578
J'BDBB4L BBPOBTBB.
SONSTmy 'V. KEELEY.
(Oirtute
D. Minnesota.
March,1882.)
Where a person purchases a stock of goods in good fi;Lith, and without notice of fraud on the part of the vendor, and pays a part only of the consideration, and for the.balance of the consideration assumes the debts of the vendor held by and agrees to pay the same, such agreement is equivalent to payfide pW'Qhaser against the atment, aq.!l he is entitled to protection as tachiJ:ig creditors of the fraudulent to the full amount of the consideration. " " . ,. 2. LuBILITY":"'Rut.EOFDECISION'OF STATE OOURT.'
thfl, purchs,ser, llJ1der the rulings of the supreme court of Lbe is held liable for such ciebts, anc;l. th¥, court apply the rule bys'lCli supreme court if'it appears that by reason of ihe situation of the tiesalid of' tliesubject-matter that to hold otherwise would subject the party " ;todou.ble payment.
lJi sUCl;!, a.
Wilson' and ,f Rf)gers, for the motion. O.-K.DatJis;contra.: , , ' C.J. I have grave as to the propriety of attempting #>, apply to a ;ca.se at law the principle invoked by counsel for in this case. That principle is that where a vendee buys in good faith, and without notice of fraud on,ttte part of the vendor, and pays a part only of the consideration, agreeing to pay the remainderat a future d,a.y, if, before sll,cp remainder is paid, he receives notice of ,the vendor's fraud, he will be protected, only to the amount actually paid before notice. 'No doubt this is sound principle in equity; .but can it 'be. applied by a oourt of law? Can such a court rescind the contract pro tanto, and place, the parties in statu quo? If so, can it be done in a case like the present, in which no issue is made except upon the validity of the sale? If the sale was held void, so as to leave the title in Forbes, against whom the attachments were issued, judgment at law could be rendered for defendant; but where the sale is found to be valid and bona fide, so far as the vendee is concerned, and the title is vested in him, and where he has sold or disposed of a portion of the stock, and probably expended money and given time and laborin its care and preservation, it seems probable that only a court of equity would be competent to grant any relief to the creditors of the vendor. But it is not necessary to pass finally upon this question, as I am clearly of the opinion that the proof shows a payment by plaintiff of the whole of the purchase price. It is contended that the promise by plain.
SONSTIBY
v.
xEEtEY.
579
tiff to assume and pay the iridebtedness of Forbes at the bank, though made as a part of the consideration for the purchase, was not payment, and this for the reason that plaintiff is not legally bound to pay those debts. It is said that the holders of those claims cannot sue plaintiff and recover upon them. Uponthis question there is a,conflict of authority in this country. In many of the states the right' of action by the payee of such debts against the party assuming to pay them is maintained, even where such payee is not party to the contract. This is upon the ground that such a promise is' an original promise, based upon a valuable consideration, namely, the sale and delivery of the goods. 1 Parsons,Cont. (5th Ed.) 466-468; Farley v. Oleveland,4 Oow. 432; Same v. Same, Id. 639;' Canal Co. v. Bank, 4 Duer, 97; Lawrence v. Fox, 20 N. Y. 268; Arnold v. Lyman, 17 Mass. 400; Oarnigie v. Morrison, 2 Mete. 404; Crocker v. Stone, 7 Cush. 341; Hynd v. Holdship, 2 Watts, 104; Burs v. Robinson, 9 Barr, 229; Eddy v. Roberts, 17 Ill. 508; Todd v. Tobey, 29 Me. 219,; Motley v. Manuf'g Ins. Co. Id. 837; Metcalf, Cont. 205-11, and cases cited in notes. And such is the law in Minnesota, as repeatedly decided by tha supreme court of that state. Sandera v. Olason, 13 Minn. 379; Goets v. Fooa, 14 Minn. 265; Merriam v. Lumber CO.,23 Minn. 814. But the opposite doctrine is maintained by numerous cases, and among them by the supreme court, of the United States, in Nat. Bank v. Grand Lodge, 98 U. S. 123; 2 Chitty, Cont. (11th Ed.) 74, and cases cited in notes; Mellen v. Whipple, 1 Gray, 317. Ordinarily, this court would feel bound to adopt and follow the rule laid down by the supreme court in Nat. Bank v. Grand Lodge, supra; but, under the peculiar circumstances of' the present case, I am clearly of the opinion that I ought to apply the rule established by the supreme court of the state of Minnesota., It will be observed that the plaintiff'assumed and agreed, in consideration of the sale to him of the stock of goods, etc., to pay certain debts held by the bank against Forbes. In so far as the debts are the property of the bank, it is certain that they can be sued upon only in the state courts; for it appears that the bank is a corporation of the state of Minnesota" and the plaintiff a citizen of that state. How many of theSe" debts belong to the bank, and how many to other parties represented by the bank, and how many of such other parties are citizens of Minnesota, does not appear, nor is it material. It is enough to say that certainly flo part, and probably the whole, of said debts could only be
580
FEDERAL REPpRTER.
