proper; nor tha.t the defendant can justly complain of the plaintiff'8 refusal to hold his cotton to warrant him in making sales for future delivery. The plaintiff furnished the money with which to buy the cotton, and while, ordinarily, factors are generally bound to obey all orders of their principal, yet when they have made large advances, or incurred expenses on account of consignments, the principal can· not, by any !,!ubsequent orders, control their right to sell at such a time as, in the exercise of a sound discretion, and in accordance with the usage of trade, they may deem best to secure indemnity to themselves, and to promote the interest of the consignor; they acting, of course, in good faith, and with reasonable skill. Feild v. Farrington, 10 Wall. HI. It is true that a factor or other agent who is guilty of fraud or gross negligence in the conduct of his principal's business, forfeits all claims to commissions or other compensation for his services, (For'. dyce v. Peper, 16 Fed. Rep. 516;) and, ordinarily, a factor who takes commissions from his principal, who employs him to sell, would violate his contract, should he also take commissions from the person to whom he sells, (Dos Passos, Brok. 224; Ba·ston v. Glijfo1'd, 18 Amer. Rep. 549; Raisin v. Glark, 20 Amer. Rep. 66; Lynch v. Fallon, 23 Amer. Rep. 458; Scribner v. Collar, 29 Amer. Rep. 541;) nor could an agent employed to sell be himself the purchaser, (Code Ga. § 2186.) Here, however, the plaintiff was not strictly a factor. It is very clear from the evidence that he was a general commission merchant; that his principal dealings were in dry goods; that he dealt largely with spinning mills and spinners, supplying them with cotton, which he frequently sold to them on time. He was neither a cotton factor, a cotton broker, nor a member of the cotton exchange in New York city; and it was clearly understood by the defendants that because of the peculiar facilities that the plaintiff had to dispose of the cotton to spinners, they would pay him a commission; and they not only understood that he was receiving commissions from the spinners, but they tacitly acquiesced. The double agency was therefore clearly understood by both parties. The plaintiff furnished the means, not only to pay for the cotton, but frequently to give time to the spinners who bought from him. This was legitimate. Rice v. Wood, 18 Amer. Rep. 459; 3 Cent. Law J. 316; Scribner v. Collar, 8 Cent. Law J. 205; Fritz v. Finnerty, 10 Cent. Law J. 487. In fact, all the cotton purchased was the property of the plaintiff, and the defendants' profits were to be made by the use of his money; and it is not to be supposed that he would sell the cotton for less than its market value. On the review of the whole case, I am satisfied that there is no error in the report of the auditor. It is therefore approved, and judgment directed for the amount of his finding.
OREGONIA.N RY. CO·. V. OREGON RY. & NA.V. 00.
NOTE. A broker cannot act as the agent of both parties to the transaction so as to be entitled to receive pay for his services from each, unless the parties understood his position, lind expressly agreed to such payments. v. Sears, 23 Fed. Rep. 874. ' One acting as broker or agent of both partIes to an exchange of lands may not recover compensation from either, even upon an express promise, without clearly showing tllat each had full knowledge of all the circumstances, and aBllented to the double employment. Bell v. McConnell. 37 Ohio St. 396·.
CO., LUIITED, V. OREGON SAME
Ry. & NAV. CO.
(No. (No. (No.
SAME V. SAME. SAME V. SAME.
(Oircuit Oourt, D. Oregon.
April 16, 1886.)
PLEADING-SHAM, REDUNDANT, AND IMMATERIAL ALLEGATIONS IN ANSWER.
An allegation in an answer denying knowledge of a matter aJleged in the complaint will not be stricken out as sham unless it appears that the same must be false. An allegation in a complaint that the plaintiff, a British corporation, "is a citizen of Great Britain." is meaningless and immaterial, and so is a denial of the same in the answer. It is not necessary that a corporation formed under the law of Great Britain to construct, own, operate, and lease railways in Oregon should specify in its memorandum of association the fRrmini thereof; and therefore an allegation in an answer to a complaint. in an action by such a corporation on 11 lease of its road, that it had not made such 11 specification, is immaterial. An allegation of fact in an answer which is not per ae a defense to the action. and is not attempted to be made so by any proper averment, is immaterial. A mere denial of the lessee corporation's power to execute a lease of a railway, in an action thereon by the lessor corporation to recover rent, is a conclusion of law, and immaterial. An allegation by the lessee corporation in such action that the lessor's road had no near connection with its road; that the capital stock of the latter was not contributed to operate leased roads; that the lease was not ratified by its stockholders, or that it was signed by its president and secretary without the state of its origin,-is immaterial. In an action by the lessor to recover the rent reserved in a lease, an allegation in the answer to the complaint that the lessee did not occupy the premises during the period for which the rent is demanded is immaterial, unless it is further alleged that such non-occupation was the direct result of the fault or misconduct of the lessor.
