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praisers appointed by the Probate Court as to the value placed upon it by the appraisers, are not sufficient to sustain an action of the case for deceit in the sale or exchange of property.
ON exceptions from Superior Court.
The case and material facts are sufficiently stated in the opinion.
John H. Potter and George J. Moody, for plaintiff. Bean & Bean, for defendant.
SYMONDS, J. Case for deceit alleged to have been practiced by the defendants in effecting an exchange of real estate with the plaintiff.
One of the allegations of fraud relied upon at the trial was that the defendants said the place in Belfast which they exchanged with the plaintiff for her farm in Fayette, was valued by the appraisers upon the estate of Lydia A. Hollis, mother of the defendant, Grace U.Davis, at $1,000, when in fact the appraisal was only $225.
In this respect the jury were directed by the presiding judge that if the defendants stated "as a matter of fact that the appraisal had been made by the official appraisers, under their oaths, in performing their official duty under the laws of this State, and that statement was false (and there is no dispute, I believe, about the fact that the appraisal was $225 instead of $1,000), and was known by them to be false at the time, and was made for the purpose of deceiving the plaintiff, and as an inducement to her to make the exchange, and she did rely upon it, and was thereby induced to make the exchange," it was a fraudulent misrepresentation, which would give the plaintiff a right of action to recover the damages which she sustained thereby. The ruling appears to have been a pro forma one, and the verdict being for the plaintiff, the question of its correctness is reserved upon exceptions by the defendants.
It is the general rule, at least in Massachusetts and Maine, that an action of tort for deceit in the sale of property does not lie for false and fraudulent representations by the vendor to the vendee concerning its cost or value, or the prices which have been offered or paid for it. Long v. Woodman, 58 Me. 52; Holbrook v. Connor, 60 id. 578; Martin v. Jordan, id. 531; Bishop v. Small, 63 id. 12. "When a vendor of real estate affirms to the vendee that his estate is worth 80 much; that he gave so much for it; that he has been offered so much for it, or has refused such a sum for it, such assertions, though known by him to be false, and though uttered with a view to deceive, are not actionable." Medbury v. Watson, 6 Metc. 259; Gordon v. Parmelee, 2 Allen, 212; Hemmer v. Cooper, 8 id. 334; Mooney v. Miller, 102 Mass. 220; Cooper v. Lovering. 106 id. 78; Parker v. Moulton, 114 id. 99; Poland v. Brownell, 131 id. 138; Page v. Parker, 43 N. H. 368. With this rule established, it is difficult to see how a distinction can be drawn so as to hold a false statement about an appraisal of property actionable, when proof of similar misrepresentations in regard to prices offered or actually paid for it would fail to support the action.
It will be observed that in this case the false affirmations alleged are by the vendor to the vendee, personally or by agent, not as in Medbury v. Watson, supra, by a third person, who stands "in the light of a friend who has no motive nor intention to depart from the truth, and who thus throws the vendee off his guard and exposes him to be misled by the deceitful representations."
This is the distinction drawn in that case between misstatements of this class by the vendor and the same by a person who assumes to be disinterested, not
between misrepresentations by the vendor on the one hand as to what he himself had paid, and on the other as to what had been paid by third persons, as the dicta in Manning v. Albee, 11 Allen, 522, and Belcher v. Costello, 122 Mass. 190, would seem to imply. We can see no difference in legal effect between a misrepresentation by the vendor in regard to the price which he paid and one by him in regard to the price paid by other persons. The case of Medbury v. Watson draws no such distinction, and the other cases cited only purport to follow that.
In this respect 'then the misrepresentations as to the appraisal stand upon the same footing as that class of affirmations of cost and value which the authorities hold are not material. They were made by vendor to vendee. The ruling so regards them. In another respect they are even less dangerous to a vendee in the exercise of common diligence; the proceedings of appraisers upon estate being matters of public record, and therefore open to the inspection of all persons interested. Notwithstanding the official character of the action of the appraisers, it still expresses only the judgment of individuals as to the values of property. and from the time of Harvey v. Young, Yelv. 21 a, it has been held as a general rule that mere affirmations of value between vendor and vendee are not actionable, though false; "for it was but the defendant's bare assertion that the team was worth so much, and it was the plaintiff's folly to give credit to such assertion."
