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
is, for Jury tri,tll haVing, been waIVed, the eliirewas tried tlHif Co' was treasuret of the defendant corporation from Febto Jrine 11,1872jwhen he was removed by vote ofth. directors.)'IOriFebruary20, t812;hebought ofthe plah'J:tiffs, who were bankers iriBoston, R bill of lexchange.drawn by them on Benson & CQ., London, ,fol":£l,873, paytl.ble66 days after sight,' gl 'the following agreement: ' ' . ,: ' ' ,; . "BOSTON. February 20. 1872. '; ":Received of Page.. RlchardSon'& Co;,ifor,:acct.Fall Ri,ver, Warren, & ProvidenceRaUroad. their bill ot,axchlmge, on Robert Benson,&Oo·· of London. at sixty days' sight. as follows: No. 644. for eighteen and .· (say. . ,and, Il.9unds Rlqhardson & ,to or its equiv!lJeIlt, satlsfa.ctory to them, fO'r,tlie:sald' eIghteen h llndred. and seventy4hree'pounds sterlmg. say 1,873.1n 'to 'meet maturity: of the said bills in London; paying the cent.,alld of (1f,) Bank of England:interest;.not on" payAble in "l:j,,:; i .': "FALL WARREN.,& Cq., , .' .· ;By C. T. CIiILD, Treas. " ; '..; ',1 i " · ·.... !;
an
'.
i
l.
:;'.
not(!8,drtift.!Ji Pr0mwes, cop,traqt8/f/tadei BigrtiJd,
This was afterwards renewed for 60 days, under a second and similar agreement. '" _ The bill of exchange was sold by Child for value, and was accepted and paid by Benson & Co., who charged the amount to the plaintiffs in account. btt'>.ug):t,t corp<JrQ.t1.on on this contract. The case turns upon the question whether Child had any authority to bindfthe defendttnt.)'Tne plaIntift'sinsistthatsuch authority is to be found in the by-laws. Qf,if not, that Qhi;ld h,ad impUePfluthoritytomak.esqcli a cantra9t,,;&rising from the 'fact that it 'wl'SLhiscustom bQ: bortowumoney' by giving theilotes. of the comwitb or R(fquiescence oftha du:e.ctQrs;.. and. that:,thereCQl'e, they.held him out to the world as b,ound . The thmgs,. that the treasurer "shall all aSSfl8stnents, incomes, and, money!! that may be the samells,theboard of directors may ,orqgr;.,,);ie', o$e¥ 'P;JlomissorypaperB. on paymenHheteof, 'and discharge. Buch Olortgagesaamay have been ,given seeurin,g. the he sp'all regular set of 'boo¥:s,containing the" accounts (jf and of aU its furids ,t4at may pasl\ tllro\lgh his amd: Bhalllay before the diredoril'lnonthly a'written 8tatement of aU
all property bought or sold, and of such other matters as thedi;reetors may deem important." The fact that this direct,s the tp lay l:!efore thedir,E)ctors monthly a written 'statement of all notes;Q.TIJ.fts; promises, tracts signed or indorsed by him does not,I thillk;,bonfel'upon hiIn the
llip:1,; andas.t.atem,ent of
or
.
"
PAGE 11.
W.
,.Ii
IP.R.
co.