collected by suit in the state It may be that some of the claims are less than $500, and for that reason not within the jurisdiCtion of this court. I must assume, therefore, that, in case plaintiff refuses to pay said claims, suits must be brought certainly upon some of them, and probably upon a11.of them, in the courts of Minnesota. far as those courtB are concerned, as already seen,. the law is settled by repeated decisions of the supreme court, and in accordance therewith the plaintiff would be held liable in a suit by the payee of aJ;ly of· said debts. The question therefore is, shall this court hold to recover from plaintiff the that the creditors of Forbes are. of those debts in this case, and thus subject him to a second payment of the same amount to the holders of the claims? A decision which would establish such injustice as this is not, I am sure, required at my hands. It is true that this case does not belong to' the class in which, as a rule, the federal courts are required to folIpw the decisions-of the highest judicial tribunal of the state. But, although the que/stion is a new one, I am clearly of the opinion that, even on questions purely of commercial law, the feder.al courts should follow those decisions if it that by reason of the situation of the parties and of the SUbject-matter to hold otherwise would subject !t party to double payment the same debt, without the possibility of relief from the federal courts. The motion for a new trial is overruled. NOTE. Section 721, Rev. st., originally section 34 of the- judiciary act, (1 St. 92,) is construed only to include civil .cases at common law, and not criminal offences against the United States:(a) It is limited strictly to local laws ;(b) that is to say, to the positive statutes of the state, (c) to private statutes,(d) and does not apply to questions of a general nature,(e) as to contracts of a commercial nature, the true interpretation of which is sought in the doctrine of commercial jurisprudence.(f) United States courts adopt and follow the decisions of the state courts in questions which concern merely the constitutions(g) and statutes of the state,(h) given by the highest state tribunal as part of the law.(i) It applies to the construction of a law providing for administration of estates,(j) or the construction of devices ereSTATE STATUTES AS RULES OF DECISION. (a) UnIted States v. Reid, 12 How. 361. (b) Swift v. Tyson,16 Pet. 1; BOl'ce v. Tabb,lB Wall. 546. (c) Swift v. Tyson, 16 Pet. 1. (Ii) Williamson v. Berry, B How. 495. (e) Boyce v. Tabb, 18 Wall. 546. (t) Swift v. Tyson, 16 Pet. 1. (If) Lnther v. Borden, 7 How. 1; Jefferson Branch Bank v. Skelly, 1 Black, 436. (h) Luther v. Borden, 7 How. 1; Morgan v. Curtenlu., 20 How. 1; Jefl'erson Brancll Bank v. Skelly, 1 Black, 436. (i) Lavin v. Emigrant Inunst. Say. Bank, 1 Fed. Rep. 650; Christy v. Pridl'(eon, 4 Wall. 196. see Lefllngwell v. Warren. 2 Black, 603; Shelby v. Gay, 11 Wheat. 367. (j) LavIn v. Emigrant Indust.Sav. Bank, 18 Blatchf. 11; S. C. 1 Rep. 641.
SONSTIBY V. KEELll1Y.
581
i
ating estates in fee ;(k) but the mere construction of a will by a state court does not, as the construction of a statute of the state, constitute rule of decision for the courts of the United States, unless such construction had been so long acquiesced in as to become a rule of property.(l) It applies to principles ei;ltablishing title to real .property,(m) and the constplCtion by the state supreme court of the state statutes establishing the rule of property.(n) This rule of decision does not apply on the general principles of equity, not controlled by local law or usage,(o) nor to remedies at common law or in equity,(p) but a non-resident complainant can ask no greater relief than he could were he to resort to the state courts.(q) The rule applies on questions of jurisdiction of inferior courts of the state under state laws,(r) ason a question to subject legal and equitable interests in real estate to. the claims of creditors,(s) but not to the practice of allOWing ejectments to be maintained on equitable titles,(t) nor to state laws regulating proceedings on executions and other process in suits at common law,(u) nor to all rules governing procedure and practice;(v) but it applies to rules of evidence(w) and to the statute of limitations of the state,(x) as limitations of actions and executions on jUdgments,(y) except where the laws of the United States otherwise provide,(z), as in patent cases.(a) The decisions of state courts will be followed as to the construction of a contract declared by the state court void, on the general principles of public policy, unless the question was whether the legislation impairs the obligation of the contract.(b) It applies to the interpretation of contracts made by the state, as statutes authorizing municipal corporations to subscribe to aid railroads extending beyond the limits of the city or county, and to issue bonds accordingly,(c) and to the question as to the validity of municipal bonds issued by the state,(d) but not to a question of contract made by the state, which violates the constitution of the United States.(e) So it applies to the construction of a state grant, as a ferry franchise.(f)-[Ed.
