« SebelumnyaLanjutkan »
is that under the national bank act a shareholder has spect thereto, is plainly deducible from the national the unrestricted right to make an out-and-out bona banking act itself. But if any doubt could exist on fide and valid sale and transfer of his shares to any this subject, it would be removed by the judicial person or corporation, capable in law of taking and decisions, construing the provisions of the banking holding the same, and of assuming the transferor's act in this regard, and similar provisions in other liability in respect thereto.
legislative enactments. The right to transfer shares in a corporation is usu- In the Bank v. Lanier, 11 Wall. 369, arising under ally recognized or given in express terms in the char- the national banking act, it was expressly held by the ter or constituent act, which also, not unfrequently, Supreme Court of the United States that the owner of prescribes the manner in which the transfer shall be shares in a national bank may transfer the same by made. The capital stook of a corporation is invaria: an assignment and delivery of the certificates, and the bly divided into shares of a fixed amount for the pur- transferee may compel the bank to register the transpose, among others, of allowing it to be readily fer on its books. The learned justice who delivered transferred. In an ordinary partnership the consent the opinion of the court in that case, after speaking of of all the partners to the admission or retirement of the additional value given to this species of property a member is necessary, and every such change in- by reason of its transferuble quality, says, “Whvever volves the dissolution of the old and the formation of in good faith buys the stock and produces to the cora new partnership. But in incorporated companies | poration the certificates, regularly assigued, with this is different. Indeed, it is one of the leading ob- power to transfer, is entitled to have the stock transjects of an incorporated body to avoid the operation ferred,” even if the transferor is the debtor of the and effect of this doctrine of the law of partnership. bank. The duty of the bank to make the transfer in Accordingly, in this country, shares in corporations such a case is held to be a corporate duty, in respect are universally bought and sold without reference to of which the bank is liable for the wrongful acts and the cousent of the other shareholders.
omissions of its officers. The restrictions on the right bona fide to sell and It was urged in the argument at the bar, in the transfer shares must be found in express legislative present case, that the provision that the shares should enactment, or in authorized by-laws. The national “be transferable on the books of the bank," gave the banking act (Rev. Stats., $ 5139), by providing that directors of the bank the power to approve or disapshares shall " be transferable on the books of the asso- prove of any given transfer of shares, and to register ciation, in such manuer as may be prescribed in the or refuse to register the same, as in their judgment by-laws or articles of the association," recognizes the the interests of the bank or of the other stockholders right of the shareholder to transfer his shares. There might require. Such, however, is not the object of is nothing peculiar in this provision. A similar pro. this very common provision in charters and acts of vision is fouud in nearly all the incorporating acts incorporation. The purpose of requiring a transfer on and charters in this country. The right to transfer is the books of the bank, is that the bank may know giren or implied, in the section just referred to (Rev. who are the sharehholders and as such entitled to vote, Stats., $ 5139), and that right, the association cannot receive dividends, etc., and for the protection of bona take away or defeat. It contemplates a transfer on fide purchasers of the shares, and of creditors and the books of the association, and all that the associa- persons dealing with the bank. That such is the tion is authorized to do is to prescribe the manner in meaning of the provision in question, and that it does which the transfer shall be made on its books. There not restrict the right of the owner to transfer his is here no limitation whatever upon the right of trans- stock or clothe the corporation with the power to refer, and none exist except such as is implied from the fuse to register bona fide transfers, is settled beyond nature of the transaction, or from other provisions of all question by numerous decisions in the English, and the act. Another section (Rev. Stats., 5201) prohibits the Federal and State courts. Black v. Zacharie, 3 How. the bank from dealing in its own shares. This implies 483; Union Bank v. Laird, 2 Wheat. 390; Webster v. a restriction on the shareholder from selling his shares Upton, 1 Otto, 65, 71; Bank v. Lanier, 11 Wall. 369; St. to the bank itself, or to a known trustee for the bank. Louis, etc., Ins. Co. v. Goodfellow, 9 Mo. 149; Chouteau And a shareholder cannot transfer his shares colora- Spring Co. v. Harris, 20 id. 382; Moore v. Bank, 52 bly, and thereby cease to be a shareholder as respects id. 377; Hill v. Pine River Bank, 45 N. H. 300; Re creditors and other shareholders, who would be in- London, etc., Tel. Co., Law Rep., 9 Eq. 653. jured by such a transfer. There may also be an im- The general subject of the right to transfer shares plied prohibition against the right to transfer shares has been much discussed in the cases in Eugland aristo an infant or person not capable in law of assuming ing under the various Companies' Acts. Some of the liabilities, as well as enjoying the rights of the these acts give the directors express power to refuse transfer or the shares in respect thereto, but we have to assent to or register transfers of shares, and some no occasion to determine this point. Rev. Stats., $ do not. The result of the English cases is that the 5139; compare ib., $ 5152, Weston' case, Law Rep., 5 directors cannot refuse to register a bona fide transCh. App. 614, 620. And on general principles there fer of stock unless the power to do so is expressly may also be an implied probibition against the trans- given in the act of Parliament or the articles of assofer of shares to a pauper or man of straw, or insolvent ciation. The leading authority on this point is Wesperson, for the fraudulent purpose of escaping la- ton's case, Law Rep., 4 Ch. App. 20. See also Gilbert's bility, but this is a matter that need not be now con
Law Rep., 5 Ch. App. 559. In Weston's case, Law sidered.