to, ,do acts direction,(lrapproval. To' fer J3uphbroad and gElneJ,'al on the treasurer 9£' a corporation .is certainly unusua,l. The courfsQouldnot hold Jhat. ,such authority is vested in a treasurer by hllplicatio;n from the of a by-la.w, but the by-law should e:;presslygive,such authority, if:it1l'as intended ,to be so conferred. The plaintiffs rest tbeir mainly on the, ground .of:an implied au,. thority,on the part ofthe to make ,contract, because, aa they say, the ,out to the world ,JIB its general fiscal agent,authorized to negQtiateloans, borrl:l1v:p1oney, make notes,and manage, jtswhole The legal: principle relied :upon by the plaintiffa is v. Webb, lAUen. 34: ' , .. The: il'ule is well settled that,if aeorporation pel'IIlit the treasurer to aetas theh' general fiscal agent, and hOld,hhn out'to th(l publie, as having tl\e geur authpriby implied from his 91llq;.alnameand ehar&Cten and by andacqiiiescel1-ce sUtIer. hiW,Jp, and, aceept to payable to the 'corporatIOn; th:eyare bound by his actsdohe the scope of such implied aUthority." "
See, also" ¥erchant8' v. StafeBwnk,lO Wall. 604j Mining 00. Y. Bank , !O4 U. S. " In the present case the ,difficulty liee in the correct QOhis legal principle to the facts us. From 1867 qown to ;n.bout thl'l time removal, Chilq. :Wl1-sdJ;l the habit ·of borrowing the notes of the defendllnf Corporation, signed by himself astreaaurel',. Most of th,e15e :notes were indorsed. by o;ne of the· i some w;eJ;e,indorsed ,by:hipl individually. These notes "ere <lisp<>unted.by the· Na;.. Bank, of Warren, Rhode Island, or throllgh Dwight I. Brown&'Co.,bankers of Providence, who soldthem to .pifferent banks in the state,: and sometimes out of the state. There were put inevidence 41 oftbesenotes, usually $5,000 each, the aggreg!tte ing nearly: $200,000. It ;does not appear that the directors; as a board, ever authotized makh;tg these notes, or took any acti.on· in :relation thereto.· '·. It was the custom of Child, who was also treasurer or trustee for several ,corporations, to .all money in. his for them to the of his personaLaccount at the Union Bank,Providence, and to pay the various obligations of these concerns with his personal,checks, charging each one with what 1>,e paid on their account. There iS,no evidence that Child ever borrowed, money by purchasing a bill of exchange. except the one now i,n controversy, or that any notes were made :and negl),tiated ,other than those mentioned. Childplld had personal deal, ingswiththe pll,tintiffs but it is admitted that the railroad com,. pany never any. , , . . ' Upon this state offacts two questions a,rise:, Can it be fairly said that the directol'!3.,Py their courseofcpnduct, held Child out to the pUblic as the fiscal !J,gent of thecQrporatl..on, having Rllthority to make and indorse notes foJ;' the corporation? and, if was ther.e anything so unut;lUal in, th,e; P.1'esent all to ,have putt1;le plamtiffs on their in, quiry? I have no doubt that the directors, by allowing. Child for, ,Sf),v-
for a large amoti;lit to sign notes fOr the corporation, most of which were sold to different banks in the state and some outofit,some of the directors going sO -far in recognition of Child's authority as to indorse the notes,"-:-Conferted upon him, so far as the public is concerned, lnl"implied power tciborrowmoney, which the corporation cannot now dispute. As to the nature of this transaction, I am unable to conclude that :it'was of such 'atie:dtaordiliarycharacter as to relieve the defendant. The defendant clll1ed: several officers' -of different railroads, 'Who t stified that in their experience they never knew railroads to borrow money upon su()h ooIitra'cts as this; also two presidents and one cashier ()f'Boston banks were' who testifled,in sUbstance, that to their knoWledge such:contracM/were not an otdinat)· and usual method ofborrowing money, and that they had never known of the loan of money on such 'Contracts. On the otnei''hand, the plaintiffs introduced evidence that time of this trans3:C'tiori the ofmoney by 111eans of to how was a usual and sterling having .forordinary way 'of borrowing money in Boston eign capital to loan, by persons not importers or requiring to use money ·'ibroad. It mli.y be true that to o'rdinarybankers this way of borrowing .noney was unusual or unknown,but to bankers having control of foreign funds it seems to have baena .common mode. To bankers like these' plaintiffs there would' be nothing unusual Ol'ctdcu1ated to excite !uspicion:foranyone desiring a loan to apply to them, and fOT thenl to make it in such