« ForrigeFortsett »
beyond the jurisdiction of the court, and this only for the purpose of preventing a failure of justice.
2. BILL-CROSS-BILL-DISMISSAL DECREE.-The plaintiffs in the original bill in an equity suit have the right, as a matter of course, at any time before decree, to dismiss their bill at their own costs; but where a cross-bill has been filed by defendants and service of process was had thereunder on the plaintiffs, or the latter had voluntarily entered their appearance thereto, then the defendants would be entitled to a decree pro confesso on such cross-bill on a dismissal of the original bill by the plaintiffs, after the lapse of the time allowed them by the rules to answer.
3. THE BILL AND CROSS-BILL IN EQUITY do not necessarily constitute one suit, and the service of a subpoena on the defendants in the cross-bill is necessary to bring them into court on such cross-bill, unless they voluntarily enter their appearance thereto, which is ordinarily done.
Erb, Summerfield & Erb, for plaintiffs; Dodge & Johnson, for Partee and wife.
The plaintiffs filed their bill to foreclose a deed of trust on real estate. R. D. Partee and wife among others were made defendants upon the allegation that they had some interest in the said mortgaged premises, or some part thereof, as purchasers, judgment creditors or otherwise, which interests, if any, have accrued subsequent and are prior to complainants' lien and subject thereto. Partee and wite answered, alleging they were the owners in fee of the property by purchase from one Christman, from whom Parish, the grantor in the deed of trust, derived his title; that the sale of the premises by Christman to Partee and wife was made long before the conveyance by Christman to Parish, and Parish to plaintiffs; that all these parties had full notice of the purchase by Partee and wife; that a suit for specific performance of the contract for the sale of the property, was brought by Partee and wife against Christman in the Pulaski Chancery Court, and was pending at and before the conveyance of the property by Christman to Parish and Parish to plaintiffs, and that said parties had notice of the pendency of such suit, and that that court decreed a conveyance of the property from Christman to Partee and wife, the title under such conveyance to relate back to the 20th day of December, 1876.
Partee and wife also filed a cross bill against the plaintiff's setting up the same facts set out in their answer, and praying for the cancellation of the plaintiffs' deed of trust and for a decree against plaintiffs for the rents and profits of the property received by them between the 23d of January, 1877, and the 27th of December, 1877, from the trustee in the deed of trust, who was in possession as such under said deed, and collected the rents of the property and paid the same to the plaintiffs for the period mentioned. The cross-bill was filed February 4th, 1878. No process has issued thereon, and the defendants who are plaintiffs in the original bill have not entered their appearance thereto.
The plaintiffs in the original bill now move for leave to dismiss the same. To this motion Partee and wife, who are named among the defendants in the original bill and who are plaintiffs in the
cross-bill, object, and they also move for a decree pro confesso on their cross-bill.
Plaintiffs claim the dismissal by them of the original bill operates to dismiss the cross-bill. CALDWELL, J.:
The plaintiffs in the original bill have the right, as a matter of course, at any time before decree to dismiss their bill at their own costs. 1 Barb. Chan. Pr. 225, 228; 1 Daniels on Pl. and Pr. 792.
The cause is not at issue on the original bill-no replication to the answer having been filed—and the defendants in that bill under rule 66 might have obtained an order, as of course, for a dismissal of the suit for this reason.
The motion of plaintiffs to dismiss their bill is granted and the same will be dismissed at their costs.
The motion of plaintiffs in the cross-bill for a decree pro confesso thereon against the defendants therein named is denied.
If the defendants in the cross-bill had been served with process, or had voluntarily entered their appearance to the cross-bill, the plaintiffs therein would have been entitled to a decree pro confesso after the lapse of the time allowed defendants by the rules to answer.
The bill and cross-bill in equity do not necessarily constitute one suit, and according to the established practice in equity the service of a subpœna on the defendants in the cross-bill, although they are parties in the original bill and in court for all the purposes of the original bill, is necessary to bring them into court on the cross-bill, unless they voluntarily enter their appearance thereto which is the usual practice. And the general chancery rule is, that service of the subpœna in chancery to answer a cross-bill cannot be made upon the solicitor of the plaintiff in the original bill. 1 Hoffman's Chan. Pr. 355 and note 4.
