Woolw. 390, to the effect that a party by change of residence after suit brought may have the right of removal. This decision of Mr. Justice MILLER is counter to the ruling of the supreme court, and cannot be sustained, and Judge DILLON'S decision, bottomed upon it, must fall with it. The decision of Judge BLATCHFORD in Clarkson v.Manson is ruled in part upon his own decision in McLean v. Ra.ilway Co., 16 Blatchf.309, to the effect that, under the act of 1875, the requisite citizenship need not exist at the commencement of the suit, and the decision in Insurance Co. v. Pechner, supra, under the judiciary act of 1789, was held inapplicable. The cases of Johnson v. Monell, supra, and McGinnity v. White, supra, are cited in support of the conclusion reached. The decision was made, however, before the construction by the supreme court of the act 0£1875, and is counter to the settled law of the land. I am compelled to the conclusion that, to entitle a non-resident defendant to remove the from a state to a federal court. the jurisdictional amount or value of the matter in dispute must exist at the commencement of the suit, as well as at the time of the petition for removal; or, in other words, that it is the claim of the plaintiff in such suit which must alone be considered, and such claim must, at the commencement of the suit, as well as atthe time of application for removal, come within the jurisdictional amount. The cause will be remanded.
et al, v.
(Oircuit Oourt, D. Delawnre. October 18,1890.)
The owners of three patents assigned the right to their use to defendants, reserving to themselves a stipulated royalty. To successfully carryon the business, defendants purchased a patent owned by one Hanna, Which, by Ii. supplemental contract, became the joint property of defendants and the owners of the three original patents. Afterwards the father of one of the owners of the three original patents acqUired all of the latter's rights therein, and later sold the same to defendants. Held, that by managing this sale, and by knowingly permitting defendants to consummate it under the belief tbat they were acquiring bis interest in all the patents, witbout informing tbem tbat no interest in the Hanna patent had IOlver passed to his father, the son was estopped from asserting any rights under that patent as against defendants. Where a cestui que trust has conveyed all its interest under the trust to others by instruments prima facie competent, and wbere tbe bona fides of tbe transfer and, of the trust has been unsuccessfully assailed on the ground that it was without consideration, and made to defraud creditors, and that both trustee and original cestui que trust were identical, and insolvent wben the assignment was made, a debtor in whose hands the individual assets of the trus.tee have been attached cannot refuse to pay to him a trust debt.
TRUSTS-PROPERTY LIABLE TO ATTACHMENT.
Bill in Equity by August Hartje, trustee of Waldemar A. Schmidt, and of Henrietta Hartje and said Waldemar A. Schmidt and John H. Mueller, and said August Hartje and said Henrietta, his wife, in right of said Henrip,tta, against the Vulcanized Fibre Company of Wilmington.
HARTJE V. VULCANIZED FIBRE CO.
M. A. Woodward and Henry O.. Oonrad, for complainants. The assignment from Schmidt to Hartje was for three named patents. It must appear that the actor, having no means of knowledge, was induced to do what he would not otherwise have done, and that injury would ensue from a permission to allege the truth. Com. v. Moltz, 10 Pa. St. 527; Bigelow, Estop. 9, 480; Herm. Estop. § 325 et seq. If both parties have equal means of knowledge there can be no estoppel. Hill v. Epley,31 Pa. St. 331; Bigelow, Estop. §§ 289, 290, et seq. 1 Story, Eq. Jur. § 191. Edward G. Bradford, for respondent. Schmidt is either equitably estopped or has parted with his interest. Whitney v. Burr, 115 Ill. 289, 3 N. E. Rep. 434; Walk. Pat. §§ 274, 285.
