$449 rected. findings of fact, adopting the findings of, ver Bell Company, was under the dominion the district court and making certain find- and control of Steinfeld and did as he diings of its own. So far as necessary to determine the case as we view it, the findings may be summarized as follows: In the year 1900 Steinfeld purchased, in his own name and in the name of the Mammoth Copper Company, which was owned and controlled by him, certain mining properties in the neighborhood of the Old Boot mine, known as the English Group of Mines, and in September, 1900, proceeded to Europe, and there concluded the purchase of the English title to that group. The findings of fact sent up to us, and which must alone be the basis of our judg ment (Eagle Min. & Improv. Co. v. Hamilton, 218 U. S. 513, 515, 54 L. ed. 1131, 1132 31 Sup. Ct. Rep. 27), showing that Steinfeld, in purchasing the English Group of Mines, did not purchase them with the intent that they should thereby become the property of the Silver Bell Company, but that at that time he purposed to give the Silver Bell Company an opportunity to take the mines upon reimbursing him for his outlays and expenditures in that connection, which he expected the Silver Bell Company would do, intending, if it did not, to keep them for his own. In our view, the facts found show that Steinfeld and the company effectually carried out this purpose, and that the subse quent attempt to rescind the action by which the proceeds of the sale of the English Group of Mines became the property of the Silver Bell Company, and to give the proceeds to Steinfeld, must be held for naught. Since 1878 Albert Steinfeld and Louis Zeckendorf have been partners under the firm name of Louis Zeckendorf & Company. Zeckenford lived in the city of New York. Steinfeld resided in the city of Tucson, Arizona, and was the active member of the firm in its mining operations. William and Julia Zeckendorf were the owners of a certain mine known as the Old Boot or Mammoth mine, which was being operated by the Carl Nielsen, under contract with Steinfeld as trustee of the owners. Nielsen became so indebted to the partnership that, in order to secure such indebtedness, in January, 1899, a company was incorporated under the laws of Arizona known as the Nielsen Mining & Smelting Company, the name being changed on January 14, 1901, to the Silver Bell Mining Company, and all the stock of the company was originally issued to Carl Nielsen, in consideration of the transfer to the company of his rights in the Old Boot mine, and a like transfer of personal property used in working the mine. The stock was divided as follows: 499 shares to L. Zeckendorf & Company, 30 shares to Albert Steinfeld, trustee of William and Julia Zeckendorf, 170 shares to J. N. Curtis, 300 shares to Carl Nielsen, and one share to R. K. Shelton, but being in fact the property of L. Zeckendorf & Company. In January, 1901, the 300 shares in Nielsen's name were transferred on the books of the company to the name of Albert Steinfeld, trustee. On the 6th of June, 1903, the 499 shares of L. Zeckendorf & Company were divided, 250 shares to Louis Zeckendorf and 249 shares to Albert Steinfeld, Steinfeld taking the one share standing in the name of Shelton, which was in Steinfeld's possession until December 9, 1903, when it was given to Shelton. At the meeting of the stockholders Steinfeld voted the stock in his name as trustee, and the stock of L. Zeckendorf & Company, and Louis Zeckendorf was never at any stockholders' meeting and did not vote therein by proxy until the stockholders' meeting of December 26, 1903, at which he was present. Subsequent to January 14, 1901, Albert Steinfeld, J. N. Curtis, and R. K. Shelton were the directors of the corporation, all In the early part of 1901, Curtis, who was residing in Tucson, Arizona. Shelton was president of the Silver Bell Company, holdat all times the representative of Steinfelding certain shares in his own right, contendon the board of directors of the company, ed that the English Group of mines was held and at all times involved in this action in trust by Steinfeld for the Silver Bell Voted as ordered, directed, and requested by Company. Both parties consulted one Steinfeld. After June 6, 1903, J. N. Cur- Franklin, an attorney, who advised that tis, as director and other officer of the Sil-Steinfeld could not hold the properties as The findings show that after the acquisition of the English Group of Mines Steinfeld turned them over to the possession of the Nielsen Mining & Smelting Company (the name of which was subsequently changed to the Silver Bell Copper Company), which assumed the possession and control of them; that they were operated in connection with the other mining property of the company, known as the Old Boot mine; that maps were prepared, under the direction of Steinfeld, showing the mining properties as one entire group of mines, and that the president of the company made reports of the mines as the properties of the Silver Bell Company; that these maps and reports were sent to Zeckendorf and others, and that efforts were made by Steinfeld to sell the properties as a whole, including the English Group. 