SMITH P. NEW ENGLAND HUT. UFEINS. 00.

769

creditors of defendant Cohn, in enforcing their garnishment, are pressing a "suit which is in effect a suit by the defendant [Cohn], in plaintiff's name, against the garnishee," so far as existing relations and substantial rights of parties are concerned (Daniels v. Clark, supra), the state court could not have reached a different' conelusion upon plaintiffs' attack from what it must have reached upon an attack by the main defendant himself; and especially if the proceedings attacked be viewed in the light of section 2528 of . Code of Iowa, which provides:
"The rule of the common law that statutes in derogation thereof are to be strictly construed, has no application to this Code. Its provisions, and all proceedings under it shall be liberally construed with a view to promote its objects and assist the parties in obtaining justice."

The action which the state court would be required to take must be taken by this court in case at bar. Liability against a garnishee is never presumed, but must be affirmatively shown. Letts, Fletcher & Co. v. McMaster, 83 Iowa, 449, 49 N. W. 1035. The garnishee is not to be placed in a worse position than he would have been in had the claim for which.he is garnished been enforced against him directly. Henry v. Wilson, 85 Iowa, 60, 51 N. W. 1157. The views above expressed necessarily lead to the discharge of the garnishee, the Farmers' State Bank of Charter Oak, Iowa. Let judgment be entered accordingly. To which plaintiffs at the time duly excepted.
SMITH v. NEW ENGLAND MDT. LIFE INS. CO. (Circuit Court of Appeals, Third Circuit. October 18, 1894.) No. 26.
1.

LIFE INSURANCE-NoNPAYMENT OF PREMIUM.

The giving of a note for a premium to an agent, who had no power to postpone payment of the premium or to substitute anything for it, which was never accepted by the company or brought to its knowledge, will not keep alive a polley which prOVides that the company assumes no risk except for that portion of the year for which the premium shall have been actually paid in cash in advance.

2.

SAME-PAYMENT OF PREMIUM.

The acceptance of payment of a quarterly premium and of premium notes 73 days, 50 days, 120 days, and 30 days, respectively, after they were due, in one year, does not show such a course of dealing as justifies the assured in believing that punctuality in paying premiums is not required, so as to excuse delay in paying premiums the following year.

In Error to the Circuit Court of the United States for the Western District of Pennsylvania. · This action was brought by Aline M. Smith against the New England Mutual Life Insurance Company on a policy of insurance for $10,000 issued on the life of Zant McD. Smith. Another action was brought at the same time on another policy, like, in all respects, to the one in this action, and the two cases were tried together. The policies contained the following conditions:
to receive premiums at the day when payable, and not afterwards, but can.
"Gnneral agents appointed directly by the company are alone authorized

v.63F.no.6-·49

770

. I'BnERAL BEPORT:flR,

vol·. 63.

not give qredit, or make, alter, or discharge contracts, orwaiv:e. fprfeiture; an.drio alteration. or waiver of the COIl;ditions of this policy shall be valld un'\ess made In writing at tlIe ofllc.e ItlBoston, and signed by the president or 'Secretary." "AU premiums due on this policy shall be paid in advance, but any annual premium may, at tlle election of the assured, be paid in 'eit4er in one SUlP, or in semiannual. or quarterly iQstaIlments, to 00 the of the assured;}1; being understood tl:!at the company risk for the period coveted' J>ysuch deferred payments, but only for malt portion of the year for which' the· premium shall have been actually pafd·<,lti.cash, in advance, .and tllat !in.;clise of loss allsucll deferred payments are to be deducted from tile amount payable."

