FEDERAL REPORTER.
!ish; and therefore Ido not base this on that case, as counsel for the plairitiff in citing it seems to think may be done. The difference between that case and this is marked enough, perhaps, but in deciding this I do not care to go as far as that case might imply that we have gone. As before remarked, the right Of 'set-off is of itself statutory, and the privileges of the parties in any jurisdiction may be affected by limitations concerning it that are quite beside any question of jurisdiction in its enlarged application to courts ofjudicature, but still potential as elements entering into the right or privilege of setting off one claim against another in ,any suit brought upon either of them. For this reason we are liable to be misled by cases concerning it, as this does, and to fall into confusion that I seek to avoid by strictly holding to the ruling that we look to state statutes only for the purpose of determining by their admeasurement the jact,-what is the sum or value of the matter in dispute in this.case?-and not as a statutory regulation to admeasure our jurisdiction, as to which we look alone to the acts of congress. Nor is this any strained doctrine, and it is made plain if we take as an example other statutes which operate precisely in the saUle way, but are wholly outside of the somewhat confusing subject of jurisdiction, unlike the statutes concerning set-off. Take statutory rights created by state legislation, which the federal courts. enforce, for illustration. We are bound by the limitations of the amount·allowed to be recovered, as if a stattite gave a right of recovery for one's death by the negligence of another, and limited the recovery to $500. Surely we could have no jurisdiction by removal or by original process. . The statute of set-off operates in exactly that way in this case. Railroad 00. v. Telegraph Co., 112 U. S. 306, 5 Sup. Ct. Rep. 168. The statutes of this state above mentioned, which are construed in the Tennessee.cases already cited, are grouped here for convenience of reference. Mill. & V. Code Tenn. §§ 3628-3635, 3678, 3688, 4898,4936-4938; Thomp. & S. Code, §§ 2918-2925, and notes; §§ 41604162, and notes. Remanded to state court.
FIsx v.
HENARIE
et al.
Oircuit Oourt, -.D. Oregon. June 11, 188& RBHOVAL 011' CAUSES-LoCAL I'REJUDICE-Ac'r OF 1887-PRACTICB. . The act of 1887 (24 St. 552) does not repeal subdivision 3, R639, Rev. St., (aot of 1867,) prescribing the procedure or method of procuring a removal of a cause on account of prejudice or local influence; and an affidavit by the pa:oty
seeking such removal, to tbe effect that he believes he will not obtll-in justice in the state court on account of prejudice and local influence, is sufficient to authorize the same. 1 (8gllaoU8 oy th6 Court.) -See County Court of Tavlor Co.
v. Railroad Co., 35 Fed. Rep. 161, and note.
FISK
v.
HENAR1E.
231
On Motion fox New Trial. Action by J. H. Fisk against D. V. B. Henarie, Peter Donohue, Eleanor Martin, Thomas Martin, Edward Martin, and John D. Wi.cox, to cqver damages. George H. WiUiams alid George H. Durham. for plaintiff. Jam68 K. KeTJ:u and John M. Gearin, for defendants. DEADY, J. This action was removed to this court on the petition and affidavit of certain of the defendants, who are citizens of California, on the ground of prejudice and local influence. Amotion to remand was denied, (32 Fed. Rep. 417,) and the cause was tried here wiiha jury who, on December 17, 1887, gave a vtlrdict for the defendants. The plaintiff moves for a new trial, and submits the motion on the single ground that the court erred in refusing to remand the case to the state court,-the other grounds of the motion being expressly waived. Strictly speaking, this is not an error occurring at the trial, for which this motion is the proper remedy. The case may be taken to the supreme court on error, and the ruling of the court in this respect reviewed, and, if erroneous, corrected. But counsel ask the court to reconsider the question in the lightof Mr. Justice BREWER'S subsequent ruling in Short v. Railway Co., 33 Fed. Rep. 114, and I am quite willing to do So. On the argument of the present motion but one point was made:. that it did not clappear" to the court from the petition and the affidavit for removal, as required by the act of 1887, (24 St. 552,) that the defendants will not, on account of prejudice or local influence, be able to ob-tain justice in the state court, because the probatory circumstances, on which the defendants based their statement to that