450 *451 his own until he had given the company an opportunity to take them upon reimbursing him for his outlays and expenses, and it had declined to do so. Steinfeld acquiesced in this position, and on July 15, 1901, made a proposition in writing to the Silver Bell Company. The substance of this proposal was that he would hold in trust for the Silver Bell Company all the mining properties controlled by him, the company to assume all obligations, counsel fees, etc., to pay for the annual assessment work, and to reimburse him for his outlays on or before the 15th of October, 1901 (and that he would also turn over the Nielsen stock in controversy in the second cause of the action upon the assumption of certain obligations). And upon compliance with the terms of the proposition the mining properties were to belong to the Silver Bell Company. Steinfeld stated in this proposal: no action was taken. And the Silver Bell Company continued to possess, use, and work the properties as its own with the full knowledge and consent of Steinfeld and the Mammoth Copper Company. In this situation of affairs Steinfeld negotiated the sale of all of the properties, and on May 13, 1903, reported to the board of directors that he had, on behalf of himself, the Mammoth Copper Company, and the Silver Bell Company, given an option for the sale of the properties for $515,000, as one entire property, and requested that his action be confirmed, which was done, Steinfeld himself voting in favor of such confirmance. At the time the price of $515,000 was fixed, Steinfeld intended to renew and permit the corporation to accept the terms of his proposition of July 15, 1901, as extended, and the officers of the Silver Bell Company expected the corporation to avail itself of the offer, so that the whole of the purchase money would be paid to and become the property of the Silver Bell Company. On May 20, 1903, all the properties were conveyed to the Imperial Copper Company for the purchase price of $515,000, $115,000 in cash and the balance "I am of the opinion that all of the mining claims and mill sites and property acquired, as above set forth, by the Mammoth Mining Company and by myself, are of great value to you, and that your company should own the same, and as an inducement to you to purchase and acquire the same, I am will-in notes payable in four equal quarterly ining to place you in my shoes; that is to say, to sell and convey to you all the interest so acquired by me, upon my being repaid the amounts of money I have expended, with interest, and upon your assuming and guaranteeing with security satisfactory to me the performance on your part, of all the matters and things and payments which, under the various contracts, I am liable or responsible for. To this end I herewith submit to you the following proposition." The Silver Bell Company was given until October 15, 1901, to accept the proposition; and, in the event it failed to do so and to comply therewith by such date, the option was to be at an end. This proposition was presented to the board of directors on July 15, 1901, and it was ordered that a meeting of the stockholders should be called to decide upon it. Another meeting of the directors took place October 1, 1901, at which Steinfeld stated that he would agree, on condition that the company pay for the assessment work done and to be done in 1900, 1901, and 1902, and pay interest for the interval on the amount named in his original proposition, to extend the time for acceptance of his proposal to the 15th day of September, 1902. This proposition of extension was accepted by the board, and it was further resolved that a stockholders' meeting should be called not later than September 15, 1902, and a stockholders' meeting was held later on that day, October 1, 1901, but Zeckendorf was not present and stalments. The cash and notes were turned over to Steinfeld as the treasurer of the Silver Bell Company, and were to be held by him under a certain agreement, dated May 20, 1903, which permitted Steinfeld to hold the money and notes as indemnity for the obligations and liabilities to the Imperial Copper Company which he had assumed, the latter company having required Steinfeld to guarantee the titles to the mines sold for one year. It was mutually agreed in the agreement of May 20, 1903, that the purchase price paid and to be paid upon the sale should belong to the Silver Bell Company. Between May 20, 1903, and January 20, 1904, the Imperial Copper Company paid to Steinfeld, as treasurer and trustee of the Silver Bell Company, $319,487.50, representing the cash payment and the proceeds of the first two notes, with interest, out of which money was paid $118,000, including $18,117 to Steinfeld. In October and November, 1903, Steinfeld sent all the money, except $50,000 which had been attached in his hands at the suit of Franklin, to the Bank of California, at San Francisco, California, and deposited it there in his individual name. On the day the contract of May 20, 1903, was