« PreviousContinue »
The material facts are stated in the head note and opinion.
Charles Hamlin and Jasper Hutchins, for plaintiff. H. L. Mitchell, for defendants.
FOSTER, J. The object of this bill is a specific performance of an oral agreement for the conveyance of real estate. This necessarily presupposes an agreement, and the bill must, as in all cases of this description, set out what that agreement was.
Upon inspection of the bill it will be found to be a parol contract for the sale of real estate, and therefore void by the statute of frauds. An action at law could not be sustained on this agreement. The statute for the prevention of frauds would be a barrier to the maintaining of an action upon it.
The power of this court as a court of equity then must rest on other grounds, for the specific execution of parol agreements is decreed in equity for the purpose of preventing fraud.
Heretofore, on account of limited equity powers, this court has declined to enforce specific performance of oral contracts relating to real estate, and it was not until February 28, 1874, that "full equity jurisdiction, according to the usage and practice of courts of equity in all cases where there is not a plain, adequate and complete remedy at law" was conferred upon it, with power of decreeing specific performance in cases of this kind. St. 1874, ch. 175; Stearns v. Hubbard, 8 Me. 320; Wilton v. Harwood, 23 id. 131; Pulsifer v. Waterman, 73 id. 244.
Nor will a court of equity lend its aid to the enforcement of oral contracts, unless there shall have been such acts of part performance by the party seeking relief as will be considered sufficient in equity to take the case out of the operation of the statute, and authorize a court of general equity powers in the exercise of sound discretion to decree specific perform
And it is well settled that the ground upon which courts of equity consider part performance of such contract as creating an equity to have the agreement specifically executed, is that it would be a fraud upon the party if the transaction were not completed. Parkhurst v. Van Cortland, 14 Johns. 15; Newton v. Swazey, 8 N. H. 13; Tilton v. Tilton, 9 id. 391; Malins v. Brown, 4 Comst. 410; Pulsifer v. Waterman, 73 Me. 244; Kidder v. Barr, 35 N. H. 255.
Where there has been part performance the refusal to complete it is in the nature of a fraud, and the defendant is estopped to set up the statute of frauds in defense. Potter v. Jacobs, 111 Mass. 37; Fry Spec. Perf., § 384;. Adams Eq. *86; 3 Pom. Eq. Jur., § 1409.
We must in this case then examine and ascertain what the contract was in fact, the extent of its execution by the party seeking aid, and in what the injury, hardship or fraud would consist if a performance were denied.
The contract set forth in the bill and admitted by the demurrer, was that the complainant was to pay Jeremiah G. Spaulding, now deceased, the sum of $400, $100 of which was to be paid down, and the balauce "to be paid in such sums, at such times, and in such manner as might thereafter be convenient for the complainant," and at the completion of said payments the complainant was to have a warranty deed of the premises free of all incumbrance.
It further appears that in pursuance of said agreement the complainant entered into the possession and use of the premises the next day (April 12, 1862), aud has ever since, during a period of more than twentyoue years, with the full knowledge and consent of the respondents' intestate, continued in the possession and use of the same; that payment in full was completed
about seven years after the contract was made, and that said Spaulding died in September, 1882, without ever having executed and delivered the deed of the premises in accordance with said contract.
The authorities are numerous that a respondent cannot avail himself of the statute of frauds, on demurrer, when a bill in equity is brought to enforce specific performance of an oral contract, although the bill admits the contract to be parol, if such bill, in addition to the contract, alleges matter avoiding the bar created by the statute, such as part performance. Harris v. Knickerbacker, 5 Wend. 638.
In the case at bar, to take the same out of the operation of the statute of frauds, the complainant relics on certain facts alleged in the bill, additional to the fact that the contract was oral, as amounting to such part performance as to give a court of equity jurisdiction to enforce specific performance of the contract.
What are these facts? The admission into possession of the premises under and in pursuance of the contract, immediately thereafter, and the open, exclusive and long-continued occupation of the same, not only during the time in which the payments were being made, but ever afterward for a period of more than thirteen years, together with full payment of the consideration or price agreed upon between the parties to the contract.
