Equity Suit, 803, and authorities there cited; Nash v. McNamara (C. C.) 145 Fed. 541. An order will be made remanding the case accordingly. MURRAY v. ÆTNA LIFE INS. CO. (District Court, D. Montana. November 13, 1916.) No. 178. 1. INSURANCE 527-POLICIES-ACCIDENT POLICIES. An accident policy, providing for payment for the loss of the entire sight of an eye, if irrevocably lost, should be reasonably interpreted; and the sight of an eye will be deemed lost, where there is no ability to distinguish and recognize objects, though light from darkness can be distinguished. [Ed. Note. For other cases, see Insurance, Cent. Dig. §§ 1312, 1313.) 2. INSURANCE ~646(8)—AccIDENT POLICIES-BURDEN OF PROOF. One seeking to recover the indemnity provided in a policy for the entire loss of the sight of an eye within a stipulated time has the burden of establishing his loss of sight within such time. [Ed. Note. For other cases, see Insurance, Cent. Dig. § 1665.] 3. INSURANCE527-ACCIDENT INSURANCE-EVIDENCE-SUFFICIENCY. Where a policy provided for an indemnity in case of the irrevocable loss of the entire sight of an eye, a physician is not entitled to such indemnity, though he suffered such impairment of the sight of one eye that he was unable to use such eye to any advantage, either in reading for a considerable period of time or operating, where he could normally distinguish objects before his sight would fail; it being the loss of sight as a man, and not as a professional man, which the policy covered. [Ed. Note.-For other cases, see Insurance, Cent. Dig. §§ 1312, 1313.] At Law. Action by Thomas J. Murray against the Ætna Life Insurance Company, a corporation. On motion for new trial after verdict for plaintiff. Motion granted. tiff. E. B. Howell and Walker & Walker, all of Butte, Mont., for plain H. A. Frank and R. F. Gaines, both of Butte, Mont., for defend ant. BOURQUIN, District Judge. In a trial upon a policy providing for payment amongst other things, for "loss of entire sight of one eye, if irrevocably lost" as the result of and within 90 days from accident, the jury was instructed that, though the injured eye could "distinguish light from darkness, or perceive objects temporarily, for brief intervals," yet, if "all useful and practical sight was irrecoverably lost." it was within the policy and plaintiff was entitled to recover. Verdict for plaintiff, and defendant moves for a new trial, for error in said instruction and for insufficiency of the evidence. [1] It is believed the instruction is the law. The indemnity is virtually for the loss of the benefit of sight or vision. The latter may be defined as the ability to perceive, distinguish, and recognize objects, and the former as satisfaction of will, need, or pleasure. If this abil For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes ity is so far destroyed that what remains will not to practical and useful extent confer any of this benefit, entire sight, within the construction. of analogous terms in insurance law, is lost. So would it be in popular phrase or sense. The interpretation must be reasonable and relative, not literal. The ability to perceive light and objects, but no ability to distinguish and recognize objects, is not sight, but blindness. So would it be, though there were intermittent flashes of the latter ability. To no practical or useful extent would it serve the will, need, or pleasure. See Travelers' Ass'n v. Rogers (Tex. Civ. App.) 163 S. W. 421; Casualty Co. v. Wynne, 36 Okl. 325, 129 Pac. 20; Moore v. Etna, etc., Co., 75 Or. 47, 146 Pac. 151, L. R. A. 1915D, 264, and cases therein cited. [2, 3] But it is also believed the evidence is insufficient to sustain a finding or verdict that of his injured eye plaintiff has lost the entire sight as herein defined. [The evidence is set out at length, omitted for brevity, the nature of which is sufficiently disclosed by subsequent comment.] Remembering the burden is on plaintiff to prove that within the 90-day period he lost the entire sight, as hereinbefore defined, of one eye, the evidence fails. It is not enough that sight may be so far lost and the eye so impaired that he is disabled to perform major operations, or to read continuously, or that, when he closes the uninjured eye, the injured one loses vision, or that natural co-ordination and accommodation are lacking; for defendant did not contract to pay upon the happening of any or all these contingencies, but only when entire sight was lost-when all practical and useful sight for any purpose of will, need, or pleasure was lost. The evidence is too lacking in facts and replete with ambiguous conclusions to support a finding that plaintiff has lost entire sight of the injured eye. The conclusions repeatedly testified to are that plaintiff can normally see objects but a "short time," and then vision fades out "in a very much shorter time," or "longer," dependent on his physical condition; that he cannot read, distinguish letters, "for any amount of time"-"not able to use the left eye to any advantage," and the like. But the facts testified to are he can normally see objects for. a short time, and then, if very tired from the use of both eyes, when he closes the uninjured eye and subjects the injured one to the abnormal strain of excess nerve impulse, it fails of vision in a very short time, defined as 3 to 5 