254
: FEDERALREfORTER. ,
re!usedtoreceive. the, same, and dellied that the right to redec;lIU existed. Complain$nthas deposited with .the clerk of the courts the amount tendered, 'an<lgertainly, under these ctrcumstances" it cannot be, said that ,entitled to hold the.land under the second deed, becl;l.use the same hasl.not been redeemed. ",Defendant denied complainant's right to redeem, ,anQ. compelled him to resort to a suit in equity to establish and enforooi"!uahrightj and, as a defendant to such suit, he is even now claim to the right of redemption. He.cannot now be permitted to take advantage of fa.ct that he has procured a second deed from the treasurer under the circhmstances disclosed in the evidence. The amount deposited with the clerk by complainant is,as·lunderstand the record, the sum which is sufficient to COVer the amount for taxes, penalties, etc. Decree therefore is ordered for complainant, the defendant being entitled to the money on deposit; and the total costs, both in state and federal courts, will be equally divided, each party paying one-half.
SOUTH BEND ,
WORKS v. CoTTRELL and others.. '(WARDER and others; Jntervenors.)
(Oircui' (Jom, No D. Iowa,
w: D.
May Term, 1887.)
1..
CoNDITIONAL SALE-MACIDNE CONTRACT-PRINCIPAL ANDAGENT-GARNISUMENT. ,:
a.
A contract creating an agency for the sale of agricultural machines provided that all unsold machines were to be purchased by the agent at the expiration olthe contract, and that they were to remain the property of the principal until paid for according to the. terms of the agreement. Held, that such unsold machines, and the proceeds of machines sold to third pa.rties, were not subject to garnishment in the hands of a SUbagent for the individual indebtedness'of the agent. '
CONSTRUCTION 'OF CONTRACT-USAGES OF TRADE-EvIDENCE.
Said contract provided that such unsold machines were to be ,Paid for in stipulated installments, during the years 1888 and 1884, and contamed a marginal modification to the effect that the principal a§reed "to carryover all machines left unsold at the end of the season of 1883.' Held, that such modification wasstanding alone, somewhat equivocal and obscure, and that resort might be had in such instance to the well-defined and known usap;es of the trade as an aid in reaching a true interpretation of the contract.
Said contract further provided that the agent in seUingthe machines should take notes for the deferred payments upon blanks furnished by the principal containing certain provisions and stipulations. Held, that notes taken on other blanks, and of a different form, payable in Bome instances to the order of the ag-ent,did not defeat the'right of the principal to waive objection to the variance]n form, and to maintain his ownership in the notes so lOng as the rights ofinnocent purchasers for val.ue were not involved. 4. CONDITIONAL SALE-SECTION 1922; CODE IOWA-GARNISHMENT. Section1922, Code Iowa, provides that "no sale, contract, or lease, wherein the transfer·of title or ownership of personal property is made to depend upon any condition, shall be valid against any creditor or purchaser of the vendee or lessee in actual possession obtained m pursuance thereof without notice,
8.
PRINCIPAL AND AGEN'l'-OWNERSHIP OF NOTES-WAIVER OF VARIANCE.
SOUTH BENDntON WORKS V. COTTRELL.
255
unless the same be in writing, executed by the vendor or lessor, acknowledged and recorded the same as chattel mortgages." Held, that this section did apply to the above contract in garnishment proceedings, where the. property in disput!ltwas in the possession of a subagent; the plaintiff in such case being neither a "creditor nor a purchaser," within the meaning of the statute, ;of or from said sUbagent.
8. M. Marsh., for plaintiff. a. R. Mark8, for intervenors.
At Law.
Demurrer to amended petition on. behalf of intervenors.