Possession of land taken by the vendee and continued from the time of the contract to the time of bringing the bill, such possession being in pursuance of the contract, is an act of part performance, taking the case out of the operation of the statute of frauds. Harris v. Knickerbacker, supra. And in this case, where the possession had been for eight years, the court says: "The possession is, in my judgment, to be considered as taken on ac. count of the contract and pursuant to it; and being thus taken by the appellant and continued so long, it would be a fraud in him now to repudiate the contract. The respondent may therefore allege this possession and its continuance by his permission as a part performance available to avoid the operation of the statute of frauds."
Admission into possession having unequivocal reference to the contract, has always been considered an act of part performance. Lester v. Foxcroft, 1 Cole Parl. Cas. 108; Lead. Cas. in Eq. 774*; Morphett v. Jones, 1 Swanst. 181; 4 Keut Com. 451*; Watermau Spec. Perf., § 270
Although it was formerly held otherwise, the authorities now all agree that mere payment of the consideration alone will not take it out of the statute. Webster v. Blodgett, 59 N. H. 120; Glass v. Hulbert, 102 Mass. 28. Nevertheless possession together with payment is sufficient part performance; and this act is greatly strengthened where improvements have been made, serving to explain and define one act of part performance "to which it is itself a superadded and contributory act." Brown St. Frands, § 487; Tilton v. Tilton, 9 N. H. 390; Wetmore v. White, 2 Caines' Cas. Err. 109; Story Eq. Jur., § 763; Stark v. Wilder, 36 Vt. 755; Waterman Spec. Perf., §§ 270, 280.
The law is thus correctly stated by the Supreme Court of Vermont: "It is equally well settled that where the purchases pays the whole or a part of the purchase money, and enters into possession of the premises, or does acts relying upon the agreement, that place him in such a position that the refusal by the seller to execute the contract on his part will operate to his prejudice and injury, beyond the payment of the money, so that the repayment of the money, or the recovery of it, will not be an adequate remedy, then such acts will take the case out of the statute, and warrant a court of equity in decreeing a specific per
formance of the contract. A refusal under such circumstances to execute the contract, it is sometimes said in the books, operates as a fraud on the purchaser." Stark v. Wilder, 36 Vt. 755.
The defense here claimed by the respondents in relation to the statute of frauds cannot prevail. The facts alleged and admitted by the pleadings are sufficient to eonstitute part performance on the part of the complainant, thereby taking the case out of the statute and entitling him to a decree for specific performance, unless by his delay in asking relief he has slept upon his rights, and been guilty of such laches as would deprive him of that right.
In considering this branch of the case we are permitted to regard the situation of the parties, their relation to each other, and the circumstances of the case as gathered from the facts alleged.
The parties were near relatives, and the trust and confidence in each other, whether well-founded or otherwise, seems to have been reciprocal. The complainant was to have a warranty deed "free and clear of all incumbrances; " but it appears that at the time of the contract these premises, together with other lands of said Spaulding, were incumbered by mortgage, and remained thus incumbered till about a month prior to his death. He had many times acknowledged payment in different parties, promised to give complainant a deed, and it is alleged would have done so had he not died.
With whom are the equities in this case? Would a decree for specific performance be doing injustice, or would a denial of it be inequitable?
The respondents represent the deceased, and there is nothing that shows any change in the situation of the parties, or the property, or any new interests intervening that would render a decree inequitable. The death of either party to such a contract does not impair its obligation, and forms no objection to the maintaining of a bill for specific performance in a case where such performance might have been enforced had the party lived. Newton v. Swazey, 8 N. H. 14; Kidder v. Barr, 35 id. 253. Here had been full execution of the contract on the part of the complainant and full payment by him. If the contract were executory on his part, and none or a part only of the consideration had been paid, the equities between the parties would stand in a different light. The court remarks in King v. Hamilton, 4 Pet. 328, that "when a party comes into a court of equity seeking equity he is bound to do justice, and not to ask the court to become the instrument of iniquity."
In cases where the contract is not fully executed on the part of the complainant seeking for a decree of specific performance, and even where time is not of the essence of the contract, courts of equity will not interfere where there has been long delay and laches on the part of the party seeking specific performance.
