5S!
FEDERAL REPORTER.
were to Le governed by the law of the st:l,tes wl:ere the com· panies were incorporated, and where the contract::! were to be performed, and the act of 1872 did not have the effect to extend to such policies the non-forfeiiure act of 1861. The same question was again before Judge Lowell in 1879, in Whitcomb v. Phcenix Mutual Life Ins. Co. 8 Ins. Law Jour. 624, and in Ames v. Manhattan Life Ins. Co. (unreported.) The, learned judge considered himself bound by the decisions of Mr. Justice Clifford1 above cited, and held that the policies were not Massachusetts contracts 1 and were not governed by her laws. The facts in this case are almost exact counterparts of those in the other cases. Certainly there is no material difference between them. In the case of Morris v. Penn Mutual Life Ins. Co. 120 Mass. 503, decided in 1876, the supreme judicial court arrived at a different conclusion upon this question from that reached by Mr. J u9tice Clifford1 and it was there held that the act of 1861, by force of the act of 1872, applied to foreign as well as domestic companies doing business in the state. The effect of that decision was considered in Desmazes v. Mutual Benefit Life Ins. CO' 1 and was not deemed binding on this court. The learned and well-considered brief of the counsel for the plaintiff has failed to convince us that we should change the rule of 1'aw adopted by this conrt upon full consideration1 and since so frequently re-affirmed and acted upon. Judgment for the defendant.
WANN v. I.
KELLY.
(Oircuit Oourt, D. Minnesota.
February 11, 1881.)
ILLEGAL CONl'RACT-LUBILITY TO ACCOUNT FOR PROCEEDS.
A joint owner is liable to account to hiB associates for money paid under an illegal but completed contract.
2.
SAME-AcTION AT LAW.
When, in a single adventure, which is closed, a person, jointly interested therein with others, appropriates the prooceeds to his own use, he becomes a debtor to his associates, anu an action at law gives adequate relief.-[ED.
WANN
v. KELLY.
585
« Clough, for plaintiff. W. P. Warner, for defendant. NELSON, D. J... This action is brought by the plaintiff, Wann, against defendant, Kelly, to recover money paid to the latter for the plaintiff's use. The facts developed are these: The plaintiff and defendant and E. B. Gibbs agl'eed to engage in a speculation by the sale an'd purchase, or purchase and sale,-it is immaterial which,-of 300 shares of Northern Pacific Railroad stock on tbeir joint account, each to be interested to the extent of 100 shares. The transaction was determined upon and agreed to by the parties in the belief that the stock would depreciate in the market, and by "selling short" they would be able in the future to purchase so as to make a profit upon the whole transaction, called by stoykjobbers "the deal." The plaintiff alleges it was agreed that Kelly should UJ,anage the speculation, and through his broker in New York sell 300 shares Northern Pacific Railroad stock, which was done November 8 and 11, 1879, and afterwards, when a depreciation in the price of the stock reached two points, or two dollars per share, he should order the broker to purchase 300 shares of the stock, and thus close the venture, and pay over ' to each his proportion of the profits. The evidence shows very clearly that the arrangement contemplated, in fact, no contract of actual sale or purchase; but, on the contrary, the intention and design was that, as, between themselves and the party with whom they dealt, all differences in the price of the stock, at the time of the supposed contracts, should be paid by one party to the other as performance and satisfaction thereof. There were no actual bargains for the sale of' the actual stock, but mere bets or wagers on the future price,-gambling transactions on the chance of future rise or fall. Kelly claims the "deal" closed November 19, 1879, when there was a depreciation of two or more points, showing a profit of $647, and that he has paid the plaintiff his portion, one-third of that amount. Wanu admits the receipt of $215.66, but claims that the "deal" was Gilman
586
not closed until November 22, 1879, when Kelly actually realized and received a profit of $2,000, and that he is enti· tIed to one-third of this amount, which Ke.llyxeceived for him. The broker in New York did not close up the speculation until November 22d, as appears ):>y ,his statement rendered KeHv, u for whom he acted, and the only per,son known to him in the business, at which time the profit realized was the sum before stated. Kelly further claims that he was authorized by his arrangement, which was agreed to by Gibbs and plaintiff, to carry the "deal" on his own account, if he desired to, after a decline of two points, by paying each of them the profits resulting from such decline, and could close them out in that way. This is not the arrangement disclosed by the evidence. It was not possible to close up the transaction with W Gibbs, unless by their consent, until he notified the New York broker to close the "deal," and that he would take the profit which resulted from the speculation at the time, whether the As the broker .iid not close decline was two or more the "deal" until November 22,:1879, if the plaintiff is entitled to reco,.: anything, it will be upon the basis of the profit paid Kelly then. 'fhe testimony of Kelly shows that the three parties were interested to the extent of one-third each in the venture, and the statement rendered Wann purports to be based upon the close of the "deal" by the New York broker, November 19th. Kelly thought he could carq the speculation for his own benefit, and at his own risk"after a profit of two points was reached, ,but the arrangement, as testified to by all the parties to it, woqld not permit him to do so. lt is, urged by that the, J:JUsiness in which the parties was contrary to public policy and illegal, a.nd therefore he can retain all the, profit which resulted therefrom without recognizing his associates jointly interested, and that a court will not enforce the plaintiff's claim. Such is not the law. the parties ,related to a single transaction, and when,' the business closed, and Kelly received the profits, he was in duty bound to pay over to the ,,plaintiff his part of it.
587 If the speculation was contrary to public policy and illegal, it had been closed, wound up, and the illegal object of it had been accomplished. It is settled by the United States supreme court (McBl,air v. GiMes, 17 How. 237; Brooks v. Martin, 2 Wall. 70, and authorities cited) that when the illegal contract is completed, and money has ,been received by a joint owner! by 'force of the it, and canillegal contract, he will not. be permitted to not protect himself by setting up the illegality of the transaction in which it was paid him, but must account to his associates. It is also urged by the defendant that plaintiff, if entitled to a share of the profit, can only enforce his claim in equity. I think an action at law gives adequate relief. The parties were engaged in a single venture, .and the defendant,hlwing appropriated 'the proceeds to his own use, made himself a debtor to the plaintiff. J udgmentwill be entered in favor of the plaintiff for $451, and interest from November 22, 1879. The amount being less than $500, costs must be paid by the . plaintiff.
MQKAY, Trustee, etc.,
V.DIBE.aT··
(mrcuit Oourt, D. Nf!IJJ Jersey. January 11_1881.) 1. PATENTS-INll'RINGEMENT-PROVISIONAL llq·jUNCTION·. Where complainant has for a number of years been. in the extensive and undisp,uted use of patents, and all that period there has
been a public acquiescence in the monopoly, a provisiQnal injunction to restrain infringement will be granted, unless some appear to take it out of the general rule. 2. SAKE-SEPARATE PATENTS FOR MACHINE, PROQE8S;ANi> PRoDUCT-Ex-
BrILL ExISTING., Where, under the acts of July 4, 1836, and Marc'h 3,1839, a patent was taken out for a machine for the manufacture of a specific article, and ,subsequently,.and within two years; patents, were applied for and granted for the process of manUfacturing such uticle, and also for the product of such process as a new article of manufacture,/Mld, that the patents for the process and product did not'terminate witl) fIll' PIRATION OF ONE, OTHERS
"Reported by Homer a.Eller, Esq., of the St. Paul bar.