SlDRA8, J. The firm of Cottrell Bros. & Miller was, in the year 1888, engaged in the business of selling agricultural implements at Sioux City arid Le Mars, Iowa, and on the third day of January of that year a written contract was entered into with the firm of Warder, Bushnell & Glessner,whereby the former named firm was appointed agent for the latter, for the· sale of the Champion reapers, mowers, and binders; it being agreed that Cottrell Bros. & Miller Elhould guaranty the sale of all machines forwarded under the agreement; and that, incase the machines were not aJIsold during the continuance of the contract, thenthe.said Cottrell Bros. & Miller were to make payment for such unsold machines, either in notes of responsible farmers, properly guarantied, or in other valuable oonsideration, at the option of said Warder,Bushnell & Glessner; the machines to remain the property of the latter until paid for; one-third of the price thereof to come due October 1, 1883, one-third January 1,1884, and one-third on or before October 1, 1884. Upon the margin of the contract is entered the following modification: . "It is further agreed between the parties that said Warder, Bushnell & Glesslier agree to carry over all machines left unsold at the end of the season oH888." :. In the spring of 1883,. Cottrell Bros. & Miller arranged to furnish machlnery to Jacob Koolbeck, of Hospers, Iowa, to be by him resold and accounted for; and under this arrangement certain of the machines manufactured and furnished to' Cottrell Bros. & Miller by Warder, Bushnell & Glessner were placed in the hands of Koolbeck, llnd part thereof was sold by him. Cottrell Bros. & Miller failed in business, and in August, 1883,suibvas brought by the South Bend Iron Works, ona debt Que, and a writ Of garnishment was served, upon Koolbeck, and his answer taken and filed in the cause. Thereupon Warder, Bushnell & GlessJOrer intervened in the cause, setting up their rights under their contract,arid claiming ·that the machines; in· hands of the garnishees, and the proceeds of those sold by him, belonged to them, and were not in any sense the ' property <>f Cottrell Bros. & Miller. .. ·10 the amended petition, filed by the intervenors, it is averred that, in 'the 'business of manufacturing and selling agricultural implements, the expression used in the modification entered upon' the margin bf the eontract,aB above stated, to-wit, "to carryover all machinery left unsold at the erid of the season," has a well-defined and understood meaning, to t.he effect that the consignors were not to exact or demand· payment or
256
FEDERAL REFORTER.
settlement for machines unsold at the end of the season named in the contract, but that said were to be charged back to the consignors as their property; ·and that this construction of such phrase was well understood at Sioux Clty and Le Mars, and was well known to both Cottrell Bros. & Miller and Warder, Bushnell & Glessner,and had been recognized and acted upon in previous dealings between the parties, and that, in fact, such was themEl'aning intended to be given to such phrase by both contracting parties, when the same was ma:de part of the contract. One question presented by the demurrer to the amended petition is whether, in construing the contract, the court can consider the meaning which.it is averred custom and usage has thus given to this phrase. If in any business or trade, by well-known and established usage, certain terms or phrases have acquired a well-defined meaning, the presumption is that, when used in a contract between parties engaged in such trade or business, and cognizant of such meaning, the parties intended such to be the construction thereof. Where the language used in a contract is plain, and its meaning free from obscurity, proo{ of custom or usage,.in contradiction.thereof, is not admissible; language used in this contract, standing alone, is certainly somewhat:equivocal and ob. scure; and iusuch case resort may be had to the well-defined and known usages of the as an aid in reaching a true interpretation of the contract between'the parties. The pivota:l ,question between the contending parties is whether the machines, and proceeds of those sold in the hands of the garnishee, remain the property of the intervenors, or has the title thereto passed to Cottrell Bros·. & Miller? The plaintiff does not 'stand in the position of an innocenbpufchaser for value, but claims