Rep., 4 Ch. App. 20, Lord Justice Page Wood, in conSubject, however, to such prohibitions and limita- sidering this subject, said: tions, the right of the shareowner to make an actual “I have always understood that many persons enter and bona fide sale and transfer of his shares to any these companies for the very reason that they are not person, capable in law of taking and holding the same like ordinary partnerships, but that they are partnerand of assuming the liabilities of the transferor iu res- ship from which members can retire at once, and free
themselves from responsibility at any time they disposition of them without the consent of the directplease, by going into the market and disposing of and ors or other shareholders. No such power over the transferring their shares without the consent of di- right of transfer has been given in the national bankrectors or shareholders, or anybody, provided only it ing act. Such a power is so capable of abuse and so is a bona fide transaction; by which I mean an out- foreign to all received notions and the universal prac. and-out disposal of the property, without retaining tice and mode of dealing in these stocks that it cannot, any interest in them. But if it is desired by a com- in the absence of legislative expression, be held to pany that such unlimited power of assignment shall exist. not exist, then a clause is inserted in the articles by For these reasons and upon these authorities the which the directors have powers of rejection of mem- proposition must be considered as established that a bers. Shortridge v. Bosanquet, 16 Beav. 84, which shareowner in a national bank, while it is a going conwent to the House of Lords, was a case of that kind. cern, has the absolute right in the absence of fraud to In the absence of any sucb restriction, I think it is make a bona fide and actual sale and transfer of his perfectly plain that the companies act, 1862, in the 22d shares at any time, to any person capable in law of section gives a power of transferring shares.
purchasing and holding the same, and of assuming the think there is no such power given to the shareholders, transferor's liabilities in respect thereto, and that this and that the shares are at once transferable under the right is not, in such cases, subject to the control of statute, unless something is found to the contrary in the directors or other stockholders. the articles of association. * * It would be a very Our second proposition is that Laflin did make a serious thing for the shareholders in one of these com- complete and effectual sale and transfer of his shares panies, to be told that their shares, the whole value of to James H. Britton individually, and that as to which consists in their being marketable and passing Laflin, it was not a sale and transfer of the stock to freely from hand to hand, are to be subject to a clause. the bank. Laflin sold through the broker or agent, of restriction, which they do uot find in the articles. Keleher; and the latter dealt with Britton as an in. And I may add that if we were to hold that such dividual, without knowledge that Britton intended to powers were vested in the directors it would be a very turn over the shares to the bank, and he received in serious thing for them, and would impose upon them payment for the shares the personal check of Mr. much more onerous duties than any which are really Britton, and delivered to him at the same time the imposed upon them by this clause." In Gilbert's case, certificates of stock assigned, in blank, with powers Law Rep., 5 Ch. App. 559, 565, Lord-Justice Giffard of attorney in blank thereon indorsed, authorizing said: “I agree that according to Weston's case, and the transfer of the shares on the books of the bank. according to what I have always considered to be the As between Laflin and Britton, the transfer was law, there is no inherent power in the directors, apart complete by the sale, assignment, delivery and payfrom the provisions of the articles of association, to ment, without registration, and this whether it gare refuse to register a proper and valid transfer, if that Britton before the registration, the legal title to the proper and valid transfer is submitted to them." shares as against Laflin, or only a complete equitable