effect, were not set forth in the affidavit. In the opinion of this court on the motion to remand it was said that the act of 1887 does not provide how the fact of prejudice or local influence"shall be made to appear" to the court. This class of cases is expressly excepted from the operation of section 3 of the act prescribing the mode of removal thereunder generally. It follows that so much of section 639 of the Revised Statutes as relates to the method of removal on account of prejudice or local influence, and the proof thereof, is not in conflict with the act of 1887, and is. therefore still in. force, and applicable to such removal. * * * It is sufficient that they [the defendan,ts] have made oath that they so believe, [that from prejudice and local influence they will not be able to obtain justice in the state courts.] without setting forth the facts or circumstances on which such belief is founded. It is admitted in Short v. Railway Co., that the act of 1867 (section 639, subd. 3, Rev. St.) "is not in terms repealed" by the act of 1887. But it is contended the latter act "covers the same ground, and is obviously intended by the legislature to be its expressed will upon the whole subject involved therein," and therefdre l although there Dlay be some provis-
232
ions in the earlier not absohJtely inconsistent with those of the later yet the whole of the earlier act is repealed. But in my judgment this deduction is founded on a misapprehension of the intention of the legislature as manifested in the act of 1887. The plain purpose of the act, so far as the removal of causes on the ground of prejudice or local influence is concerned, is to provide who may remove a suit for such cause, and within what time, and not to prescribe the procedure or manner of taking the removal. For instance, by the act of 1867 a suit could be removed on the pe. tition of either party thereto, if he was not a citizen of the state in which it was brought, while the act of 1887 restricts the right to the defendant. The act of 1867 allowed a removal only in a case of "a suit" between citizens of different states, but the act of 1887 gives the right of removal to "any" defendant in a suit who is a citizen of a state otl}er than that in which the same is brought. whenever there is "a controversy" therein between himself and a citizen of any other state. Fisk v. Hena1'ie, 32 Fed. Rep. 422. The act of 1867 permitted the removal to be made "at any time before the trial or final hearing of the suit," while the act of 1887 limits it to "any time before the trial thereof." Section 3 of the act of 1887 expressly provides a method of removal in all cases withinits purview, except those for prejudice or local influenl'e, which are expressly included from its operation in this respect. From these premises, it appears to me, but one conclusion can reasonably be drawn, that the act of1887 does not and was not intended to repeal that portion of the act of 1M7, contained in subdivision 3, § 639, Rev. St., which prescribes the procedure on a removal for prejudice or local influence. Then, again, in considering this question it is to be remembered that repeals by implication are not fAvored, and are never admitted where the former act can stand with tht' new one. Wood v. U. S., 16 Pet. 362; Ex parte Yerger, 8 Wall. 105 Ohew Heong v U. S.,112 U. S. 549, {) Sup Ct. Rep. 255 . . In Wood v. U. S., supra, Mr. Justice STORY, speaking for the court on a question of the repeal of a statute by implication, says: "That it has not been expressly or by direct terms repealed is admitted; and the question resolves itself into the narrow inqUiry whether it has been repealed bf necessary implication. We say, by necessarr imp1;ication; for it is not sufficient to establish that SUbsequent laws cover some, or even all, of the cases provided fol' by it, for they may be merely affirmative, or cumulative, or auxiliary. But there must be a positive repugnancy between the provisions of the new laws and those of the old, and even then the old law is repealed by implication only pro tanto,-to the extent of the repugnancy." In HilliJ v. Railroad Co., 33 Fed. Rep. 81, Judge NEWMAN considers this question, and comes to the conclusion that the act of 1887 does not change the practice where a defendant seeks to remove a case on the ground of prejudice or local influence. The decision in Short v. Railway Co., supra, does not go so far as to hold that the affidavit must cont.i1in the facts on which the affiant bases
EDISON ELECTRIC LIGHT CO.
NEW HAVEN ELECTRIC CO.