Especially is this true where there has in the meantime been a great change in the circumstances, as in the value of the land, and new interests have intervened. In such cases the refusal is upon the plain
ground that it would be inequitable and unjust. Holl v. Rogers, 8 Pet. 433; Barnard v. Lee, 97 Mass. 93. "Inexcusable laches and delay," says Folger, J., in Merchants' Bank v. Thomson, 55 N.Y. 12, "will debar a party from the relief which, they being absent, he might have by a judgment for specific performance." But whenever the delay is attributable to the party resisting performance, he will not be allowed it as a defense. Munro v. Taylor, 3 Mc. N. & G. 723; Morse v. Merest, 6 Madd. 26; Spurrier v. Hancock, 4 Ves. 667. In Lloyd v. Collett, 4 Bro. Ch. Chs. 469, Lord Loughborough said the conduct of the parties, inevitable accident, etc., might induce the court to relieve, notwithstanding the lapse of time. And in Waters v. Travis, 9 Johns. 450, the court held that mere lapse of time is not in all cases an objection to decreeing specific performance; and in that case where an agreement for the sale of land was suffered to remain unexecuted for fourteen years, the vendee having continued in possession, the court under the circumstances of the case decreed specific performance of the contract.
It was stated by Spencer, J., that the continuance of the possession by the tacit consent of the respondent was a constant and continued affirmance on his part that the holding was under the agreement, and that this was irresistible evidence that the agreement was not abandoned by the parties, and their conduct was such as to leave no doubt that they both looked to the future performance of it, and brought it within the principle laid down by Lord Loughborough. These views are supported by Barnard v. Lee, 97 Mass. 93, and cases there cited; Ahl v. Johnson, 20 How. 521; Taylor v.Longworth, 14 Pet. 175; Hubbell v. Von Schoening, 49 N. Y. 330; Eyre v. Eyre, 19 N. J. Eq. 102. In the case last cited there had been a delay for fifteen years in calling for specific performauce for the couveyance of land under a parol contract, and without any attempt to enforce it in the life-time of the vendor.
Mr. Justice Clifford, in the opinion of the court announced by him in Ahl v. Johnson, supra, says, "that courts of equity, as a general rule,have always claimed and exercised the right to decree specific performance of agreements in respect to the purchase and sale of real property, in their discretion, and usually to a more liberal extent in favor of purchasers than those who contract to sell such properties."
The court expects the party to show that the relief which he is seeking is under all the circumstances of the case equitable, and to account in a reasonable manner for this delay. Taylor v. Longworth, 14 Pet. 175.
This is more often the case where the contract is executory on the part of the complainant, than when it has been executed by him. Barnard v. Lee, 97 Mass. 95; Waterman Spec. Perf., § 480.
In this case the equities seem to be with the complainant. True there has been delay in seeking his equitable relief, but under the circumstances of this case, not such gross negligence as will necessarily defeat his right. He was admitted into possession of the premises, and has lived there all the time under the agreement, paying the taxes and treating the property as his own, paying in full the consideration in accordance with that agreement, without objection from the respondents' intestate, Spaulding. Such occupancy, taken in connection with the relation and situation of the parties, the length of time it has continued, the fact of its incumbrance by mortgage, the admission of payment and of promise to convey, indicates that the delay in completing the contract by executing and delivering a deed is certainly as much, if not more, attributable to the deceased as to the complainaut. And it is as evident that this delay has been acquiesced
in by the deceased as well as by the complainant. It goes to show that the contract was not considered by either party as abandoned, but that there was a constant and continued affirmance" that the holding was under the agreement, and now when the complainant cannot be made whole in any other way, it is his right to ask that the agreement should be performed by the party whose delay and death has compelled him to seek the intervention of a court of equity.
Nor do we think the statute of limitations should apply in this case for the reasons before stated. The language of Mr. Justice Barrows, in Lawrence v. Rokes, 61 Me. 43, may not be inappropriate in this connection, that "where it appears beyond question or dispute that lapse of time has not in fact changed the condition and position of the parties in any important particular, and there are any peculiar circumstances entitled to consideration as excusing the delay, they (the court) will not refuse the appropriate relief, al- | though a strict and unqualified application of limitation rules might seem to require it. ** * * He does not plead the statute of limitations, and although under rule 6 he may have the benefit of a plea in bar by inserting its substance in his answer, in the absence of any intimation in the answer that he claims exemption on the score of lapse of time, the court will not interfere to set up the bar, but will consider the respondent as waiving it, even though the facts alleged were such as to make it appear that it might be successfully interposed."
Neither will courts of equity allow such a bar to prevail "to suits in equity, where it would be in the furtherance of a manifest injustice." Story Eq. Jur., S
Under all the circumstances and upon the case as set forth in the bill, we are of the opinion that the complainant is entitled to the specific performance for which he prays, and in accordance with the stipulation of the parties, the entry should be: Demurrer overruled. Bill sustained, with no costs for complainant. Decree for specific performance as prayed for in said bill.