a
(k) Van Rensselaer v. Kearney. 11 How. 297; Carroll v. Lessee of Corroll, 16 How. 276. (I) Lane v. Vick,3 How. 464. (m) Snydam v. Williamson, 24 How. 427; Chicago City v. Rob bins, 2 Black, 418. (n) Green v.Neal, 6 Pet. 291; Ross v. Duval, 13 Pet. 46; Lauriat v. Stratlon, 18 Blatchf. 11; R. C. 11 Fed. Rep. 107; citing I"olk's Lessee v. Wendel, 9 Cranch, 98; Jackson v. Chew, 12 Wheat. 162; Nichols v. Levy, 6 Wall. 433. (0) Neves v. Scott, 13 How. 268; Montejo v. 14 Blatehf. 3"26. (:p) Robinson v. Campbell, 3 Wheat. 212. (q) Ewing v. St. Lonis, 6 Wall. 413. (r) Jeter v. Hewitt, 22 How. 362. (.) Nichols v. Levy, 6 Wall. 433. (I) Shell'bnrn v. De Cordova. 24 How. 423.
(It) Wayman v. Southard, 10 Wheat. 1; Ross v Dnval, 16 Pet. 46. (v) Brown v. Van Braam, 3 Dall. 344. (w) Hanseknecht v. Claypool, 1 Black, 431. (:zo) Leffingwell v. Warren, 2 Black, 699; sayles v. Oregon Cent. R. Co. 6 Sawy. 31. (y) Sayles v. Oregon Cent. 'R. Co. 6 Sawy.31; Sayles v. Lonisvllle City R. Co. 9 Fed. Rep. 613. (z) Sayles v. Oregon Cent. R. Co. 6 8awy. 31. (a) Id. (b) Delmas v. Ins. Co. 14 Wall. 661. see Bridge Proprietors v. Hoboken Co. 1 Wall. 145. (c) Gelpcke v. Dnbnque, 1 Wall. 176. (d) Mitchell v. BnrIlngton, 4 Wall. 271. (,) Bridge Prop. v. Hoboken Co. 1 Wall. 145. Bee Delmas v. Ius. Co. 14 Wall. 6>1. (f) Conway v. Taylor, 1 Black, 803.
See Moor.. V. Ottt".m' Nat. Bank, Dotes of cases, po,t.
589
DDEBAL REPORTER.
ATCHISON
MORRIS.
(Circuit Court. N. D.llUnoi8. MQ.rch 6,1882.) PRIVILEGE Oll' WITNEss.
Where a non-resident of the state is in attendance on B trial in the circuit court as a witness in a case therein pending, he is privileged from service of summons in a civil action issued from a state court of such state, and the privilege extends to a reasonable time after the disposition of the cause to enable him to return to his own state; and if in such case he is served with a summons from the state court, the fact that he files in that court a petition and bond for removal under the act of congress does not prevent him from objecting to the service when the case is removed to the circuit court of the United States.
Quigg if Tuthill, for complainant. Doolittle a: McKey, for defendant. DRUMMOND, C. J. The defendant, a resident of the town of Sharon, Walworth county, Wisconsin, on the seventh day of February last was subprenaed, under section 876 of the Revised Statutes of the United States, as a witness in this court on the trial of a cause then pending. In obedience to the subprena he attended court, and while in Chicago, on the ninth day of February, was served with a writ of summons in this case, issued out of the superior court of Cook county, in this state. The parties in this suit, and in the suit formerly pending in this court, were all different. This cause has been duly removed from the superior court to this court under. the act of congress, and an application is now made to set aside the service. It is founded upon an affidavit, from which, and from the admissions of the parties, it appears that the defendant presented himself in court to testify as a witne;ls on the subprena served upon him; and that while in Chicago, thus in attendance on the court, and before the trial of the case, the summons in this case out of the superior court was served upon him. If the privilege of a witness operated at all upon the defendant, it would protect him so as to give him a reasonable time after th 8 disposition of the cause to go home. It is not claimed in this case that there was any effort to influence the witness to come to Chicago with a view of having the summons served upon him; and the general question in the case may be con· sidered to be this: Whether a person who attends a court in this state as a witness, being a resident of another state, is, while thus in attendance as a witness, subject to the service of process of summons in a civil action. All admit he is not subject to arrest while thus in
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