minutes. If not so tired, it may be 10 minutes before it fails; that his eyes are nearly normal for distant vision, and can comfortably be used with lenses for several minutes; that with his old denses he can read the chart, distant, practically normally, for as much as 5 minutes, and after a few minutes' rest, "very likely within 10 minutes or 15 minutes," he can so read again; and that lenses will correct the lack of co-ordination and accommodation. If, after plaintiff has become very tired from the use of both eyes, he still has power in the left eye to such extent that he can close the right eye and still see with the left eye thus abnormally burdened, for 3 to 5 minutes before its vision fails; if with lenses he can enjoy normal distant vision for several minutes at a time; if he can read the test chart, distant, for as much as 5 minutes, and then, after resting 10 to 15 minutes, can again so read it; if with the left eye alone, abnormally used; he could walk safely an indefinite distance on Main street, fair to infer a fourth mile, or as far as easily walked in 5 minutes (and all this is the testimony of himself and physician)-it cannot be said plaintiff has lost entire sight of the left eye. On the contrary, the proof is he has not. He has between a fourth and a half of its former vision, a substantial part, and which in respect to many needs and pleasures will render him practical and useful service, doubtless greater in a life of inactivity and leisure than in one active and professional. But it is loss of sight as a man, and not as a doctor, that this term of the policy applies to. That these conclusions in the testimony, considered alone by the jury, would support the verdict, is admitted, but that the jury could rightfully do so is 'not admitted. The facts in the testimony demonstrate the conclusions are mere erroneous estimates or opinions, or ambiguities explained by the facts, and not to be relied upon. The said facts are judicial admissions by plaintiff, against interest, and, not receded from, were bound to be given full weight by the jury. The jury could not ignore them, and consider only mistaken conclusions, and therefrom draw unreasonable inferences, but was bound to render a verdict in accordance with the facts. It did not. The motion for a directed verdict should have been granted. As it is, the only remedy is a new trial. Granted. Later the suit was settled. In re STUCKY TRUCKING & RIGGING CO. (District Court, D. New Jersey. February, 1917.) 1. CORPORATIONS 484(1)-ULTRA VIRES ACTS-GIVING NOTE FOR STOCKHOLDER'S DEBT. Where, on a sale by a stockholder of his stock in a corporation to a third person, the corporation executed to him its note for the purchase price, the transaction was ultra vires, especially as in one aspect the effect of the transaction was to constitute the seller a creditor of the corporation without it having received any benefit, while in another aspect it amounted to a loan to the buyer, in violation of Corporation Act N. J. (Laws 1896, c. 185) § 48, forbidding loans by corporations to stockholders or officers. [Ed. Note. For other cases, see Corporations, Cent. Dig. § 1815.] 2. BANKRUPTCY 339—CLAIMS-JUDGMENTS-COLLATERAL ATTACK, Where a judgment on notes executed by a corporation to a former stockholder for the purchase price of his stock sold to a third party was obtained by default a few days before bankruptcy, without any effort by the company to defeat the action, the judgment could be collaterally attacked in bankruptcy proceedings, as collusion or fraud would be conclusively presumed. [Ed. Note. For other cases, see Bankruptcy, Cent. Dig. §§ 525, 526.] In Bankruptcy. In the matter of the Stucky Trucking & Rigging Company, bankrupt. On petition to review an order of the referee disallowing the claim of Joseph B. Stucky. Order affirmed. See, also (D. C.) 240 Fed. 427. For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes Peter Bentley, of Jersey City, N. J., for claimant. HAIGHT, District Judge. [1] That part of the claim in question which has not been reduced to judgment, and which is based on promissory notes given by the bankrupt, admittedly, for an indebtedness of a third party to the claimant, is unquestionably an unenforceable obligation against the bankrupt. It would be difficult, indeed, to imagine a more flagrant example of an ultra vires contract than that. which resulted in giving the notes in question. They represent part of the purchase price of a certain amount of the capital stock of the bankrupt corporation which Allen individually purchased from Stucky, and for which the corporation received no benefit or consideration whatever. If a transaction of this kind were to receive legal sanction, there would be no security either in corporate investment or in the dealings between a corporation and those who might become its creditors. In addition, in one aspect, the legal effect of such a transaction would be to constitute Stucky a creditor rather than a stockholder of the corporation, without the latter having received any benefit therefor; and in another it would amount to nothing more nor less than the loan by the corporation of money to Allen, a stockholder and officer, which is specifically prohibited by section 48 of the New Jersey Corporation Act. This vice being inherent in all of the notes, the only remaining