Peters, C. J., Danforth, Virgin, Emery and Haskell, JJ., concurred.
[See 37 Am. Rep. 847; 3 id. 657; 22 Eng. Rep. 764.— ED.]
UNITED STATES SUPREME COURT ABSTRACT.
NEGOTIABLE INSTRUMENT NOTE-CONSIDERATION—SURRENDER.--Amarket-house company, incorporated for twenty years, with power to purchase, hold and convey any real or personal cstate necessary to enable it to carry on its business, built a market-house on land owned by it in fee-simple, and sold by public auction leases for ninety nine years, renewable forever, of stalls therein at a specified rent. The highest bidder for one of the stalls gave the corporation several promissory notes in part payment for the option of that stall, received such a lease, and took and kept possession of the stall, and afterward gave it a note for a less sum in compromise of the original notes, and upon express agreement that if this note should not be paid at maturity the corporation might surrender it to the maker, and thereupon the cause of action on those notes should revive. Held, that the new note was upon a sufficient legal consideration, and that the corporation, holding and suing upon all the notes, could recover upon this note only. The plaintiff insists that the original notes were valid, because a corporation, empowered to hold and convey the real estate for the objects of its incorporation, may convey an estate in fee or any less estate in lands which it has
purchased, and may therefore make a valid lease of them for any term af years, though extending beyond the limit of its corporate existence. But is is unnecessary to express a definitive opinion upon that point, because it is agreed in the case stated that the defendant gave; in compromise of the original twenty notes for $171.05 each, the new note for $1,881.60. If the plaintiff had exceeded its corporate powers in making the original contract, yet it had authority to compromise and settle all claims by or against it under that contract. Morville v. American Tract Soc., 123 Mass. 129. The compromise of the disputed claim on the original notes was a legal and sufficient consideration for the new note. Cook v. Wright, 1 Best & S. 559; Tuttle v. Tuttle, 12 Metc. 551; Riggs v. Hawley, 116 Mass. 596. By the terms of the agreement of compromise the plaintiff's cause of action on the original notes was not to revive, in case of the new note not being paid at maturity, except upon the surrender of this note to the defendant. The plaintiff not having surrendered it, but holding and suing upon it as well as upon the original notes, has not performed the condi tion on which the revival of the right of action on the original notes depended. It follows that the plaintiff cannot recover in this action on the original notes for $171.05 each, but is entitled to recover on the new note for $1,881.60. Northern Liberty Market Co. v. Kelly. Opinion by Gray, J. [Decided Jan. 19, 1885.]
UNITED STATES GOVERNMENT PROPERTY-UNAUTHORIZED SALE.-A party to whom has been delivered without sanction of law material of old ships, property of the United States, to which he had no title whatever, by contract or otherwise, is accountable to the government for its full value, notwithstanding that his account has been settled by the officers of the navy department at a sum less than its full value. Both the disposition of the property and the settlement of the account were without authority of law, and not binding on the government. Nor can laches in not objecting to the settlement of the appellant's account at an earlier time be imputed to the United States, and set up as a bar to the recovery of the value of the property unlawfully appropriated. This is a case for the application of the rule nullum tempus occurrit regi. Lindsey v. Miller, 6 Pet. 669; Gibson v. Christian, 13 Wall. 92. Steele v. United States. Opinion by Woods, J. [Decided Jan. 19, 1885.]
ATTORNEY-COMPENSATION-TRUST FUND-INSOLVENT RAILROAD CORPORATION.-Certain unsecured creditors of a railroad company in Alabama instituted proceedings in equity in a court of that State, on behalf of themselves and of all other creditors of the same class who should come in and contribute to the expenses of the suit, to establish a lien upon the property of that company in the hands of other railroad corporations which had purchased and had possession of it. The suit was successful, and the court allowed all unsecured creditors to prove their claims before a register. Pending the reference before the register the defendant corporations bought up the claims of complainants and other unsecured creditors. Thereupon the solicitors of complainants filed their petition in the cause to be allowed reasonable compensation in respect of the demands of unsecured creditors (other thau their immediate clients) who filed their claims under the decree, and to have a lien declared therefor on the property reclaimed for the benefit of such creditors. The suit between the solicitors and such defendant corporations was removed to the Circuit Court of the United States. Held, (1) Within the principle announced in Trustees v. Greenough, 105 U. S. 527, the claim was a proper one to be allowed; (2) it was also proper to give the solicitors a lien upon the property
brought under the control of the court by the suit and the decree therein, such lien being authorized by the law of Alabama. See also Montgomery, etc., R. Co. v. Branch, 59 Ala. 139; Matter of Lehman, id. 632; Warfield v. Campbell, 38 id. 527. Central Railroad & Banking Co. of Georgia v. Pettus. Opinion by Harlan, J.