executed, the board of directors held a meeting, Steinfeld, Curtis, and Shelton being present, at which the president reported the various transactions attending the sale and submitted certain documents. He further reported that Steinfeld, who had con *453 *454 | ducted the negotiations with the Imperial, the holding of the supreme court of ArizoCopper Company, had again submitted for na as to the effect of this decision upon its acceptance his proposition of July 15, 1901, own judgment and that of the district court, with the modifications that the company the case reached this court for the first time forthwith pay him in cash the sum of upon the present appeal, and certainly the $18,117, being the sum named in the origi- holding of the supreme court of Arizona at nal proposal, with interest, and assume all any of the stages of the case prior to this obligations incurred in past and present appeal would not be the law of the case negotiations and transactions with respect for this court. United States v. Denver & to such mining properties, and the presi- R. G. R. Co. 191 U. S. 84, 93, 48 L. ed. dent stated that it was necessary to adjust 106, 109, 24 Sup. Ct. Rep. 33. with the Mammoth Copper Company the *We cannot agree with the supreme court of disposition of the purchase money, and sub- Arizona that the effect of this stockholders' mitted the agreement of May 20, 1903. meeting was to rescind so much of the forFive several resolutions were thereupon un- mer action as vested the proceeds of the sale animously adopted: (1) Ratifying the sale; in the Silver Bell Company. Nor can we (2) accepting Steinfeld's proposition and agree, as the court held, that, if the parties directing the payment forthwith of the $18,- did intend to rescind only the former ac117, and providing for certain other pay tion as to the custody of the proceeds of the ments; (3) authorizing the payment of sale, they made a mistake only as to the certain commissions on the sale: (4) fully legal effect of the rescinding resolution. On empowering the president and secretary of the other hand, we think it is apparent from the company to indemnify Steinfeld against a consideration of the proceedings of that loss or damage for having guaranteed the meeting, which the supreme court of Arizotitles to the properties; and (5) specifically ❘ na has made a finding of itself, that the obratifying and approving the agreement of jection of Zeckendorf, the principal stockMay 20, 1903, providing for the disposition holder other than Steinfeld, was to so much of the proceeds of the sale and indemnifying of the former action as pertained to the Steinfeld. And on the day following, May turning over of the proceeds of the sale 21, 1903, the $18,117 was paid to Steinfeld. to Steinfeld to be held by him for his inZeckendorf was not at this meeting or any demnity. At the meeting no disposition was of the meetings except the stockholders' manifested to give Steinfeld the ownership meeting on December 26, 1903. of the proceeds of the sale of the English mines, nor to treat any modification of the former action as a rescission of the entire matter. In December, 1903, Zeckendorf brought a suit in California to enjoin the bank there from turning over to Steinfeld the moneys and notes so deposited by him, and obtained an injunction restraining Steinfeld from receiving and the bank from delivering to him the money and notes. Thereafter, on December 26 1903, & stockholders' meeting was held in Tucson, Arizona, all the stockholders and the respective attorneys of Zeckendorf and Steinfeld being present, and it was at this meeting, it is contended, that the action thereto fore taken vesting the proceeds of sale in the Silver Bell Company was rescinded. The supreme court of Arizona, on the first appeal of this case to that court (10 Ariz. 221, 86 Pac. 7), found that such rescission was accomplished, notwithstanding the stockholders may have intended to do no more than rescind the indemnity feature of the former agreement and resolutions, and sent the case back for findings of fact as to the ownership of the English Group of Mines and also of the 300 shares of stock, and as to the rights of the parties as to the distribution of the proceeds of the sale. This conclusion as to the rescission of the agreement of May 20, 1903, it is said, has become the law of the case and binding in its subsequent stages. Whatever might be The discussion at that meeting throughout shows that the object of Zeckendorf was to get the money and the proceeds of the notes into the hands of a treasurer of the company who would give security therefor, and to have the entire proceeds of the sale divided among the stockholders. There was no intimation that the money or notes then held by the treasurer would be taken from the Silver Bell Company and one half thereof turned over to Steinfeld as the vendor of the English Group of Mines. As the counsel of Steinfeld said: "We are unwilling to admit that we did not have the right to this money. We still assert that this resolution and agreement was honest and valid, and that