between the time when the statute began to run and commence· ment of the action, will leave less than six years to be reckoned towards the statute bar. The statute is not understood to mean, as has been assumed in argument, that residence without the state rpust continue for a year, not to be a part of the time limited; but that if the person departs from the state and resides without it for any length of time, that time is to be taken out, although absence f()r less than a year not accompanied by residence without the state is not. If this were not so the first alternative would be useless, for residing without the state would be included in absence from it. And there is good reason for the distinction. Service might be made if his residence was within the state during his absence from the state, while it could not if his residenee was without the state. Therefore it might well be provided that no mere absence of less than a year should be deducted, but that any permanent residence without the state should be. These conclusions make it unnecessary to decide the question much discussed in argument, whether putting this note in the schedule of debts due by the defendant in the insolvency proceedings was asufficient acknowledgment to take the debt out of the statute. Judgment for plaintiff.
(Oircuit Oourt, N. D. illinois. July 22, 1885.)
MUNICIPAL INVALIDITY. FIDE PURCIIASER-KNOWLEDGE OF ATTORNEY AS TO
M. and her agent having acquired certrlin town bonds, with knowledge of facts which made them invalid, placed them in the hands of her attorney, MacV.,who sold them to O. It appeared that at the time of the purchase by 0., j\!IacV. was his legal adviser, and was one of the attorneys retained by him in the prosecution of the suit on the bonds against the town. Hela, that C. was not a bonafide purchaser of the honds, and could not recover.
At Law. E. Towne and Wayne MacVea,qh, for plaintiff. Mayo <t Widmer, for defendant. GRESHAlIf, J. The plaintiff brought this action on the twelfth day of August, 1884, as the holder and owner of 40 bonds of $500 each, issued by the defendant on the second day of August, 1869, payable to be.arer 15 years after date. The defense is that the bonds were issued for an unauthorized purpose, and that the plaintiff is not an innocent holder for value. The supreme court of the United States, at the October term, 1882, in Ottawa v. Garey, 108 U. S.110, S. C. 2 Sup. Ct. Rep. 361, held that a number of bonds of the same issue were void in the hands of a holder who acquired them with knowledge of the circumstances under, and the purposes for, which they wera
issued, and at the October term, 1878, in Hackett v. Ottawa, 99 U. S. 86, that court held that bonds of the same issue were valid in the hand of an innocent purchaser for value. The bonds in this suit helonged to Mrs. Louise Mather when the ahove decisions were rendered, and she and her agent, L. H. Eames, both citizens of the city of Ottawa, knew, at and before the alleged sale to the plaintiff, the grounds upon which the municipality resisted payment. Thus advised, and knowing that payment could not be enforced by her, Mrs. Mather, through her agent, placed the bonds in tlie hands of Wayne MacVeagh, an attorney at Philadelphia, for collection. The plaintiff was a successful business man of large meaIls, engaged in mining and selling coal, and in manufacturing pig-iron, and MacVeagh had been his attorney and general legal adviser since 1877 or 1878. The plaintiff had inquired of MacVeagh, shortly before the latter's employment by Mrs. Mather, if he knew of opportunities for investment. The plaintiff had previously made invest· ments through MacVeagh, and the latter was still the plaintiff's legal adviser. Under these circumstances, MacVeagh telegraphed the plaintiff at his country place, calling him to Philadelphia, where they met, and it is claimed the plaintiff hought the bonds in suit. The plaintiff testified that at this interview MacVeagh informed him he had the bonds for sale; that they had been issued by the city of Ot· tawa; that the municipality was able to pay them; that they were good beyond all question, and would certainly be paid at maturity; that they contained the proper municipal clauses; that, without see· ing or knowing anything more about them, he made the purchase, relying upon MacVeagh's advice, and gave the latter his checks for $20,OUO, with the understanding on his (the plaintiff's) part that the bonds were to be purchased hy MacVeagh for him; that they certainly were so purchased; that he did not ask MacVeagh whether their validity had been disputed; and that he had no agreement with anyone t,hat his money should he returned if he failed to collect the bonds. . Eames testified that ne went to Philadelphia and placed the bonds in MacVeagh's hands for collection; that he did this on the ad vice of Franklin MacVeagh, of Chicago, who is related by marriage to Mrs. Mather, and who is Wayne MacVeagh's brother; that he was Mrs. Mather's agent in the management of her estate, and that neither Wayne MacVeagh nor anyone else had paid to him or to his principal, with his knowledge, any money arising from the sale of the bonds. Wayne MacVeagh testified that Eames advised with him as to the best method of securing the money due upon the hands, and employed him to bring suit or take any other course that he might think hest to collect the money; that in negotiating the sale to the plaintiff he did not act as the latter's agent or attorney; that he told the plaintiff he had the bonds for sale; that he had made inquiries and had satisfied himself the municipality was abundantly able to pay its debts,
