Gambar halaman
PDF
ePub

11 F.(2d) 87

Manufacturing Company had not been transferred to the Star Car & Foundry Company, but remained in its own name liable for its debts, to which they were applied when it was adjudged bankrupt a few months later. It appeared that Shirer's application to plaintiff for a loan was made pursuant to a request from Ferguson that he negotiate a loan in Chicago so as to take up the overdraft and a part of the indebtedness at the bank. He told Ferguson about the application upon his return from Chicago, and was in consultation with him about the matter from time to time until the loan was granted. Before it was closed, he gave Ferguson checks against the fund to pay the overdraft in the bank and one of the notes held by it. Ferguson did not disclose to plaintiff his relationship to the Star Car & Foundry Company, its indebtedness to the defendant bank, or the fact that it was experiencing financial difficulties and was being compelled to assign its accounts to raise funds with which to operate.

With respect to the damages sustained by plaintiff, it was shown that the Star Car & Foundry Company was adjudged bankrupt on March 22, 1922, and that at the time nothing had been paid on the $80,000 loan. Plaintiff, however, credited against the loan a balance of $611.73 on checking account; and dividends received and expected from the bankrupt estate reduced the balance of the indebtedness with interest to $54,295.68. It was undisputed that the defendant bank received from the proceeds of the loan the sum of $21,618.55 in payment of overdraft and note, and that this with interest to the trial amounted to approximately $26,019.31, which was the amount of the verdict rendered against it. The aggregate of the amounts awarded against the defendants, $54,300.68, is exactly $5 more than the balance admittedly due plaintiff on the $80,000 loan, and this difference was evidently a mere error in calculation on the part of the jury; their manifest intention being to award plaintiff a sum equal to the loss which it had sustained.

With respect to the alleged error in the charge, it appears that one of counsel for defendants had argued to the jury that the statement in the letter of June 6th, to the effect that the Star Car & Foundry Company owned the plant at New Lexington, Ohio, was a true statement. In his general charge the trial judge referred to this argument and stated that the evidence showed that while the Star Car & Foundry Company owned 87 per cent. of the common stock of the Star

Manufacturing Company and a large percentage of the preferred stock, it did not own the plant of that corporation. And he then proceeded to explain the difference between the ownership of the plant and the ownership of stock, showing how in the case of dissolution or receivership the debts of the corporation would be paid out of its assets before anything would be distributed on the stock.

[1, 2] 'On plaintiff's writ of error it is argued that there was no question as to the amount of damages sustained by the plaintiff, and no serious controversy that, if defendants were liable to plaintiff at all, they were jointly liable for the full amount of plaintiff's damages; that the sole question in the case was whether the fraud was perpetrated as alleged; and that, the jury having answered an issue as to this against each defendant, the court should enter judgment against both for the aggregate amount of damages awarded, ignoring the attempted apportionment by the jury. The trouble with this argument is that it ignores the fact that the jury fixed the extent of the liability of each defendant in the finding which established his liability. It is not a case where the verdict, after establishing joint liability for the entire damages, seeks to apportion the liability between the defendants. In such cases there is authority for the position that the court may ignore the apportionment as surplusage and enter judgment against the defendants jointly on that part of the verdict establishing joint liability. Lake Erie & W. R. Co. v. Halleck, 136 N. E. 39, 78 Ind. App. 495; Washington Market Co. v. Clagett, 19 App. D. C. 12; Schoat v. Marriott, 194 N. Y. S. 849, 119 Misc. Rep. 92. But here the amount found against each defendant is the very essence of the verdict, and the amount awarded cannot be stricken out without destroying the verdict in its entirety.

