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positary duties which were unusual, but also attached to its office responsibilities which were disproportionate to any advantages which could reasonably have been expected to accrue to it therefrom. There was no express arrangement for its compensation, and not only did paragraph 11 and Exhibit A expressly require it to promptly pay over to the plaintiff and his co-depositors “all moneys” received by it in payment for their stock, but paragraphs 4, 5, and 6 left it altogether uncertain whether any of the moneys would even pass through its hands, should Nix avail himself of his option to purchase. As is said by Schouler, in his work on Bailments ([3d Ed.] $$ 58, 63), “the courts are indisposed to extend, by inference, the perils of an unprofitable trust,” and “every bailee without reward ought to be given the least trouble consistent with his actual undertaking.” This is in keeping with the rule that, when a contract is fairly open to two constructions, it is legitimate to adopt the one which equity would favor. Washington, etc., Co. v. Coeur d'Alene, etc., Co., 160 U. S. 77, 101, 16 Sup. Ct. 239, 40 L. Ed. 355.
The circumstances surrounding the making of the agreement were these: The certificates had been issued in the name of Nix and had been by him assigned in blank. They were in the possession of the plaintiff and his co-depositors, who were giving Nix an option to purchase their shares. To protect each party against any intervening act of the other, as also for their mutual convenience, it was deemed proper to place the certificates in the custody of a depositary to abide the action of Nix under the option contract. The certificates were not formally assigned to the bank, and it was not even nominally made the owner of the shares. The original conditions therefore could be restored, if Nix made default, by a mere redelivery of the certificates to those from whom they were received. The bank was in no better position to divide the shares and obtain new certificates than were the owners. Indeed, its place of business was at Deadwood, S. D., and the mining company was a Colorado corporation, whose principal offices, including that for the transfer of stock, were presumably in the latter state. Thus the situation at the time suggests no reason why the bank should have been charged with dividing the shares and obtaining new certificates, in the event of Nix's default.
The language of the agreement is that of the plaintiff and his codepositors, and, if there be any doubt as to its true meaning, it is both just and reasonable that it should be construed most strongly against them. Noonan v. Bradley, 9 Wall. (U. S.) 394, 407, 19 L. Ed. 757; Texas & Pacific Ry. Co. v. Reiss, 183 U. S. 621, 626, 22 Sup. Ct. 253, 46 L. Ed. 358; Osborne v. Stringham, 4 S. D. 593, 57 N. W. 776.
Of course, effect must be given to the intention of the parties, and, if that is made plain and certain by the agreement, every part of it being duly considered, the considerations and rules of interpretation to which we have referred are without application.
Turning to the agreement, we find that, in respect of moneys deposited with the bank in payment for the stock of the plaintiff and his co-depositors, it is directed with much particularity, in paragraph 11 and Exhibit A, that they shall be "by said bank apportioned” among and paid over to the "several” parties entitled thereto; the amount to be paid to each being precisely stated. But, in respect of the disposition of the certificates to be made by the bank, in the event of Nix's default, it is said, in paragraph 8, "said parties depositing said stock may withdraw the same from said First National Bank of Deadwood, and shall be the owners thereof as shown by the schedule marked 'Exhibt A’ hereto.” And in paragraph 9: "The undersigned parties may withdraw said stock from said bank as above provided.” These paragraphs, it will be observed, do not charge the bank with the division of the shares among the several parties entitled to them, but plainly contemplate that it shall merely permit the depositors to withdraw what they deposited with it, the certificates. Thus a distinction is reasonably and clearly drawn between the moneys, which would be readily capable of division by the bank, and the certificates, which could not be divided without the assistance of the mining company, over which the bank had no control. And that it was intended that the bank should not be troubled with making any change in the certificates is further indicated by the fact that no provision was made for segregating the shares of Nix, named in paragraph 7, from the others during the life of his option, and also by paragraph 4, which authorized the bank to surrender certificate No. 19 for 505,000 shares upon the payment of the purchase price of 499,700 shares, and by paragraph 5, which authorized it to surrender certificate No. 20 for 1757,500 shares upon the payment of the purchase price of 749,550 shares. Without any doubt or uncertainty, the several paragraphs and provisions which we have mentioned, unless modified by another, contemplated that the bank should deliver to Nix or redeliver to the de- . positors, as the one or the other might become entitled thereto, the identical certificates deposited with it.