And although there is express power to the direct- title. Union Bank r. Laird, 2 Wheat. 390; Webster v. ors to refuse to assent to or register a trausfer, this Upton, 1 Otto, 65, 71; Black v. Zacharie, 3 How. 483; power must be exercised in a reasonable manner and Bank y. Lanier, 11 Wall. 369, 377; Chouteau Spring Co. bona fide, and they must have some valid and lawful v. Harris, 20 Mo. 382; Moore v. Bank, 5.2 id. 377; N. reason for refusing to register. Ex Parte Penny, Law | Y., etc., R. R. Co. v. Schuyler, 34 N. Y. 80; McNeill v. Rep., 8 Ch. App. 446; Nation's case, Law Rep., 3 Eq. Bank, 46 id. 325; Grimes v. Howe, 49 id. 17, 22; 77; Fyfe's case, Law Rep., 9 Eq.589; Allin's case, Law Bank of Utica v. Smalley, 2 Cowen, 778; Bank of ComRep., 16 Eq. 449; id. 559; Weston's case, Law Rep., 5 Ch. merce's Appeal, 73 Penn. St. 59; Ross v. S. W. R. R. App. 614, 6:20; Et parte Elliot, Law Rep., 2 Ch. Div. Co., 53 Georgia, 514; Hoppin v. Buffum, 9 R. I, 513; 104.
Bank of America v. McNeil, 10 Bush (Ky.), 54; Davis In a case where the directors had power to approve v. Lee, 26 Miss. 505; German, etc., A88. v. Sendemeyor reject the transfer of shares, one of the vice-chan. er, 50 Penn. St. 67; Leavett v. Fisher, 4 Duer, 1. cellors, speaking of the right of a shareowner to dis- That the transaction is complete as between seller pose of his shares, said: “One of the incidents (of this
and purchaser of stock by the assignment and delivery class of property) is the right to transfer it-a right to of the certificate, with the power to transfer, and the make a present and complete transfer of it. It is the receipt of payment is fully shown by these cases, and duty of the directors to receive and register the trans- is also evident from the fact that thereupon each of fer or to furnish some (valid and sufficient) reason for them has the legal right to have a transfer of the refusing to transfer." In re Stranton, etc., Co., Law shares made on the books of the bank. The seller of Rep., 16 Eq. 559, per Bacon, vice-chancellor.
the shares, for his protection against creditors of the Similar observations are made by the Supreme Court bank in case of insolvency, may transfer the same on of the United States in the Bank v. Lanier, supra. the books to the vendee, the purchase being the auMr. Justice Davis then says: "The power to transfer thority to the seller to do this. Websler v.
Upton, 1 their stock is one of the most valuable franchises con- Otto, 65, 71. ferred by Congress. * * It euhances the value of the
And for like reason the seller of shares who has done stock. Although neither in form nor character ne- all that is necessary to enable the purchaser to transgotiable paper, they (the share certificates) approxi- fer the shares on the books, may file a bill to compel mate to it as nearly as possible.”
the vendee to record the transfer. Shaw v. Fisher, 2 It would be a new, and I apprehend, a startling De Gex & S. 11; Cheale v. Kenward, 3 De Gex & doctrine to proclaim that the holder of shares in a J. 27; Wynne v. Price, 3 Do Gex & S. 310; Webster corporation, where the only provision on the subject v. Upton, 1 Otto, 65, 71. of transfers was one requiring them to be made on its So, also, the vendee of the shares, where the vendor books, had no right to make a complete and effectual has done all that is necessary to enable the transfer to be registered, may for his own protection compel the not actually liable, if the bank should so elect. And bank to register the transfer, or hold it liable in if the seller of shares remains liable under the national damages for a wrongful refusal. Bank v. Lanier, 11 banking act until there is a registered valid transferWall. 369; Hill v. Pine River Bank, 45 N. H. 300; that is, until some person succeeds to the stock who is Bank of Utica v. Smalley, 2 Cowen, 778; Commercial capable of bolding it and liable in respect to it, this Bank v. Kortright, 22 Wend. 348.