Tbe"premiums due May 24, 1891, were not paid until August 5th or 73 days after were due,' and the three installlriellt premium notes were. not,paid for 50da,YIil, 120 days, and 30 days, after they were due. When the premiums fell due :May 24, 1892, the assured deli"Vered to the local agent at Pittsburgh premium vouchers for $46.90 on' each policy, and premium' quarteI1y'installments, 'and an ordinary promissory in 30 dayS-to the order of defendant, for $86.61, with the balan:ce'9f the .first quarterly . installments on both; policies. This nO'te and the regular premium notes were never paM. The assured'died November 22,1893, and, the company ha,vil1g,·re.fused to pay the amount of the .two suits were bronght,llnd by of counsel were tried together, and a verdict rendered in each: case, under instructions of the court, for the amount of paid-up insurance due on the policies, under the Massachusetts statute, as lapsed policies. A writ of error was taken by plaintiff in only one . counsel having agreed that the decision in this case should be treated as applicable to the other. W. for plaintiff in error. Shiras & Dickey, for defendant in error. Before ACHESON, Circuit Judge, and BUTLER and WALES, District J The suit is on a policy of insurance for $10,000, issued on the life of zant MeD..Smith, dated May 24, 1890, which recites as a condition, the payment of' a premium by the assured .at the payment of. like premiums on or before the 24th of M{i..;Y in. every year thereafter until 34 such premiums: have been paid" or during the term of Mr. Smith's life if he shall'diewithin 34yeal'$ of its date. The defendant is a corporation of the state:of Massa.chusetts, and the policy recited that itis iss:'Q,edd'fsupject to, the:provisionsof t4ei:p.sprance act" of that state; ·the 76th section of which was indorsed, .and provides that "no thereafter. issued by any domestic corporl;ltion Shllll fqrfeited Or 'Void for nOnpayment of premiums arfter twofllll f'l:nnual have been made, but In case of dethen withput any further stipulation fault of or 811Cb, .poJicys4altbi,'! Ilinding: on. the company for the amount: of paid-up insurance,"!t4;>pe,. computed and valued according to a prescribed.:rule. , !fr" S:o:;Lith paid two full annual premiums. Whether he pa.idiortendered another, which feIl,due May 24, 1892,

SMITH 11. NEW' ENGLAND 'MUT.: LIn; INe. co.

-771

or excused ,from doing so, is the question raised. 'l'lle company, treating him as in default for failure to pay, refused payment subsequently, because, as it asserted, the policy had lapsed. Under directioriof the court, a verdict was rendered for the plain· paid-up insurance under the statute, only. tiff in the amount The plaintiff appealedaJid assigned the following errors:

of

"First: The court erred in refusing to affirm the plalntiO:'8ftrst point, which was as follows: "'If the jury believe from the evidence that Z. McD. Smith, tl1e insured, on the 24th day of May, 1892. signed and delivered to the defendant ,company a dividend receipt or voucher for $46.90 in each polley. authorizing the com· pany to apply the same on the premiums then due: that he gave his three premium notes upon the forms provided by the company, payable in three, six and nine months, in accordance with the company's custom, and also gave an ordinary promissory note for $82.61, payable in thirty days, being for the balance of the cash payment of premium In each policy" to wit, $1.10, with Interest on the note,and that the same were accepted by the com· pany in payment of the annual premiums due that day upon policies Nos. 88,946 and 88,947; that said policies were thereby continued In force for another year, and said company having afterwards refused payment of said orqinary note and attempted to cancel said polley, and the said Smith having subsequently died, plaintiffs are entitled to recover in each case, and the vel'· diet should be for the full amount of the policies, with interest from the Insured's death.' "Second: The court erred in refusing to affirm the plaintitr's second point, which was as follows: " 'If the jury believe, from the evidence, that the previous course of dealings between the insured and the company in regard to receiving payment of overdue premiums at any time within ninety days from the date that they fell due had been such as to lead him to believe that the same course will be pursued In regard to the small portion of the apnual premium due May 24, 1892, covered by the promissory note for $82.61, m'entioned in the first point, and that he tendered payment thereof within ninety days of its date In good 'faith, the defendant company sh()uld have accepted payment and had no right to forfeit the policy, and for that reason, in addition to the one set out In the first point, the verdict ilhould be for the plaintiffs in each case for the full amount of the policy, with interest from the date of the decedent's death,' , "Third: The court erred in affirming the first point of the defendant, which was as follows: ' " 'That under all the evidence the verdict must be for the defendant except as to the paid up value of the polley as set forth in the defendant's third "Fourth: The court erred hl the general charge in stating that " 'Mr. Dermitt had no authority to accept the Insured's note at thirty days instead of cash; besides the evidence d()es not justify the finding that he did so accept the note for $82.61. The company Itself did not accept that note or authorize the acceptance thereof, and knew nothing of the transaction.' "Fifth: The court erred In the general charge In stating that "'The indulgence which Mr. Smith received in the year 1891 did riot excuse his default In 1892. The evidence In the opinion of the court does not justify the finding that Mr. Smith was misled.' "

.