233
his belief, but only that the fact of prejudice or influence must be positivelv stated. The petition in this case, which is verified by the oath of the defendant Henarie, does state the fact of prejudice and local influence positively. But the affidavit thereto is that the petition is true, as the affiant "verily believes." The affidavit for the removal, which is sworn to by the defendants Henarie and Eleanor Martin, state::: that the affiants "have reason to believe and do believe and so state" that from prejudice and local influence the defendants will not be able to obtain justice, etc. A duly-verified petition is so far an affidavit that, if it contains the necessary averments, a removal may be had thereon. This petition states positively the fact of prejudice and local influence. Nor is the force of this -statement affeoted by the fact that the defendant swears it is true ItS "he verily believes." Of course, what he believes to be true he may state as a fact. If he had sworn that the petition was true, without saying "as I verily believe," he would have neither said nor meant anything more than "I swear it is true, because I believe so." In fact, the difference between saying" I believe I cannot get justice in the state court on account of prejudice and local influence" and "I cannot get justice in the state court," etc., without saying whether I believe it or not, in my humble opinion is the difference between tweedledum' and tweedledee. The statement in the affidavit proper, in addition to the belief of the affiant, contains a positive averment of the fact of prejudice and local influence. It is in effect a declaration that the affiant has reason to believe, and does believe, a certain fact to exist, and therefore" states" that it does. And this is equivalent to saying that the fact exists, without saying that he believes it, which is understood. I conclude, then, that the fact of prejudice and local influenceis "made to appear" to the circuit court whenever it does so appear from the affidavit of the party causing the removal, and that it does so appear whenever such party states on oath that it is so, or that he believes it to be so. The motion for a new trial is denied.
EDISON ELECTRIC LIGHT
Co.
fl. NEW HAVEN ELECTRIC
Co., (two cases.)
(Circuit Oourt, D. Oonnecticut. June 11, 1888.) CORPORATIONS-CONSOLIDATION-STATUS OF OLD CORPORATION-PATENTS FOR INVENTIONS-AsSIGNMENT. '
Laws N. Y. 1884, c. 367, § 5, provides for the consolidation of existing corand for the transfer of their property to the new company; section 6 provides that no claim against any corporation so consolidated shall be impaired, Rev. St. N. Y. pt.!, c. 18, tit. 3,§ 9, provides that the directors or managers of any dissolved corporation, at the time of its dissolution, shall be trustees of its creditors and stockholders, with full power to settle its ,affairs. ReV'. U. S. § 4898, provides that every patent shall be assignable in law. by,an instrumen,t in writing, . Held, that by the consolidation of two corpora
at.
\.
234
REPORTER.
tioJls old corporations do not become extinct, so as not to be able to wind uptlieidlusiness, biit that an assignment of the legal title of a patent in writing to the new corporation, by the president and secretary of one of the old corporations, after the consolidation, in.: pursJlanceof a vote'of its executive committee passed prior thereto, is.sufficient to convey said title.
In Equity. Bills to restrain alleged infringement of letters patent by the Edison Electric Light Company against the New Haven Electric Company, in two cases, numbered 570 and 571. John O. Tomlinson and Ola,rcnoo..4. Seward, for plaintiff. Frederick P Fish and Samu;elA.. Duncan, for defendant. SHIPMAN, J. The bills in equity in these two cases nre brought to restrain the alleged infringement,of letters patent of the United States No. 274,290, granted to Thomas A.Edison, March 20,1883, and No. 369,280, granted to the plaintiff, August30i 1887. The bill in No. 570, which was filed October 10, 1887, alleges the assignment of No. 274,290, on Apri16,1883, to the "Edison Electric Light Company," a New York corporation,and the subsequent formation of the. plaintiff,called "Edison Electric Light Company ,I' by the consolidation of said "The Edison Electric L'ightGompany" and another New York corporation called the "Edison Company for Iso]atedLighting," under an.d pursuant to chapter 367 of the Laws of the state of New York. ItJurther avers that, by virtue of theconsolidatioil,' thetiq.e of the Edison· Electric Light Company to