principle will not make Laflin liable under the facts of The delivery of the share certificates and blank the present case. Here the transfer was registered, transfers will entitle the bona fide vendee to have the but Britton, instead of registering it in his own name, transfer registered. “Whoever in good faith buys as it was his duty toward Laflin to do, registered it the stock and produces to the corporation, the certifi- in his name as “trustee," without Laflin's knowledge. cates regularly assigned with power to transfer, is But the act (Rev. Stats., $ 5152) authorizes the holdentitled to have the stock transferred ” (per Davis, J., ing of stock by a trustee. If Laflin, in order to relieve Bank v. Lanier, 11 Wall. 369), unless there exists some himself of liability, is bound to see the transfer of the valid and legal reason in favor of the bank for refus- stock registered, the registry actually made would not ing to register the transfer as in the case of the Union charge him with constructive notice that the bank Bank v. Laird, 2 Wheat. 390. In that case the charter was in reality the cestui que trust. gave the bank a lien for the shareholders' debt to it, Britton is responsible personally, inasmuch as he and provided that "stock shall be transferable only had no authority to act for the bank, and as there is on the books of the bank." Under these circum- no cestui que trust who is liable. He is liable for the stances, the bank was held to have a lien on the shares unauthorized investment and use of the trust moneys to secure the shareowner's indebtedness to it, which of the bank, and can be compelled to refund it. Great was superior to the right of the unregistered trans- Eastern Ry. Co. v. Turner, Law Rep., 8 Ch. App. 149. feree of the stock. Black v. Zacharie, 3 How. 483. If it becomes necessary to assess the stockholders he
If the foregoing propositions are sound, Britton will be estopped to say that he is not individually reagainst Laflin had the right immediately op delivery sponsible, since he was not acting by authority of any and payment to register the transfer of the shares, cestui que trust capable of taking and holding the and had the power to fill up the blank transfers, and shares. If the sale of this stock has been registered to hare the transfer registered. Re Tahite Cotton Co., Britton individually, it is clear that Lafliu would not Law Rep., 17 Eq. 273; German Union Ass. V. Send- have been liable to the bank or its creditors; and as meyer, 50 Penn. St. 67 ; Leavitt v. Fisher, 4 Duer, 1; Com- the matter now stands, the bank and its creditors have mercial Bank v. Kortright, 22 Wend. 348. Nothing every right and remedy against Britton, which they more was required to be done by Laflin or needed to would have had if the shares had been transferred to enable Britton to make his title complete. And Laflin him individually, instead of to him as “trustee." could have compelled Britton to register the transfer. Our third proposition is, that Laflin is not liable, If Laflin had proceeded against Britton he could have
because the money received for the stock was unlawforced him to have accepted a transfer of the stock in fully taken by Britton from the bank. The reason for his own name or in the name of some person capable this conclusion is that Laflin parted with value--with of taking and holding the same. Maxfed v. Payne, his shares, with his power of control over them and Law Rep., 6 Exch. 132. It would have been no answer the right to sell them to others, and had no notice at, to Laffin for Britton to have said: “I bought this or prior to the consummation of the transaction that stock, not for myself, but for the bank." Laflin could Britton was acting ultra vires and intended to misaphave rejoined: “You purported to act for yourself. propriate the funds of the bank. If he had dealt diI supposed you were so acting, and you had no au- rectly with the bank, or if he or his agents had thority, and could have had none, to act for the known what took place inside the counter before the bank.”
transaction with Britton had been completed, he It is held in England under the companies acts would have been liable. that the transferor of shares is liable to be treated as a It is urged by the receiver's counsel that Laflin had stockholder, until he transfers to one who is in law constructive notice. Mr. Shields, in his argument, capable of holding, and liable in respect of the shares, bases Laflin's liability on the proposition that, being a and whose purchase is registered, unless, perhaps, shareholder in the bank, he is charged with constructwhere the neglect to register is entirely the fault of ive notice of the condition of the bank, and of what the corporation or its officers. Fyfe's case, Law Rep., was done by the president in violation of law and of 4 Ch. App. 768; Lowe's case, Law Rep., 9 Eq. 589; his official duty in respect of these shares. I admit Shropshire, etc., R'y and Canal Co. v. The Queen, Law that if in a transaction directly with the bank, he had Rep., 7 House of Lords Cases, 496, 513; McEwen v. received moneys to which he was not entitled, he West London Wharves, etc., Co., Law Rep., 6 Ch. App. could be made to pay back the same irrespective of the 655; Weston's case, Law Rep., 5 Ch. App. 614, 620; question of knowledge on his part. Curran v. ArkanGooch's case, Law Rep., 8 Ch. App. 266; Gilbert's case, sas, 15 How. 304; Railroad Co. v. Howard, 7 Wall. Law Rep., 5 Ch. App. 559; Master's case, Law Rep., 7 392. Ch. App. 292; Nickalls v. Merry, Law Rep., 7 House But it is to be remembered in this case that Laflin of Lords Cases, 530; Symonds' cuse, Law Rep., 5 Ch. is sought to be made liable in respect of the sale and App. 298; Heritage's case, Law Rep., 9 Eq. 5.
