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to which neither of the appellants contrib- | mately to convey to each his proportionate uted any part; that in November, 1890, a share. In this connection it is sought to large body of rich ore was discovered, and apply the familiar rule that neither laches since that time gold to the amount of sev- nor the statute of limitations is applicable eral hundred thousand dollars has been against an express trust, so long as that taken out. Both of the appellants left the trust continues. Conceding all that can be territory of New Mexico during the year claimed as to the existence of an express 1885, and resided abroad up to the time of parol trust in this case, the refusal of Hewthe beginning of this suit. Both were aware itt to execute the deed to H. J. Patterson that Hewitt had refused to deed them their of his interest in the property, of which interest in the mine and in the patent which both appellants had notice, was a distinct he, in the meantime, had obtained to the repudiation of such trust, which entitled property.

the complainants to immediate relief, and It thus appears that the right of action opened the door to the defense of laches. accrued to the appellants in April, 1885, and Speidel v. Henrici, 120 U. S. 377–386, 30 L. that this suit was not begun until eighted. 718, 719, 7 Sup. Ct. Rep. 610; Riddle years thereafter,-in 1893. Whether the v. Whitehill, 135 U. S. 621-634, 34 L. ed. refusal of Hewitt to make the deeds was 283–287, 10 Sup. Ct. Rep. 924. right or wrong is not material here. There The supreme court of the territory also is no doubt from the findings that appellants found that the case was within § 2916 of the had no share in the subsequent development Compiled Laws of the territory, requiring of the mine or the discovery of ore in 1890, that all actions founded upon "unwritten and that it was through the efforts and per- contracts

or for relief upon the severance of the defendants, and the aid ground of fraud, and all other actions not they received from Fergusson, that they herein otherwise provided for and specified,” were put in possession of this valuable prop- shall be brought within four years; and erty. If appellants had expected a share in that this defense was not answered by this property they should either

either have $ 2930, declaring that “none of the provibrought a bill promptly to enforce their sions of this act shall run against causes rights, or at least contributed their propor- of action originating in or arising out of tionate share to the subsequent work and trusts, when the defendant has fraudulently labor, and the expenses then incurred. To concealed the cause of action, or the existaward them now a deed to their original ence thereof, from the party entitled or interest in the property would be grossly un. having the right thereto.” As there was no just to the defendants, through whose exer- evidence that the defendants had fraudu. tions the value of the property was discov- lently concealed the facts from the appelered and the mine put upon a paying basis. lants, and abundant proof that the facts While it is true the court might impose were known to them, the latter section was upon the appellants the payment of their held not to apply. While the case does not

. proportionate share of labor and expenses necessarily involve it, we see no reason to as a condition of relief, it could not com- question the correctness of the court's conpensate the defendants for the risk assumed clusion on this point. by them that their exertions would come We are clearly of the opinion that the to nought. There is no class of property delay of eight years in this case was inexmore subject to sudden and violent fluctu-cusable, and the decree of the court below ations of value than mining lands. A loca- must, therefore, be affirmed. tion which to-day may have no salable value may in a month become worth its millions. Years may be spent in working such prop

(195 U. S. 345) erty, apparently to no purpose, when sud- | CLARENCE T. BIRKETT, Piff. in Err., denly a mass of rich ore may be discovered, from which an immense fortune is realized.

COLUMBIA BANK. Under such circumstances, persons having claims to such property are bound to the Bankruptcy-discharge-effect on debts not utmost diligence in enforcing them, and scheduledknowledge of creditor. . there is no class of cases in which the doctrine of laches has been more relentlessly en. Knowledge of bankruptcy proceedings on the

part of a creditor of the bankrupt, which is forced.

not acquired until after discharge, though in 3. But little need be said in reply to ap- time to prove his claim under the bankruptcy pellants' argument that a trust relation was


uly 1, 1898 (30 Stat. at L. 563, chap. established between these parties by the

541, U. S. Comp. Stat. 1901, p. 3448), $ 65, oral agrement of 1883, under which Hewitt

and to move, under $ 15,1 to revoke the dis

charge, is not the "actual knowledge of the was to take possession, hold the property

proceedings in bankruptcy" which, under $ 17,1 for the benefit of all concerned, and ulti- is essential to the release, by the discharge, of

act of

1 U. S. Comp. St. 1901, p. 3428.


provable debts which have not been duly at any time given to defendant in error by, scheduled in time for proof and allowance. or by the direction of, the bankrupts or

either of them. It was decided that the [No. 26.)

claim of defendant in error was not barred

by the discharge in bankruptcy, and judg. Argued October 28, 1904. Decided Novem- ment was directed for defendant in error. ber 28, 1904.