It is said, however, that the verdict establishes the fact of liability as to each defendant and that the court should enter judgment for $55,300.68, the total of the damages awarded, as the fact of joint liability therefor is established by the undisputed evidence in the case. This in effect would be to set aside the verdict of the jury and substitute for it the judgment of the court in establishing the extent of liability and would result in rendering judgment against each defendant in a sum greatly in excess of the verdict against that defendant as found by the jury. This cannot be done. Constitution of United States, Amendment 7. In Hodges v. Easton, 1 S. Ct. 307, 106 U. S. 408, 27 L. Ed. 169,

[ocr errors]

certain questions covering only a part of the material issues of fact were propounded to the jury, who returned them with the answers thereto as a special verdict. The judgment against the defendant recited that it was rendered upon the special verdict "and facts conceded or not disputed" upon the trial. In reversing the judgment the court said: "The record discloses that the jury determined a part of the facts, while other facts, upon which the final judgment was rested, were found by the court to have been conceded or not disputed. We then have a case at law, which the jury were sworn to try, determined, as to certain material facts, by the court alone, without a waiver of jury trial as to such facts. It was the province of the jury to pass upon the issues of fact, and the right of the defendants to have this done was secured by the Constitution of the United States. They might have waived that right, but it could not be taken away by the court. Upon the trial, if all the facts essential to a recovery were undisputed, or if they so conclusively established the cause of action as to have authorized the withdrawal of the case altogether from the jury, by a peremptory instruction to find for plaintiffs, it would still have been necessary that the jury make its verdict, albeit in conformity with the order of the court. The court could not, consistently with the constitutional right of trial by jury, submit a part of the facts to the jury, and, itself, determine the remainder without a waiver by the defendant of a verdiet by the jury." Hodges v. Easton, 1 S. Ct. 310, 106 U. S. at 411 (27 L. Ed. 169). In the later case of Slocum v. N. Y. Life Ins. Co. the court after reviewing a number of cases, including Hodges v. Easton, supra, stated the rule as follows: "In principle, these cases are decisive of the question arising on the motion for judgment on the evidence notwithstanding the verdict. They show that it is the province of the jury to hear the evidence and by their verdict to set tle the issues of fact, no matter what the state of the evidence, and that while it is the province of the court to aid the jury in the right discharge of their duty, even to the extent of directing their verdict where the insufficiency or conclusive character of the evidence warrants such a direction, the court cannot dispense with a verdict, or disregard one when given, and itself pass on the issues of fact. In other words, the constitutional guaranty operates to require that the issues be settled by the verdict of a jury, unless the right thereto be waived. It is not a question

of whether the facts are difficult or easy of ascertainment, but of the tribunal charged with their ascertainment, and this, we have seen, consists of the court and jury, unless there be a waiver of the latter." Slocum v. N. Y. Life Ins. Co., 33 S. Ct. 532, 228 U. S. at 387, 388 (57 L. Ed. 879, Ann. Cas. 1914D, 1029).

For the reasons stated, we think that the motion of plaintiff was properly denied. [3,4] The principal question presented by the writ of error of defendants is whether the court erred in refusing to set aside the verdict as rendered and in entering judgment thereon. The contention of defendants, briefly stated, is that the declaration alleged a joint liability on the part of defendants; that the evidence, if it showed any liability at all, showed a joint liability; that the rendition of a verdict establishing several liability was in effect a mistrial; and that it was error in the court below to receive such verdict or to enter several judgments thereon. We agree with the defendants that there was error in receiving the verdict which apportioned between the defendants the liability for their joint wrong; but we think that it was error of which only the plaintiff could complain. Joint tort-feasors have no right to determine whether they shall be jointly or severally sued for their wrong. This right rests with the party aggrieved. If he elects to sue them jointly, he is entitled to a verdict responding to his allegations, so that he may have judgment for his entire damages against both of the wrongdoers. And in this case, if the plaintiff had moved to set aside the verdict and for a new trial, the motion should and in all probability would have been granted. But the defendants cannot complain, for the simple reason that they have not been hurt. As a result of the apportionment each has been subjected to a smaller judgment than would have been entered against him if a joint verdict had been returned. A case directly in point was decided by the Circuit Court of Appeals of the Fifth Circuit in 1911. Hooks v. Vet, 192 F. 314, 113 C. C. A. 526. That was an action of trespass for assault and battery against several defendants. The jury returned a verdict as follows: "Macon, Ga., May 20, 1911. We, the jury, find for the plaintiff as against B. A. Hooks and A. A. Cowart the sum of one thousand dollars each, and against T. W. Hooks, Blount Freeman, and Daniel Driggars, the sum of one hundred dollars each. R. L. Sparks, Foreman."