No. 274,290 passed to'the1consolidated:oompany, and that pursuant to a resolution ofthe executive committee of the said first-named company, passed on December 30, 1886, and before the consolidation, the compll,nythereafter, and ltS· of that date, executed and delivered an assignment of said· patent to the plaintiff. The defendant has filed a plea, which sets forth that. under the patent laws ofthe United States, the consolidation :proceedings of ·themselves were; wholly 'incompetent to transfer to or to vest in the complainant any title in Or 'to the patent in suit. As to the assignment j;)yaninstrument in writing, it alleges, in substance, that the consolidation was consummated on December3!, 1886; that, by the act of consolidation, the corporate existence of each of the old companies was terminated; that the said deed of assignment was not executed or delivered until after the dissolution and termination of the life of the and that no instrument in writing as.signing'midtni.nsferring the pliten't in suit to the' complainant was executer} and delivered during the corporate existence of the said the Edison Electric Light 'Company, or while it had any power or capacity to make such assignment; and that the "complainant had not, at the date of the filing of the bill, any title on which it could bring suit. By stipulation the'ofollowing facts are ·established'for the purposes of the hearing on the plea; ... That 00 the 30th day of December, 1886, the company known "The Edison .Electric Light Company" was a corporation duly organized and existing under 1helawa of New York; that at that date the saidcompanj was the owner of the patent in suit; that the consolidation proceedings referred to in the bill of complaint took place, and that the
as
F:DlSON ELECTRIC LlGHT CO; II. NEW HAVEN ELECTRIC CO.
235
oonsolidation was effeoted, on December 31:,1886; that on the 30th day of December, 1886, the executive committee of the said "The Edison Electric Light Company" passed a resolution authorizing and directing the president and secretary of the Company to "execute under seal of the company, and deliver to said new company, all assignments, patents, and transfers of contracts and rights of every kind;" that the said officers did not act on this resolution (at least as regards the patent in suit) until after December 31,1886; that on January 18, 1887, a written assignment of said patent was drawn and was executed in the name of "The Edison Electric Light Company," by Edward H. Johnson, as president thereof, and the seal of the said old company was thereto affixed by F. S. Hastings, as secretary of the .said company, who appended his signature, as secretary, to said assignment, the said Johnson and the said Hastings having been respectively the president and the secretary of the said company at the time of the consolidation and of said vote; and thereupon the document was delivered to the consolidated company. Sections 5 and 6, c. 367, Laws 1884, under which the two companies were consolidated, are as follows: "Sec. 5. Upon the consolidation 'lUbe said corporations, and the organization of such new company, as hereinbefore prescribed, all anll singular tpe rights, privileges, franchises, and interests of every kind belonging to or enjoyed by tbe said several corporations so consolidated, and every species ot property. real. personal. and mixtJd, and things in .action thereunto belonging. mentioned in said agreement of consolidation, shall be deemed to be transferred to and vested in and may be enjoyed by such new corporation without any other deed or transfer; and such new corporation shall hold and enjoy the same. and all rights of property.; privileges. franchises, and interests, in the same manner and to the same extent as if the said several companies so consolidated had continued to retain the title and transact the business ot such corporations; and the title to real and personal estate, and rights and privileges aCqUired and enjoyed by either of the said corporations. shall not be deemed to revert or be impaired by such act of consolidation, or anything relating thereto. "t:lec.6. The rights of creditors of any corporation that shall be so consolidated shall not In any manner be impaired by any act of consolidation, nor shall. any liability or obligation for the payment of any money now dile or hereafter to become due to any person or persons, or any claim or demand in any manner or for any cause eXisting against any such corporation or against any stockl.older thereof. be in any manner released or impaired; but