ESTOPPEL BY CONTRAlJT.
In an action by an apparent corporation on a lease of its railway, to recover an installment of the rent reserved therein, the lessee is estopped to deny the lessor's corporate existence or power to make such contract.
When a denial of knowledge concerning a matter alleged in the complaint is followed by a direct averment necessarily implying such knowledge, either the denial may be stricken out as sham or the averment as redundant.
ESTOPPEL-JUDGMEN'f ON DEMURRER AN ESTOPPEL.
Judgment on a demurrer to a complaint is as conclusive and binding on the parties to the action, as to all matters well pleaded therein, as though it was given on a verdict on an. issue arising on a denial of the allegations of the complaint; and if final judgment illgiven for the plaintiff on a demurrer to an
answer, such judgment Is a conclusive determination between the parties of the questions involved in the defense made by such answer, and of the material matters stated in the complaint.
A judgment is an estoppel in an action between the parties thereto a9 to any fact or matter determined thereby.
SAME-EsTOPPEL BY JUDGMENT IN
A covenant, in a lease of a railway for a number of years, to pay the rent reserved therein in semi-annual installments, is in the nature of a series of undertakings or obligations assumed or incurred at the same time and under the same circumstances, and a judgment in an action to recover anyone of these installments of rent is conclusive of the validity of the lease, and the liability of the lessee thereunder, in any subsequent action thereon, as to any matter or qefense that might have been made to the first action. A writ of error from the supreme to the circuit (,ourt is not a proceeding under the state Code. but at common law, as modified by the Revised Statutes, and it does not have the effect. pending the proceeding, to suspend the operation of the judgment of the circuit court as a bar or an estoppel.
ACTION ON LEASE FOR RENT.
SAME-WRIT OF ERROR-EFFECT OF, ON JUDGMENT.
At Law. Earl C. Bronaugh, for plaintiff. Oharles B. Bellinger, for defendant. DEADY, J. These actions are brought by the plaintiff, a corporation alleged to have been formed in Great Britain under the companies act of 1862, against the defendant, a corporation formed under the Oregon corporation act of the same year. They are brought on the covenants in a lease alleged to have been executed on August 1, 1881, by which the former demised to the latter its railway in Oregon for the term of 96 years, upon a rental to be paid in advance, in semi-annual installments, of $68,131, on May 15th, and November 11th, together with the further sum, at the same times, of $1,459.95 for the purpose of paying the expense of keeping up the lessor's organization. The first three actions are brought to recover three several installments of rent falling due on November 11, 1884, May 15 and November 11, 1885, and the fourth one to recover the installment of the expense money falling due on November 11, 1885. The first two of the actions were commenced on March 18, 1885, and on November 7th there were amended complaints filed in each of them. The last two were commenced on November 28th, and they were all heard on December 30th and January 2d thereafter,on (1) motions to strike out parts of the answers as "sham, frivolous, irrelevant, immaterial, and redundant;" (2) demurrers to so much of the answers as denies the corporate existence of the plaintiff, and its right to have and exercise the powers and privileges claimed by it; and (3) demurrers to the second and third replies of former adjudications of certain matters between the same parties, in reply to certain defenses set up in the answers. . The answers in these cases are alike, except in the last two there is defense of a former adjudication set up in !)ar. They are all specimens of what may be called the conglomerate style of pleading, in
OREGONIAN RY. CO. V. OREGON RY. &: NAV. CO.
