"plQyed to. canvass to advertise tPEl products o{pl)mbusiness. Prior making the contract now under consider- .. .he, had been fors6veral, years employed in a similar. caracity by ,the complainants, and itmust be presumed that he had acquired l1Q exJepsiveknowledge" not only of the, complainants' business met!)ods, 1mt of their trade secrets, and this knowledge he .had the pay of complainantS, and acting for them. It does not, therefore, se13mto me unreasonl.lible, that the complainants should exact, from him that he would, not reveal their trade I:!oorets. and would not of any competitor of complaipants for the time f!pecifi.ed in his, covenant after his employment by cOlllpla,.inants ElhQuld ter,minate. , In the wine dealer's ;case, just quoted, the restriqtion a term of ten years after the employment qeased,;and the GaUTt, under, the circumstllinces, not . Here the restriction is for <three, years opiy,whicb, it me,was,entirely proper for defendto agree foand .' for complainants to exact. A d.ecree. ,ther:efore be, entered for.the complainantll.. ,:!

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:!o,MBSJm,·PuOFLTS.....LuBILlTT,'OlrDmSEJSOR-PABTIES....,EQtJ'IT:r. . , . : . :

&'SAlItE'-'-PJtINOIPAL 'AND' BtJ'RETy....RELlilASB.

A Sllit was brought by thl! owner of land against .the !,arties in possession for mesne profitll'. 'The defendants n9tified their grantor,'who had 'warranted the title, J !and.· he. conducted, their defense. : After, recovering judgment, the plaiutitf ,s1lQli ,aillgrantor to. recover the of such .The dl3fendants intheorigi.' "'YmlllUit were not Diade and objecti0ll; was i'aised.on groun'd: Bf}ld, . that the fact that some of Iloald defendants had. dIed after entry of JUdgnlentagamst did, not affect the suit against the 2. BY TENANT.' . ..· . ,; : i Pliiitltiff bad had trantderred ioher tberight' to .iuesaid grantor for the ,price paW ffior the land. Bela, that this fact did nQtai;re'?t ,her right toO mense IIro t s. ..... . ..' . .

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; :.,' who 'hasreQoveredt'Wo agalJ;lst ,,: ptll'!lon in , pOSSllssion,-onefor the lanciand the other for rents andprollts,-exolulDges her ). judgMent claim for rents and prollts .againstan evicted: tenant 'for the i'igh1l 'of the tenant to recover over from hisgrant0r t;he same ,the. lattllr'scov,enant · of warranty,' and all clai!D pers0ll; perSOnally. · such agreement is no defense' to a SUIt aga1Ust suob'grantor for sInd 'rents and ... ,profits, since he is the.prin.C.iP.3.1 debtor, and the eVi.Qted,pe",pn fa · but equity will deduct fromtb.ll amount to be rilcovereci against the principal the " amount paid by the surety' as part consideration for and. personal . release. .

In Eqllity. . . .. ..'. . : Sllitby W. W. Whitney, liS administrato.rot against thEl city 9f:New .flhefa.ctsin th('l,case, see.9 SQ.p. Ct. Rep, . ;; , :.J 'f.. J, .Semme$ ilnd· A. for com · . J! .J· .R,;Redqw.ith, fox " .

. of Myra of

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216

FEDERAL REPORTER,

vol. 48.

BILLINGS,J. This cause is submitted upon exceptions to the master's report; Very many of the exceptions present the question as to the scope of inquiry included in the order ofreference. This matter was dealt with by thecoui't in the order referring the matter to the master. That order involved a defining of the question committed to this court by the mandate, as stated in the accompanying opinion of the supreme court. See 9 Sup. Ct. Rep. 745. The supreme court r:lubmitted the cause to this court, as involving a sum in subtraction. It fixed the 'minuend at $576,707.92, with interest from January 10, 1881, and the subtrahend as the aggregate of the judgments against the tenants or defendants in the Agnelly and Monsseaux Casesfof rents and profits, which the decedent, Mrs. Gaines, should be found to have compromised or settled fot less sums than their· face. . 1. It is 'objected that one of the defendants in the AgneUy Case was dead when the judgment for rents and profits was rendered. The record shows this to be the fact. His heirs voluntarily appeared, and the judgment was based upon the statements rendered by the heirs. There was no formal decree of revivor. But all this appeared of record. From the opinion, it is clear that the Agnelly and Mon88eaux Cases were not to be tried over again, and this and similar ojections were not to be considered, but solely how much reduction the minuend, the Agnelly and Monsseaux judgments, should suffer by rell.Bon of judgments compromised or settled for less than their face. .' 2. It is also that the Agnelly and Monsseaux judgments do not aggregate the said sum of $576,707.92, as is stated by the supreme court... This a mistake. Besides the judgments set forth in Schedules Band C,there were some $60,000 of judgments rendered in the AgneUy and Monsseaua: G.tses after the bill in this case was filed. In fact it is stated by the master the judgments shown by the record to have been rendered in the Agnelly and Monssecf,ux Cases aggregate several thousands of dollars more than the amount as arrived at by.the supreme court. 3. His also objected that some 20 of the judgment defendants in the Agnelly and Mon88eaua: Ca8es had died after the entry of judgment against them, and before the reference to the master in this cause. This is immaterial.The supreme court were-clearly of the opinion that, as an original question ·. the defendants in .theAgnelly and M0'Ii88eaux Case8 were necessary parties to this case. But. since this objection had not been taken the defendant herein was the by the tiefend.ant in this case, and party ultimately liable in the Agnelly and Mons8eauxCases, had been notified as warrantor, as warrantor had appeared and .herself conducted the defense, and in her own right taken an appeal in those CRses, the court thought the whole of her opportunity to protect herself had been as ample as it wo,uld or could have been if she had been made a party defendant by the complainant, with' the single exception, viz., the opportunity to ascertain and establish what defendants, if any, had settled or compromised after the rendition of the judgment. The supreme court accordingly held that the numerous defendants in the two former cases (th9 Agnelly and Mon88eaua:) were not necessary partiesj their death could have