The judgment was successively confirmed

by the appellate division of the supreme IN N ERROR to the Supreme Court of the court and the court of appeals. 174 N. Y.

State of New York to review a judgment 112, 66 N. E. 652. Thereupon judgment was entered in that court in accordance with the entered in the supreme court, in accordance direction of the Court of Appeals of that with the direction of the court of appeals. State, which affirmed a judgment of the Ap- This writ of error was then sued out. pellate Division of the Supreme Court, First Section 7 of the bankrupt law of 1898 deDepartment, which had, in turn, affirmed a volves a number of duties upon the bank. judgment of the Supreme Court at a term rupt, all directed to the purpose of a full held in and for the county of New York, in and unreserved exposition of his affairs, favor of plaintiff in an action on a promis- property, and creditors. Among his duties sory note, in which defendants set up a dis- he is required to "prepare, make oath to, charge in bankruptcy as a bar. Affirmed. and file in court, within ten days

See same case below, 174 N. Y. 112, 66 N. a schedule of his property showing the E. 652.

amount and kind of property, the location The facts are stated in the opinion. thereof, its money value in detail, and a

Messrs. John Murray Downs, Robert list of his creditors, showing their resiG. Scherer, and Thomas Carmody for plain. dences, if known; if unknown, that fact to tiff in error.

be stated, the amounts due each of them, Mr. Julius J. Frank for defendant in the consideration thereof, the security held

by them, if any, and a claim for such exemp

tions as he may be entitled to, all in tripliMr. Justice McKenna delivered the cate, one copy of each for the clerk, one for opinion of the court:

the referee, and one for the trustee. This is an action on a promissory note for To the neglect of this duty the law attaches $750. The defense is discharge in bank- a punitive consequence. Section 17 proruptcy. The making of the note was ad- vides: "A discharge in bankruptcy shall remitted, and the only question presented is lease a bankrupt from all of his provable the effect of the discharge.

debts, except such . . have not been The facts as found by the court are: duly scheduled in time for proof and allowPlaintiff in error and one Calvin Russell, ance, with the name of the creditor, if known who died before the commencement of this to the bankrupt, unless such creditor had action, were partners, doing business under notice or actual knowledge of the proceedthe name of Russell & Birkett, and in that ings in bankruptcy ." [30 Stat. at name made and delivered to the Manhattan L. 548, 550, chap. 541, U. S. Comp. Stat. Railway Advertising Company a promissory 1901, pp. 3424, 3428.] note for $750. The latter company indorsed But plaintiff in error urges that defendthe note to defendant in error, of which ant in error did have actual knowledge of Russell & Birkett had knowledge before its the proceedings in bankruptcy, and that maturity. On the 13th of April, 1899, the Congress contemplated that there might be firm of Russell & Birkett and plaintiff in an intentional or inadvertent omission of error, upon their own petition, were adjudi. the names of creditors from the schedule of cated bankrupts in the United States district debts, and provided against it by other procourt for the northern district of New visions of the law; especially by that which York, and were discharged September 12, makes it the duty of the referee to give no1899. The claim of defendant in error was tice to creditors (838), and by that which not scheduled, either as a debt of the firm imposes the duty on the bankrupt to appear or of plaintiff in error, in time for proof and at the meeting of creditors, for examination. allowance with the name of the defendant The finding of the trial court is that dein error, though defendant in error was fendant "had no notice or actual knowledge, known, at the time of filing the schedules, or other knowledge, of said proceedings in to be the owner and holder thereof by plain bankruptcy prior to the discharge of the tiff in error, and that defendant in error bankrupt therein.” This is made more defihad no notice or actual knowledge or other nite as to time by the court of appeals. De knowledge of the proceedings in bankruptcy fendant in error, upon making an inquiry prior to the discharge of the bankrupts. No by letter November 6, 1899, about Russell notice of the proceedings in bankruptcy was '& Birkett, was informed that they had gone

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through bankruptcy; and subsequently (No- pality to impose a tax for the purpose of vember 17) the northern district was given

erecting a waterworks plant, or the alleged as the district of the proceedings. The dis

invalidity of any method of acquiring such

works except by purchasing existing works, charge was September 12, 1899. Knowledge,

are excluded from consideration by a stipulatherefore, it is contended, came to defendant

tion in the agreed statement of facts, on in error in time to prove its claim ($ 65), which the case was tried, that if the city and to move to revoke the discharge of the

has the right to erect and maintain an inde

pendent plant of its own, in view of the conbankrupt (§ 15). It is hence argued that

tract rights of a private waterworks comdefendant in error must be held to have had

pany, it contemplates raising funds and rev. "actual knowledge of the proceedings in enues therefor in the manner provided by law, bankruptcy,” as those words of § 17 must be and will raise revenues within the limits construed. We do not think so, nor is that

of indebtedness authorized by the state Con.

stitution and laws. construction supported by the other provisions of the law urged by plaintiff in error.

[No. 27.) Actual knowledge of the proceedings, contemplated by the section, is a knowledge in time to avail a creditor of the benefits of the Argued October 28, 1904. Decided November law,-in time to give him an equal oppor

28, 1904. tunity with other creditors,—not a knowledge that may come so late as to deprive APPEAL from the United States Circuit him of participation in the administration

Court of Appeals for the Ninth Circuit of the affairs of the estate, or to deprive him to review a decree reversing a decree of the of dividends ($ 65). The provisions of the Circuit Court for the District of Montana, law relied upon by plaintiff in error are for in favor of complainant in a suit to restrain the benefit of creditors, not of the debtor. a municipality from acquiring a waterworks That the law should give a creditor remedies system except by purchasing an existing against the estate of a bankrupt, notwith- plant, and from incurring any indebtedness standing the neglect or default of the bank therefor, and remanding the cause, with inrupt, is natural. The law would be, indeed, structions to dismiss the bill. Affirmed. defective without them. It would also be See same case below, 58 C. C. A. 381, 122 defective if it permitted the bankrupt to Fed. 1.

. experiment with it,-to so manage and use its provisions as to conceal his estate, de- Statement by Mr. Justice Day: ceive or keep his creditors in ignorance of This case was begun by a bill filed in the his proceeding, without penalty to him. circuit court of the United States by the It is easy to see what results such looseness Helena Waterworks Company, successor to would permit,—what preference could be ac- the Helena Consolidated Water Company, complished and covered by it.

to restrain the city of Helena from erecting, Judgment affirmed.

purchasing, or acquiring a waterworks system for said city, and from acquiring water

for such purpose, except it purchase the (195 U. S. 383)

plant of the complainant company, and from HELENA WATERWORKS COMPANY, incurring any indebtedness or expenditure Appt.,

of money for such purpose.

The rights in controversy are alleged to CITY OF HELENA.

result from a contract made by the passage, and acceptance by the company, of a certain

ordinance, number 248, passed and approved Contracts--impairment of obligation-im

in January, 1890. plied contract of municipality not to build

It is also alleged that the Helena Consoliwaterworks-agreed case.

dated Water Company, predecessor of the 1. A city does not impliedly contract not to complainant company, complied with all the construct its own waterworks system by re

terms of the ordinance, and expended large quiring a waterworks company, as a condi- sums of money in erecting and maintaining tion of its franchise, to provide all the in- the plant for supplying water to the inbabhabitants of the city with a water supply on itants of the said city of Helena. the terms and conditions therein expressed, when read in connection with a previous pro-led certain ordinances and taken certain pro

It is averred that the said city has adoptvision requiring the company to furnish water to those desiring to purchase it,--at ceedings to acquire and build a water system least, after the five years have expired dur- of its own, and that said ordinances and ing which the company was bound by such proceedings are in violation of the contract franchise to furnish water to the city at a definite price, for which an appropriation was

rights of the complainant company, guartherein made.