transfer of his shares, which sale and transfer he had Assuming without deciding, that this principle ap- the perfect right to make, if he acted bona fide; and plies in all its force under the national banking act, he has the same right to sell his shares to another if Laflin had sold to an infant, his liability would re- shareholder, that he would have to sell them to a permain, notwithstanding the transfer was registered. son not a shareholder.
Nickalls v. Merry, Law Rep., 7, House of Lords Cases, Even directors have the right to make a bona fide 530; Symonds' case, Law Rep., 5 Ch. App. 298. If he sale of their shares and thus get rid of liability, if they had sold to the bank, he would remain prima facie if pursue the articles or charter, and take no advantage of their position and commit no fraud. Gilbert's case, ly received by Laflin personally, or through an agent, Law Rep., 5 Ch. App. 559; Ex parte Littledale, Law would be immaterial. Rep., 9 Ch. App. 257.
If this view is sound, it is unnecessary to decide the And shareholders in the exercise of their right to further question whether Girault, in consequence of transfer shares are not bourd, it seems, to take no- his relations to Britton and the fact that he acted as tice of irregularities on the part of the directors in his servant and implicitly obeyed his directions, is to respect to the transfer of shares. Bargate v. Short- be regarded, in making the formal act of transfer on ridge, 5 House of Lords Cases, 297, 323; Taylor, v. the books, as the agent of Laflin, in such sense that Hughes, 2 Jones and Lat. 24; Ex parte Bagge v. North knowledge required by him from Britton is to be imCoal Co., 13 Beav. 162.
puted to Laflin. It deserves consideration whether Nor are directors, much less shareholders, in the under the circumstances Girault was Laflin's agent transfer of their stock bound, it seems, to take notice so as constructively to affect Laflin with notice of of the books of account of the company. Cartmell's what was being done, not in the necessary or lawful case, Law Rep., 9 Ch. App. 691; Hill v. Manchester, execution of his authority, but in violation of that etc., Co., 2 Nev. and M. 573; 5 Barn. and Adol. 874; authority, and in hostility to his rights as well as those Haynes v. Brown, 36 N. H. 568.
of the bank. These are the positions taken by Mr. We are of opinion, therefore, that the sale and Slayback in Mr. Laflin's behalf, and they certainly transfer of the stock as between Laflin and Britton have great force. For in this view, if the name of was complete as soon as the stock was delivered and some one outside of the bank, having no knowledge of assigned, with the power to transfer, and payment what was going on inside the bank, had been filled in received; and that what Britton, without Laflin's by Britton as the attorney to make the transfer, or if knowledge, afterward did, although on the same day, Britton had it filled in his own name, Laflin would in transferring the shares to himself as trustee for the not be liable. It is certainly extremely narrow ground bank, and in reimbursing himself out of the funds of to make Laflin's liability depend upon the accident the bank, could not retroact upon Laflin, whose status whose name shall be used to make the formal transhad already been fixed, and whose rights had already fer, and upon what knowledge of the interior workings been acquired. Bank of America v. McNeill, 10 Bush of the bank such person may happen to possess, (Ky.), 54, 58.
especially in view of the custom to transfer stock in Mr. Henderson's argument for the receiver went blank through many hands before any registry is made. mainly upon the ground that Laflin was chargeable
It was strongly urged at the bar by Mr. Henderson through Mr. Girault, with constructive notice of for the receiver, that the foregoing views of the right Britton's wrongful acts in the purchase of these shares of the shareholder to transfer his shares, will have and in the use of the bank's money to reimburse him- the effect to permit transfer to persons not able to self therefor.
respond to the double liability imposed on shareholdThis argument rests upon these propositions: First, ers, and thus work an injury to the solvent shareholdthat the sale was not complete until the transfer was
ers and to creditors.