W AI>ES, J. This bill is filed for a discovery, an accounting, and for a decree to compel the payment of royalties claimed to be due and payable for the use of certain patent-rights, which were formerly the property of the complainants, and by sundry mesne assignments came into the possession of the defendant, subject to the payment of the royalties now sued for. The patents referred to cover improvements for treating paper pulp and vegetable fibre substances in the manufacture of what are known as "vulcanized fibrous articles." The pleadings put in issue the title and ownership of each one of the complainants in or to the royalties which are the subject-matter of the present suit, and by the stipulation of counsel this is the only question now to be decided, leaving the scope and limitation of any account that may be decreed to be settled hereafter. The answer denies that Waldemar A. Schmidt had any legal or equitable right or interest in any of the patents or royalties mentioned in the bill, at the time of bringing this suit, and alleges that what was known as the Schmidt interest in the patents had been assigned to the defendant before that time. The evidence shows that Waldemar A. Schmidt derived his right and interest in the most important and valuable of the patents by and under a declaration of trust made by August Hartje, that the latter held the patents therein mentioned in trust for the Pittsburgh Manufacturing Company and Waldemar A. Schmidt in equal shares. It further appears that August Hartje, acting as trustee, and with the consent of his cestuis que trustent, sold and assigned the right to use the trust patents to third persons, through whom they came into the possession of the defendant, on terms and conditions set out in a contract of assignment dated June 30, 1873. This contract fixed the rate of royalties to be paid for the use of the trust patents, and provided that any improvements in said inventions, made by the assignees, should be secured and patented for the joint benefit of the contracting parties. The patents thus assigned were No. 61,267, dated July 12,1867; No. 113,454, dated April 4, 1870; and No. 114.880, dated May 16, 1871. The contract of June 30, 1873, was supplemented by another one between the same ties, made the 20th of November, 1873, and by which the first contr;l.ct was m.odified and altered. The assignees of the trust patents having found it necessary, in order to secure greater protection in their business,
to, buy other, patents from! Edmund S.. Hanna, it the which had been purchased (from Hanna, or which should thereafter be purchased from him, should (be the joint property of the, parties to these two contracts. E. S. Hanna, on 1873, and transferred to patties under .'fhOln 'defendant claiIHsj (\11 patents and parts of patents held by him 'either as and all. other patentfl for which he may make apphcatIOn thereafter, any of whIch shall relate to the methods of treating paper, paper pulp, or other vegetable fibrous substailces, or any 'articles 'made from these substances, or any mechanical devices for working the 'same, 'reservingd3ttain royalties to be divided equally hetween the said Hanna, August Hartje, trustee, and the assignees of the said pat',entk ,OnJune7, U80, WaldemarA. Schmidt assigned toA. T. Schmidt :',' all my intel'est,right, title, find claim of, in, and to those .tpre, patent8,"etc. , rl'tferrillg to the trust patents, and specifying ibersanddates. On the 15th of October, 1880, A. T.Schmidt aSfligned ,his interesHn, the ,three truist'patents to the defendant for ,and in considof certain money :pa,yments, stated in tbe·agreement between ,them of that ,date. On Marah·26, 1884, in the court of com,monpleas, 'No·. l;: ofAllegheny county, P.ennsylvania, in the suit ,of A. T. SchmiJt, '¥Signee of W. Schmidt, against August Hartjel' it was adjudged 80(1 ·qecreed, inreralia, as. follows:
i 'the 'trllstber'etofoJ1e eXisting asset'forth in the bill of complaint be, land theaame Is hereby, d'ec!sl:ellUo. be determined and fully ended that the said August Hartje, by good and sufficient assignments or .?f the in.tbepatents held 11111100 In trust as III DIU to the plalOtlff." . ' )
, . . . . . .,j :._ . .' . '
On Novernber :August Hartje, in obedience to the above deeree,:assighed to A.T; Schmidt the undivided one-half interest in the ·:trust· patents. On the 14th of April, 1885, A. T·. Schmidt, by way of :further:8ssurance, again. assigned all his rights and claims in the trust .'patents to the defendant;· on' the payment of the consideration money Imentioiled in ,the of October 15, 1880. These contracts ,and,'assignments completei:the chain of defendant's title to what had been the Sebtnidt interestiu ,the trust patents, and show that W. A. ;'Schmidt has no right tosu.e for any royalties which may be due on ,them. ·But ,his counsel contend that he has never assigned or parted and with his interest in the Hanna patents, on which royalties are fora discovery and anaccount in respect to them he 08n maintalinthe presentsMt. It iSlrue that Waldemar A. Schmidt, J'by,his;assignmentto his Jather, transferred nothing more than his inter:e8t in trust patents:, and that the' father could not assign to the IdElfenQililt ,anymore than, hahad received; but the defendant charges ';t}ult;Waldetriili' A.Sch'IUidt;jn 'the course of the negotiations for the sale ·ofthel&hmidt interestjoindnced the defendant to believe that it was ,all the patents, and that he is thereby ;lbuying :estopped fr.oln now assetti'ngany rightiri"them. By. the agreement of ,Oct0ber;15,'1880 1 A. 1\ and the 'defendant, the conIi