In sustaining a judgment entered upon the verdict, the court said: "If, however, we

11 F.(2d) 87

concede the contention of the plaintiff in error that the verdict should have been joint, and not several, and that it was error to enter the several judgment on the verdict, it seems that it was certainly error without injury. As it stands, the judgment and verdict against the plaintiff in error is for only $1,000. The jury found that five of the defendants were properly liable for damages, and the aggregate sum of such damages, as found by the jury, amounted to $2,300. The result of the contention of the plaintiff in error would be that the judgment and verdict should have been for that sum against all the defendants jointly. The error, therefore, in assessing the damages severally, makes the plaintiff in error liable for only $1,000, when otherwise he would have been liable for $2,300, with no right to contribution. 8 Cyc. 804; 23 Cyc. 1470. If this is error, it is, as to the plaintiff in error, error without injury."

The

[5] In the case at bar there was no real dis-
pute as to the damages sustained by plaintiff
nor as to the fact that if there was fraud
both defendants were liable for it.
only question was whether the defendants
were guilty of the fraud. The jury found
that question against the defendants, and de-
fendants were benefited and not injured by
the fact that the jury so apportioned the
damages as to render against each a verdict
for a less sum than was justified by the un-
disputed evidence as to damages. The rule
seems well settled that a judgment will not
be reversed for error in a verdict whatever
its character if it is not prejudicial to appel-
lant. 4 C. J. 1054. And by section 269 of
the Judicial Code as amended by the act of
February 26, 1919 (Comp. St. Ann. Supp.
1919, § 1246), we are required to disregard
technical errors, defects or exceptions which
do not affect the substantial rights of the
parties.

It is argued by defendants that the apportionment was prejudicial to them because contribution between joint tort-feasors against whom joint judgments ex delicto have been entered is authorized by section 8, chap. 136, Barnes' West Virginia Code of 1923. But this statute merely allows contribution where a joint judgment has been entered. It does not authorize one joint tort-feasor to insist that the others jointly liable be sued with him or give him any ground of objection to a several judgment. Notwithstanding the statute, he is still subject to a several judgment for the full damage inflicted by his wrong upon the injured party.

where a joint judgment has been rendered the statute does not authorize contribution in every case but only "to the same extent as if the judgments were ex contractu." In this case, therefore, even if there had been a joint judgment the defendant Ferguson would not have been in a position to enforce contribution from the bank, for the reason that Ferguson's liability was based upon a positive fraud perpetrated by him. "He who comes into equity must come with clean hands;" and certainly equity will not lend its aid to the perpetrator of a fraud to enable him to shift a portion of the liability therefor upon another. Buskirk v. Sanders, 73 S. E. 937, 70 W. Va. 363; Avery v. Central Bank of Kansas City, 119 S. W. 1106, 221 Mo. 71. Furthermore, the primary liability for the fraud rested on Ferguson. It was his fraud perpetrated for the benefit of the company of which he was treasurer although also incidentally for that of the bank. The bank was liable on the principle respondeat superior because the representations were made by him while acting as its vice president and were within the apparent scope of his authority; but, as the bank did not actually authorize the fraud, it would be entitled to reimbursement from him for any damage which it might sustain by reason of being compelled to respond to plaintiff in damages therefor. The right of contribution does not exist in favor of a joint tort-feasor primarily liable even under a statute such as that of West Virginia. Kinloch Telephone Co. v. City of St. Louis, 188 S. W. 182, 268 Mo. 485. So far as the bank is concerned, the verdict against it was only for the amount which it had actually received as a result of the fraud; and, as to this, it would certainly have no right to enforce contribution, which is an equity applied to enforce equality of burden where there is equality of obligation. In addition to this, the verdict against the bank was for less than one-half of the damage sustained by plaintiff, and in no possible view of the case could it have been benefited by the rendition of a joint verdict for the entire damages.