and that the bonds would be paid at maturity; that they showed upon their face they had neen.issued for a municipal purpose; that he sent for the plaintiff because he was an investor; that there was no occasion for acting as counsel for the plaintiff; that he still retained the money he got from the sale of the bonds; and that he was one of the plaintiff's counsel in prosecuting this suit. Mrs. Mather acquired the bonds, with knowledge of the facts which made them invalid. Her agent and her attorney, Mr. MacVeagh, both knew that collection could not be enforced in her favor; and the plaintiff is therefore equally unfortunate if his purchase was made upon Mr. MacVeagh's advice as his counselor agent, as in that case knowl. edge of the connsel or agent was the plaintiff's knowledge. If the plaintiff's testimony is to be credited, he certainly understood the purchase was so made. Was he justified by the facts in assuming, in the interview with Mr. MacVeagh, that the relation of attorney and client existed between them, and that Mr. MacVeagh was advising him as his counsel as to the character of the securities? Mr. MacVeagh had been the plaintiff's attorney and general legal adviser for five or six years, during which time he had represented the plaintiff in litigl:}tion in the courts, and had given him legal advice, as occasion required, in connection with his large business interests. 'fhis relation still existed, and the confidence naturally incident to it remained unshaken. at this time, The plaintiff was not even cautioned against upon Mr. MacVeagh as his coulll:lel in making the purchase. If the plaintiff had been so cautioned, it is probable he would have gone to some other attorney for advice. It cannot be presumed that the plaintiff, a citizen of Philadelphia, was willing to invest $20,000 in bonds, issued by a municipality in Illinois, without the opinion of an attorney that they were valid. Mr. MacVeagh advised the plaintiff, in effect, if he did not do so in terms, to buy the bonds; and the plaintiff relied upon this as the advice of his counsel. It was natural and reasonable that he should do so. It is significant in this connection that in his argument of the motion for a new trial Mr. MacVeagh frankly stated that, while talking to the plaintiff about the bonds, he had in his mind the importance of keeping the latter ignorant of the facts which would prevent a recovery in his favor as an innocent holder for value. It is true, Mr. MacVeagh testified as a witness that he did not act as the plaintiff's attorney or agent in this instance, but that was an expression of his opinion rather than the statement of a fact. The evidence, fairly considered, shows that whatever interest the plaintiff has in the bonds he acquired upon the advice of Mr. MacVeagh as his attornf'Y, or through him as his agent; and that, notwithsta.nding Mr. MacVeagh's secret intention to the contrary, he was in law and fact such attorney and agent. A material part of the evidence remains to be considered. Mr. MacVeagh collected the money two years ago on the checks which
PROVIDENCE WASHINGTON INS. CO.
the plaintiff gave him, and still
it in hands. There evidence that Mrs. Mather ever aemallded thIS money, or that It IS withheld without her consent. Mr. MacVeagl1 is still the plaintiff's general legal adviser, and one of his counsel in this case. Why should the money be permitted to remain in his hands unless there is an understanding, tacit perhaps, that it shall be returned to the plaintiff if he is unsuccessful in this suit? That it is held for this purpose there can scarcely be a doubt. Any other theory would make Mr. MacVeagh unmindful of his duty to Mrs. Mather as her attorney. The foregoing are my reasons in brief for holding that the plamtiff is not an innocent holder of the bonds for value. The motion for a new ilial is overruled.
PROVIDENCE WASHINGTON INS.
(Oircuit Court, D. Oolorado.
August 3, 1885.)
FIRE INBUHANCE-PLEADING PERFORMANCE OF CONDITIONS OF POLICy-ANSWER -EVIDENCE.
Where, in an action on a policy of fire insurance, plaintiff alleges generally that he has fulfilled the conditIOns of the policy. and the in-malice company generally that he did not observe all the conditions of the policy, without pleading specially the breach of such conditions, plaitltiff is not bound to prove affirmatively that he has fulfilled all of such conditions, nor can the company show that some of such conditions were not fullilled.
At Law. Sam. P. Rose, for plaintiff. Patterson J: Thomas, for defendant. HALLETT, J., (orally.) Mr. George W. Bittinger brought an action against the Providence Washington Insurance Company, on a policy of insurance. He alleged in general terms that he fulfilled the conditions of the policy; I believe set out the policy also. The defendant answered in the like general terms that he did not observe the conditions of the policy. "Defendant, further answering, denies that on the first day of November, 1883, or at any other time, said Atkinson gave notice of proof of loss, as provided in said policy, and denies that said Atkinson performed all and singular the conditions of said policy on his part to be performed." At the trial the defendant contended that upon this state of the pleadings, the plaintiff was bound to prove affirmatively that he had fulfilled and executed all the terms of the policy; and if that was not true, that the defendant was at liberty to offer evidence to the point that some of the conditions had not been fulfilled; as, that the property was allowed to remain vacant and unoccupied for some time. and that it was not kept in operation, the property being a mill am?