form as waS most convenient to them at· the time. There is'no proof that Child suggested the.form the loan should take. The inrather would be tbat he applied to theplaibtift's; and they sugthe mode adopted·. ,The fact that it was not customary for railroads to borrow money in this'wiiy was not suffidient to put the plliintiffs Iipon their guard, or to excite suspicion of irregularity. The plaintiffs were lenders of foreign money in the Boston market. Theywere applied ·ro by one'. who was a customary. borrower of home ca.pital from other parties, atldwhose notes were 'bought by institutions not only in the bllt Ollt of it. Whyshonld they not loan their funds, under these circumstances,in a manner not unusual with them and bankers of their class? If the defendant· had desired to restrict its treasurer to borrowing JilOneyfroni. the Warren Bank,or through Brown & Co., or to the form of borrowing by promissory notes, it could have done so by formal and propel' action on tbe patt of the directors. In the absence of any 8uchrestriction, the defendanth1ilst be beld liable. When the authority of the agent is left to be inferred by the public from powers usually ercised by the agent; it is enough if the transaction in question involves the same general powers, though applied to a new subject-matter. Mer.. chantB' Bank v. State Bank,.8Upra./lIt is not necessary, in order to cOnstitute a general agent, thait he shbuldbave done before.an act the same fn, tpede with that in question. If.he has usually donifthings of the Bame general character and eft'ect',andwith tbe assent of his principals, that is enough." COWEN, J. t in CbrIl/llierciC?:l Bank oj Erie v. NorUm, 1 Hill) 501)503.
LLOYD 'D.
M'WILLIAMS.
261
The defendant raises the objection that the plaintiffs. citizens of Massachusetts, cannot sue in this court because the defendant is a corporation created by the laws of Massachusetts as well as Rhode Ish-md. The 8upremecourt have held this abjection to be invalid in Railway 00. v. Wkitton, 13 Wall. 270, 283. Mr. Justice FmL:D, delivering the opinion of the court, says: "But it is said, and here the objection to the jurisdiction arises,' that the defendant is also a corporation under the laws of Illinois, and therefore is also a citizen of the same state with the plaintiff. The answer to this position is obvious. In Wisconsin the laws of Illinois have no operation. The defend· ant is a corporation, and as such a citizen of Wisconsin by the laws of that state. It is not, then. a corporation.or a citizen of any other state. Being there sued, it can only be brought into court as a citizen of that state, whatever its statuS or citizenship may be elsewhere." I am of opinion. that judgment should be entered for the plaintiffs for the amount claimed, not exceeding the ad damnwm of the writj and it is So ordered.
MCWILLIAMS, Collector.
(lHrcuit Court, D. Rhode Island. May 28,1887.)
1.
CuSTOMS DUTIES-RATE-INGREDIENTB-ALIZAIUNE ASSISTANT.
tor-Oil. 2.
Alizarine assistant. used as a mordant by calico printers, the principal in· gredient in which is castor-oil, is chargeable with a duty of 80 cents per galIon, under section 2499 (known as the" similitude clause ") of the act of March 8, 1888,. which provides that. on all articles manufactured from two or more materials, the duty shall be assessed at the highest rates at whichtbe component .materiill of chief v:alue may be chargeable, that being the duty on. cas-
SAME-CONSTRUCTION OF LAW-EXCEPTION.
,The phrase" chemical compound or salt, "in section 2502 of the act of March 8, 1883, imposing a duty of 25 per cent. ad valorem. is too general to be cons.idered an enumeration, so as to take an article out of the operation of the si. militude clause of section 2499 of said act.
At Law. Charly L. Woodbury and J. P. Tucker, for plaintiff. David S. Baker, Jr., U. S. Dist. Atty., for defendant.
COLT, J. Upon this importation, known as "alizarine assistant," and used as a mordant by calico printers, the collector imposed a duty of 80 cents per gallon, under section 2499 (known as the "similitude clause") of the act of March 3,1883. The case was heard by the court, jury trial having been waived. The import in question is manufactured from castoroil, sulphuric acid, and soda, and is soluble in water. The principal ingredientsare castor-oil and sulphuric acid. The duty upon castor-oil is 80 cents a gallon. The collector. assessed the same duty on alizarine assistant under that paragraph of section 2499 which provides that,on all articles manufactured from two or more materials, the duty shall be.