Mr. Steinfeld, under it, had the right to this money, and had the right to act as he has done. But since you attack it, we are willing to agree to pass a resolution in the language of your prayer in which we will rescind the right whatever to the personal custody of resolution and agreement, and relinquish all that money, and turn it over to the com pany. "Now, I drew a little resolution, which I would suggest one of you gentlemen (I am *456 *455 not a member of the board) should offer.", and not in any proper sense a finding of (Italics ours.) fact. If this be so, we think it is the prop Thereupon the resolution in the following er conclusion from the facts stated. In our language was offered: "Resolved, that the agreement executed on May 20th by the president and secretary of the corporation, the Mammoth Copper Company, and Albert Steinfeld, be and the same is hereby rescinded, and that the said agreement and resolution passed on said day be declared null and void." view it cannot be reasonably maintained that, in passing the resolution, when it is read in the light of the proceedings at the meeting and the known facts surrounding the parties at the time, the stockholders intending to rescind any more of the transaction than related to the indemnity agreement. On the other hand, the fair inference from the proceedings at this meeting leaves no doubt in our minds that the stockholders intended to affirm the previous transactions "We are acquiescing in your demand. except so far as they related to Steinfeld's right to hold the money and notes for his “We will now organize as a stockholders' indemnity, and that Steinfeld acquiesced in meeting. After the resolution had been offered and before the vote was taken, counsel for Steinfeld said further: such modification as one of the stockholders. "Our desire is in good faith to rescind In interpreting the action of the stockthat resolution, but we will never admit we holders in passing the resolution, the facts acted wrongfully in taking the money; you and circumstances surrounding them may attacked the resolution, and we are willing, legitimately be looked to. Chesapeake & if you wish, to rescind it." (Italics ours.) O. Canal Co. v. Hill, 15 Wall. 94, 100, 101, What resolution does this refer to? Cer-21 L. ed. 64, 67, 68. In construing written tainly not the one (1) ratifying and ap-documents, "this kind of evidence," said proving the sale to the Imperial Copper Mr. Justice Bradley, speaking for the court, Company; nor the one (2) accepting Steinfeld's proposition and authorizing payments to Steinfeld and those from whom he had purchased; nor (3) the payment of commissions. But manifestly all parties had in mind so much of the resolutions as referred to the right of Steinfeld to continue to hold the proceeds of the sale, cash and notes, for his indemnity. At the stockholders' meeting, the entire 1,000 shares, representing those belonging to Zeckendorf, Steinfeld, Shelton, and Curtis, were all voted in favor of the resolution. We will not stop to recite the other parts of the long finding which includes all the proceedings of this meeting.* At the end of the findings of fact in this connection the supreme court of Arizona makes this significant statement: "is especially pertinent when the inquiry is as to the subject-matter of the agreement" (p. 101). To the same effect, Reed v. Merchants' Mut. Ins. Co. 95 U. S. 23, 30, 31, 24 L. ed. 348–350. Notwithstanding the directors did not, in good faith, understand the rescission to go beyond the indemnity feature, as above stated, on December 26, 1903, the directors, Steinfeld, Shelton, and Curtis, met and undertook to rescind their former action. It is specifically found that Zeckendorf had no knowledge of this meeting, although it was held on the same day as the meeting of the stockholders to which we have referred. On January 16, 1904, Curtis and Shelton, for the directors, without notice to the other stockholders, and no one else being present but Steinfeld and his counsel, "In the stockholders' meeting held on the at the request of Steinfeld, adopted the res26th day of December, 1903, herein above set olution which divided the $515,000, the proout, plaintiff, in voting to rescind said ceeds of the sale to the Imperial Copper agreement of May 20, 1903, and the resolu- Company, by awarding to Steinfeld and his tion hereinabove mentioned, did not under- company, the Mammoth Copper Company, stand or know or believe that anybody as the owners of one half of the property claimed or would claim that the action tak- sold, one half of the cash and notes, less en on that day by the stockholders of the certain payments which are recited. UnSilver Bell Copper Company would operate der that supposed authority, Curtis, as to give either Albert Steinfeld or the Mam- treasurer, turned over to Steinfeld $145,moth Copper Company any right or claim 743.75 in cash and one of the notes. In to any of said proceeds of said sale, nor did so voting and acting it is specifically found the directors in good faith understand or that Curtis and Shelton consulted with no believe