In the chancery practice of the Circuit Courts of the United States there are two exceptions to this rule: (1) In cases of injunctions to stay proceedings at law, and (2) in cross-suits in equity where the plaintiff at law in the first and the plaintiff in equity in the second case reside beyond the jurisdiction of the court. In these cases, to prevent a failure of justice, the court will order service of the subpœna to be made upon the attorney of the plaintiff in the suit at law in the one case, and upon his solicitor in the suit in equity in the other. Eckert v. Bauert, 4 Wash. 370; Ward v. Sebring, Ib. 472; Dunn v. Clark, 8 Pets. 1; and for application of analogous principles to parties to cross-bills, see Schenck v. Peay, 1 Woolw. 175.
It not unfrequently occurs that the facts constituting defendant's defense to an action or judgment at law are of a character solely cognizable in equity; and in suits in equity it often happens that the defendant can only avail himself fully and successfully of his defense to the action through the medium of a cross-bill.
In suits in these courts the plaintiff is usually a citizen of another state and hence beyond the jurisdiction of the court, and in such cases defendants who desire to enjoin proceedings at law, and de
fendants in equity cases who desire to defend by means of a cross-bill, would, but for this rule of practice, be practically cut off from their defenses by reason of their inability to make service on the plaintiff in the action. It would be in the highest degree unjust and oppressive to permit a nonresident plaintiff to invoke the jurisdiction of the court in his favor, and obtain and retain, as the fruits of that jurisdiction, a judgment or decree to which he was not in equity entitled, by remaining beyond the jurisdiction of the court, whose jurisdiction on the very subject matter and against the very party he had himself first invoked. The reason of the rule would seem to limit it in equity cases to cross-bills, either wholly or partially defensive in their character, and to deny its application to cross-bills setting up facts not alleged in the original bill, and which new facts, though they relate as they must to the subject matter of the original bill, are made the basis for the affirmative relief asked.
The cross-bill in this case is of this latter character, and without deciding that this fact alone would preclude the court from directing service of the subpoena on the solicitors of the plaintiff's in the original bill, such an order will not be made after plaintiffs have filed their motion to dismiss their bill-a motion grantable as of course.
Whether the dismissal of the original bill carries with it the cross-bill depends on the character of the latter. If the cross-bill sets up matters purely defensive to the original bill and prays for no affirmative relief, the dismissal of the latter necessarily disposes of the former. But where the cross-bill sets up, as it may, additional facts not alleged in the original bill, relating to the subject matter and prays for affirmative relief against the plaintiffs in the original bill in the case thus made, the dismissal of the original bill does not dispose of the cross-bill, but it remains for disposition in the same manner as if it had been filed as an original bill. Warrell v. Wade, 17 Iowa 96; 2 Daniels Chan. 1556.
The cross-bill in this case is of this character, and it will remain on the docket, and the plaintiffs therein can take such action in relation thereto as they may be advised, but no steps can be taken in the case until defendants are brought into court.
has changed hands and the title passed, and to preclude the hazard of the seller obtaining a false credit from the continuance of his apparent ownership. Hence, held, that the retention of the old sign, in this case, amounted to a declaration to the public that the former owner was still proprietor, and gave the transaction such an equivocal character that it should have been declared fraudulent as a matter of law.
Snoddy & Short and Bridges & Sloan, for respondent; B. G. Wilkerson and W. S. Felix, for appellant.