We are thus brought to paragraph 12, upon which the plaintiff chiefly relies, which reads:
"In case any of said payments shall not be made, the stock shall be delivered to the parties named in said Exhibit A and be the property of said parties; twenty shares of stock to be delivered for each dollar to be paid the said parties."
It is difficult to harmonize this paragraph with other provisions of the agreement. The parties named in Exhibit A are not identical with those authorized by paragraphs 8 and 9 to withdraw the stock from the bank, upon the default of Nix, for he is not one of the latter, and yet is named in Exhibit A. Again, while other paragraphs show unmistakably that he was not to have any right to any of the stock of the plaintiff and his co-depositors, save as he should pay for it, this paragraph, if given full effect as it is written, would entitle him, in the present situation, to 149,911.60, or possibly 149,916, shares of their stock without pay.
It is apparent, we think, that resort must be had to interpretation to remove the doubt and uncertainty cast upon the meaning of the agreement by this paragraph. While the reference to Exhibit A seemingly includes Nix among those to whom the stock was to be delivered, what follows equally indicates that he is not included, for
it says "twenty shares of stock to be delivered for each dollar to be paid the said parties." He had no interest in the stock to be sold and was not one of those to be paid. Although entitled to a commission of 10 per cent. on the gross purchase price, in the event and to the extent that he availed himself of the option to purchase, he was plainly not entitled to any commission or payment in respect of stock not sold. The reference to Exhibit A must therefore be understood as not including him, and therefore as directing a delivery to the other parties named in the exhibit, who are identical with those designated in paragraphs 8 and 9 as the "parties depositing the said stock” and “the undersigned parties.” This view is also strengthened by the fact that the measure so prescribed for determining the interest of the depositors in the stock not sold—that is, 20 shares for each dollar to be paid—is the precise rate at which the gross purchase price was fixed, for by paragraphs 2 and 3 the depositors agreed to sell to Nix their 1,998,880 shares for $99,944,
Unlike the provisions relating to the disposition of moneys paid into the bank, this paragraph does not in terms direct an apportionment among the depositors, but only the delivery of the stock to "the parties named in said Exhibit A”—meaning the depositors. It does not say that the stock shall be delivered to them severally, or that 20 shares shall be delivered to each for each dollar to be paid to him, but simply refers to them in a collective way as do paragraphs 8 and 9. But, as there would necessarily be more than enough stock to fill the measure of 20 shares for each dollar to be paid to the depositors, and as the excess would necessarily be all or part of the 21,120 shares owned by Nix as stated in paragraph 7, it is urged that it could not have been intended that his shares should be delivered to the depositors or become their property, and therefore that it must have been intended that the bank should divide the stock and procure for and deliver to the several owners new certificates representing the shares to which they would be respectively entitled. There is some color for the contention, but we think it is not sound. Of course, it was not intended that the depositors should become the owners of Nix's shares any more than that he should become the owner of theirs without pay; but it does not follow that the original certificates representing the shares of both were not to be redelivered to the depositors from whom they were received. He had assented to the inclusion of his shares in these certificates, had indorsed upon the latter an assignment in blank, and had intrusted them to the possession and keeping of the depositors before they were delivered by the latter to the bank. He also assented to the terms of the agreement, although it contained no provision for the delivery to him of his shares save as he might by making the prescribed payments become entitled to the original certificates. In these circumstances, it is quite reasonable to believe that he was content to look to the depositors, to whom alone the agreement directs a redelivery, for a segregation of his stock in the event that through his default the certificates should be returned to them. Had there been a purpose to impose upon the bank the unusual duty of dividing the stock and procuring for and delivering to the several owners new certificates for the shares to which they would be respectively entitled, it doubtless would have been plainly stated; but, as such an intention is not expressed, or even necessarily implied, we think the considerations and rules of interpretation before mentioned require that whatever doubt or uncertainty may exist in that regard should be resolved in favor of the bank, and that it must be held that no such duty was imposed.
Our conclusion is that the plaintiff was not entitled to demand that the bank divide the remaining stock among the several co-owners, or that it deliver to him alone the remaining certificates, and that therefore no conversion was shown, and a verdict against him was rightly directed.
The judgment is accordingly affirmed.
BELL V. NORTH AMERICAN COAL & COKE CO. (Circuit Court of Appeals, Sixth Circuit. June 18, 1907. On Rehearing,
October 15, 1907.)
No. 1,636. 1. WASTE-NATURE OF REMEDY_EQUITY.