that the stockholders intended to in-person whatsoever except Steinfeld and his struct them to rescind any portion of the agreement and resolution other than that relating to the indemnity agreement hereinbefore mentioned." (Italics ours.) It is argued that this is but a conclusion, attorney, and that they were under the complete dominion and control of Steinfeld, and voted and acted on his orders and not otherwise. For the reasons stated, we are of the opinion that the supreme court of Arizona *459 erred in affirming so much of the judgment nation is within the authority of the act as dismissed the first cause of action. This of February 20, 1907 (34 Stat. at L. 898, conclusion renders it unnecessary to consid- chap. 1134, U. S. Comp. Stat. Supp. 1911, er whether Steinfeld, in view of his relation P. 499), as amended by the act of March to the company, could have held the title 26, 1910 (36 Stat. at L. 263, chap. 128, U. acquired by him except in trust for the S. Comp. Stat. Supp. 1911, p. 501), and at subsequent stages in the proceeding, and before the hearing was closed or the orders for deportation made, she had the assistance and advice of counsel. company. [Ed. Note.-For other cases, see Aliens, Cent. Dig. § 100: Dec. Dig. § 40:* Constitutional Law, Cent. Dig. § 949; Dec. Dig. § 318.*] CESS OF LAW-DEPORTATION OF ALIEN. As to the second cause of action: * On the 20th of January, 1904, Steinfeld received $33,300 as dividends upon the stock standing in his name as trustee and which is in controversy in the second cause of action, a dividend of $111 per share having been declared by the board of directors. As to this phase of the case, it is unneces- to issue process to compel the attendance sary to recite the facts found by the supreme court of Arizona. They are clear and distinct, and there can be no doubt that Steinfeld held the 300 shares of stock purchased from Nielsen for the company, and the court was right in affirming the judgment upon the second cause of action upon the facts found. It is contended that it was wrong to appoint a receiver in the case, but we think that, in view of the situation of the property and the final winding up of the company, the appointment of the receiver was proper, and that that officer should be continued for the final settlement of the affairs of the company. It follows that the judgment of the Supreme Court of the Territory of Arizona should be reversed in so far as it affirms the judgment of the District Court on the first cause of action, and affirmed in so far as the Supreme Court affirms the District Court on the second cause of action; and the case remanded to the Supreme Court of the state of Arizona, as successor of the Territorial Supreme Court (36 Stat. at L. chap 310, pp. 576, 577, U. S. Comp. Stat. Supp. 1911, p. 158; Nielsen v. Steinfeld, 224 U. S. 534, 56 L. ed., 32 Sup. Ct. Rep. 609), for such further proceedings as may not be inconsistent with the opinion of this court. Judgment accordingly. (225 U. S. 460.) LOW WAH SUEY and Li A. Sim V. of witnesses does not render invalid, as ALIENS (8_44*) – DEPORTATION-DEPART MENTAL REGULATIONS. 3. The rules of the Secretary of Commerce and Labor governing the deportation of aliens found as inmates of houses of prostitution within three years subsequent to their entry into the United States are not so arbitrary as to be beyond his power, under the act of February 20, 1907, as amended by the act of March 26, 1910, beamination in the absence of counsel, where cause provision is thereby made for an exthey also provide for a hearing at which the alien shall have opportunity to show cause why she should not be deported, and for her apprisal at such stage of the proceedings as the person before whom the hearing was held shall deem proper that sel, and for the forwarding to the Depart she may thereafter be represented by counment of all papers, including the minutes and any written argument submitted by counsel. [Ed. Note.-For other cases, see Aliens, Cent. 4. A foreign-born Chinese woman, though married to a Chinaman of American birth, is an alien, within the meaning of the provisions of the act of February 20, 1907, as (Mrs. amended by the act of March 26, 1910, for the deportation of any alien found as an inmate of a house of prostitution within three years subsequent to her entry into the United States. SAMUEL W. BACKUS, Commissioner of ALIENS ($ 40*) CONSTITUTIONAL LAW ($318*)-DUE PROCESS OF LAW-DEPORTATION OF ALIEN. 1. Proceedings resulting in the deportation of an alien found as an inmate of a [Ed. Note.-For other cases, see Aliens, Cent. Dig. §§ 76-90; Dec. Dig. § 23.* For other definitions, see Words and Phrases, vol. 1, pp. 299-301; vol. 8, p. 7571.] [No. 869.] house of prostitution within three years Argued April 30, 1912. subsequent to her entry into the United States are not wanting in due process of 1912. Decided June 7, law because she had no counsel when first APPEAL from the District Court of the under examination, where such an exami United States for the Northern Dis For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes |