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Nelson, D. J. These cases are tried together without a jury. The only matters relied on in defence are:
First. That the provisions of chapter 106, Gen. Laws Minnesota 1877, and particularly of section 7, under which the bonds and coupons issued, were unconstitutional and void.
Second. That the decision of the supreme court of Minnesota in the case of Harrington v. The Plainview Railroad Co. is conclusive and binding in respect to the first point upon the federal courts, as an exposition and construction of the constitution of the state of Minnesota.
The view taken by the court will render it necessary to consider only the second defence urged. The following propositions must control the decision:
First. The recitals in the bonds are conclusive evidence in favor of the plaintiffs, who purchased without other information than that which appears upon their face, that all the conditions precedent prescribed in the law had been complied with.
Second. If the law under which the bonds issued had been sustained and recognized as valid by the highest court of thestate at the time, no subsequent act of the judiciary can impair their validity in the hands of the plaintiffs.
The bonds on their face refer to the law under which power to issue them was given by the legislature, and the coupons, though detached, are described with sufficient certainty in the complaint, and the evidence is plain that they belonged to the bonds issued. If the bonds are valid obligations, the coupons are identified and follow the bonds, so that, if the second proposition can be applied, the plaintiffs are entitled to recover.
In State ex rel. v. Town of Highland, 25 Minn. 355, a case arose under the act of 1877, and section 7 was before the supreme court of the state. Proceedings for a mandamus to compel the town of Highland to comply with the mutual agreement entered into as prescribed by this section were instituted, and, on motion to quash the alternative writ which had issued, the respondent's counsel presented and urged, in a written brief, among other things the following, as appears by the records on file, but not given in the report of the case, viz.:
“Fourth. Because the act of 1877, c. 106, in so far as it attempts to empower a majority of the tax-payers of a town, by means of a petition, to enter into and bind the town by agreement, is unconstitutional and void.”
The court, in its decision, after citing the principal provisions of the act, say:
“We think the following propositions clearly deducible: First. The statute authorizes a town to aid the construction of railroads. It does not authorize aid to roads already constructed. The idea of the law-maker unquestionably was to authorize aid to be given to roads which were believed to require aid
to secure their construction, and not to roads which had been constructed without such aid. Second. The aid is to be rendered by the making of a mutual agreement between the town and the railroad company, by which the town is legally bound to issue its bonds to or for the use of the company, upon performance by the latter of its part of the agreement, and by the issue of bonds accordingly. Third. Until the mutual agreement is arrived at and perfected, as provided in section 7, no legal liability or obligation whatever is imposed upon or incurred by the town in the premises. In other words, unless an agreement is arrived at and perfected, as there provided, all steps which may have been taken with the intent of arriving at and perfecting one, or looking in that direction, are absolute nullities."
Here was a recognition, in my opinion, of the validity of this law, and a full and comprehensive construction of the section. It is true the court did not consider the constitutional question, but the decision did not express a doubt, and at least favored its validity. This decision was rendered January 10, 1879, and at that time the bonds, with the coupons in suit of the town of Elgin, had been issued and were in the market as commercial securities. The Plainview Railroad Company had also entered into an agreement with the town of Plainview, and by the construction of its road was entitled to receive town bonds, when a suit was commenced in the district court of the state, by a tax-payer and citizen of the town, entitled Harrington v. Town of Plainview et al., to enjoin and restrain their issue, and a preliminary injunction issued. This suit was subsequently tried, and the action was dismissed by the court and the injunction dissolved, and the town issued its bonds. An appeal to the supreme court of the state was taken by Harrington, and among other things it was argued on the hearing that section 7 of the act was unconstitutional, and it was so declared by the court. It is insisted that this decision of the highest court of the state is binding and the defendants entitled to judgment. Such is not my opinion. The federal courts, it is true, generally follow the adjudications of the highest courts of the state in the construction of its statutes, but exceptions are recognized, and these cases fall within the rule laid down in The City v. Lamson, 9 Wall. 477, which is, briefly, where a decision of the highest judicial tribunal at the time the bonds issued favors the validity of the law under which they issued, a subsequent decision impairing their validity will not be followed to the prejudice of bona fide holders.
To the same effect is Douglass v. Pike Co. 101 U. S. 687:
“We have no hesitation in saying that the rights of the parties are to be determined according to the law as it was judicially construed to be when the bonds in question were put on the market as commercial paper.” See collated authorities in Dillon on Municipal Corporations.
The question, as stated by the court in that case, is not so much whether the last decision was right as whether it should be followed.
These bonds having been purchased by the plaintiffs before the decision in the Harrington Case, and no previous expression by the court other than that contained in State v. Town of Highland, are “clean obligations to pay” not affected by the last decision.
It is urged that the bonds are invalid in the plaintiffs' bands by the fact that they were purchased during the pendency of the suit in which the law was held to be unconstitutional. The answer to this proposition is that the plaintiffs were not parties to, and had no knowledge of, that suit; and the rule that all persons are bound to take notice of a pending suit does not apply to negotiable securities. 97 U. S. 96.
The plaintiffs are entitled to judgment in each case, and it is so ordered.
McCrary, C. J. I concur in the conclusions reached in the foregoing opinion, as well as in the reasons by which they are supported.
CABLE v. PAINE & Co. and others.
(Circuit Court, D. Iowa, C. D. September 5, 1881.)