HOUGH, J., delivered the opinion of the court: This was an action brought by the plaintiff, under the statute relating to the claim and delivery of personal property, against the sheriff of Pettis county, to recover certain property seized by him on the 30th day of October, 1874, under a writ of attachment against Charles A. Doherty, a dealer in cigars and tobacco, in Sedalia. The plaintiff claimed title under a sale of said goods made to him by said Doherty on the 28th day of October, 1874, and the validity of this sale, as against the attaching creditor, is the question presented for determination. It appears from the record that Doherty, who was indebted and in failing circumstances, wrote to the plaintiff, Wright, who was one of his creditors and resided in St. Louis, that he had been sued; that he wished to secure his debt, amounting to $190, and that he had better employ Snoddy & Bridges to attend to the matter. Wright at once directed Snoddy & Bridges to secure his debt, and in doing so to act according to their best judgment. Doherty kept two establishments in Sedalia, a store in the Porter block, on Ohio street, and a cigar stand in the Ilgen House. David Sprecher was clerk in one, and his brother, Newton Sprecher, was clerk in the other. On the 28th day of October, 1874, in consideration of the debt due by him to the plaintiff, Doherty executed to the plaintiff a bill of sale of the stock on hand, in both establishments, and delivered the same to Bridges. At the same time one of the keys to the store on Ohio street was handed by Doherty to Bridges, the other being retained by the clerk,and both clerks were informed by Bridges, in the presence of Doherty, that he had bought the goods in both places of business, and they were instructed to account to him for all sales thereafter made by them, and not to permit Doherty to have any further control over the goods. Both places of business were kept open, and sales made thereat as usual, after the execution of the bill of sale, and the same sign, "C. H. Doherty, dealer in cigars and tobacco," was kept up at the store, which had been there for months prior to the sale. Nor was any change made at the cigar stand to indicate a change of ownership. After the sale, and before the attachment, Doherty was frequently at the store, and occasionally made sales of goods therein, but as appears from the testimony of Bridges, without his knowledge or consent. Newton Sprecher testified that he was paid by Doherty for his services at the cigar stand, up to the morning of the attachment. The court refused all the instructions asked by the defendant, and of its own motion gave the following:
1. That if it appear from the evidence that at the time of the alleged sale from Doherty to plaintiff, Doherty had the control or was in possession of the goods sold, the plaintiff cannot recover in this action, unless the court, sitting as a jury, is satisfied from the evidence that the sale was ir good faith and for a valuable consideration, and accompanied by a delivery of the goods so sold in a reasonable time, (regard being had to the situation of the property) and such sale and delivery was followed by an actual and continued change of the possession of the thing sold.
2. It is necessary to the validity of the sale from Doherty to plaintiff that the change of the possession of the thing sold, as required by the first instruction above, from Doherty to plaintiff, was actual, exclusive, visible, and continuous up to and at the time of the levy of the attachment; and if the court,sitting as a jury, believes from the evidence that the plaintiff did not, in good faith, purchase said goods, or that there was no actual, continued and visible change of possession and control of said goods sold, prior to levy thereon of the defendant, the finding must be for the defendant.
3. If the court, sitting as a jury, believes from the evidence, that prior to the levy by defendant on the goods sold, the plaintiff, by his agent, Bridges, in the presence of Doherty, or with his assent and concurrence, notified and informed the Sprechers, who had before, and up to that time, been agents and clerks of said Doherty, that he had bought said goods, and that they were to act for plaintiff in any further charge or dealing with said goods, and that Doherty was to have no further control of, and nothing further to do with the goods sold, and further believe that with the plaintiff's assent, Doherty had nothing further to do with the goods or with the possession or control of the same, then in such case there was such change of possession, as is contemplated by instructions 1 and 2 above.
The court found for the plaintiff and the defendant has appealed. It has been repeatedly held by this court that the actual and continued change of possession contemplated by the statute in relation to fraudulent conveyances, must be open, notorious and unequivocal, such as to apprise the community or those accustomed to deal with the party, that the goods have changed hands and that the title has passed out of the seller and into the purchaser. Claflin v. Rosenberg, 42 Mo. 439. Bishop v. O'Connell, 56 Mo. 158.
In Lesem v. Herriford, 44 Mo. 325, it was said that the statute requires "such a change as to preclude the hazard of the seller deriving a false credit from the continuance of his apparent ownership."
The third instruction given by the court is not in harmony with these decisions, and while the facts stated in that instruction might constitute a true test of title as between the parties to the transaction, they are of themselves insufficient to notify the community at large, or the regular customers even of the vendor, that there had been a change of ownership. The retention of the old
2. CASE IN JUDGMENT - NEGLIGENCE - USAGE.The defendant bank received from the plaintiff bank a sight draft for collection drawn by the plaintiff on a third bank against funds actually to the credit of the drawer; the defendant received this draft for collection January 10th, and transmitted it directly to the drawee, its correspondent, on the same day. It ought to have reached the drawee in two days. The drawee continued good until January 29th, when it failed. The drawee did not acknowledge the receipt of the draft, and, in fact, the draft miscarried and never reached the drawee. The defendant made no inquiries about it until February 9th. The plaintiff and defendant both supposed, meanwhile, that it had been paid. The defendant gave the plaintiff no notice of any kind in respect of the draft until February 11th. The plaintiff sued the defendant for its negligent omission to give it notice. Held, 1, that the defendant was liable. 2. That the usuage or custom set up by the defendant to the effect that it was not required to make the inquiries concerning such remittance prior to the receipt of the regular monthly statement of accounts between banks, was not established by the evidence.
