TRIPP V. APPLEMAN.
19
purchase of property by an insolvent person with a precohceived intent of not paying for it. In both cases the depositor and the vendor may reclaim that with which they have parted, if it can be identified in the one case, and has not passed to an innocent purchaser for value"in the other. As this is an action of replevin, the judgment will be that the plaintiff is entitled to the possession of the money deposited, and the damages· for the detention will be assessed at one cent.
TRIPP 11. ApPLEMAN.
(C7ifocuit Court, 8. D. Ohio, E. D. May 9, 1888., .1. CORPORATJONS-STOCX-1'RANSFER-PROOF OF ACCEPTANCE.
As between the administrator of the original stockholder and his alleged assignee, who denies having bought the stock or authorized the transfer. the recordaf tbe tranSfer upon the books of the company. is not sufficient proof of acceptance by the assignee to render him liable to the estate for calls and assessments paid by it subsequent to the assignment; and tbis is especially so where suchtranllfer was made under a power of attorney given by the original stockholde",. g,nd executed at hill instance without the.knowledge or consent of the 'pretended 'assignee. . In an action by .the administrator of an original stockholder against his alleged assignee to recover the amount of assessments paid after the transfer, plaintiff. to prove the assignment and its acceptance. offered the blotter of tbe company's treasurer. and the stubs of its check-book, both of which contained,entries to the effect that defendant had paid calla on the shares. He'd, that tbe evidenCE! was inadmissible; the defendant being a stranger to the corporation'. . . EVIDENCE-BOOKS OF CORPORATION.
2. S..u nc--DoomIENTARY
8.BAHE-8trnROGATION OF AsSIGNO:R TO CLAIM FOR ASSESSMENTS.
Au original stockholder. who has been compelled to pay calls on stock after he has assigned it, is entitled to be subrogated to the rights of the corporation against the delinquent Rssignee only upon clear proof of acceptance of tbe transfer by the assignee. 1
At Law. Action by Andrew C. Tripp, as administrator of Charles M. Daugherty, deceased, to recover the amount of calls and assessments paid by the estate upon certain shares of stock alleged to have been assigned by said Daugherty during his life-time to Alpheus R. Appleman, the defendant. 'l'here was a trial to a jury, and verdict for plaintiff. Defendant thereupon moved for anew trial. Derlam & Leyman, for plaintiff. J. T. for defendant. SAGE, J. The plaintiff alleges in his petition that on the 8th of Feb.. ruary, 1866, Charles M.. Daugherty,' for a valuable consideration, sold
lRespootiJig the doctrine of subrogation and its ap-plioa.tion, see Dowdy. v. Blake {Ark.) 6 S. W. Rep. 897,.and.no.t6; Appeal of MillerJ.. (Pa.) AtLRep. 504; Appeal of Baker, Id. 487LBapk v. Aokerman! (lex.) 8 S. W. ii.6p. 451..Mehr v. Cole, (Ark.) 7 S. W. Rep.4!5lj muut v. ManufactUrIng 'Co.). (N. 0.) 5 S. E. 81; Bunn v. Lindsay'! w. Rep. 4711; Raj.lroad vo., 15N, E. Rep. 393; Appea.lof Oil Co., (Plio.) 12 At!. Rep. 443; v. Anderson, (Ga..) 5 S. E.Rep. 48i. Appeal of RObeson, (Pa.) 12.A.tl. Rep. 51, Knoblauoh v. FcglesoDg; (Minn.) 88 N. W.ii.6\l. 366.[
20
FEDERAL REPORTER.