such new corporation is declared to succeed to such obligations and liabilities, and to be held liable to pay and discharge all sucb debts and liabilities of each of the corporations that shall be so consolidated, in tbe mallner as if sucb new corporation had itself incurred the obliltation or liability to pay such debt oJ: damages; and the stockholders of the respective corporations so entering into such consolidation shall continue subject to all the liabilities, claims, and demands existing against them as such at or before such consolidation; and no SUit, action; or proceeding then pending before any court or tribunal which any corporation that may be so consolidated is a party, or in which any such stockholdel' is a party, shall be deemed to have .abated or been discoutinued by reason of any such· consolidation; but the same may be prosecuted to final jUdgment in the same manner as if the said corporation had not entered into the said agreement of consolidation; or the said new corporation may be substituted as Hi p:uty in the place of, any corporation so consolidated
236
as aforesaid With any other corporatlon or .corporations, and forming such new corporation, ,by order of the court in which such action, suit, or proceeding may be pending." The Revised Statutes of the state of New York (part 1, § 9, tit. 3, c. 18) provide as follows: "Sec. 9 .Upon the dissolution of any corporation created or to be created, and unless other persons shall be appointed by the legislature. or by some court of competent authority, the directors or managers of the affairs of such corporation at the time of its dissolution, by whatever name they may be known in law, shall be the trustees of the creditors and stockholders of the corporation dissolved, and shall have full power to settle the affairs of the corporation, collect and pay the outstanding debts,and divide among the stockholders the moneys and other property that shall remain after the payment of debts and necessary expenses. " Section 4898 of the Revised Statutes provides that "every patent or any interest therein shall be assignable in law, by an instrument in writing." The position of the defendant 1S that the consolidation proceedings did not and could not vest the legal title of the patent in suit in the plaintiff, but an instrument in writing, signed by a properly authorized person, was necessary to convey the legal title, (Ager v. Murray, 105 U. S. 126;) that no written conveyance was made until after the dissolution and death of the holder of the legal title, when the powers both of the corporation and its officers had ceased to exist; and that the legal title has therefore never been conveyed to the plaintiff. It must be assumed as true that the entire equitable. title and interest in said patent vested in the plaintiff by virtue of the proceedings of consolidation, but that, no written conveyance or assignment having been executed on December 30, 1886, the bare legal title remained outstanding. It is further true that if, as the result of consolidation, the old corporation had wholly ceased to exist, it could not act thereafter as a corporation; and the written assignment did not confer the legal title upon the plaintiff. It is furthermore true that the question of the continuance of the company's life depends upon those statutes under which consolidation takes place, and which relate to the dissolution of corporations, but that where a new corporation is created to take the place of two old corporations, and has the grant of a new charter, the old corporations are at an end, except so far forth as corporate life is prolonged by special legislative enactment. Bank v. Colby, 21 Wall. 609; Pomeroyv. Bank, 1 Wall. 23; Banking Co. v. Georgia, 92 U. S. 665; Railroad Co. v. Georgia, 98 U. S. 359. . ,The question, then, is whether the intent of the various statutory provisions was that the old corporation should be entirely dissolved, so as to be withou t power to do anything necessary to close its business. The consequences which, according to the stringent rules and ideas of the common law, followed the dissolution of a corporation, are well known. "According to the old settled law of the land, where there is no special statute provision to the contrary, upon the civil death of a corporation all its red estate remaining unsold reverts back to the original grantor arid heirs. The debts due to and from the corporation are all extinguished. Neither the stockholders nor the directors or trustees of the
EDISON ELECTRIC LIGHT CO. V. NEW HAVEN ELECTRIC CO.