The extension of this rule to false statements about prices paid or offered seems to include its application to fraudulent representations, such as appear in this case, about an appraisal of property.
In Buxton v. Lister, 3 Atk. 385, a decree for the specific performance of an agreement to buy timber trees was resisted on the ground that the plaintiff had procured the contract by representing that two timber merchants had valued the trees at £3,500, when in fact their valuation was ouly £2,500. Lord Hardwicke held that this, if proved, was good ground for refusing to decree specific performance, for such a decree is in the discretion of the court, and should be entered only when the agreement is certain, fair and just in all its parts. This case is cited in 2 Kent Comm. 487, as illustrating the greater strictness of the rule in this respect in equity than at law, and also as showing that in equity there is a distinction between enforcing specifically and rescinding a contract. "It does not follow that a contract of sale is void in law merely because equity will not decree a specific performance."
cream of the same, or shall sell, or offer for sale, the same as an article of food."
Held, that said section prohibited, absolutely, the manufacture and sale, as therein specified. of any article designed to take the place of butter or cheese, without regard to whether or not it was manufactured or sold with an intent to deceive.
That the Legislature had power to pass the act by virtue of the police power vested in it, and that it was constitutional and valid. Pratt, J., dissenting.
PPEAL from a judgment of the Court of Special Sessions, convicting the defendant of a misdemeanor in having violated the provisions of chapter 202 of the Laws of 1884.
James Troy, for defendant.
James W. Ridgway, district attorney, for people.
DYKMAN, J. The Legislature of this State has enacted a law with a title at its head indicative of a purpose to prevent deception in sales of dairy products in this State. Ch. 202, Laws of 1884. Section 6 of this law has in it these words: "No person shall manufacture out of any oleaginous substance or substances, or any compound of the same, other than that produced from unadulterated milk or of cream from the same, any article designed to take the place of butter or cheese produced from pure unadulterated milk, or cream of the same, or shall sell, or offer for sale, the same as an article of food." Then the same section specifies the punishment for its violation.
This defendant has been convicted of a misdemeanor for violation of this section of the law, on proof that he manufactures what is called oleomargarine from an oleaginous substance other than that produced from milk or cream, namely, animal oil extracted from the tallow of beef; that this article is manufactured for sale as a substitute for butter; that it resembles butter so much in appearance and taste that it might be taken for butter by any ordinary person, and that it was designed by the defendant to take the place of butter as an article of food and a substitute therefor. He however manufactures it as and calls it oleomargarine, and does not pretend or represent that it is butter, but states expressly that it is oleomargarine and not butter, and that it is designed and intended as a substitute therefor; that he has sold about eight pounds of this article as oleomargarine with the design that it should be used for food as a substitute for butter, and that the purchaser knew how it was made and of what it was composed and bought it for use as an article of food in the place of butter.
From such conviction the defendant has appealed to this court, on the theory that the section under which his condemnation was secured was intended only to apply to a case of deception in the manufacture and sale of the article specified. The language employed however will not admit of that mild interpretation. It prohibits both the manufacture out of any oleaginous substance, except that produced from milk or cream, of any article designed to take the place of butter or cheese produced from milk or cream, and also the sale, or offer for sale, of the same as an article of food. The prohibition, so far as it extends, is absolute, and if the Legislature possessed the power to make the law it must be respected and enforced.
Under the American system of government the uncontrolled power of legislation resides in the people themselves as an aggregate body politic. On the separation of the colonies from the mother country all sovereignty and supremacy devolved upon the people in undiminished plenitude. But they do not exercise Sovereigu power directly. In the first place all the people of all the States established the general govern
ment by the adoption of the Constitution of the United States, in which they delegated to the national government certain enumerated powers. Then the people of each State established State governments and invested the same with all the power which they did not expressly withhold; so that the powers of the general government are definite and restricted, while the powers of the State governments are general and residuary, and all power not conferred on the general government belongs to the State governments or to the people. The State governments exercise all the powers of sovereignty not conferred on the national government, so far as the people permit them to be exercised at all. Without constitutional limitations the power of the Legislature to make laws would be absolute, because the law-making power is intrusted by the people to the legislative branch of the State government. Whether a statute is constitutional or not is a question of power, and if that question be answered in the affirmative the courts can institute no inquiry into the proper exercise of the power. They must assume that the power and discretion have been judiciously and wisely exercised, and that the Legislature had before it, at the time of its action, all requisite evidence to justify the same. But the people have set certain limitations to the law-making powers, some of which are expressed and some are implied.. Oue of the express limitations is that no person shall be deprived of life, liberty, or property without due process of law. If therefore the law in question falls under the condemnation of the Constitution it is because'it offends against this limitation of legislative
This constitutional restriction has received exhaustive examination in our Court of Appeals in the cases of Wynehamer v. People, 13 N. Y. 378, and Bertholf v. O'Reily, 74 id. 509; and in both of these cases the conclusion was reached that notwithstanding such restriction the legislative power extends to entire prohibition of the traffic in spirituous liquors. This doctrine proceeds on the theory that the Legislature may prohibit and suppress any traffic injurious or demoralizing either to the public health or public morals, or in its tendencies or consequences, and that the conclusion and decision of the Legislature on the question of fact involved is final and conclusive.