sideration for'the assignment offhe trust patents ;wis to be paid: pafdIy in cash and the balance on the rendition of the decree establishirig,the f right of A. T. Schmidt to the one.half interest in them. The trustllll:Y" ing been determined, and the trustee having made the assignment,ll;S or·, dered by the decree, the defendant was called on to fulfill his part of the, agreement by paying the balance of the purchase moneYi and' it is in : the negotiations which preceded the final payment, and which were con-' ducted by W. A. Schmidt in behalf of his father, that the evidence' must be found to support the defendant's charge. It is cleat enough that the defendant's officers and attorneys entertained the belief that in : closing the transaction of April 14, 1885, they were obtaining the whole, Schmidt interest, and it is only necessary to inquire what W. A. Schmidt: did or saiu, or designedly lelt undone or unsaid, to produce that belief. , It appears that at one time he presented a vague claim of $500 on; ao-, count of some of these patents, which was dil;allowed, and the matter was ( dropped; Mr. Dalzell, one of defendant's counsel, at Pittsburgh; testifies:) "The transfer of April. 1885. was made in further assurance of the.tit,Ieto( the patents as originally made by A. T. Schmidt to the Vulcanized i pany. I have no recollection of ever having heard, from. my with this business up to within a very short time, any suggestion or pretense, that the entire Schmidt interest-by which 1 mean all the interest outside of that held by Hartje as tr\lstee for himself and the manufacturing company"'-; was not OWDPd byA. * * ... I know of the payment onhe last installment of purchase money by the Vlllcanized Fibre. Company to A;; T. Schmidt. and I understood when I paid that money and took the receipt, that I was paying it for the entire Schmidt interest, and by the · inter",. est' I ulean as I have defined heretofore. Nothing was said by Mr. W. A., Schmidt, witb whom I dealt, that would have led we to suppose anytliing', else." ., , Waldemar A. Schmidt testifies on cross-examination: . " 1 "I was of the conveyance of all of A. T. 8chmiclt's interest in the' Schmidt interest referred to in the question. Question. Do you not now understand, and did you not then understand, that the Vulcanized Fihre Compan)', through its counsel. was dealing or negotiating witll your father for the· transft'r to it of the whole Schmidt intel"est i' Answer. My offer having been, refuse.) by Hampton on the glOund that I had nothing. and having rethat,I. ceived no intimation of a change of opinion on their part, it is thought thl'Y thollght they bad the whole intel'est; but I differed with them· then,' and do so now differ." , W. A. Schmidt never renewed his claim for the $500, and allowed the negotiations to go on until the transaction was c1osed,and it was supposed by the defendant that it had acquired the complete title to the Schmidt, property ihthe patents. If he had a title or claim to any portion 'of the patents or royalties he remained silent when it was his duty to aod his conduct ·affords a proper. case for the application of ru]eo( equitable estoppel, which is nowhere more clearly stated thallby Chan-' celIoI.' BATES in Marvel. v. Ortlip, 3 Del. Ch. 9, as follows: ; "Where 011e by his acts, dl'clarations. or silence, where it is his, duty to, speak, induced in reasonable r.lil\oce on such acts or dec-' to ent'er into a tra1'lsadion; he shall not; to the prejudice of the per,..: so'ml81ed,ifupeaeh the transaction." . '.
The shome principle is also recognized in Margan v. Railroad 00., 98 U. S. 720, where the court say: A person"Is not permitted to deny a state of things which by his culpable silence or misrepresentation he has led another to believe existed, and who has acted accordingly upon that belief. The doctrine always presupposes error on one and fault or fraud upon the other, and some defect of which it would be inequitable for the party against whom the doctrine is asserted to take ad. vantage."
A court of equity will not compel the purchaser'of property, under such circumstances, to buy any portion of it over again from a person who stood silently by at the time of the sale and made no sign, although he knew that the purchaser believed that he was buying the property free froin all claims. Much less will the court lend its aid toa claimant ofsucli property who personally managed the sale and designedly permitted the purchaser to believe that he was getting a perfect title. Common honesty and fair dealing required that the complainant should notify the defendant, or its attorneys, that the assignment of A.T. Schmidt: was of a part, and not of the whole, Schmidt interest; but, as he chose to adopt a different course, and to conceal what he should have made known, he cannot now be allowed to take advantage of his own wrong in maintaining.this suit. · The right of the other complainants to bring the suit is disputed on the ground that August Hartje is the sole and individual owner of the royalties which he had formerly held as the trustee of the Pittsburgh Manufacturing Company, and that he should have sued in his individual capacity I and not as the trustee of his wife or of John H. Mueller. The defendant admits its accountability for the royalties which Hartje held for the benefit of the Pittsburgh Company, and by its answer alleges that it fully accounted for and paid them to the trustee of that company up to the 12th of July, 1885, on which day all the property, rights" and credits of August Hartje in the possession of the defendant were at-· tached at the suit of A. T. Schmidt against the t'aid Hartje. in the superior court of Delaware for New Castle county. The defendant does not deny its obligation to pay the royalties, but asks for its own security to be directed by a decree of this court how and to whom such payment· shall be made. The complainants' Exhibits G and H set forth the written· instruments by which J. H. Mueller and Henrietta Hartje became tpebeneficiaries of the property in the place of the Pittsburgh Company. these instruments, two in number, bearing date, respectively, April 8, 18&1, and May 11, 1881, are in due form, and are prima facie proof that their purpose was, as expressed, to put Mueller and Mrs. Hartje "fully intheplaGe ofthePittsburgh Manufacturing Company under and in relation to the whole subject-matter of the trust respecting said patents, and recognized by said agreement, of which August Hartje was andremains trustee." The defendant has assailed the bona fides of the new trust by charging thatit was crel1ted without consideration and for the purpose of defrauding fIartje's creditors, and is therefore void... It is also charged that August Rartje and the Pittsburgh Company were identical,
FARMERS' LOAN & TRUST CO. V. CHICAGO & A. RY. 00.