and transferred to defendant 50 shares of the capital stock of the National Express & Transportation Company, a corporation organized under the laws ofthe state of Virginia, and that the same, at the request of the defendant, and with the consent of the corporation, were, on the 17th of February, 1866, assig ned and transferred on the books of the corporation to the defendant, who then and thereby became the owner and holder thereof. The plaintiff sues to recover the amount of subsequent calls and assessments upon the stock so transferred, paid by the plaintiff in discharge of the liability of the estate of said Daugherty therefor. The defendant, by his answer, denied each and every of the allegR.tions of the petition above referred to. Upon the trial, the plaintiff offered in evidence a copy of the original certificate No. 540 for 100 shares of the capital stock of said company, issued to said Daugherty; also a copy of a power of attorney by said Daugherty to R. Mayo, Jr., reciting that Daugherty had bargained, sold, ftssigned, and transferred to A. R. Appleman 50 shares, and authorizing the transfer of the same to him. There was also testimony that this power of attorney was pasted on the back of said certificate No. 540, which was surrendered by Mayo, as attorney for Daugherty, and canceled, and that an entry of the transfer of 50 shares to A. R. Appleman by Mayo, as attorney for Daugherty, was made on the 16th of February, 1866, on the .company's transfer book; and on June 30, 1866, in treasurer's blotter, an entry, "Rec'd from A. R. Appleman, 5% on 50 shares of $250," under the head, "Cash to 4th Assessment;" and on the stub No. 91, in a bank check book of the company, an entry, June 30, 1866, of a deposit of three checks, one of them being "A. R. Appleman, $250;" and a memorandum of the mailing of certificate to Appleman. This was all the testimony offered on behalf of the plaintiff, excepting testimony showing plaintiff's payment of calls and assessments, and that of witnesses tending to prove" that the defendant was the" A. R. Appleman" named in the power of attorney and in the entries above referred to. No witness had any personal knowledge of an/ of the transactions to which the entries in the books refer. The company, on the 20th of September, 1866, made an <lssignment of aU its property in trust for the payment of its creditors. All question as to the competency of the evidence having been reserved at the trial, a verdict was rendered for the plaintiff, and the case is now before the court on motion for new trial. A new trial must be granted. It is necessary for the plaintiff to establish the averments of his petition denied by the answer, and this he cannot do by showing merely that the defendant named appears upon the books of the company as a stockholder, for it .also appears that his the original stockholder, calised the transfer to be intestate, made from himself to the defendant. It is therefore necessary that there should be in addition proof of acceptance by the defendant of the transfer. TumbuU v. PayaDn, 95 U. S. 421, is clearly distinguishable from this case. There the nction was against an original stockholder, for the benefit oCcreditors of the corporation; here it is by the administrator of an original stockholder against his alleged transferee, who denies having
TItIPP
v.
APPLEMAN.
21
made purchase of the stock, or authorized the transfer; and it is sought to establish the liability of the transferrer by the record of the company of a transfer made under a power of attorney given by the transferrer, and executed at his instance, so far as the testimony indicates, without the knowledge or consent of the transferee. In such case, in which the company is not interested, nor are its creditors,something more than the company's record of transfer is necessary. The extreme improbability that the name of an individual would apppear on the stock-books of a corporation as a stockholder to whom a certificate had been issued, is sufficient warrant for the legal presumption casting upon him the burden of proving that he is not a stockholder; but that case is essentially different from one in which it appears that a stockholder hus by his own act caused a transfer of stock on the books of the corporation to a third person, who denies that he requested or authorized or accepted such transfer. The reason for the distinction is clear when it appears, as it does from the petition in this case, that the corporation, not long after the transfer, made a general assignment in favor of its creditors; for, when a corporation is in straightened circumstances, or in danger of insolvency, stockholders sometimes make haste to dispose. of their stock, and the rule recognized in Turnbull v. Payson does not apply. The question remains whether the additional evidence offered makes out the case against the defendant, conceding that"A.R. Appleman," as the name appears in the power of attorney and in the books of the corporation, sufficiently designates the defendant. The answer must be in the negative. Memoranda on the margin of a bank check book, showing the date and tenor of the checks drawn and cut from the books, are inadmissible. Cooper v. Morrel, 4 Yates, 341; Wilson v. Goodin, Wright, 219; Wafs v. SheweU, 31 Ohio St. 331. This last case is directly in point as to entry on stub of check No. 91, referred to in statement of the evidence. Nor is the entry of $250. credited to A. R. Appleman, admis.sible. It must .be considered apart from the evidence that the books .show the issuance of a certificate to him; for that evidence, as we have seen, does not establish that he was a stockholder. He must therefore, in disposing of the competency of the entry on the treasurer's book, be regarded as a stranger to the corporation, and as against strangers the It will books of a corporation are not admissible. 1 Whart. Ev. § hardly do, therefore, toconcIude that, although the certificate of transfer is not evidence sufficient to establish that the defendant was a stockholder, and the' entry on the treasurer's book is not admissible against him as a stranger, each may be used in aid of the other, and thus the .objections to both be overcome. Finally, it cannot be maintained that under the laws of subrogation the plaintiff has all the rights of the company against the defendant. 'That proposition applies in favor of a plaintiff only when he succeeds in establishing the relation of stockholder on the part of the defendant to the company, and this the plaintiff has not done. The verdict of·the jury will be set aside and a new trial granted.