The same doctrine was enunciated by the Supreme Court of the United States in the Slaughter-House cases, 16 Wall. 36, where a law of the State of Louisiana, which operated very disastrously on large business interests and materially impaired the value of private property, was held constitutional and valid. These cases are sufficient to sustain the constitutionality of the law under consideration. It may well be that such legislation requires the highest reason for its justification, but it is not the province of the courts to inquire into their existence. Complaints against such enactments must be carried to the Legislature and not to the courts.
It must be assumed in the consideration of this statute that the Legislature ascertained that the use of this prohibited article was injurious and detrimental to the public, and so found it necessary to advance in respect to the same, beyond the point of regulation, to actual prohibition. The presumption is that such legislative action was deemed necessary for the welfare of the public, and it cannot be abrogated by the courts. With these necessary assumptions this law falls easily within the police power of the State, which is a power vested in the Legislature to ordain such laws and ordinances as shall be deemed essential and necessary for the welfare, health and property of the public. The underlying foundation of the power is the principle that all property must be so used that it shall not become injurious to others. All reasonable
restraints may be imposed for the attainment of this end which may be deemed necessary by the law-making power, even though they amount to absolute prohibition, and the propriety of such restrictions is a legislative question entirely free from all judicial control. The enactment of this law in question was therefore within the scope of legislative power as the same has been delegated to the Senate and Assembly by the people of the State in the fundamental law. It prohibits the manufacture and sale of oleomargarine as an article of food in place of butter, and the defendant has been convicted of a violation of its provisions, and in our view the conviction must be affirmed.
BARNARD, P. J., concurred.
PRATT, J., dissenting. I am constrained to dissent from the views of a majority of the court in this case upon the following grounds: If section 6 of the act under which the defendant was convicted is to be construed as an absolute prohibition of the manufacture of pure and wholesome oleomargarine, unconnected with any desigu to deceive the public or simulate dairy butter, it is unconstitutional as being within the prohibition of article 1, section 6 of the State Constitution.
There are certain well settled principles to be kept in view in considering this class of questions. Before NEW YORK COURT OF APPEALS ABSTRACT. a statute can be annulled by the courts its repugnancy to the Constitution should be clearly demonstrated. Neither cau courts sit in review of the discretion of the Legislature, or determine the wisdom or propriety
of legislative action, and every intendment is in favor
of the validity of statutes.
Until the Legislature, in the exercise of its inherent powers to enact police and health laws, prohibits the manufacture of oleomargarine, it seems to me a citizen has a right to make any pure and wholesome article of food and sell it for what it actually is, and it is immaterial what lawful use shall be made of it afterward. If a man is too poor to buy good butter I see no objection to his using oil, cheese or honey, or any other substitute for butter. A law prohibiting the making of an iron rake to be used as a substitute for one made entirely of wood could be passed with just the same legal effect, as a law providing that oleomargarine should not be made to be used as a substitute for butter. I do not claim that the Legislature cannot do all this, but that it can only do it to protect the public health. Assuming even that it may pass such a law, if in the exercise of its discretion it deems it best for the public health, and that the courts cannot review such an exercise of discretion, however unwise it may be, yet this law was not passed under the exercise of any such discretion or for any such purpose, nor can we indulge in the presumption that such was the purpose of the act when we read the title or the act itself.
It was held In re Peter Jacob, 19 Week. Dig. 533, that it is not constitutionally competent for the Legislature to deprive by any arbitrary enactment a laborer in any lawful vocation of his right of work, and of enjoyment of the fruits of his work, in his residence or in his own way, except for purposes of police or health regulations.
It is true that the statute then under consideration recognized the legality of the labor and only restricted it to certain places, while this prohibits all the labor or manufacture if the article is to be used thereafter as a substitute for butter, but the principle is the same. In both cases the citizen is deprived of the beneficial use of his lawful property.
FIDUCIARY CAPACITY UNAUTHORIZED SALE BY BROKER-REQUEST TO SUBMIT TO JURY.-An unauthorized sale by a broker of the stock,
purchased by him for a customer, although a conversion, does not constitute such a fraud as is contemplated by the Bankrupt Act. Hennequin v. Clews, 77 N. Y. 427; Palmer v. Hussey, 78 id. 303. Neither under the circumstances was the insolvency of the defeudants at the time of the sale conclusive evidence of a fraudulent intent. We do not think that the testimony conclusively proved the fraud alleged so as to entitle the plaintiff to a direction of a verdict in his favor. At most, the evidence raised a question of fact, which might have been submitted to the jury. No request to that effect was made, but both parties requested the court to direct a verdict. Under these circumstances it has often been held that the parties must be deemed to have submitted the questions of
In Bertholf v. O'Reilly, 74 N. Y. 516, it was held by the Court of Appeals "that no law can be pronounced invalid for the reason simply that it violates our notions of justice, is oppressive and unfair in its operation, or because in the opinion of some or all of the citizens of the State, it is not justified by public necessity or desigued to promote the public welfare. We repeat, if it violates no constitutional provision it is valid and must be obeyed." It is equally well settled that whether an action is obnoxious to the Constitution is a question for the court to pass upon, and for that purpose it is competent for the court to look to the circumstances and purpose under which and for which all act is passed. That the substance from which oleomar-fact, if any, to the decision of the court, and waived garine is made is property cannot be disputed. Neither 84, and subsequent cases. The decision of the court the right to go to the jury. O'Neill v. James, 43 N. Y. can it be claimed that this act was passed to protect or preserve the public health, for the reason that it nowhere appears that such was the purpose; and an entirely different purpose does appear in the title. If we are to seek for an expression of the purpose in the act itself, it is plain that its object is to create and protect a monopoly in the manufacture of dairy butter and prevent any successful competition therewith. In this view it deprives the owner of the substance from which oleomargarine is made of the beneficial enjoyment of his property and the fruits of his lawful labor.
therefore stands in the place of a verdict of the jury.
Stratford v. Jones. Opinion by Rapallo, J.
WATER AND WATER-COURSES--PRESCRIPTIVE RIGHT-EQUITABLE ACTION TO QUIET TITLE-INJUNCTIONPLEADING JOINDER OF DEFENDANTS.- Defendants threatened to float a large number of logs over the plaintiff's lands, using the stream and its banks for that purpose, and they would then do some damage to the banks of the stream and other lands of the plaintiff. They would occupy the stream for several days. Not only this, they claimed the right to float the logs, and asserted, in substance, that they would do 80 whenever they chose to. By continuing to exercise the right they might, by lapse of time, be able to prove and establish a right by prescription. They not only claimed a right for themselves but for the public-for everybody. That in such a case, upon such facts, a plaintiff may maintain an equitable action to quiet his title and settle his rights and prevent the threatened injury is abundantly settled by authority. Angell on Wat. Cours., § 449; 2 Story Eq. Jur., § 927; 3 Pom.
Eq. Jur., § 1351; Hols man v. Boiling Springs Bleaching Co., 14 N. J. Eq. 335; Campbell v. Seaman, 63 N. Y. 518; Johnson v. City of Rochester, 13 Hun, 285; Swindon Water-Works Co. v. Wilts. & Berks. Canal Co., R., 7 H. L. 697: 14 Eng. Rep. 100; Clarnes v. Hofferthau, Petrie's L. Rep., 8 Ct. App. 125, 142; Goldsmid v. Tunbridge Wells Imp. Com., L. R., 1 Ch. App. Cas. 349, 354. This is not a case where the defeudants threatened only to commit a single trespass, but they threatened to commit, and claimed the right to repeat the trespass every year. Here a preventive action was proper to prevent an irreparable injury within the meaning of the equitable rule, and also to avoid a multiplicity of suits. (2) The defendants were properly united. They claimed a common right hostile to the plaintiff. They asserted a public right common to many. In such ase all the ties asserting the common right may be united as defendants in an action by one who seeks to overthrow the common claim, and establish his right against all claimants. Varick v. Smith, 5 Paige, 137; Dimmock v. Bixby, 20 Pick. 368, 377; Woodruff v. North Bloomfield, etc., 8 Saw. 628; Hill v. Newington, 57 Cal. 56. Myers v. Phillips. Opinion by Earl, J. [Decided Dec. 9, 1884.]
