GASQUET t1. CRESCENT CITY BREWING CO.

493

only have been known at the time of its creation to persons who are now dead. I think it is impossible to prove the averments of this bill by any legal evidence, and on that ground the suit must fail. I hold also that the court ought not to hear a party who comes before it as a purchaser of a mere right to sue. The purchaser of a legal right may by his purchase become entitled to protection and aid from a court of law, and, if entitled to it, he can obtain appropriate relief in a court of law; but courts of equity will render no assistance to any scheme of speculation depending for success upon its determination of any controversy. In other words, equity will not aid the purchaser of a lawsuit in an endeavor to derive profit from such an investment.

, GASQUET 17. CRESCENT CITY BREWING

Co.

(Circuit Court, E. D. Loui8Wn,a. ,ebruary 5, 1899.)

t.

MASTER'S REPORT-Tum OJ' FILING.

t.

The term "month," as ulled.in equity rule 88, giving one month ,from the time of filing a master's report to file exceptions thereto, means a calendar, and not "" lunar, month; therefore, where the report is 11100 on May 28th, a confirmatol') order, made June 28th, is premature. '
OF EXCEPTIONS-CONFIRMATION.

a.

The formal withdrawal by an exceptor of an exception to a master's report on the order-book and in a paper filed by the exceptor in the cause, is a sufficient withdrawal of the exception, although no order of discontinuance is allowed by court, and the report will stand confirmed,' nnder equity rule 88, after the lapse of time fixed therein.
MASTER'S l!.EPORT-ExCEPTIONS-CoNI!'IRMATION.

Where a receiver, not in his capacity as trustee, but for himself, and against the trust-estate, provokes, adversely to all others in.interest. a contest, by presentillg to the court a claim for compensation, and the matter is referred to amasteJ:. hi,S report, so far as exception thereto is concerned, falls within equity rUle 83, provid. ing that the report shall stand confirmed on the next rUle-day after a month has expired without the filing of exceptions; a\ldequity will not hear exceptions made thereafter, unless the party was prevented from making them in time through accident, surprise, mistake. or fraud. '"

,

"

In Equity. On exceptions to master's report. Richard De Gmyand F. B. Thomas, for petitioners. E. HllWard McCaleb and Frank L. Richardson, for respondent.
BILLINGS, District Judge. The court allows the amended and enlarged -statement of the testimony to be filed, for the filing of which leave was asked by the solicitors of the petitioners. Indeed, it may be doubted whether the practice in this district, under rule of May 22, 1880, whereby it is required that each party shall file a note of evidence, giving by dfic reference all the testimony which is relied upon, does not do away with the objection for want fullness of reference to the testimony whioh, in districts where that rule does not obtain, would be good. As to the meaning of the term "month" in rule 83, I think it is a .calendar, and not a lunar, month. It would, therefore, follow that, as

494

I'EDERAL REPORTER,

vol. 49.

the report was filed on May 28t.h, and the order confirming the report was made on June> 28th, t.he confirmatory order was premature. The exception of Bailey was in time. Although no order of court was entered allo:wing a discontinuance, I think his formal withdrawal of it on the order-book and in s paper filed by him in the cause was enough to cause it to beheld as withdrawn by him. As an exceptionit had ceased to exist in the cause. When, therefore, the successive rule-days after that of August and before that of February, during which. month this petition was filed, occurred, the first report of the master, in the language of the rule. was as of course confirmed. It has been e.uggested by the solicitor of the .petitioners that the fact that the matter in dispute was a fee of the receiver would make it, under the uSllges of chancery. to be not operated upon by rule 83, but would leave it, notwithstanding the rule and the lapse of time. open to objection by those in interest. I do not think this view can be maintained. It is true in the practice the receiver's aecounts which he has staled:""-that is,those which involve his receipts and expenditures as trustee-are liable to question at any time before the cause is closed by final decree. But where, as in this case, the receiver, not in his capacity as trustee, but for himself, and against .trust-estate, provokes, adversely to all others. in interest, s contest, by presenting to t1)e courts claim for compensation, and the matter is referred to the master, who files his report,' I think it is like any other matter referred to the master and reported uponjand that the report, so far a.s the time for exception thereto is concerned, falls within the dominio:nof the rule. It follows that; after the of the ruleday next following the withdrawaiof the exception of Bailey, the report of tbe master, which had been filed 011 May 28th,in the language of rule 83, stood confirmed. .The effect of such a state of facts, as fa.r as relates.to the cutting off of exceptions, is analogous to the effect of a judgment alter the term at which it waS rendered had terminated; that is, the tille, as a general oanon,precludes subsequent exceptions. However, s court of equity would, while the fund is under the control of the court, still hear exceptions from those who had been prevented trom making them within the time fixed by the rule through accident, surprise, mistake, or fraud. As to all others the rule is absolute. In Foote v. Van Ran8t, 1 Hill,. Eq. 185,the precise point was passed upon, and the court refused to consider exceptions, because not filed within the trme·of the rule, and not accompanied by proof of the facts constitutingsn equity which would take the.case out of the rule. There the equity asserted arose from ,the inadvertence of the exceptor, and could have beel1showIl by sim pIe affidavit. Here the excuse for the delay was claimed to lie in the fraudulent devices or misrepres,elltat:ons of the receiver,whereby the exceptor was misled into inaction; and therefore, court ordered full investigation 'upon the presentation of the petition, befor.e the master, who has found ngainstthe petitionera, that is, that the allegati<lns of fraud have not· been sustained by the. proofs. The correctness of this finding as presented by \he exceptions will first be

a

GAsQUll;'t 11. CRESCENT.OITY BREWING CO.