must hold to the registered; that in making the transfer, Girault, al- absolute right of the shareowner to transfer his stock though acting under Britton's directions, was solely in good faith, or the alternative that the directors Laflin's agent (by virtue of his inserting his name in may have the right to refuse their assent to such the blank power of attorney), and that inasmuch as transfer, thus putting a shareholder in their power. Girault knew of Britton's acts in directing the trans- Not a syllable can be found in the banking act giving fer for the benefit of the bank, and in paying himself the directors such a power; while on the other hand for the purchase-money out of the general means of the right to transfer shares is expressly recognized. the bank, the law imputes this knowledge to Mr. Laf- If it is desirable for the security of the shareholders lin. The first branch of this proposition is inconsist- or creditors that the existiug members should, through ent with the one which we have above attempted to the directors, have a veto on the right of a shareholder maintain, viz. : That the transaction between Laflin to transfer his shares, such a power must be plainly and Britton was complete without registration of the conferred. It has not been given and cannot theretransfer, and that it is equally complete as to the fore be held to exist. bank, unless the bank had some valid reason for re- It is proper to remark in order to preclude erroneous fusing to register the transfer, Britton had the right inferences from the views here maintained, that it is to register the purchase in his own name. He was
probable that the unrestricted right to transfer has in good credit with the bank and in the community. reference to transfers in solvent and going concerns, He was not then known to be insolvent. Indeed, it is and are not intended to enable shareholders to escape not shown by the proofs that he is now insolvent. from liability where the association has committed an Laflin could have compelled him to register the trans
act of insolvency or has ceased to be a going concern.
Allen's case, Law Rep., 16 Eq. 449, per Lord Chaufer in his own name. In the eye of the law the trans
cellor Selbourne; Chappell's case, Law Rep., 6 Ch. fer to Britton, as “trustee," is a transfer to Britton App. 902. While we maintain the right of a shareindividually-for as above shown, Britton could not holder to dispose of his shares absolutely, by an out
and out sale and registered transfer, and thus escape set up his ultra vires acts to defeat his personal respon
liability, provided the sale is made bona fide, and the sibility. Ashurst v. Mason, Law Rep., 20 Eq. 225; Ex
purchaser is in law capable of assuming the liabilities parte Littledale, Law Rep., 9 Ch. App. 257. If Laflin of the transferor, yet this does not involve the right
to transfer shares for a fraudulent purpose, or under had a completed right immediately on receiving pay
circumstances which the transferor knows will make ment for the shares to have Britton register the trans
the transfer, if it is sustained, work a fraud on the fer of the shares; and if immediately on such pay- other shareholders or on the creditors of the bank. ment, Britton had the right to register the transfer to
The result is that there must be a decree dismissing
the bill as to Laflin, and as the bill is not framed for himself, and if the bank could not have resisted Laf
separate relief against Britton, dismissing the same as lin's application to compel a registration of the trans- to him also, but without prejudice. fer to Britton, it is obvious that notice subsequent.
UNITED STATES SUPREME COURT ABSTRACT.
3. Construction of revenue laws.-Revenue laws are
not penal laws in the sense that requires them to be AGENCY.
construed with great strictness in favor of the defendRevocation of authority of insurance agent : payment ant. They are rather to be regarded as remedial in of premium to agent by one not having notice of revcca- their character, and intended to prevent fraud, suption.- A policy of insurance was issued by the S.
press public wrong, and promote the public good. Company upon the life of C., by an agent of the com- (Cliquot's Champagne, 3 Wall. 145.) Ib. pany authorized to receive premiums. Subsequently the second premium due on the policy was paid to the
FIRE INSURANCE. same person, who was not then agent of the company, which fact was not known to the assured. This per
1. Construction of policy containing contradictory propson rendered an account to the company of the receipt
osition.- When a policy of insurance contains conof the second premium; but the company did not no
tradictory provisions, or has been so framed as to leave tify the assured of the termination of the agency.
room for construction, rendering it doubtful whether Held, that the company could not, after the death of
the parties intended the exact truth of the applicant's the assured, repudiate the payment of the premium;
statements to be a condition precedent to any binding but that such payment would bind the company.
contract, the court should lean against that construcJudgment of Circuit Court, S. D. Alabama, affirmed.
tion which imposes upon the assured the obligations Southern Life Ins. Co., plaintiff in error, v. McCain.
of a warranty. Judgment of Circuit Court, W. D. Opinion by Field, J.