which denials and other matters, having no legal or logical connection with one another, are run together so as to form a contlnuous statement, instead of being pleaded separately as distinct defenses, in the manner required by section 72 of the Code. But the plaintiff, instead of moving to strike out the answers on this account, as it might, (Code, § 81,) has undertaken to purge them of sundry clauses and statements, and has demurred and replied to the remaining portions thereof, distinguishing them by their character. The motions to strike out include 14 portions or clauses of the answers. The first one is a denial of the allegation in the complaint that the plaintiff "is a citizen of Great Britain." The complaint alleges that the piaintiff is a foreign corporation, formed under the laws of Great Britain, and adds, "is a citizen of Great Britain." As there are no "citizens" of Great Britain, and as the allegation that the plaintiff is a foreign corporation, formed in and under the laws of Great Britain, is sufficient to show that it is, in contemplation of law, an alien, and therefore entitled to sue in this court, this allegation as to its citizenship is a meaningless and immaterial one, and so is the denial. The only proper response to it was a motion to strike out. Besides, matter in abatement, as that the plaintiff is not a corporation or citizen as alleged in the complaint, must be set up in a separate plea, and if pleaded with any other defense, is deemed waived. Circuit Court Rule 40; Sheppard v. Graves, 14 How. 509. The second clause is an allegation that the plaintlfi has not specHied in his memorandum or articles of association the termini of the road it was incorporated to construct, lease, or operate in Oregon. This allegation is based on the assumption that subdivision 6 of section 4 of the Oregon corporation act, (Or. Laws, 525,) which provides that the articles of a corporation formed thereunder to construct a road shall specify the termini thereof, applies to a foreign corporation formed to construct a rail way in Oregon. But the validity of the organization of a corporation is to be determined by the law of the place of its formation. In the exercise or assertion of its corporate power in Oregon, a foreign corporation may be required to conform to the law of the state concerning the conduct of corporations, but the sufficiency of its incorporation must be tested by the law of the place of its origin. And this is not all: By the act of October 20, 1880, (8ess. Laws, 56.) "the plaintiff was directly recognized as an existing corporation, lawfully engaged in the construction and operation of a railway in Oregon from' Portland to the head of the Wallamet valley.''' The effect of this act is to establish the legal right of the plaintiff to construct and own the road in question, and, in my judgment, to dispose of the same. Orrgonian Ry. Co. v. Oregon 11. ce Nav. Co. 10 Sawy. 481; S. C. Fed. Rep. 245, and 23 Fed. J1ep. 232. The third clause is a denial of any knowledge whether the plaintiff's memorandum of association specifies the purpose of its incor-
poration as alleged in the complaint. This is moved against partieularly'as sham. But it does not appear to be false. On the contrary, there is no reason to doubt its truth. The defendant does not appear to have ever had any connection with this memorandum from which it could be inferred that the contents thereof are known to it. Oregonian Ry. 00. v. Oregon B. et Nav. 00., supra. The eighth one is also a denial of knowledge whether the plaintiff's directors ever adopted a resolution authorizing the execution of said lease. It is also moved against as sham. But it does not appear to be false, and must be taken to be true for the same reason. The fourth one is an allegation as to what the memorandum of association under the companies act of Great Britain is required to contain, without any averment that the plaintiff has not complied therewith in its formation, or any other application of the matter, and is therefore immaterial. The fifth one is a denial of the defendant's power to lease or operate the plaintiff's road. This is a mere conclusion of law, and should have been alleged, if relied on, by a demurrer to the complaint. Oregonian Ry. 00. v. Oregon R. et Nav. 00., supra. The sixth, seventh, and twelfth ones are allegations to the effect that the plaintiff's road has no near connection with the defendant's; that the capital .stock of the latter was not contributed to operate leased roads; and that the lease in question was not ratified by its stockholders. 'rhese matters are immaterial and utterly frivolous. Oregonian Ry. 00. v. Oregon R. et Nav. 00., supra. 'I.'he ninth, tenth, and eleventh ones are clauses and phrases found in an allegation that the lease ,in question was executed by the president and assistant secretary of the defendant in pursuance of an invalid resolution passed by a minority of the directors without authority of law, to the effect that, while the defendant's principal office is at Portland, its president and assistant secretary signed and sealed said lease at New York. These clauses are omitted. from the answers in the last two cases. They are clearly immaterial. It is well Mettled that while a corporation can have no legal existence beyond the boundaries of the state of its creation, yet it may act anywhere through its agents the same as a natural person, unless prohibited by law. Brwk v. Earle, 13 Pet. 588; Runyr!n v. Ooster's Lessee, 14 Pet. 129; Galveston R. R. 00. v. Oowdrey, 11 Wall. 476; McOall v. Byran l11anuJ'g 00.,6 Conn. 436; Bellows v. Todd, 39 Iowa. 217; Ohio et M. h. 00. v. McPhe'fson, 35 Mo. 25; Field, Corp. §§ 25, 254. The thirteenth and fourteenth ones are statements to the effect that on May 15, 1884, the defendant offered to return the road to the plaintiff, but that the defendant retained possession of the same, under a stipulation with the plaintiff that such possession should not have the. effect to prejudice either party, until November 5, 1884, when, in a suit brought in this court by the plaintiff, the defendant was enjoined, and required to operate the road until the further order
OREGONIAN RY. CO. 11. OREGON RY. & NAV. CO.