[Decided Jan. 5, 1885.]
MANDAMUS — ADEQUATE REMEDY JUDGMENT OF CIRCUIT COURT.-A writ of mandamus is not ordinarily granted when the party aggrieved has another adequate remedy. No formal allowance by the Circuit Court of a writ of error from this court to review a judgment of that court is required. Davidson v. Lannier, 4 Wall. 453. The writ issues in a proper case as a matter of right, but when sued out security must be given, and a citation to the adverse party signed. This security may be taken, and the citation signed by a judge of the Circuit Court, or any justice of this court. No action of the Circuit Court as a court is required. It does not appear from the petition that any application has been made to either of the judges of the Circuit Court to approve security or to sign a citation. If they should refuse an application hereafter, resort may be had to either of the justices of this court. It will be time enough to apply for a mandamus when all these remedies have failed. Motion denied. Matter of Com'rs, etc., of Virginia. Opinion by Waite, C. J. [Decided Nov. 10, 1884.]
ADMINISTRATION OF ESTATE-CONCEALMENT, FRAUD, ETC.-SURVIVING PARTNER-TRUSTEE-PURCHASERNOTICE. (1) A settlement of an administrator's account by the decree of [a Probate Court does not conclude as to property accidentally or fraudulently withheld from the account. If property be omitted by mistake, or be subsequently discovered, a court of equity may take the proper action to do justice to the heirs or creditors of the estate as to such property, even though the Probate Court might in such case reopen its decree and administer upon the omitted property. (2) A fraudulent concealment or a fraudulent disposition of property is always a ground for the interposition of equity. (3) The administrator of a deceased member of a partnership, who taking advantage of the consent of an ignorant and weak-minded surviving partner, assumes control of the entire partnership property, is bound to the utmost good faith in his dealings with the property, and should be held in its disposition to the responsibilities of a trustee of such surviving partner. (4) A surviving partner, whose property is sold by the fraudulent act of a deceased partner's administrator, may, instead of seeking to annul the sale, compel the administrator to account to him for the amount received for the property. (5) A purchaser, who colluded with an administrator in the fraud by which a sale of partnership property was consummated, takes the property with notice of the rights of the intestate's partner, and of the relation of trustee which the administrator bore to such partner. Griffith v. Godey. Opinion by Field, J. [Decided Jan. 25, 1885.]
CONSTITUTIONAL LAW-EMINENT DOMAIN-PUBLIC USE-MUNICIPAL BONDS TO AID PRIVATE CORPORATION. The general grant of legislative power in the Constitution of a State does not enable the Legislature in the exercise either of the right of eminent domain or of the right of taxation to take private property without the owner's consent for any but a public object. Nor can the Legislature authorize counties, cities or towns to contract, for private objects, debts which must be paid by taxes. It cannot therefore authorize them to issue bonds to assist merchants or
manufacturers, whether natural persons or corporations, in their private business. These limits of the legislative power are now too firmly established by judicial decisions to require extended argument upon the subject. In Loan Association v. Topeka, 20 Wall. 655, bonds of a city, issued, as appeared on their face, pursuant to an act of the Legislature of Kansas, to a manufacturing corporation, to aid it in establishing shops in the city for the manufacture of iron bridges, were held by this court to be void, even in the hands of a purchaser in good faith and for value. A like decision was made in Parkersburg v. Brown, 106 U. S. 487. The decisions in the courts of the States are to the same effect. Allen v. Jay, 60 Me. 124; Lowell v. Boston, 111 Mass. 454; Weismer v. Douglass, 64 N. Y. 91; In re Eureka Co., 96 id. 42; Bissell v. Kankakee, 64 Ill. 249; English v. People, 96 id. 566; Central Branch Union Pac. R. Co. v. Smith, 23 Kan. 745. We have been referred to no opposing decision. The cases of Hackett v. Ottawa, 99 U. S. 86, and Ottawa v. National Bank, 105 id. 342, were decided as the chief justice pointed out in Ottowa v. Carey, 108 U. S. 110, 118, upon the ground that the bonds in suit appeared on their face to have been issued for municipal purposes, and were therefore valid in the hands of bona fide holders. In Livingston v. Darlington, 101 U. S. 407, the town subscription was toward the establishment of a State reform school, which was undoubtedly