3. MEASURE OF DAMAGES.-Under the special facts, the measure of damages was the amount of the draft.
ant (to the order of whose cashier the draft was payable) received the same, in due course of mail, January 10th, and, without delay, transmitted it on the same day, for credit and advice, directly to the drawee, the Kansas City bank. When the draft was drawn by the plaintiff, it had more than the amount actually on deposit with the Kansas City bank, and it at once credited the last named bank with the amount. According to usage the defendant, on receipt of the draft, credited, (January 10th) the amount to the plaintiff, and charged the amount to the Kansas City bank. This was done in anticipation that the draft would reach the drawee, and be duly paid when it arrived.
The letter containing the draft, which was sent by the defendant to the Kansas City bank, would, in due course of mail, have reached the drawee January 13th, at the latest on January 14th. The Kansas City bank never received the letter containing the draft. That bank continued to do business until January 29th, 1878, when it closed its doors, and afterwards the Comptroller of the Currency appointed a receiver, and the bank is now in process of liquidation. If the draft had been presented at any time before January 29th, it would have been paid. The Kansas City bank did not, of course, acknowledge the receipt of the draft since its president testifies that it was never received.
Singularly enough, another draft for $5,000, drawn about the same time, by the plaintiff, on the same Kansas City bank, and forwarded for collection through a bank in Pueblo, Colorado, was never received by the Kansas City bank,—so its officers testify.
The defendant bank made no inquiries prior to February 9th, 1878, concerning the draft here in question, or why the receipt of it had not been acknowledged by the Kansas City Bank. The defendant's officers assumed that it had been received and credited until February 9th, when, on receiving the monthly statement, or account current, of the Kansas City Bank, it learned, therefrom, that it was not credited with the draft in question. The defendant immediately (February 9th), telegraphed the Kansas City Bank that it had, on January 10th, transmitted the draft which did not appear in their statement just received.
On February 10th the Kansas City Bank wrote the defendant that it had never received the remittance. This letter being received by the defendant February 11th, the defendant at once, on that day, notified the plaintiff and charged back the amount to it. Until this the plaintiff supposed the draft had been paid.
The plaintiff objected to the defendant charging back the amount; but the defendant insisted, and refused upon demand to restore the credit or to pay the amount to the plaintiff.
The plaintiff's action is against the defendant to recover the amount, and is based upon the defendant's alleged negligence, as the agent of the plaintiff, in omitting to give the plaintiff notice that the draft had not been credited or received prior to the failure of the drawee. The defendant denies the imputed negligence, and sets up, in its answer, a
custom or usage among the banks in Colorado, to the effect that in transmitting bank checks and drafts to correspondents, on whom they are drawn, it was usual or customary to await the advices of the regular and usual monthly statement, and that such custom or usage did not require the defendant to make any inquiries concerning such remittances prior to the receipt of the regular monthly statement.
The replication denies the existence of any such custom or usage, or any knowledge thereof by the plaintiff.
A jury was waived, and on the trial by the court the facts appeared substantially as above set forth. Wells, Smith & Macon, for the plaintiff; Sayre, Butler & Wright, for the defendant.
DILLON, Circuit Judge.
The plaintiff treats the defendant as its agent to collect the draft in question, and the ground of the action is the alleged negligent omission of duty on the part of the defendant, resulting in loss to the plaintiff.
I have fully examined the adjudged cases relating to the duty and responsibility of a bank which undertakes to act as a collecting agent for its customers, or for other banks. Bailey v. Boodenham, 16 C. B., N. S., 294; Shipsey v. Bowery Bk., 59 N. Y. 485. They clearly show that the defendant bank ought to have ascertained, within a reasonable time, whether the draft transmitted had been received by its correspondent; and, if not, to have advised the plaintiff thereof. The practice of banks to send such checks or drafts directly to the drawee, as in this case, is attended with some obvious additional peril, and does not weaken, if, indeed, it does not increase the diligence required of the collecting bank, in respect to inquiry and notice.
The defendant bank allowed an unreasonable time to elapse before it made inquiry concerning the draft; and more than a reasonable time had elapsed before the failure of the Kansas City bank occurred. It was this negligence that caused the loss, since it is established by the evidence that the draft would have been paid if it had been presented at any time before the suspension of the drawee on the 29th day of January. Here, then, was an unexcused delay for fifteen or sixteen days to make any inquiry or give any notice.