[8] We see no merit, whatever, in the assignment of error directed to the charge of the court. It was entirely proper that the court correct the erroneous statement of counsel and explain the difference between the ownership of stock in a corporation and the ownership of its plant. The difference, especially from the standpoint of credit, is a vital one, which Ferguson as an experienced banker and as the organizer of the Star Car & [6,7] It should be observed also that even Foundry Company must necessarily have

realized. But whether he realized it or not, the statement in the letter was untrue, and the instruction of the court was proper. To tell the jury that the statement was untrue was not, as argued, an instruction to convict the defendants of fraud. There remained still the question of fraudulent intent, upon which the jury were correctly charged. It was proper that they should consider the ownership of stock as tending to show a lack of fraudulent intent in making the statement. It was not proper that they consider it as showing the truthfulness of the statement itself, which the uncontradicted evidence showed to be untrue.

Upon a careful review of the entire record and of the points presented on both writs of error, we are of opinion that the judgment of the District Court should be affirmed. Affirmed.

[ocr errors][merged small][merged small][merged small][merged small]

1. Mines and minerals 70(2)-Coal lessee held liable for royalties on coal used by it, rather than sold, on basis of market value.

Lessee of coal lands agreeing to pay royalty of 10 cents per ton, and in addition 10 per cent. of net price above $1 per ton realized by sale of coal mined, held liable for 10 per cent. of market value in excess of $1 per ton of coal mined and not sold but used in lessee's own iron mines and blast furnaces.

2. Mines and minerals 70(2)-Coal lessee held not entitled to complain of manner of calculating royalties on coal used by it rather

than sold.

Lessee of coal lands, adjudged liable for royalty on coal used rather than sold, on basis of its market value, "taking into consideration the purpose for which" it used it, was not entitled to complain of quoted words, where it failed to offer proof of market value without limitation or to show harm.

Appeal from the District Court of the United States for the Southern District of West Virginia, at Huntington; George W. McClintic, Judge.

Suit by the Dingess Rum Coal Company against the Steel & Tube Company of America. Decree for the plaintiff, and defendant appeals. Affirmed.

See, also, 3 F. (2d) 805.

J. Gilbert Hardgrove, of Milwaukee, Wis. (Arthur W. Fairchild, of Milwaukee, Wis., Harold A. Ritz, of Charleston, W. Va., Mil

ler, Mack & Fairchild, of Milwaukee, Wis., and Brown, Jackson & Knight, of Charleston, W. Va., on the brief), for appellant.

Douglas W. Brown, of Huntington, W. Va. (Rolla D. Campbell and Fitzpatrick, Brown & Davis, all of Huntington, W. Va., on the brief), for appellee.

Before ROSE and PARKER, Circuit Judges, and WATKINS, District Judge.

ROSE, Circuit Judge. [1] The Dingess Rum Coal Company, the appellee, a West Virginia corporation, was the plaintiff in the District Court, and the appellant, the Steel & Tube Company of America, a Delaware corporation, was the defendant. The parties will be here referred to by the positions they occupied in the court below. The plaintiff there recovered a decree against the defendant for $94,437.82 for royalties and interest thereon. Admittedly the main, and as we think the only, question raised by the appeal, is whether the defendant owes the plaintiff anything.

The relevant facts are that the plaintiff is, and for a number of years has been, the owner of a tract of upwards of 4,000 acres of coal lands in West Virginia. On the 1st of August, 1916, it made a coal mining lease of this property to three individuals to continue until the lessees should have mined and removed all of the minable and merchantable coal upon the property. The lessees were to pay in return a royalty of 10 cents for each and every short ton of coal mined, and in addition 10 per cent. of the net price above $1 per short ton realized by the lessees on the sale of the coal. The lease contained a further provision entitling the lessor to a minimum royalty of a certain number of dollars per acre, gradually increasing until after the fifth year it became $6 per acre per annum. By various mesne assignments, the lessees' interest became vested in the defendant.