a public purpose, and the question in controversy was whether it was a corporate purpose within the meaning of the Constitution of Illinois. In Burlington v. Beasley, 94 U. S. 310, the grist-mill, held to be a work ot internal improvement, to aid in constructing which a town might issue bonds under the statutes of Kansas, was a public mill which ground for toll for all customers. See Osborne v. Adams Co., 106 U. S. 181, and 109 id. 1; Blair v. Cuming Co., 111 id. 363. Subscriptions and bonds of towns and cities under legislative authority, to aid in establishing railroads, have been sustained on the same ground on which the delegation to railroad corporations of the sovereign right of eminent domain has been justified-the accommodation of public travel. Rogers v. Burlington, 3 Wall. 654; Queensbury v. Culver, 19 id. 83; Loan Association v. Topeka, 20 id. 661, 662; Taylor v. Ypsilanti, 105 U. S. 60. Statutes authorizing towns and cities to pay bounties to soldiers have been upheld, because the raising of soldiers is a public duty. Middleton v. Township of Mullica, 112 U. S. 433; Taylor v. Thompson, 42 Ill. 9; Hilbish v. Catherman, 64 Penn. St. 154; State v. Richland Tp., 20 Ohio St. 362; Agawam v. Hampden, 130 Mass. 528, 534. The express provisions of the Coustitution of Missouri tend to the same conclusion. It begins with a declaration of rights, the sixteenth article of which declares that "no private property ought to be taken or applied to public use without just compensation." This clearly presupposes that private property cannot be taken for private use. St. Louis Co. Ct. v. Griswold, 58 Mo. 175, 193; 2 Kent Comm. 339 note, 340. Otherwise as it makes no provision for compensation except when the use is public, it would permit private property to be taken or appropriated for private use without any compensation whatever. It is true that this article regards the right of eminent domain, and not the power to tax; for the taking of property by taxation requires no other compensation than the tax payer receives in being protected by the government to the support of which he contributes. But so far as respects the use, the taking of private property by taxation is subject to the same limit as the taking by the right of eminent domain. Each is a taking by the State for the public use, and not to promote private ends. Cole v. City of La Grange. Opiniou by Gray, J.
[Decided Jan. 5, 1885.]
UNITED STATES CIRCUIT COURT ABSTRACT.*
REMOVAL OF CAUSE-COLLUSIVE TRANSFER-REMANDING CASE-ACT OF MARCH 3, 1875, § 5-EVIDENCECREDIBILITY OF WITNESS-DISCRETION OF COURT.—(1) A plaintiff who has been introduced into a controversy by an assignment or transfer merely that he may acquire a standing and relation to the controversy, to enable him to prosecute it for the beneficial interests of the original party, is collusively made a party to the suit, and when the fact appears it is the duty of the court to remand the suit, under section 5 of the act of Congress of March 3, 1875. Where an extraordinary transaction is disclosed, no satisfactory explanation of which is vouchsafed, and the evidence of the transaction, which it was in the power of the to produce, has been withheld, the court may disregard the testimony of the parties so far as it is improbable, and interpret the transaction in a way consistent with the ordinary conduct and motives of business men. It is stated in Newton v. Pope, 1 Cow. 109, that it is difficult to establish a rule which shall regulate and limit the discretion of a court or jury in the degree of credit to be given to the testimony of a witness, but where he is unimpeached, the facts sworn to by him uncontradicted, and there is no intrinsic improbability in the relation given by him, his testimony cannot be disregarded. A witness may be contradicted by circumstances as effectually as by the statements of other witnesses. Conjecture is not to be substituted for probative indicia; but where these exist, a judge or a juror is not bound to surrender his convictions and blindly accept the statement of a witness, because no other witness has contradicted it, and the character of the witness is not impeached. The authorities are numerous that a judge or jury, in the exercise of judicial discretion, is at liberty to reject the statements of witnesses in the situation of the witnesses here, and under the circumstances of this case. Harding v. Brooks, 5 Pick. 245; Elwood v. W. U. Tel. Co., 45 N. Y. 549; Kavanagh v. Wilson, 70 id. 177; Gildersleeve v. Landon, 73 id. 609; Koehler v. Adler, 78 N. Y. 287. Cir. Ct., N. D. New York. Chandler v. Town of Attica. Opinion by Wallace, J. [ (2) See 92 N. Y. 497; 85 id. 377; 2 Abb. N. C. 239, 257; 86 N. Y. 548, 553-4; 22 Fed. Rep. 634.]