Aside from the custom or usage, pleaded in defense, to be noticed presently, the decisions in England and in this country are uniform that such delay to make inquiry, and omission to notify the party interested, as occurred in this case, impose a liability if loss is thereby occasioned. The alleged custom or usage in derogation of the otherwise legal rights of the plaintiff, is one which scarcely seems consistent with reasonable vigilance, or the well-known practice of business men and banks to acknowledge promptly the receipt of money remittances. The evidence in this case showed that it was the uniform practice to make such acknowledgments. The defendant claimed that all the banks in Denver and Colorado relied on the monthly statements, and that it was not customary or usual to inquire after remittances in
the interim between monthly statements. The evidence failed to show any such custom or usage common to all, or even to the majority of the banks in Denver. In fact it failed to show that there was any such uniform usage in the defendant bank, whose business seems to be well regulated. The cashier of the defendant frankly testified that if his attention had been called to the fact that no letter of advice had been received in due course from the drawee, that he would have made inquires. At all events the usage of the defendant was at most its private usage or mode of doing business. It was not known to the plaintiff, and if it was invariably adhered to by the defendant, it was of such a nature that the plaintiff was not bound to take notice of it. It was shown in evidence that the defendant bank did a very extensive business; and it was claimed by the cashier, on the witness stand, that it was impracticable to look after all the paper sent forward to correspondents for credit in the interval between the transmission of such paper and the receipt of the monthly statement. But the evidence did not sustain this claim. On the contrary, it showed that banks, in general, were in the habit of so keeping their books as to have their attention called to a failure to receive advices in order that they might institute the needful inquiries, and that it was the usual practice to make such inquiries, unless upon the eve of the date when the monthly statement was due. The fact that the defendant transacts a large business can not relieve it from the duty of giving due attention to every piece of paper it undertakes to collect. The measure of diligence can not fluctuate with the amount of business which a given bank may do. And the defendant would not, perhaps, like to be discharged from liability on the ground, judicially declared, that it was not bound to the same degree of care as smaller banks, in transacting the business of its correspondents.
I consider the liability of the defendant bevond any reasonable boubt. Under the circumstances I regard the rule of damages as equally clear. The plaintiff had more than the amount actually on deposit, subject to draft in the Kansas City bank. The draft would have been paid if it had been presented in time; if plaintiff had been notified within a reasonable time that the draft had miscarried, it could have protected itself against loss.
The Kansas City bank has failed. There was no evidence what dividend, if any, its creditors will receive.
The draft in question was drawn in favor of the defendant, and it had and has the legal title thereto. The plaintiff, when it drew the draft, credited it to the drawee, and charged it to the defendant, and received in turn credit from the defendant therefor. The defendant, having the legal title to draft, will be entitled to prove it as a lost instrument against the Kansas City bank, and to receive all dividends which may be declared. Under these circumstances the defendant is liable for the full amount of the draft, and will be entitled to hold the draft as its own, or to have a duplicate if it desires.
1. DEVISE-REMAINDER-"SURVIVORS.”— Where a devise is made by will of all testator's property to trustees, providing for an annual payment to the widow and the remainder of the net income of the estate to be divided between the two daughters of testator for life, with benefit of survivorship between them in such income, and after their lives, and that of the wife, the whole of the estate to be distributed equally between the lawful "surviving" descendants of testator's brothers and sisters, and where both of the daughters have died without issue, the widow of the testator still liv. ing, but having renounced her rights under the will and elected to take under the statute: Held, that the gift of remainder over after the life estate to "survi vors" means those only who survive the period of distribution, unless a contrary intent is found in the will.
2. THE PERIOD OF DISTRIBUTION is the death of the widow, although she elected to take under the statute, and the remainder to the survivors can not be accelerated so as to bring them into the enjoyment thereof before the death of the widow.
3. THE DOCTRINE OF ACCELERATION OF REMAINDERS only applies when such a construction would not do violence to the intention of the testator, as expressed in the will.
Appeal from Cook County.
SHELDON, J. delivered the opinion of the court:
This case is one involving the construction of a will. Walter L. Newberry, a citizen of Chicago, made his will on the 30th day of October, 1866, and died November 6, 1868. He eft a widow, and two unmarried daughters. By his will he devised and bequeathed unto two trustees his whole real and personal estate, after payment of certain specific legacies of inconsiderable amount, to be held upon the general trusts declared in the will, until distribution by them to the person ultimately entitled; the will containing careful directions governing this period, the administration of the estate and its income. The estate was a very large one, of the estimated value of from four to five millions of dollars.