WHITNEY

v.

CITY OF NEW ORLEANS.

i17

no effect, especially as the opportunity was reserved to the defendant in case of death as much as in the case of life. They not parties, and their death deprived the defendants of no equities, and did not af,· feet the result or judgment in this cause. 4. It is objected that the decedent, Mrs. Gaines, had had transferred to her the right to sue the defendants for the price of some of the property recovered in the Agnelly and Monsseaux Cases by the defendants in those cases, and had sued on those rights, and, in some cases, had recovaffect the ered from the defendants the amounts thereof. This does inquiry or the result in this case. When the owner evicts a tenant in an action of ejectment the tenant may, upon eviction, recover over from his warrantor (1) the price which he paid, and (2) the rents and profits recovered against him. But the price is one thing and the rents another. The judgments for price and for rents are different things. The transfer of the right to sue for and recover the price, or its recovery, would leave the matter of the rents unaffected. There remains the question whether, and, if yes, to what extent, Mrs. Gaines compromised or settled any judgments for rents in the Agnelly and Monsseaux Cases for less than the face of those judgments. This question is presented in. written agreements which are, in all, the cases, in words as well as substance, the same. The agreements recite that Mrs. Gaines has recovered two judgments against the tenant,-one for land, the other for rents. (1) It exchanges the land for a transfer of the right of the evicted tenant to recover the price from the tenant's warrantor and all preceding warrantors, includiog the defendant. (2) It relinquishes all claims against the tenant personally upon divers considerations, among which is the transfer of the right to recover the rept from the defendant. If the actual tenant was the principal debtor, and the defendant was the surety, then such an agreement would be a complete discharge of the whole debt for rents. If the actual te.nant was the surety, and the defendant was the principal debtor, them such an agreement would leave the debt of the defendant, as principal debtor, unimpaired. The supreme court, in their opinion in this cause, New Orleans v. Gaines' Adm'r, 131 U. S. 212, 9 Sup. Ct. Rep. 745, say: " As between the city and its grantee, the former. by reason of its guaranty of title, is really the principal debtor, and bound to protect the gmntee as a principal is bound to protect his surety." This proposition is exactly in accordance with the decisions of our Qwn supreme court. Millaudon v. McDonough, 18 La. 108. I think, therefore, that it was neither the intention of the parties, nor the legal effect of what had been done, that the principal debtor should be discharged. It was an agreement on the part of the creditor to look to a principal debtor, instead of a surety against whom judgment had already been obtained. Upon the transfer of the right to look to a principal, the surety was personally discharged. The law placed the primary Qbligation upon the warrantor. The agreement left him the sole debtor. In no resf/ect did it injure the original situation of the warrantor, or affect his obligation. The test as to whether there was a settltJment or

n'

J'El)ERAL' BlllI'ORTER,

vol. 43.