DEED-CONSTRUED AGAINST GRANTOR-WHEN RULE DOES NOT APPLY-INTENT TO GOVERN-LIFE ESTATE OR FEE-POWER TO SELL-DISCRETION-MAY NOT BE DEL
EGATED.—(1) The rule governing controversies between grautor and grantee, by which the language of a conveyance is required to be taken most strongly against the grantor, has no application when the dispute occurs between parties claiming under the same conveyance, and are each entitled to the benefit of the same rule of construction. If the disposition which the owner of property desires to make does not contravene any positive prohibition of law, his control over it is unlimited, and the ouly office which the courts are called upon to perform in construing his transfers of title is to discover and give effect to his intentions. In the case of repugnant dispositions of the same property contained in the same instrument, the courts are from necessity compelled to choose between them; but it is only when they are irreconcilably repuguant that such a disposition of the question is required to be made. If it is the clear intent of the grantor that apparently inconsistent provisions shall all stand, such limitations upon and interpretatious of the literal signification of the language used must be imposed as will give some effect if possible to all of the provisions of the deed. Salisbury v. Andrews, 19 Pick. 250; Norris v. Beyea, 13 N. Y. 273; Jackson v. Blodgett, 16 Johns. 178. "It is a cardinal rule in the construction of contracts, that the intention of the parties is to be inquired into, and if not forbidden by law is to be effectuated, and whenever the language used is susceptible of more than one interpretation, the courts will look at the surrounding circumstances existing when the contract was entered into the situation of the parties, and of the subject-matter of the instrument. French v. Carhart, 1 N. Y. 102. This rule is now by statute made imperative upon judicial tribunals, and cannot be evaded when the intention of the grautor is made clearly apparent by the language of the conveyance. 3R. S. (7th ed.) 2205, § 2. De P. executed to the wife of his son a deed containing words sufficient and appropriate to convey an absolute fee. The deed declared that it was made by way of advancement to be charged against the share of the sou in the grantor's estate, and to enable the grantee to sell and convey in fee simple if she should desire so to do. It also contained a covenant upon the part of the grantee, that upon sale by her she should cause the proceeds to be properly invested, and at her de
cease the premises, or the principal only realized from a sale, should be conveyed to the issue of her marriage with the grantor's son living at the time of her decease or their legal representatives. The grantee died without having sold, but devised the same to her son, with power to her executor to sell and convey. In an action to compel specific performance of a contract to purchase said real estate plaintiff claimed under a conveyance from said executor. Held, that whatever construction is given to the instrument, the grantee still takes all of the interest which the grantor iutended to confer upon her, and by confining her estate to that of a life tenant only, as is clearly contemplated by the deed, a door is closed against the possible defeat of the expressed intention of the grantor to transmit the corpus of the estate to his own descendants. Goodtitle v. Bailey, Cowp. 600. If it be held that she takes the fee of the land, the covenant in the deed would restrain her from impairing the principal of the estate during her life, and if her interest is adjudged to be a life estate merely, she would of course be entitled to enjoy its rents, issues and profits during her life. We think that a construction which gives to Mary Livingston De Peyster a life estate only effectuates the desigu of the grantor, and is abundantly supported by authority. Jackson v. Myers, 3 Johns. 387; Moore v. Jackson, 4 Wend. 68; French v. Carhart, 1 N. Y. 96; Post v. Hover, 33 id. 593; Hunt v. Johnson, 44 id. 27; Saunders v. Hanes, id. 354; Terry v. Wiggins, 47 id. 512; Wager v. Wager, 96 id. 164; Smith v. Bell, Peters, 512. It will be observed that while the power to sell is specially mentioned, careful provisions are also inserted for the disposition of the proceeds of the sale. They are to be immediately invested in real or personal property, and the principal is to be conveyed unimpaired to the issue upon the decease of the grantee of the power. It appears therefore that its exercise after the death of the grantee was impliedly forbidden, and that the grantee had no disposing power over the property conferred upon her. Her interest is confined to the enjoyment of the rents, issues, and profits during her life. These provisions do not authorize either of the expressed trusts permitted by the statute, and are therefore ineffective to create such an estate, but do contain an authority to do an act in relation to lands which the owner might himself lawfully perform, and there being other persons than the grautee entitled to the benefits, if any there are, derivable from the performance of the act, it takes effect as a power in trust. 