question is whether any additional validity has been given to such of them as were reduced to judgment. [2] The judgment, admittedly, was entered by default a few days before the petition in bankruptcy was filed; no defense having been interposed nor any effort made by any of the officers of the company to defeat the action or question the legal right of the plaintiff therein to recover as against the corporation. It must be borne in mind that this is not a case where there has been a contest in another court respecting the enforceability of the notes and in which such court has pronounced a solemn judgment. While it is undoubtedly true that a judgment cannot be collaterally attacked, even by creditors or their representative, except for lack of jurisdiction, fraud, or collusion, I think it admits of no doubt that under the facts of this case, as above detailed, collusion or fraud in law must be conclusively presumed as respects creditors or their representative. Palmer v. Martindell, 43 N. J. Eq. 90, 10 Atl. 802. That such a judgment may be collaterally attacked in bankruptcy proceedings, on the grounds before mentioned, seems likewise to be clear. Chandler v. Thompson (C. C. A., 7th Cir.) 120 Fed. 940, 57 C. C. A. 230; In re Continental Engine Co. (C. C. A., 7th Cir.) 37 Am. Bankr. R. 102, 234 Fed. 58, 148 C. C. À. 74. It is urged, however, that the objections filed by the trustee to this claim were not sufficiently broad to raise the question just discussed. While they were not as specific as they might have been, I think they were broad enough to cover the kind of fraud which I think invalidates this judgment, especially in view of the conclusive presumption before mentioned. The referee's order will accordingly be affirmed. CHURCH V. SWETLAND et al. (Circuit Court of Appeals, Second Circuit. June 4, 1917.) No. 260. 1 CANCELLATION OF INSTRUMENTS 37(2)-PLEADING-EXCUSES FOR LACHES. Where the complainant, in a suit to avoid transactions on the ground of fraud occurring over three years prior to the filing of the bill, had in the meantime filed other bills for relief in which he did not plead fraud, if he did not know of the fraud when they were filed, and subsequently discovered it, he should have so alleged. 2. CONTRACTS 270(2)-RESCISSION-TIME FOR RESCISSION. A party loses his right to rescind on the ground of fraud by not availing himself of it within a reasonable time after he discovers it. 3. CONTRACTS 270(2)—Time for RESCISSION-LACHES. A party, by waiting over three years before suing to avoid transactions on the ground of fraud, waived his right to complain thereof, especially where, in previous suits attacking the transactions, he did not suggest that they were in any degree affected with fraud. 4. FRAUD 12-REPRESENTATIONS CONSTITUTING FRAUD-FACTS OR PROMISES. As a rule false representations, to constitute fraud, must relate to some material past or existing fact, and not to mere promises or statements of intention. 5. PRINCIPAL AND SURETY 7-INVALIDITY OF PRINCIPAL'S CONTRACT-RIGHT OF SURETY TO AVOID. Complainant held bonds of the W. Co. as collateral security. S. requested him to loan the bonds to the company to enable it to obtain a loan and save it from insolvency, stating that this would liquidate all its pressing debts, and enable it to continue in business, and that if he made the loan he would take charge of the company, keep it on its feet, and not allow insolvency or bankruptcy proceedings to intervene. Complainant accordingly loaned the bonds to the company to be used as collateral for a loan wherever it might be secured. It was not alleged that any promises were made to complainant with no intention of fulfilling them, but it was alleged that thereafter S. made a loan to the corporation on the security of such bonds, and promised to make other loans necessary to save it from insolvency or bankruptcy on the same security, and that when the loan was made he secretly and fraudulently intended that the note should be immediately called under a provision thereunder making it due forthwith if bankruptcy proceedings should be instituted, and that shortly thereafter he procured a petition in bankruptcy to be filed and asserted the right to declare the note due. Held that, if the representations made with no intention of performing them constitute fraud, it nevertheless was a fraud on the company, and not on complainant, and gave complainant no right to avoid the loan and recover the bonds, as defenses personal to the principal do not operate in favor of a surety. & PLEDGES 25-Loss of LIEN-TRANSACTIONS BETWEEN THIRD PARTIES. Where a corporation, purchasing all of the stock of another company and all of its assets, assumed its debts and obligations, including notes held by a trust company and secured by bonds loaned to the maker of the notes by plaintiff, an agreement of the purchasing corporation that these bonds should be returned to plaintiff could not affect the right of the trust company to hold them until its debt was paid. 1. PLEDGES 19-DEBTS SECURED-RENEWAL OF NOTE. Where property is pledged to secure a note, the extension or renewal of the note does not, in the absence of a distinct agreement, affect the pledge, but it continues as a valid and effectual security until the debt is paid. For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexin 243 F.-19 |