of the court, which it did until the appointment of a receiver in aaid suit on the motion of the plaintiff, who thereupon took possession of the property, and held it during the period for which the rent is sought to be recovered in this action. This is not an action to recover money for the use and occupation of the premises. It is brough' on the covenant of the defendant contained in the lease to pay the specific amount therein reserved as rent. Therefore these allegations concern'ing the possession of the property are immaterial. They do not affect the obligation of the defendant to pay the rent according to its contract, unless it is further alleged that such non-occupation was the direct result of the fraud or misconduct of the lessor. Oregonian Ry. Co. v. Ougon R. It Nav. Co., supra. And so far as the possession of the receiver is concerned, it is for the benefit of whom it may concern, and, so far as appears, that is defendant. All the clauses in the anSwer moved against except the third and eighth ones are immaterial. The matter contained in these comes within the purview of the demurrers to the answers. The demurrers are taken to all those portions of the answers that controvert or deny the corporate existence and due organization of the plaintiff, or the powers, franchises,- or ownership of the plaintiff, alleged in the complaints, for the reason "the defendant onght not to be allowed or heard to say that the plaintiff is not a corporation, or has no power to make the contract herein sued on, or to make any denials contrary to defendant's own acknowledgment and deed of August 1, 1881, as appears by the complaint herein, and admitted by the answer thereto." These demurrers are well taken. Oregonian Ry. Co. v. Oregon R. d Nov. Co. supra. This question was well considered in that case, and I have nothing to add to the conclusion reached therein. As was then said:
"Where the law authorizes the formation ana existence of the alleged eorporation. with power to make the contract in question. then a party thereto ought not and cannot be heard, in an action thereon by such corporation, to deny its due formation or legal existence, with the power to make said contract."
On November 27, 1885, the plaintiff replied to so much of said answers as are not included in the demurrers thereto and the motion to strike out. After denying any knowledge of the invalidity of the meeting of the defendant's directors at which the execution of the lease was authorized, the replies, briefly stated, allege: (1) A ratification of the lease by the defendant with knowledge of all the facts, by entering upon and taking possession of the road thereunder, about August 1, 1881, and continuing in the same, and paying rent therefor, until May 15, 1884, wherefore the defendant ought not to be allowed or heard to deny the execution of said lease, or the binding obligation thereof; (2) that the defendant ought not to be allowed or heard to deny the execution by it of said lease, because on June 28,
1884, theplaintiff commenced an action against the defendant thereon. in this court, for the installment of rent falling due thereon on May 15,1884, wherein, among other things, the due incorporation of the plaintiff, and its power and authority to construct and lease said road, as well as the due execution and validity of said lease, and the power and the authority of the plaintiff and defendant to execute the same, and perform the covenants therein contained, were put in issue and contested by a demurrer to the answer of the defendant therein, and by the judgment of this court thereon were determined in favor of the plaintiff, whereupon, on March 28, 1885, the defendant not making, or offering to make, any further answer or defense to the complaint, final judgment was given thereon for the plaintiff and against the defendant for the sum demanded thereon; (3) that the defendant ought not to be allowed or heard to deny the corporate existence of the plaintiff, or to deny the demise by the plaintiff to the defendant, or the due execution by each of them of said lease as alleged in the complaint, because on June 25, 1885, the plaintiff commenced another action thereon, in this court, against the defendant, to recover three semi-annual installments of the yearly sum of $2,919.90, which the defendant in and by said lease agreed to pay the plaintiff, to meet the expense of maintaining its organization, pending said lease, amounting in the aggregate to $4,379.85, wherein on July 29, 1885, on a demurrer to the complaint by the defendant, judgment was given against it for the amount claimed by the plaintiff; and (4) in the last two actions denies that on July 29, 1885, or other time, in any action then pending between the plaintiff and defendant for the same cause of action set forth herein, any judgment was given in favor of the former or against the latter for the Bum of $4,028.32, or any other sum. On November 28th the defendant moved to strike out the reply of ratification, and the two replies of prior adjudication, and also an averment following the denial therein of any knowledge of the alleged invalidity of the meeting of the defendant's directors at which the lease was authorized, to the effect that said meeting was duly called and held, and the resolution in question. duly passed thereat. The effect of these two contradictory allegations as to this matter of the 'lIleeting in question is to make the denial a sham, or the averment Yedundant, as the party moving against them may elect. 'rhe motions to strike out were allowed as to the averment on the ground of redundancy, and denied as to the replies, for the reason that their sufficiency ought to be tested by demurrer. Thereupon, on January 2, 1886, the defendant demurred to the two replies of former adjudication, and the questions arising thereon were then argued by counsel and submitted. From these replies it appears that certain matters set up in the answers herein as a defense to these actions have been heretofore considered and determined in this court, in an action between these parties, on this lease, in favor of the plaintiff.