3 R. S. (7th ed.) 2188, §§ 74, 95; Russell v. Russell, 36 N. Y. 587; Delaney v. McCormack, 88 id. 174. This power is a general power, since it authorizes the grantee to convey the property to any alienee whatever (§ 77), but it is neither imperative nor beneficial, since its exercise is left altogether to the discretion of the grantee, and other persons than herself are to be benefited by its execution (§§ 79, 96), while the absolute power of disposition is vested in the donee. Yet under the statute the express directions given as to the investment as to the proceeds, and the limitatious imposed as to her authority to control its ultimate destination, show that it was not a power to be executed for her sole benefit, and the creation of a fee in the grantee of the deed by implication is therefore precluded (§§ 81, 85). (2) The terms of the power confer its exercise upon the donee alone, and being a trust to sell lands and invest the proceeds, it was purely a discretionary power, whose execution could not be delegated to another, or restrained or enforced upon the application of any of the parties. Newton v. Bronson, 13 N. Y. 592; Lewin on Trusts, 296; Mayor of New York v. Stuyvesant, 17 N. Y. 42; Perry on Trusts, 287, 408. The power and the trust connected therewith necessarily determine upon the death of the grantee, and the property after that event went to the
remaindermen, discharged of any authority over it by any person whatsoever. Coleman v. Beach. Opinion by Ruger, C. J. [Matters calling for discretion may not be delegated. 20 Eng. Rep. 523, 4; 29 Am. Rep. 108; 75 N. Y. 388; 19 W. Dig. 472; 53 Miss. 128-132; 22 Eng. Rep. 301.]
[Decided Jan. 20, 1885.]
UNITED STATES CIRCUIT AND DISTRICT COURT ABSTRACT.*
REMOVAL OF CAUSE-CASE ARISING UNDER LAWS OF UNITED STATES.-Plaintiffs sued defendant, a United States marshal, in the State court, for trespass in seizing and carrying away books of account belonging to them, but the declaration failed to allege that defendant acted in his official capacity. Defendant demurred generally, and thereupon filed a petition for removal of the case to the Federal court, alleging in his petition that he was a United States marshal, and acted under an attachment issued by the United States Circuit Court in making the alleged seizure, "if any seizure actually occurred,' " and that the suit was one arising under the laws of the United States, aud involved the construction of such laws. Held, that the record did not present a case within the jurisdiction of the Federal court, and that the cause was not removable. Railroad Co. v. Mississippi, 102 U. S. 135, 141. The case of Gold Washing & Water Co. v. Keyes, 96 U. S. 199, was very much like the present. That was a bill in equity to restrain the defendants from proceedings alleged to constitute a nuisance, to which there was a general demurrer. The cause was removed from the State court to the Circuit Court of the United States as a suit "arising under the Constitution or laws of the United States." Upon the pleadings alone, as was said by the Supreme Court, it was clear the defendants had not brought themselves within the statute. The complaint simply set forth the ownership by the complainant of his property, and the acts of the defendants which it was claimed caused a private nuisance. No right was asserted under the Constitution or laws of the United States, and nothing was stated from which it could in any manner be inferred, that the defendants sought to justify the acts complained of by reason of any such authority. It resulted therefore that the validity of the judgment of the Circuit Court remanding the cause, and brought iuto question by the writ of error, depended upon the sufficiency of the facts set forth in the petition for removal. "For the purposes of the transfer of the cause," said the court (p. 202), "the petition for removal, which the statute requires, performs the office of pleading. Upon its statements, in connection with the other parts of the record, the courts must act in declaring the law upon the question it presents. It should therefore set forth the essential facts not otherwise appearing in the case, which the law has made conditions precedent to the change of jurisdiction. If it fails in this it is defective in substance, and must be treated accordingly." Cir. Ct., E. D. Mich., July, 1884. Rothschild v. Matthews. Opinion by Matthews, J.