to be entitled to the protection of section 1922 of the Code of Iowa, which declares that "no sale, contract, or lease, wherein the transfer of title or ownership of personal property is made to depend upon any condition, shall be valid against any creditor or purchaser of the vendee or lessee in actual possession, obtained in pursuance thereof without notice, unless the same be in writing, executed by the vendor or lessor, acknowledged and recorded the same as chattel mortgages." The. property in dispute was and is in possession of Koolbeck, and plaintiff is neither a creditor of, nor a purchaser from, him; and this sf4tute, therefore, has no application to the case. By service of the writ of garnishment on Koolbeck, the plaintiff reached in his hands the property, if any, of Cottrell Bros. & Miller, and therefore, as already stated, the pivotal point is the question of title in the machines, and proceeds of those sold in hands of the garnishee. Without citing the various provisions of the contract under which the property was delivered by the intervenors to Cottrell Bros. & Miller, it is sufficient to state, in brief, that it declares that the latter firm is appointed agent for the intervenOl's; that the machines delivered remain the property of intervenors until paid for; that ,the intervenors .agree to carryover all machines remain. ingunsold at end of the season of 1883, etc. As lJetween the immediate
257 parties to tbi$ contract, ,be held that ,the to all uns<M machines rerp:ained in int rvElnors, no matter t1;1,6 same werE;l in the actual posseasionof Cottrill! Bros. & Miller, or .ofother partIes, as agents unde.r;, the latter firm. The contract 1l1so provides in selling,the machines Cottrell, Bros. & Miller shall takeI).otee for. the paYmenteU!pQJ;l blanks furnished py intervenors"qoqtaining visionsandatipulations" 'In fact, in making many1of the sales. Gottrell Bros. & Miller took notes on blanks gotten up by themselves, which dif-: fered in somepartioulara from those furnished by intervenors, and were made payable;to order ofCottr.eUBros, & Miller, instead of to ordl;lf of intervenors, and it is claimed that all such notes are the property of Cot.. treU Br6s'. ,& ?{finer. ' , The faet tbat, in'selling the of theit }>rincipals the agents dis-' obeyed the instructions oftlltLPrincipal by 'potes of a form, and varying in terms, does not change the tha,t thenote8 ually taken are the proceeds of the principal's propertY,and the:princb pals have the right to waive objection, to the variance in form and special terms, and by so ownership in the notes, sorong as the rights of innocent for value are not involved. The demurrer toaniellded petition of intervenors is therefore overruled.
PAGE
and others'tI. FALL RrvD,W. & P.R.Co. (JOU1't.
, Wfreuit
l).lllwde Island. June,
1887.)'
1:CORPORATiON:"""CONTRACT OF TREASURll:R-LIA1lILITY.
,
B.
UNITED STAT;Ell OmcUIT COURTs-JURISDICTION-DIVERSE CITIZENSHIP-COR PORATION OF TWO STATES. ' ,
The treasurer of:a railroad'corporation for several 'years had been in the ,habit of borrpwingmoneyon the notes of the aorporatiou signed byhtmself as treasurer. Most of t4ese note\lwere indorsed by one oft:Qe directorsi Wille. by himself individually. The of the corporation did not confer I!tuch autho,rityon'Che treasurer., In an, ,a,ct,io,n, against the corporation, on an agreement signed in its behalf by the a loan obtained' from a banking house took the form o;f a purchase of pn London, it appeared that railroad corporations were not in the ha!;lit of borrowing monet' in this lnode,'while on the other!hand it was shown that banking houses which., !ike plllintiif. had foreign ca,l,>ital to lend, were in the habit of lending it, In thIS manner. Held. that the dIrectors, by: their course of conduct, had held out their treasurer to the public as the fiscal agent of the corporation. and 3fI having authority to make andindorse notes for it; and that. there was nothing in this transaction so unusual as to have ,put plaintiff on inquiry. Where plaintiff is a citizen of Massachusetts. and defendant a corporation created by the ,law of Rhode Island, as well as by the law of MassachUSetts. the suit 'may be brought in the federal court for the Rhode Island district. For the purposes of the suit. defendant is to be deemed a citizen of Rhodp Island. '
At: Law.
Wm,P. $hejJield, for defendaqtg. v.31:t.no.5-17 '
lV,m. W. Dougln,aand J. H. Penton, Jr., for