anteed by g 11 of article 3 of the Constitu2. Questions respecting the right of a munici- ' tion of the state of Montana, and $ 10 of


article 1 of the Constitution of the United nishing water to its inhabitants. We mainStates, and that the proceedings of the city tain that by the contract contained in this in this behalf will amount to taking the ordinance the Helena Consolidated Water property of the complainant company with Company (predecessor of appellant] for itout just compensation, in violation of § 14 self, its successors, and assigns, expressly of article 3 of the Constitution of the state agreed to furnish water to all of the inhabof Montana, and that its rights and prop-itants of the city during the term of twenty erty will be taken without due process of years; and that by reason of the contractual law, in violation of the 14th Amendment to obligation thus assumed by the company the Constitution of the United States. there is the implied promise or undertaking

It is further averred that the taxation on the part of the city that it will not, durnecessary for the construction of the city ing such period, become a competitor of applant is in excess of any that can be law- pellant.” A consideration of this contenfully levied for such purpose.

tion requires an examination of the sections The case was tried upon an agreed state of the ordinance pertinent to a determinament of facts. In the circuit court a deci- tion of the question: sion was rendered in favor of the water- “Sec. l. There is hereby granted to the works company. Upon appeal to the circuit Helena Consolidated Water Company, and court of appeals that court reversed the its successors and assigns, for the full term decision of the circuit court, and remanded of twenty years from the passage hereof, the case, with instructions to dismiss the the license and franchise of laying and mainbill. 58 C. C. A. 381, 122 Fed. 1.

taining water mains and pipes in and The terms of the ordinance relied upon, through all of the streets, alleys, avenues, and so much of the agreed statement of and public grounds of the city of Helena facts as is necessary to a determination of for the purpose of conveying and distributthe case, sufficiently appear in the opinion. ing water throughout the said city, and for

the purpose of selling the same to all perMessrs. M. S. Gunn, B. Platt Carpenter, sons, bodies, or corporations within the said and Stephen Carpenter for appellant. city desiring to purchase the same, and to

Messrs. Edward Horsky, Edwin W. said city for fire, sewerage, and other purToole, Thomas C. Bach, E. C. Day, and R. poses, in case said city desires to purchase Lee Word for appellee.

the same, subject, however, to the provisions

of this ordinance, hereinafter contained, esMr. Justice Day delivered the opinion of tablishing maximum rates, and generally to the court:

have and exercise all the rights, privileges, As the ordinance under consideration con- and franchises necessary to the proper and tains no express stipulation that the city successful furnishing of water to the inhabshall not build a plant of its own to supply itants of said city if required; provided, water for public and private purposes, and however, that nothing herein contained shall the grant is expressly declared not to be be so construed as to give to the said Helena exclusive of the right to contract with an- Consolidated Water Company, or its sucother company, this case, unless it can be cessors or assigns, the exclusive right of distinguished, is ruled by recent decisions of occupying the streets, avenues, alleys, and this court. Long Island Water Supply Co. public grounds of said city with water mains v. Brooklyn, 166 U. S. 685-696, 41 L. ed. and pipes, or the exclusive right of convey1165-1168, 17 Sup. Ct. Rep. 718; Joplin v. ing, distributing,

distributing, or selling the same Southwestern Missouri Light Co. 191 U. S. throughout the said city, or of furnishing · 150, 48 L. ed. 127, 24 Sup. Ct. Rep. 43; | the same to said city, except as hereinafter Skaneateles Waterworks Co. v. Skaneateles, set forth.” 184 U. S. 354, 46 L. ed. 585, 22 Sup. Ct. “Sec. 3. All pipes and mains, including Rep. 400. These cases hold that the grant service pipes connected therewith, shall be of the franchise does not of itself raise an laid at the depth of 5 feet below the estabimplied contract that the grantor will not lished grade, and shall be laid under the do any act to interfere with the rights grant- supervision of the street commissioner of ed to the waterworks company, and that, in said city as to grade and location in streets; the absence of the grant of an exclusive and all repairs and extensions of such pipes privilege, none will be implied against the and mains shall be done under the supervipublic, but must arise, if at all, from some sion of said street commissioner as to grade specific contract, binding upon the munici- and location in streets. Nothing contained pality.