CORPORATION-FRAUDULENT CONVEYANCES-MORTGAGE-PRIORITY-ULTRA VIRES.-(1) A transfer of all the assets of one corporation to another, whereby, through a mere change of name, an attempt is made to defraud creditors, or which would operate a fraud, will not be upheld as against creditors, and the transferee, if he takes with notice, takes cum onere. (2) If in such a case the transferee mortgages its property to secure the payment of bonds, the lien of creditors of
*Appearing in 22 Federal Reporter.
the old corporation upon the property transferred will be prior in right to that of bondholders with notice. The doctrines laid down in the following cases establish respondent's claim to priority against the specific property transferred: Thomas v. Railroad Co., 101 U. S. 82; Hibernia Ins. Co. v. St. Louis & N. 0. Transp. Co., 13 Fed. Rep. 516; Harrison v. Union Pac. Ry. Co., id. 522; Cass v. Manchester Co., 9 id. 640; Brum v. Merchants' Co., 16 id. 140; Abbott v. American Co., 33 Barb. 578. (3) There is also another and controlling proposition. The old corporation was created by special act of the General Assembly in 1857. Its provisions were minute and specific in many essential details, not only as to obligations and rights of stockholders, but as to their duties, respectively, to each other and to the public, particularly to the State, to which annual reports were to be made, etc. The construction of the road was to be commenced within ten years and completed within twenty years thereafter; a fair record of the whole expense of constructing the road to be kept, with the privilege reserved to the State to purchase the same, at rates named, at the expiration of fifty years. It is clear that the action of the corporation in transferring all its property thus formed was beyond its corporate authority, and evasive of its chartered obligations. The conclusive effect of what was done was to fasten a lien on the assets transferred prior in right to the mortgages. Cir. Ct., E. D. Mo., Oct., 1884. Blair v. St. Louis, etc., R. Co. Opinion by Treat, J.
TRADE-MARK-PARTIES OF SAME NAME-DECEPTION -INJUNCTION.-While a party cannot be enjoined from honestly using his own name in advertising his goods and putting them on the market, where another person, bearing the same surname, has previously used the name in connection with his goods in such manner and for such length of time as to make it a guaranty that the goods bearing the name emanate from him, he will be protected against the use of that name, even by a person bearing the same name, in such form as to constitute a false representation of the origin of the goods, and thereby inducing purchasers to believe that they are purchasing the goods of such other person. Cir. Ct., E. D. Wis., Oct., 1884. Landreth v. Landreth. Opinion by Dyer, J.
TAXATION-INTER-STATE COMMERCE-LOGS IN TRANSIT.-Logs cut on lands owned by a Minnesota corporation in Wisconsin, and hauled down to a river, and piled on the ice to await the opening of the river to be floated down into Minnesota, to be there manufactured into lumber, cannot be considered as in transit from one State to another in a commercial sense, and may be assessed and taxed in Wisconsin. The mere intention in such a case, where there has been no sale or transfer of shipping out of the State, at some indefi. nite time, depending upon some circumstance so uncertain as the weather and the floods, would not amount to putting the property in actual or legal transit so as to bring them within the principle recognized in the adjudged cases. See State v. Carrigan, 39 N. J. L. 35; Blount v. Monroe, 60 Ga. 61; People v. Niles, 35 Cal. 282; Carrier v. Gordon, 21 Ohio St. 605; State v. Engle, 34 N. J. L. 425; Ogilvie v. Crawford Co., 7 Fed. Rep. 745; Passenger cases, 7 How. 416; State Freight Tax case, 15 Wall. 232; State Tax on Railway Gross Receipts, id. 284; Conley v. Chedic, 7 Nev. 336; Hurley v. Texas, 20 Wis. 665; Erie Ry. v. State, 31 N. J. L. 531; Brown v. Maryland, 12 Wheat. 442; Crandall v. Nevada, 6 Wall. 35; Almy v. State, 24 How. 169. Cir. Ct., W. D. Wis., 1884. Nelson Lumber Co. v. Lorain. Opinion by Burn, J.
TAXATION-CHARTER EXEMPTION OF CAPITAL STOCK OF RAILROAD-EXEMPTION OF INDIVIDUAL INTERESTS