AGEMENT-RIGHTS OF STOCKHOLDERS.-Where a corporation, by contract not impeached, acquires a majority of the capital stock of another corporation, and through the control thus acquired elects new directors, and the latter corporation fails to fulfill its part of the contract, the stockholders of the former company, on the sole ground that the acts of such directors are highly detrimental to the property and interests of the company, will not be entitled to an injunction against their further acting as directors and officers, and the appointment of a receiver of the property. See Dimpfell v. Ohio, etc., R. Co., 110 U. S. 209; Hawes v. Oakland, 104 id. 450. Cir. Ct., S. D. New York, Dec. 13, 1884. Converse v. Dimock. Opinion by Wheeler, J.
The defendant was thus to advertise his implements and sell them at a profit, and agreed to pay the brokers five dollars per newspaper for insertions so made. Instead of carrying out this arrangement the brokers had the advertisements inserted in newspapers in which they owned at the time, by contract with the publishers, the required space, or in which they had procured the insertion of the advertisements solely by a consideration moving from themselves, and the obtaining the implements was no inducement to the newspaper proprietors. The agents intentionally prevented the defendant from receiving all the benefits which they undertook to obtain, and made only a nominal performance of their contract. On the refusal of defendant to pay the agreed commissions they brought suit thereof. Held, that they had not acted in good faith, and were not entitled to recover. The elementary principles which govern the decision of the case are stated in all the text-books, and in one of them very clearly, as follows: "One of the rules, which will be found more particularly applicable to the relation of principal and agent is the one that good faith should always be observed,' and also the one that an agent cannot act, so as to bind his principal, when he has an adverse interest to him in himself. This rule, says Mr. Justice Story, 'is founded on the obvious consideration that the principal bargains in the employment for the exercise of the disinterested skill, diligence, and zeal of the agent for his exclusive benefit.'" Petgr. Princ. & Ag. 25. Cir. Ct., D. Conn. Allen v. Pierpont Opinion by Shipman, J.
JURISDICTION- CIRCUIT COURT
RAILROAD CORPORATION-CITIZENSHIP.-(1) A railroad corporation composed of two corporations created in the State of Michigan and one created in the State of Indiana, consolidated and merged into a single corporation under the laws of both States, owning and operating a single continuous line of road from a certain point in one State to a point in the other, is a citizen of the State of Indiana as well as of Michigan, and cannot be sued by a citizen of Indiana in the Circuit Court of the United States for the District of Indiana. (2) The precise question presented has never been authoritatively decided, though it has sometimes been stated in opinions delivered in analogous cases, and in one instance, at least, an opinion upon it has been expressed. See Uphoff v. Chicago, etc., R. Co., 5 Fed. Rep. 545; Nashua & L. R. Corp. v. Boston & L. R. Corp., 8 id. 458; S. C., 19 id. 804. In the latter case the plaintiff, being a consolidated company composed of New Hampshire and Massachusetts corporations, brought an action in the Federal court in and against another corporation of the latter State, and in discussing the question of jurisdiction, when the case was first under consideration, Nelson, J., said: "In this case it seems that the defendant corporation might go into New Hampshire, and there sue the plaintiff as a New Hampshire corporation in the Federal court, although it could not bring such suit in the District of Massachusetts against the New Hampshire corporation, because no service upon the New Hampshire corporation as such could be got in this district, if for no other reason. It has been determined by Judge Lowell that in some cases non-resident corporations may be served with process from United States courts in other districts than those in which they were chartered, and where they are found to be doing business or domiciled. But this rule would not, we suppose, extend to a case like the present." In the other case it was decided that such a company, when sued in one of the States in which it had been organized, by a citizen of that State, cannot hy showing its organization in another State, procure a removal of the cause from the State to the Federal court; and discussing the