22.
REPORTER. OREGON & W. MORTG. SAVe BANK'll. AMERICAN MORTG. CO. (Oin'cuit Oowri, D. Oregon.
7, 1888.)
1.
PRINCIPAL AND AGENT-REVOCATION-POWER COUPLED WITH AN INTEREST.
An agency or authority, coup1eiJ with an interest in the subject-matter thereof. may be revoked by the principal in pursuance of a stipulation or reo servation to that effect in the instrument constituting the agency or authority.
B.
An agency to loan the princiral'S money in his name, and collect the interest thereon. in consideration 0 an annual commission on the existing amount of such loans, to be retained by the agent out of the annual interest thereon when collected by him, is not an agency coupled with an interest in the sub·. ject-matter thereof, and may be revoked by the principal at his pleasure. AIwITRATION AND AWARD-SUBMISSION-REVOCATION.
8.
A submission to arbitration, where the same is not made a rule of court, or otherwise regulated by statute, may be revoked by either party thereto. at any time before an award is made, and the remedy of the ad,verse party, if he IS damaged thereby, is by an action on the agreement to submit.
(Sgllabua byfll,e Oourt.)
At Law.
On demurrer.
John M. Gearin. for defendant.
DEADY, J.This action is brought by the plaintiff, a corporation formed under the laws of Oregon, against the defendant, a corporation formed under the laws of Great Britain. There are three causes of action stated in the complaint, to each of which the defendant demurs because the facts stated do not constitute a cause of action. In support of the first claim it i.s alleged that on October 10, 1882, the parties made an agreement by which the plaintiff undertook to act as the sole agent of the defendant in the business of loaning money in Oregon, Idaho, and Wa&hington, "upon an actual commission or remuneration to be received from and upon the interests actually collected from loans;" that the plaintiff, as such agent, was to keep the defendant" harmless" from all claims for taxes levied on such loans, for which it was to receive 1 per centum yearly on the existing amount thereof; and also to bear all the expense of making such loans and enforcing the payIDent thereof, if necessary, for which it wasta receive H per centum yearly on the .existing amount thereof, to be deducted in each case "from the interests it may collect thereon;" that "if the mortgage company (the defendant) should desire at any time to cease loaning in Oregon, Idaho, and Washington, through the agency of the said bank, (the plaintiff,) or if the latter should desire to resign the agency of the mortgage company, each shall1:leentitled and bound to give the other three months' notice of said proposed termination, so that loans intended to be made for. the mortgage company in the future shall be directed and applied by the bank elsewhere," and that in pursuance of such provision the agency was terminated on September 15, 1887; that the plaintiff entered on the business of such agency and continued in the same until such termina-
OREGON & W. MORTG. SAY. BANK 'V. AMERICAN MORTG. CO.
23
tion, and during said period made loans, a large number of which were then outstanding, which the plaintiff was entitled to and offered to collect as they became due, and "was and is entitled to receive commissions oneuch loaus until the same are paid off," <)D which ac-count there is now due the plaintiff the sum of $25,713.72. The second cause of action consists of a claim for $779.29, laid out and expended by the plaintiff in the business of such agency for the use and benefit of the defendant; and the third one consists of a daim for $20,000 damages, alleged to have been sustained by the plaintiff by reasort'ofthe defendant's revocation of a submission of the matters in dispute under said agreement to arbitration. On the argument of the demurrer, it was admitted that it was not well taken, as to the third cause of action. " Either party may revoke a submission to arbitration at any time before an af.tard where the submission is not made a rule oCcourt, or otherwise regulated by statute. And the remedy of the other party is an action on tbeagreement to submit, to recover the damages, if any, caused by such revocation. Allen v. WatBan, 16 Johns. 