Equity has jurisdiction of a suit to restrain waste by the cutting and removal of valuable timber, and incidentally for an accounting for waste already committed.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 48, Waste, 8 16.] 2. ADVERSE POSSESSION-POSSESSION BY TENANT-EXTENT.
When a tenant is placed in possession of a definite part of a larger tract of land, the possession will not avail the landlord beyond the part so claimed and held ; but, if one claiming under an assurance of title defining boundaries place a tenant in possession without limiting him to any definite part, the tenant's possession will extend to the landlord's boundaries, although the land actually occupied is but a small part of the whole.
[Ed. Note. For cases in point, see Cent. Dig. vol. 1, Adverse Possession,
§ 585.] 3. SAME-TENNESSEE STATUTE.
Under Shannon's Code Tenn. & 4456, possession of land under assurance of title, if continued for seven years, operates not only to bar an action on a superior title, but to devest that title and vest it in the adverse holder; but, on the other hand, possession without color of title continued for seven years gives a mere right to defend against the title so long as the possession is actual and continuous, under section 4458, which provides that no person shall have any action for any lands, but within seven years after the right of action has accrued, and such right is lost the moment the possession is abandoned. Hence, under such statute as construed by the Supreme Court of the state, where one in possession of land without color of title attorned to another who had made entry from the state of a definite tract, including his own, and agreed to hold possession of the whole for his landlord, the effect was an abandonment of his own possession, and from that time his possession was that of his landlord and referable to the entry, and extended to the whole tract, although there was no extension of his actual inclosure.
[Ed. Note.-State laws as rules of decision in federal courts, see notes to Wilson v. Perrin, 11 C. C. A. 71; Hill v. Hite, 29 C. C. A. 553.]
On Rehearing 4. PUBLIC LANDS-ENTRY OF STATE LANDS-TENNESSEE STATUTE.
The provision of Acts Tenn. 1824, c. 22, $ 6, making unlawful an entry of state land on which another resided or which was occupied by him, unless he was given 30 days' notice, was intended solely for the protection of the occupier, by enabling him to exercise his prior right to enter the land ; and an entry made without giving such notice to an occupier of part of the land is void only as to such part. The notice might, moreover, be waived by an occupier, and was so waived in a case where for a valuable consideration he agreed to attorn to the entryman and hold possession for him until the grant was secured.
Appeal from the Circuit Court of the United States for the Eastern District of Tennessee.
John F. McNutt, for defendant in error.
LURTON, Circuit Judge. This is a bill to restrain trespass and quiet title to a large tract of mountain land lying in Cumberland county, Tenn. The complainant asserted title and possession of the lands included in several grants issued originally to Thomas B. Eastland, under whom by mesne conveyances the complainant claimed. These grants were from the state of Tennessee, and bore date of 1836. The bill averred that the defendant, Bell, claimed the lands included within grants Nos. 12,758, 12,769, 12,770, and 12,771, being junior grants, within the boundaries of senior grants to Eastland. It was averred that the defendant was trespassing by cutting valuable timber and removing same to the irreparable injury of the lands. It also charged that the defendant was insolvent. The answer disclaimed any title or interest in the lands claimed by complainant outside the limits of grant No. 12,771, issued May 26, 1874, to defendant, containing, by survey, 1,077 acres. It denied that the complainant had any possession of the lands inside said grant, denied that he was now or had been cutting timber from said land "for a long time," and denied insolvency. The answer asserted an actual adverse possession of the lands within said grant beginning at date of its survey made in March, 1872, and pleaded and relied upon the Tennessee statute of limitations of seven years. The court below found that jurisdiction existed because of the repeated trespasses of the defendant, and that the title of the complainant was the superior title to the lands included within the grant to defendant of 1874, except as to a parcel of 100 acres inside of said grant, designated as the “Bolin Survey,” which said 100 acres had been held adversely for more than seven years under color of title by said Bolin or those who held under him.
There was evidence showing that the defendant had cut and removed valuable timber from the lands included within his junior grant. The extent of this cutting does not appear, but sufficient is shown to justify the assumption of jurisdiction for the purpose of enjoining trespass and an accounting. The case on its facts falls within Peck v. Ayers & Lord Tie Co., 116 Fed. 273, 53 C. C. A. 551.
Complainant's title, being under the elder grants, must prevail, unless, through adverse possession under his junior grant, the latter has become the better. Beyond the possession called the “Bolin possession” neither party has had any such open, notorious, and continuous adverse possession within the interlap of the conflicting grants as will