In the years 1920 and 1921, the defendant mined and shipped from the property covered by the lease, upwards of 276,000 tons of coal. It paid the sales royalty of 10 per cent. of the net price received above $1 per ton, upon less than 17,000 tons and not upon the remaining 260,000, because, according to its contention, none of the latter was sold by it, but was used in the operation of its iron mines and blast furnaces in Michigan, Wisconsin, and Indiana. The decree appealed from was for the equivalent, with interest, of 10 per cent. of the average fair market value of such 260,000 tons, over and above $1 per ton, f. o. b. the mines of the

11 F.(2d) 93

defendant; the learned court below holding that if defendant mined and shipped, and for its purposes used coal from the leased premises, it was bound to pay the plaintiff a royalty upon the sum at which the coal could have been sold.

The controversy in the case is as to whether that conclusion was right. We have no question that it was. We do not find it necessary to follow the parties into a meticulous examination of various words and phrases in the lease further than to say that in construing the instrument as a whole, there is nothing whatever in it to indicate that the lessor for one moment thought of making its right to the 10 per cent. royalty depend upon the relationship which might, at any time in the half century or more during which the lease was to run, happen to exist between the possessor of the term of years and the person or corporation who should ultimately use the coal mined on its property and shipped from it. It is stipulated that at the time the lease was made, all coal produced in the field of which the leased property formed a part, was, and had always theretofore been, disposed of by sale. Such being the situation of the parties at the time the contract was entered into, no court would be justified in holding that the lessee, by the simple process of using the coal, could destroy the right of the lessor to its 10 per cent. royalty. If the contention of the defendant was sound, the rights of the plaintiff might easily depend upon the form which its lessee might choose to give to transactions which in their substance would differ little if at all. For example, it might suit a lessee to ship the coal to a subsidiary corporation, all of whose stock it owned. For cost accounting or other bookkeeping purposes, the transaction might take the form of a sale of the coal by the lessee to its subsidiary. In that event, the lessor would be entitled to its 10 per cent royalty. The next year, it might please the lessee to extinguish the existence of the dependent corporation and to operate the latter's plants

turn some, or all, of the coal mined into coke and the lease apparently sought to direct what should happen in such contingency. Both parties are agreed that what is said on this subject is meaningless, either because the wrong words were used or more probably because something was inadvertently omitted. No inference contrary to what has already been said can be based on the language actually employed.

[2] The parties stipulated the number of tons used by the defendant and what was its market value, "taking into consideration the purpose for which the defendant made use of" it. The words in quotation marks formed part of the decree of the learned court below, describing the principles upon which the accounting before the master should be had. Defendant now complains of them, but it did not offer to prove what the market value without limitation was, and there is nothing in the record to suggest the restriction to which it now objects did it any harm.

It follows that the decree below was right, and must be affirmed.

[blocks in formation]

2. Contempt 40-Civil contempt proceedings are between original parties, whereas criminal contempt proceedings are between public and defendants and not part of original cause.

Civil contempt proceedings arise between

cause, while criminal contempt proceedings are between public and defendants and are not part of original cause.

3. Contempt 40, 66(4)-Proceedings held criminal contempt proceedings wherein no appeal lay from decision exonerating defendants.

directly, and in that case the lessor would, original parties and are treated as part of main upon the theory of the defendant, have no claim to royalty. It is too great a strain upon credulity to suppose that any lessor intended that its rights should be dependent upon circumstances over which it could exercise no control and in which it was not in the slightest degree interested. Nothing but the plainest and most unambiguous language could support such a conclusion. It was contemplated by the lessor that the lessee in the future might choose upon the premises, to

Contempt proceedings, instituted in name of United States on the relation, of a coal company, entitled "criminal contempt proceedings," and which petitioners prayed should be entered as a charge of criminal contempt on criminal

« SebelumnyaLanjutkan »