205; Jones v. Harris, 59 Miss. 214. Of the gross amount of damages claimed on thisacoount,only $1,529 is itemized in the bill of particulars filed with the complaint, $1,000 of 1'\7hich is for "attorney fees." But however improbable it may be that this amount of damage, Or any considerable portion thereof, could have .been causediby this revocation, the defense to the daim must be made by answer, and not demurrer. The second cause of action, as shown by thebiH' of particulars, consietsof aundTJ items of expense incurred by the''Plaintiffin making and enforcing the payment ofloans, and the payment of taxes thereon, as provided in the agreement, excapt two, amouriting to'e3S.56, for taxes paid on land. Under the agreement, the plaintiff, inconsideration of the commission it'received, 'was bGund for all these expenses except those incurred in the payment of taxes on llUld. The demurrer to this cause of action is sustained except as to these two items of taxes. The first cause, as I apprehend it, consists of sundry items of annual commissions on loans which the plaintiff made prior to the termination of itsagency, on September 15,1887, and which it alleges it would be entitled to retain and receive out of the collections of interest due and to become due there0n until they were fully paid and discharged. The demurrer to this cause of action assumes that by the terms of the contract between the parties, when the agency is terminated by either of them, it is terminated in toto, and that the plaintiff's right to collect the loans of the defendant, and have or retain a commission therefor, is then at an end. The plaintiff, however, contends that the termination of the . agancy under the contract only applies to future business or loans, and that, a& to loans then made and outstanding, the plaintiff is entitled to the nlanagement and control of the same, and to receive and have compensation therefor, as though the notice to terminate had not been given. It is not alleged in the complaint which party to the gave
24
tbe notice to terminate tbe agency. It was admitted on tbe argument, however, that it was done by the defendant. But the omission is not material, as the subsequent relation of the parties and tbat of tbe plaintiff to tbe loans tben made and outstanding would be the same in either case. Neitber is it alleged that tbe defendant bas refused to allow the plaintiff to collect tbe interest on tbese loans and retain the commission for its services, but on the argument the refusal was taken for granted, and for tbe purpose of the demurrer will be so considered. The provision. of the agreement concerning the limitation of the agency, leaving out the ad.ded clause. commencing, "so tbat the loans," is neither obscure nor ambiguous. The object of this clause seems to be to state the reason for requiring notice of the termination of tbe agency. But it is not apparent bow it qualifies tbe language or effect of the provision for notice. Hit bas any meaning or purpose,-whicb counsel would not undertake toaay ,-it may be tbis: tbe plaintiff will thereby hltve time to look "elsewbere" for money witb which to make loans .it ml1Y be negotiating wben tbe notice is received. Still the use of the words "directed" and "applied," in that connection, are very vague and purposeless, and it is not at all certain wbat the writer of the clause had in his mind, or tbatthe parties to the instrument bad, when they executed it, any idea orits significance or purpose. There being no provision in tbe contract for tbe continuance of the agency for any prescribed period, it might, but for the provision concerning notice, have been terminated at the pleasure of either party. As a restraint on tbis rigbt, and to prevent the inconvenience that might follow from a sudden rupture of the relation between the parties, the clause requiring notice was inserted. If, notwithstanding tbe termination of tbe agency, there is still left to the plaintiff an interest in or control over the business< of the tben outstanding loans, it is not recognized or provided for wbere it ,would most naturally be found,-in tbe provision concerning the termination of the employment. Neither is there anything in the nature or purpose of the contract, or in any of the other provisions therein, wbich gives support to the proposition, but on the contrary. the agency was merely for the negotiation of llpecific loans, and the collection thereof when due, for which the agent was to receive a commission of 1! per centum yearly on the whole amount then loaned and outstanding, and a further percentage of 1 per cent. on sucb loans in consideration of saving the defendant from the payment of taxes on tbe same. When the agent had a proposition for a loan the same was forwl1-rded to the principal, in Scotland, when, if it was accepted by the latter, a sum equal thereto was placed to the credit of the agent on the books of the principal, for whicb the former then drew on the latter. All notes and mortgages received on loans were required to be immediately forwarded to the principal, where they were kept until returned, when due, for collection. But it is claimed that the plaintiff, as to tbe outstanding loans negotiated by it. is an agent with an interest, and tberefore the agency is so fal' irrevocable.
OREGON & W. MORTG. SAY. BANK t7. AMERICAN MORTG. CO.