1. EVIDENCE_WITNESSES-PRINCIPAL AND AGENT-IMPLIED AUTHORITY.
Where the evidence is contradictory and conflicting, it is no error to charge that “where there are witnesses in the case of equal intelligence, and with equal opportunities of knowledge of the facts, some of whom testify to acis done, and conversations and declarations had, giving in detail a full account of such acts, conversations, or declarations occurring in their presence, or done or uttered by them; and others, who testify that they have no recollection that such acts were done, or conversations or declarations uttered, -the affirmative testimony is, or ought to be, of greater weight in the minds of the jury than the negative testimony. Nor is there any error in an instruction that a general agent for the sale of manufactured lumber, etc., has no implied authority to enter into contracts for his principal for the sale of timber in the
rough. 2. SAME-LETTER-PRESS COPIES.
The exclusion of letter-press copies, though no notice to produce the originals had been given, held to be sufficient reason for a new trial, where the trial was before a judge, temporarily assigned, and where it is insisted that a rule had been established in the district, with the concurrence of all the judges, making them admissible in evidence without such notice.
On Motion for New Trial.
Nelson, D.J. This is a suit to recover damages on a contract to sell logs. The contract was made and signed in the name of the defend. ants by one Idison, who is alleged to have been the duly authorized agent of the defendants to sign such contract. The defendants deuy that Idison had any such authority to make or sign the contract, and they also further aver that the contract was signed with the understanding that if not satisfactory to the defendants it should be called off.
The defendants C. N. Paine & Co. were engaged in the manufacture of pine lumber, flooring, doors, sash, and shingles, and sawed lumber, at Oshkosh, in the state of Wisconsin. They also had a mill at Merrillon, in that state, and a lumber-yard in the state of Nebraska. Idison was their traveling agent, and there is evidence tending to show that he was selling, outside of the state of Wisconsin, materials, flooring, finishing lumber, as it is called, and also evidence tending to show that he had purchased from Hornby & Cable, on several occasions, sawed lumber and lumber manufactured by them, and that Paine & Co. had paid for the lumber so purchased by Idison. Previous to April 2, 1877, in the latter part of March, Idison was in Davenport, in communication with the plaintiffs, and the result was that he signed to the contract for the sale of logs, and which was offered in evidence, the name of C. N. Paine & Co. The authority of Idison was the chief issue, and the jury rendered a verdict for the defendants.
A motion is made for a new trial. The errors of the charge are urged by counsel to be: First, in stating that , “ There is a rule which will guide a jury in weighing and giving effect to evidence, and aid them to reconcile evidence which is contradictory and conflicting. It is this: Where there are witnesses in the case of equal intelligence, and with equal opportunities of knowledge of the facts, some of whom testify to acts done, and conversations and declarations had, giving in detail a full account of such acts, conversations, or declarations occurring in their presence, or done or uttered by them; and others, who testify that they have no recollection that such acts were done, or conversations or declarations uttered— the affirmative testimony is, or ought to be, of greater weight in the minds of the jury than the negative testimony. To reject the affirmative testimony you will determine that the witnesses manufactured the evidence which they have given; while, in the other case, the want of recollection that such acts were done, or such conversations or declarations were uttered, may be attributed to the infirmaties of the human mind. I do not say that this rule is to be followed by juries without deviation; but it may be applied.”
It was proper for the court to give this instruction; the rule is elementary, and is thus stated by Starkie on Evidence, vol. 1, p. 578:
“If one witness were positively to swear that he saw or heard a fact, and another were to swear that he was present but did not hear or see it, and the witnesses were equally faith worthy, the general principle would, in ordinary cases, create a preponderance in favor of the afirmative; for it would usually happen that a witness who swore positively, minutely, and circumstantially, to a fact which was untrue, would be guilty of perjury; but it would by no means follow that a witness who swore negatively would be perjured, although the affirmative were true," etc.
This rule was applicable to a portion of the evidence of G. M. Paine, who testified about the conversation had with plaintiff at Merrillon, in November, 1877, when called to contradict the latter, and also to the evidence of Freeman, who was called to contradict Idison.
Second. The next error alleged is in the following instruction to the jury:
“ There is no evidence of a direct appointment of Idison as the agent of C. N. Paine & Co., the defendants, giving him, in express language, authority to sell the logs mentioned in the contract, and the logs were not in his possession or under his immediate control at the time the contract was entered into. The plaintiff claims that the fact that Idison was the agent of defendants for the sale of their manufactured lumber outside of the state of Wisconsin, and the further fact that he had purchased sawed lumber from the plaintiff, and had traded for or purchased lumber—or finishing lumber, as it is calledfrom other persons for his employers, all of which transactions and acts had been recognized by the defendants, gave an implied authority to sell the logs mentioned in the contract, and to enter into it. Such is not the law. Authority in Idison to sign the defendants' name to the contract cannot be implied simply from the acts and transactions which I have detailed to you and which are in evidence. It is necessary for the plaintiff to show the acts of Idison with reference to this particular contract, and a recognition of these acts on the part of the defendants, in order to prove that he had authority to sell the logs and to sign the defendants' name to the contract for their sale. The fact that he was their traveling agent for the sale of manufactured lumber, and that he contracted with other persons for the purchase from the defendants of their sawed lumber, is not sufficient evidence for you to imply that he had authority to enter into this particular contract. The acts of Idison with reference to these logs, and the recognition of them on the part of the defendants, must be proved in order to establish his agency to sell the logs and to enter into this contract in the first instance." I am satisfied this instruction fairly presented the case.
An agency is created by (direct) express appointment, or it may be inferred from the relation of the parties, and the nature of the employment, without proof of any express appointment. So says Chancellor Kent, vol. 2, p. 613, (4th Ed.)
This question controlled the verdict: Was the contract for the sale