and that both were insolvent at the time when these complainants undertook to create the second trust. Without discussing the testimony produced by the defEmdant in relation to these charges, it is sufficient to say that the evidence does not support them. Mueller and Mrs. Hartje are the successors in interest to the Pittsburgh Company, and are entitled to have the royalties due on the patents paid to their trustee. The creditors of Hartje can prosecute their claims, in their own names, here or elsewhere. This case is decided on its own merits as they appear from the record evidence. The bill is dismissed as to Waldemar A. Schmidt, and sustained as to the other complainants, and a decree will be entered accordingly.
MCKENNAN, J., concurs.
TRUST CO. OF NEW YORK V. CHICAGO
& A. Ry.
(Circuit Court, D. Indtana.
December 9, 1890.)
MORTGAGES-FoRECLOSURE SALE-RIGHTS OF PURCHASER'S ASSIGNEB TO WRIT OJ' ASSISTANCE.
After a sale on the foreclosure of a railroad mortgage, the court directed its receiver to turn over the possession of the road to an assignee of the purchaser at the sale; the court reserving the right to resume the possession if the assignee should thereafter refuse to pay into court ,any part of the purchase price. Hetd, that this order brought the assignee within equity rule 10, which prOVides that every person, not a party to a cause, in whose favor an order has been made, shall be enabled to enforce obedience to such order by the same process as if he were a party to the cause; and that a writ of assistance would issue in favor of such assignee against another railroad company which unlawfUlly refused to surrender possession of part of the road.
SAME-MORTGAGOR'S CONTRACT PENDENTE LITE-DISCLAIMER BY PURCHASER.
Pending the foreclosure of a railroad mortgage, the mortgagor leased to another railroad company an equal right to the use of a designated part of the road for a period of 20 years. The foreclosure decree provided that the purchaser at the sale should be at liberty to abandon or disclaim any leaselloId interest or contracts or other agreements entered into by the mortgagor after the commencement of 'foreclosure proceedings. HeW, that the purchaser's right to abandon and disclaim the lease, as provided in the decree, was not affected by the receipt of the rent by the receiver during the pendency of the foreclosure proceedings, and,his acquiescence in the lease, and that all right of possession in the lessee ceased on being notified of the purchaser's intention to disclaim and abandon. Shortly after the foreclosure sale, the purchaser notified the lessee of its intention to disclaim the lease, and forbade the latter from using the road at the expiration of 30 days from the date of the notice. Held, that the receipt of the rent for these 30 days by the purchaser, which was expressly stated to be without prejudice to its right to abandon the lease, was not such a consent to the lessee's possession as to constitute it a tenant from year to year, within the meaning of Rev. St. Ind. 1881, §§5207, 5208, which provide that all general tenancies where premises are occupied with the c()nsent, either express or constructive, of the landlord,llhaU be deemed tenancies from year to year, to be determined by three 'months' 'notice to be given the tenant before the expiration of the year. "
, ',', "..,
SAME-WAIVER OF RIGHT TO DISCLAIM.
.. FEDERAL CbURTS..,..JURISDICTION-WRIT OF ASSISTANCE.
Where the undisputed facts show that the purchaser, after the forecloSiIre sale, never waived its right to abandon and disclaim the lease, the federal coutt'in Whicp. the in the of its primary jurisdiction oyer th/! matter, will Issue a writof assistance III favor of such purchaser, notwithstanding the issuance ofatempor'l!ol'Y- injUnction by a state court, in Which thepnrcbaser appeared, restraining it from interfering with the lessee's possession.