25
The general rule is, that a principal may revoke the authority of his agent at his pleasure. To this there are some exceptions, one of which is, where the principal has expressly stipulated that the authority shall not be revoked, and the agent has an interest in its execution. But both these circumstances must concur; for, if the agent has no interest in its execution, it may be revoked, although it contains a stipulation to the contrary. Story, Ag. §§ 462,476. And where an authority or power "is coupled with an interest," or is given for· a valuable consideration, or is part of a security from its nature and character, in contemplation of law, it is irrevocable, unless there is an express stipulation to the contrary. ld. § 447. And see Hunt v. Rousmanier, 8 Wheat. 203. There was no consideration paid for this agency, nor was it given or intended as a security to the plaintiff for any purpose. Neither is it an authority "coupled with an interest." The title to or property in the money loaned was not, by the terms of the agency, vested in the plaintiff, but remained in the defendant. To constitute a case of an agency or power "coupled with an interest," the property 'in the thing which is the subject of the agency or power must be vested in the person to whom the agency or power is given, so that he may deal with it in his own name. Hunt v. Rousmanier, 8 Wheat. 203. The plaintiff was simply employed to loan the money of the defendant and to collect the same, with the interest thereon, as it became due, for a compensation proportioned to the amount of the business done. It has no interest in the loans or the gains arising therefrom, except the amount itwas entitled to retain out of the latter when collected, and not before, in payment of its services. But were this otherwise, and even admitting that the agency of the plaintiff was coupled with an interest in the outstanding loans, so far as the right to collect the interest accruing thereon is concerned, yet the agreement between the parties expressly provides that the agency shall be revocable by the defendant on 90 days' notice to the -plaintiff. With the giving of this notice, the employment of the plaintiff terminated, and although it may thereby have lost a lu{lrative business, in the contemplation of law it has not been deprived of anything that belonged to it, or in which it had any property interest, and therefore has no right to complain. The demurrer to this cause of action is sustained.
26 CRONKHITE 'D.
FEDERAL REPORTER. ACCIDENT INS. Co. OF'
NORT:H AMERICA.
(Oz'rcuit Court. D.OolQrado. May 16,1888.) mSlJRANClIl- CONDITIONS OF POLICY -'PAYMENT OF PREMIUMS ASSURED. ' , DILIGEIif'IC 011'
C. procured an accident insurance policy, the general agent giving him un·' tUNoveml;lllr 1st, following to pay the premium. On that day, in company with T., who was a solicitint;:' agent for the company, and who had conducted :the rieg6tia:iions with C:, and was authorized to collect the premium, C. went to the general agent's office to make the payment, but was informed by the person who had acted as general agent at the time policy was issued that he w'as no longer such agent, and that his successor was absent. Thereupon C. and T. went out, and the latter promised C. that he would return in the afternooD,andwould pay the amount of the premiumQut of his own pOCket, and lookJo C. for it. He did call at the office two or three times durmg the afternoon, but was unable to :find the general agent, and the premium was not paid. Held; in an action on the policy, that C. had not exercised ililigence to avoid a forfeiture for non-payment. '
At Law. ,On motion to direct verdict. was an action on a policy of accident insurance, brought by PhrebeC. Cronkhite against the Accident Insurance Company of North America. Markham DillonllOd E. A. Olark, for plaintiff. Patter80n Thoma8. for defendant. BREWER, C. J. In reference to this case I have come to the conclusion that the motion to instruct the jury to find in favor of the defendant should be sustained, and ther,e is no need of an argument upon the facts to the jury. Tbe facts are these;: I simply state the facts in reference to one question without any extended comment: Mr. Cronkhite, the insured, whose polioy was dated the 3d of October, on the 6th of that DlOnth fell into an excavation, and received a bruise, from which time his health began to Jail. He was partially disabled for some days, and then seemed to be better. Afterwards, and on the 5th day of November" he was. taken down with pneumonia, and died on the 13th of that month. The contention on the one side is that, while pneumonia may have been the proximate cause, yet the bruise was the primary, and, though re,mote, the sole, cause of the death, in that that bruise created and produced the pneumonia,called "Traumatic Pneumonia," from its origin, which resulted in death. Now, that is a question of fact which I do not attempt to pass upon, but should leave to the jury whether the bruise was the sole cause of the death within the purview of the policy. Of course, if pneumonia is a germ disease, it was not the sole cause, for a blow does not develop or create germs. It may expose the person, by weakening the system, to their more potent action, but that is all. Doctors disagree, and I shall not pretend to determine the fact. The other is the question that I shall consider. The policy was issued upon the 3d of October, but no money was then paid. In fact, none was ever paid to the general agents, Porter,