237
corporation can recover these debts, or be charged with them in their natural capacity. All the personal estate of the corporation rests in the people as succeeding to this right and prerogative of the crown, at common law." 2 Kent, Comm. 317. But the learned author proceeds, in a note, to say that "the rule of the common law has in fact become obsolete and odious. It-has never been applied to insolvent or dissolved moneyed corporations in England. The sound doctrine now is, as shown by statutes and judicial decisions, that the capital and debts of banking and other moneyed corporations constitute a trust fund and pledge for the payment of creditors and stockholders; and a court of equity will lay hold of the fund, and see that it is duly applied." To the same effect are Mumma v. Potomac Co., 8 Pet. 281; Curran v. State, 15 How. 304; Bacon v. Robertson, 18 How. 480. Acting upon these modern ideas, which are based upon the fact that "corporations like this, of a private nature,' are in truth little more than private partnerships," (FOBS v. Harbottle, 2 Hare, 491,) the legislature of New York provided that in cases of consolidation no claim for any cause existing should be impaired, and no pending suit in favor of oragainst the old corporation should be abated by reason of such consolidation. And furthermore provided, by a general statute, that the managers or directors of any dissolved corporation, at the time of its dissolution, if none others were appointed, should be the trustees of its creditors and stockholders, with full power to settle its affairs. The managers, who were to be, upon the dissolution, the trustees for the stockholders, appointed the president and secretary to transfer the patents and other propenJ · If these persons had refused to assign this patent, a court of equity could have compelled them to do so, and their assignment in writing under such decree would have undoubtedly been a compliance with section 4898. Ager v. Murray, 105 U. S. 126. A voluntary act on their part would have been as effectual as an involuntary act by decree of a court of equity. But it is truly said that they did not assign as trustees, but as the agents of the corporation, thereunto authorized by the vote of the executive committee, and that the instrument purports to be the act of the corporation. It is furthermore said that, inasmuch as the president and secretary had not, before the death of the corporation, executed the power conferred upon them, and as this power was not coupled with an interest in the thing to be transferred, the power became extinct by the death of the corporation. If the analogies are complete and perfect between the condition of the old corporation after the consolidation and the death of a natural person, the position of the defendant is probably sound; but the defect in the argument, as it· seems to me, is that the old corporation was not dead. It could do no new business, and almost all its powers had ceased, but it had vitality. In the lunguageof Judge SHEPLEY, in Re Influrance Co., 1 Holmes, 103, the dissolution was" a suspension of corporate action; not a cessation of corporate life." The statute had declared that all suits by or against it could be prosecuted to final judgment, and that no claim or demand against it was impaired. Being then a corporation which was not extinct, the power which was legally conferred before the consolidation, for the purpose of
238
winding up its business, could be executed, and the seal of the corporation could be used, after the consolidation. It is true .that the statute did not, in terms, as is often done, continue the existence of the corporation to do the acts which are necessary and incident to the winding up of its business, but it did, in terms, declare that the corporation was not extinguished with respect to any demands upon it. The new corporation had a right to require a written assignment of the patents. The old corporation, recognizing this right, charged its officers with the duty of making the title of the new company perfect. and the deed was executed for the purpose of satisfying this just demand, and performing this duty. It would be a narrow adherence to technicalities to say that it was invalid. The facts in regard to patent No. 369,280 differ from those which have been recited in regard to patent No. 274,290, only in the following particulars: Thomas A. Edison, as the inventor, made application for No. 369,280 on February 5, 1880, and, pending the application in the patent-office, assigned his interest in the invention and the patent to the Edison Electric Light Company. On August 9, 1887, before the patent was granted, and after the consolidation, the president and secretary of said old company executed an assignment of said invention in the name of the old company to the new consolidated company. The facts in the two cases have no difference in any vital particular. 'fhe pleas are overruled.
I'TIt re STANGER.' (Di8triot (JO'U'f't,
w: D. Virginia.
September Term, 1887
TRUSTS-RESULTING TnusTs- EVIDENCE.
In 1870 the petitioner's husband surrendered certain land in his schedule of bankruptcy, setting up no claim therein on behalf of bis wife. In 1874 the land was sold for the benefit of the creditors, and she became the purchaser of part of it.· In 1876 he died, and in 1880 she claimed dower, and the same was assigned to her. In 1885 she asserted in this cause a claim to the property by way of a resulting trust, on the ground that the land was deeded to her husband in 1858 by her grandmother, with the distinct understanding that one-half thereof should belong to her, but there is no evidence of any payment by her out of her separate estate, and no of fraud or mistake or contemporaneous agreement is made. Held, not resting the decision upon the question of the admissibility of parol proof. that there is not evidence suffi· cient to show a resulting trust in favor of petitioner. 2
In Bankruptcy. Ohas. A. Rcmald and G. W. kL. Tho8. E. Sullivan, for defendants.
1 Reported by F. T. Barr, Esq., of the Abingdon bar. . ITo establish a resulting trust in realllstate by parol evidence, such evidence must be cleat', 'strong, and unmistakable. P'Pool v. Thomas, (Ky.) 8 S. W. Rep. 198, anll cases .cited in note. .