495

considered; for, if the finding is correct, the petitioners, under the operation of rule 83, are concluded .. The charges of fraud or fraudulent practices on the part of the receiver, contained in the petition, or urged in the oral argument, may be summarized under four heads, as follows: (1) That there was a conspiracy between tbe receiver and the president of the board of direct.:. ors of the Crescent City Brewing Company. in pursuance of which the latter gave evidence blifore the master in the receiver's favor, as well as omitted to oppose tbe receiver's claim; (2) that the receiver, through Mitchell and the other employes of the receiver, caused statements to be made to the stockholders:upon the occasion of their being asked to sign a consent to cOnvey the brewing estabHshment. after its sale by. the rp,ceiver, to the effect that the stockholders would·receive not more than 100. per gent. upon .the par yalue of· their shares; (3) that at a meeting of the . . directors, at. which stockholders were present, the stated that. the "harges (or administration of the property his fees and those of the attorneys, would not .. $30,OQOi and (4)thatnt Baton Rouge, when waited upon by a of stockholders. within the time allowed for filing exceptions, the misled them by promises to reduce theaqiopnt of his fee.as allowed QY the master. As to. the first charge, tlle master reportS, ,and I think the solicitor for the petitioners admitted at thl;1argument, that it was tained by the As to the ot9,er charges of fraud or fraudulent pra\ltices,it is the view of the master .that they have not been IJlaintained· by the evidence, and iI;l this view ooncur. So far conCerns .the basis of reopening. the .matters passed upon in the first rej>or,t, the case after the report of .the .master ):lad, by vir-. tue oHte having been filed, and by tbe occurrence ofsevers,tl succesllive rule-days, stood Confirmed, the petitioners,. who are stockholders, 'filed a petition, in which were averred matters which, if proven, were sufficient to take the case out from the operation of rule 83, and to have entitled them, even then, to file exceptions to the report. The evidence doesllot sustain these grounds. The case of the petitioners is therefore decided by the rule itself. ·Upon general principles it is like a case of a complainant who brings a biJI for relief based upon allegations offraud. If the fraud is not proven, the jurisdiction ceases, and the relief is refused. ];jvidence most voltlminous was taken upon the quantum or IIp:lqq1,.1t offee,.and the master, in connection with his report, has presel1ted'an elaborate analysis, as well as a concise summary, of the testimony upon that subject. This testimony is in the record, and can be dealt with by tpe s.ppellate court in case of appeal, and in case that tribunal sho)lld taken. different view oLthe effect of rule 83 as applied to the facts of this case. But in my opinion, upon thtl case as 6l;ltablished by the·evidence, the rule is a limitation which cannot be disregarded. 'the' decree will therefore be that the petition be. dismissed. ,.

486

I'BDERAL REPORTER,

vol. 49.

GAIlQUET tl. CRESCENT CITY BREWING

eo;

(CCrcuU Court, E. D. Lowtsfana. February 5, 1892.)
CoIlPOltATIO:Ns-BTOOX PLEDGBD. BY DmEOTOBS-EsTOPPEL.

Where stock is issued 'on the vote of directors, and used by them a8 a pledge to obtain a loan, the corporatiou is estopped from setting up that the issue of stock Dot paid up is prohibited by the oonstitution, and the hollier will be entitled to the BaIne to the extent of the loan.

In Equity. On exceptions to master's report. W. S. Benedict and Richard De Gray, for petitioners. E. Howard McCaleb, for respondent.
BILLINGS, Distnct Judge. In this matter there seems to be no question f!,$ to the 1acts. Mrs. Graham claims 400 shares of stock in the defendant corporation under a pledge to repay a debt of $14,000. The itockwas never paid-Up stockj and the charter of the corporation prohibited the issuance of stock not paid up. But the directors voted to issue the stock, and it was, with their sanction, used as a pledge to obtain t11ese loans for the corporation from Mrs. Graham, which aggregated 814,000.' In the hands of Mr. Ames the result would have been different, but upon the grounds stated so Clearly by the master; and upon the authorities cited by him, I think his conclusion is correct, to-wit, that the corporation is estopped from setting up the want of power to issue the st6ckj and Mrs. Ames, who has inherited the equities of Mrs. Graham, is entitled to have the pledge maintained or held as valid to the extent of the dividends upon thesbares not to exceed the amount loaned. ·The exceptions are overruled, and the report confirmed.

UNITED STATES tl. CALIFORNIA

& O. LAND Co.

Courted Appeal" N(nth CflrcufL March 10,1892.)

Lu'D Ga..Nn-CANoBLLATIoN-FltAUD-BoIU FIDB

In i& suit by the United States to forfeit oertain lands granted in aid of a mllitar;r road, defendant claimed to be a bona fide purchaser under a deed which declared tllatthe road company "does hereby alien, release, bargaln, sell, and oonTey" to the grantee, "his heirs and Wlsigns, the undiVIded one-half of all the right, title, and interest" of the g,rsntor "in and to all the lands lying. and being in the .tate Of OreKOn, granted or intended to beJranted to the state of Oregon by the act of congress approved July 2, 1864, * * and granted by the state of Oregon" to the. grantor.by Act Or. Oot. 24, 1864; "and the undivided one-half of the right, title, and interest" of the grantor" to said grant of land under the. several aots afore,said, whether listed and approved or otherwisei also the undivided one-half of all future right, title, interest, claim, property, ana demllnd "which the grantor "may at anytime hereafter acqUIre to any lands by virtue of any further compliance with the requirements of said acts of congress, together with the hereditaments and appurtenanoes; * * * to have and to hold the lands hereby granted unto" the grantee, "his heirB and assigns forever." that this deed shows an intent to grant the land. themselves, and not merely any interest whioh the grantor mq

PUROJlASBltS.