Missouri, reversed. First National Bank of Kansas APPEAL.
City, plaintiff in error, v. Hartford Fire Ins. Co. Opin
ion by Harlan, J. Judge alone can take security required on.-The security required upon writs of error and appeals must be
2. Conditions as to estimate of value: contradictory taken by the judge or justice.-(Rev. Stat., $ 1,000.) provision8.- By the terms of the application the asHe cannot delegate this power to the clerk. Motion
sured was required to state separately “the estimated to dismiss appeal from Circuit Court, S. D. Mississippi,
value of personal property and of each building to be granted conditionally. O'Reilly, appellant, v. Edring
insured, and the sum to be insured on each; *
* the ton. Opinion by Waite, C. J.
value of the property being estimated by the appli
cant." The applicant was also directed to answer cerEVIDENCE.
tain questions and sign the same “as a description of 1. Burden of proof : presumptionfin revenue cases from the premises on which the insurance will be predifailure to make proper entries.- In a prosecution, or cated." Among the questions to be answered, were: under the revenue law to recover taxes and penalties “What is the cash value of the buildings? What is for tbe fraudulent manufacture of tobacco, the gov
the cash value of the machinery?" The answer was: ernment introduced evidence showing that large quan- “$15,000, building; $15,000, machinery.” The applicatities of tobacco were sold or removed from the de- tion contained this: “ And the said applicant hereby fendant's premises without his making any entry of covenants and agrees to and with said company that the same in the books kept as required by law for the foregoing is a just, full, and true exposition of all the purpose, and that no accurate account of the the facts and circumstances in regard to the condition, manufactures so removed was kept in any manner in situation, value, and risk of the property to be insaid books; that seventeen monthly returns were fur- sured, so far as the same are known to the applicant nished to the assistant assessor as true and accurate and are material to the risk." The policy contained abstracts of all such sales and removals, and that they this: "Special reference being had to assured's appliwere not true nor accurate statements of the manufac- cation and survey on file, which is his warranty, and tured products sold and removed; and it was also a part hereof." The policy further recited: “If an shown that his annual inventories were false. Held, that application, survey, plan, or description of the property the burden of proof was thrown upon the defendant, hereia insured is referred to in this policy, such applithat the sales and removals not accounted for were not cation, survey, plan, or description shall be considered made in fraud of the internal revenue laws. Judg- a part of this policy, and a warranty by the assured; ment of Circuit Court, S. D. New York, affirmed. and if the assured, in a written or verbal application, Lilien thal, plaintiff in error, v. United States. Opinion makes any erroneous representation or omits to make by Clifford, J.
known any fact material to the risk, * * then, and 2. Rule as to burden of proof in criminal case : rule in any such case, this policy shall be void. in ciril cases.-In criminal cases the true rule is that fraud or attempt at fraud, or any false swearing on the the burden of proof never shifts; that in all cases, be- part of the assured shall cause a forfeiture of all claim fore a conviction can be had, the jury must be satisfied under this policy.” The policy also declared that it was from the evidence beyond a reasonable doubt, of the made and accepted upon the above, among other, exaffirmative of the issue presented in the accusation press conditions. When the policy issued, as well as that the defendant is guilty in the manner and form at the date of the destruction of the property by fire, as charged in the indictment. Com. v. McKie, 1 the cash value of the building, aside from hand and Gray, 64; Com. y. York, 9 Medo. 125; Com. v. Webster, water power, was $8,000, and no more; and the cash 5 Cash. 305; Bennet & Heard's Lead. Cr. Cas. 299. value of the machinery, at the same dates, was $12,000, Com. v. Eddy, 7 Gray, 584. But while the general rule and no more. But the court found that “the answers is that the burden of proof in civil cases lies on the made by the assured to the questions gontained in the party who substantially asserts the affirmative of the application were made by him in goud faith, without issue, the burden may shift during the progress of the any intention on his part to commit any fraud on the trial. (1 Bish. Cr. Law (6th ed.), § 835; U. S. v. defendant." Held, that the beneficiary of the policy Three Tons of Coal, 6 Biss. 391 ; Schmidt v. Ins. Co., 1 was entitled to a judgment, notwithstanding the overGray, 633; Knowles v. Scribner, 57 Me. 497.) Ib. valuation of the property by the assured. Ib.