t'lbD:lPl'Ottiiillf:of'the judgments would seem to be whether'there was anythingdol1e f which could prevent a I understand this as the supreme courtintended. A judgment had been obtai!1ed against a surety... The creditor, having in equity a resulting subroga'lJiobltakes an express one, and agrees to release the surety personally from the payment ofthe judgment, but that it shall survive as a basis of cla'im'against the principal. I think the transaction is most nearly assimilated to an agreement between the surety alid the creditor, whereby it is agreed that the springing out of the judgment to look to'the' 'principal shall survive, and be transferred to the creditor, and thltt the: creditor simply cov.enants not to ertforce his ,claim against the surety. : Such an agreement would be permissible inlaw and equity, and would IMvethe subrogation raised up by equity, as well as the ex-, presssilbtogation, to an unimpair.ed right to compel payment from theptihbipi:tI.:1ltis urged by thesQlioitol' for the defendant that a judgment is extinguished, and is still made a basis of a claim against other:pattyi.· Thi,s is not ,an' altcg4iher exact statement of the case. So far as it is a:lpersonal judgmentll.gainst the tenant, he is. released from it. Sofa:r;,asit-is the basis of a: claim against another, who is a principal in the ,tmnsilction 'Out of which it arose, it is agreed that itshaU continue in "force. It is as if Mrs. Gaines had covenanted not to force the judgment personally ,against the tenant, and, in consideration therefor,:ha:d"received a transfer 'of the judgment. It could make nO difference 'to 'the defendant whethedhe tenant paid the judgment in money to'the oreditorl\ndbrought his action over against the defendant for the n.mount of the judgment; 6rwhether the tenant paid the judginenti bytrl1l1lilferrillg to the creditora:ll:his rights under it, and the creditor b'ronghttheaction over against the defendant. In either case the oity would 'but'once satisfy her obligation to the warrantee or his subrogee. If these written.and' printed agreements represent the reil.l transactidh'biltween Mrs. Gaines arid thetenants in the AgnellyandMonB.o BroW:: caWs, 'and the master finds, and the evidence shows, they do, then they, hav& nbi the ,characteristics of compromises or settlements, but rather presllnt a contract Whereby a creditor released a surety, and agreed to look to a principal. ItaIso appears frorri the report of the master and from the evi;. dence adduced before him that the amount received by Mrs. Gaines, as the consideration for releasing the tenants in the AgneUy and MonB88aUX OaBeIl from personl;ll liabilit)";amounts in' the aggregate to the sum of $16,501; and that in two cases,-thatofJ. B. Slawson, $900 ;'was "for costs, attorney's fees, marshal's and other officers' j II that in the Case of A.Rochereau, she recei"9'OO:$206.50 for court {losts. The receipt of the costs did not prevent or qualify the subrogation. ' Astothebll.lanceof the $16,501, namely, the sum of $15,394.50, nothing appears from the agreements or from the other testimony showing for what it was paid or ,received. As to this last amount, the case stands,! thereforej that it was an amount paid by the surety as a considerationof the sUbstitution of the principal. in his place as the debtor,

of the the part of the creditor to look· exclusively· tQ the principaLdebtorfor payment. Interpreting as Ido the opinion qf the supreme court as meaning to regard the Angellyand Monsseaux judgments as conclusive upon the defendant down to the time of their rendition, and as limiting the inquiry in this court to what had subsequently been done by the creditor and the surety, w:hich compromised or settled them, I nevertheless think. that. the scope of the inquiry includes any tmnsaction which would qualify the right to subrogation, and. tha.t the amount rec,eived by the complainant, exclusive of that received for costs, should be deducted from the account of the judgments, since equity would not subrogate for the portion paid. In all other respects the exceptions to the master's report are-overruled, and a decree will be entared for the sum of $576,707.92, less the sum of $15,394.50, viz., the sum of $561,313.42, with interest from January 10, 1881, and the costs since the filing of the mandate in this court.

DOE V. WATERLOO

MIN. Co., (two cases.)

(Circuit Court, S. D. California. August 8, 1800.)
MINE8-ADVll:R8E SUIT-EQUITY.

A suit brought pursuant to Rev. St. U. S. § 2326, which provides that one who has filed in the land-office an adverse claim to an application for patent shall "commenceproceedings in a court of competent jurisdiction to determine the question of the right of possession," is cognizable in eqUity. .

In Equity. On demurrer to bill. a. J. Perkins and Memck, MazweU Phewn, for complainant. A. H. Ricketts, for defendant. Ross, J. These suits were commenced in one of the 8uperior courts of the state, pursuant to the provie>ions of sections. 2325, 2326, Rev. St. U. S. It is by those sections in substance enacted that a person who has loCated and set up a claim for mineral land, and who desires to get a patent for it, shall file in the proper land-office an application for such patent, showing a compliance with the laws on that subject, and a plat and field-notes of the claim, and shall post a copy of such plat, with a notice of the application for the patent, in a conspicuous place on the land for 60 days. If no adverse claim for the same is filed with the register and receiver within 60 days from this publication, and if the papers are otherwise in proper form, the patent shall issue; but where an adverse claim is filed during the period 0$ publication, it shall be upon oath of the person making the same, showing the nature, boundaries, and extent of his claim, and all proceedings, except the publication of notice and making and filing of the affidavit thereof, shall be thereupon stayed until the controversy shall have been settled or decided by a court of competent juriBdictio.n,. or the adverse claim waived; and "it