herein shall preclude said city of Helena As stated by appellant's counsel: “The from regrading or changing the grade of any position taken by appellants is, that by ordi- street or streets within said city, or from nance 248 the city has precluded itself from the construction or maintenance of sewer engaging in the commercial business of fur- 'work, or other works or plants of a public nature, or from letting, giving, or granting the ordinance, the company is granted the any franchises, rights, or easements to any use of the streets, alleys, and avenues and person or persons, corporation or corpora- public grounds of the city for the laying and tions, whomsoever, so long as such fran- maintenance of its pipes and mains for the chises, rights, and easements do not inter purpose of conveying water and selling it fere with the franchises, rights, and ease- to those “desiring” to purchase the same, ments hereby granted. And that said Helena and to the city for fire and other purposes Consolidated Water Company must and in case the city “desires to purchase the shall look solely and exclusively to the per- same." son or persons, corporation or corporations, Certainly, there is nothing in this section to whom such franchises, rights, and ease that savors of a contract beyond the obligaments have been given by said city for any tion imposed upon the company, in considand all damages the said Helena Consoli- eration of the franchise and privileges grantdated Water Company may sustain by rea-ed, to furnish water at certain maximum son of any interference with any of its pipes, rates to private persons or to the city, when mains, or hydrants, or any exposure of the such persons or the municipality desire to same caused by such person or persons, cor- purchase the same. When we come to conporation or corporations.”

sider 8 6 we find an engagement whereby “Sec. 6. The said Helena Consolidated the obligation of the company to furnish Water Company shall furnish and provide water to the city is limited to the term of a full, ample, and sufficient supply of good, five years; and in § 21 we find an appropriapure, wholesome, and clear water for the use tion made to cover the compensation to be and wants of the inhabitants of said city, paid by the city for the term of five years and to provide said city with water for fire, for the use of water for public purposes. sewerage (maintenance and construction), If these sections can be construed to amount and for other purposes; and such supply to a contract between the city and the comshall be full, ample, and sufficient for the pany, binding the city to take its entire present population of said city, and for the supply of water from this company for five future population of the said city, as the years, which would be broken by the erecsame may be from time to time during the tion or building of a plant by the city to full term of five years; and said water shall supply itself with water, it had expired bebe pure, wholesome, and free from animal, fore the beginning of this suit, and the convegetable, or mineral substances, such as tract, if it existed after the expiration of would render it unhealthy or unfit for do the term named in § 6, must be found in mestic use."

other sections of the ordinance.

The con"Sec. 26. It is hereby declared and under. tention is that, as by § 26 the water comstood to be of the essence of the agreement pany was bound during the term of the and the acceptance hereof that the said Hel. agreement, which, it is claimed, is twenty ena Consolidated Water Company shall, at years, to provide all the inhabitants of the all times during the term of such agreement, city, whatever their number, with a water provide all the inhabitants of the city, what. supply, this contract will be impaired, and ever their number may be, with a full, am- its benefits to the company destroyed, if the ple, and sufficient supply of good, pure, and city should erect an independent plant of its wholesome and clear water, and shall con- own. But, in our view, this section must be vey, distribute, and sell to them upon the read with 1, which requires the company terms and conditions herein provided and to furnish water to such inhabitants of the expressed."

city as desire to purchase the same; and By § 8 the company was required to pro- there is nothing in this agreement which vide 20 miles of mains within the limits of binds the city to take water from the comthe city, and by § 10 the company was pany beyond the term of five years, expressly required to lay and maintain additional provided in § 6, and for which, upon specific mains, of such sizes, at such times, and upon terms as to prices, an appropriation was such streets as the city council might, from made in § 21. There is nothing in § 26 nor time to time, direct. Section 17 provided in § 1 undertaking to bind the inhabitants that the company shall not refuse to permit of the city to take water from the comconnections to be made by, or to sell water pany. The city has not and, of course, to, persons offering to pay for the same. could not undertake to make any contract

Section 16 of the ordinance fixes maximum upon the subject for the private supply of rates for water to be furnished to the in- individuals in the city beyond securing a habitants of the city. Section 21 makes ap- maximum rate of charge for water supplied. propriation for the term of five years from The engagement for their benefit requires and after January 1, 1890, of certain sums the company, during the term of the fran. for hydrants and the use of water for the chise, to supply water at not exceeding benefit of the city. By the 1st section of certain maximum prices, which were fixed

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