended to be included within and provided for by these two respective amounts. There is testi360]mony to the effect that in arriving at the latter amount those claims included in the former, which did not represent cash, such as commissions to trustees, were to be reduced, though apparently not by any uniform ratio. Russell, who had a claim for $50,000 under the arrangement, settled at a much less figure paid in stock. It may fairly be said that the plaintiffs have not proven that their claim was to be exempted from a reduction corresponding to that made in others of like character, and of course the burden is on them to make out their case. If it be said that the amount of $38,000 was agreed upon in the first instance, a sufficient reply is that that agreement was not made with the creditors, and was only in view of the proposed sale to the English syndicate. There is no testimony as to the real value of those services. Equity would seem to say that the claim of plaintiffs should be scaled down proportionately to the amount allotted to Wilson under the two contracts, which, as we figure it, would reduce the sum to $25,440. A majority of the court are of the opinion that in view of the peculiar circumstances of the case the plaintiffs should not be allowed interest. The decree of the court below must, therefore, be reversed and the case remanded, with instructions to enter a decree in favor of the plaintiffs, awarding to them the sum of $25,440, and adjudging it a lien upon the stock of the Lake Superior Ship Canal, Railway & Iron Company remaining in the hands of defendant. Statement from brief of appellee's counsel: The judgment brought here by writ of error for review, is a judgment of the supreme court of the state of South Carolina, which simply affirmed a decision of the lower court overruling a demurrer, and thereby remanded the case to the court below for a hearing on the merits. It is therefore an interlocutory judg ment and is in no sense a final decree. Statement from the opinion of McGowan, A. J., of the supreme court of South Carolina: This is an action by the city council of Charlestown to recover from the defendant, Doris Werner, the amount paid by the city council for filling up a low lot in the city, the property of the said defendant, which said lot or portion thereof had been inspected by the "board of health," determined to be a nuisance dangerous to the public health, and ordered to be filled. The defendant having been notified, as required by law, to fill the said lot and having failed so to do, the same was filled by the city authorities, and the present action is for the recovery of the cost of the said filling, viz: For 1503 cubic yards of earth, at an expense of $1157.10, which has been paid out of the city treasury. The plaintiff alleges that no part thereof has been paid by the said defendant, and that said sum does not exceed "one half the value of defendant's said lot of land." Whereupon plaintiff demands judgment against the said defendant for the said sum of $1157.10, with interest and costs. When the complaint was read the defend. ant, by her counsel, interposed a verbal demurrer and moved to dismiss the complaint for the reason that it did not state facts sufficient His sufficient to constitute a cause of action. honor Judge Kershaw overruled the demurrer, and the defendant appealed to the supreme court of the state. was The supreme court of South Carolina, affirmed the judgment of the lower court, and the judgment of the supreme court brought to this court by writ of error. Mr. Charles Inglesby, for defendant in error, in favor of motion. Mr. T. Moultrie Mordecai, for plaintiff in error, in opposition. The Chief Justice: The writ of error is dismissed. Meagher v. Minnesota Thresher Mfg. Co. 145 U. S. 608 [36: 834]; Rice v. Sanger, 144 U. S. 197 [36: 403]; Hume v. Bowie, 148 U. S. 245 (37:438.) preme Court, where Federal question arises, or where Officer are drawn in question statutes, treaty, or Constitution, see notes to Martin v. Hunter, 4: 97, Matthews ▼. Zane, 2: 654, and Williams v. Norris, 6: 571. 1. A retired officer of the navy is not entitled to have active service credited in regulating his pay after his active service has ceased. As to jurisdiction of United States Supreme Court to declare state law void as in conflict with state constitution; to revise decrees of state courts as to con-2. struction of state laws, see note to Hart v. Lamphire, 7:679, and to Commercial Bank of Cincinnati ▼. Buckingham, 12: 169. If an officer of the Navy has been twice in the NOTE.-As to extra pay or compensation to officers, see note to United States v. Macdaniel, 8: 587. |