The only questions raised are those presented by the first and second assignments. Were the answers to the points therein recited erroneous? '1'0 the first of these, points the court said:
"This point is refused, because, in the opinion of the court, It Is not W8l'ranted by the evidence In the case. Mr. Dermitt hl\.d no authority to accept the assured's note at 30 days Instead of cash; besides, the eVidence does not

,tbat he did so flCCElPt the note for $82.61. The, cOlllpany 1tSelf did notliccElpt that note or authtitize the acceptance thereof, and knew t10thlng of the, , , ·... .

fully justified .,by the evidence. A careful examination hl:JS' pqt discovereQ.ap.yWi»g to warrant a belief that Mr. Dermitt to accept mentioned, in payment of the besides it il(clearthat if he had so undertaken his act would 'ha"e been unautHorized, and ineffectual. Hahad DO power to postponepa.YUlEmt of the or to subttituteanythingfor it. The defendant, personally neither accepted norkn(l'!r'. of its eXistence;' .. ' . tIle .
.iilthe year 1$91 did>not 1892. The evidence in the opinion at the court does not justif;Yabellefthat Mr. Smith was misled."
i

does' not warrant its atlirmance. . Tbe' Indulgence which Mr. Smith -received

the cuncobtradicted evidence ,this point Is refused.

The evidence

,'Wedo not see liow the been answered differently. We.find no evidence to warrant its submission. The dealing refer1'ell to was sUght, andsta.ndh1galone would not justify a belief obligati0J?- to make prompt payment. But It IS clear that he dId not so thmk-that he was not betrayed or misled into delay; for it distinctly apthat he re,peatedly in ample time, of the necessity paymellt,and the dllngerQf delay. . Tijere is nOfoom for question about the rules of law applicable. A 'course of dealing whichjustiftes the assured in believing that punctuality in payingpremiuDllil lanot required, or wilFbe excused, will relieve him from the of delay, as was held in Illfilurance Co. Unsell, 144 U.s. 439, [12 Sup. Ct. 671.] But it .must ·bedealing·whichactualIy··creates such belief, and justifies a illry in finding its,existence. assured seeking relief from the terms of his contract must prove they were waived or that be was misle9. Punctl,la.lity in payingpl'emiums is of the essence of such contracts, and the consequences of delay can only be avoided by waiver," or cithersu:ffi.cient excuse; .Thompson v. Insurance Co., 104 U. S. 252; Statham v. InsurllJIlce Co., 93 U. S. 24; Klein v. Insurance Co., 104 U. S. 88; Miles v. Insurance Co., 147 U. S. 177, [13 Sup.

v ..

:Ot.275.]

evidence inv<?lved would extend the opinion wit):lOut f3erviIl-$ any useful purpose. The case was well tried, and the conclusion, reached the only. one admissible. The assured acquiesced in' theeompany's position-'-tbat his policy had lapsedand accordingly neither paid nor tendered subsequent premiums, but treated the policy as a security simply for the interest acquired under the statute.· Had his life been continued the claim now made would never have been urged or.thought of; his early death alone suggested it. Had he lived ten years longel' without payment or tender, this claim would then have been as reasonable as it is now. The judgment is affirmed.

YARDLEY II. TRENHOLM.

713

.,

YARDLEY v. TRENHOLM. (Circuit Court of Appeals. Second Circuit. October 15. 1894.) No. 146.
In an· action by the receiver of a bank against a customer to recover $6,784.94, paid on alleged overdrafts, the bookkeeper of the bank testified that the ledger showed $2,995.78 overdrafts at the close of 1888, and that the letl,ves in the ledger of 1889 containing defendant's account .had been destroyed, before the bank suspended, by some unknown person, but that the witness' recollection was that the ledger showed overdrafts by defendant of about $6,000. The cashier testified that checks amounting to $3,619.16 of defendant were paid in 1889. There was no evidence of the amount of deposits in 1889 made with the receiving teller, or fiat none had been made. No deposit slips were produced, nor was it shown that there were no such slips. The accuracy of the ledger accounts was not proved. Betd, that the court properly directed a verdict for defendant. .

BANKS-ACTION FOR OVERDRAFTS PAID-EvIDENCE.

In Error to the Oircuit Oourt of the United States for the Southern District of New York. This was an action by Robert M. Yardley, receiver of the Keystone National Bank, against William Trenholm, to recover alleged overdrafts paid. The court directed a verdict for defendant, and plaintiff sued out a writ of error. Silas W. Pettit and William F. Randel, for plaintiff in error. John J. Orawford, for defendant in error. Before BROWN, Oircuit Justice, and WALLAOE and SHIPMAN, Oircuit Judges. SHIPMAN, Oircuit Judge. Robert M. Yardley, the plaintiff, was duly appointed on May 9, 1891, receiver of the Keystone National Bank of Philadelphia, which ceased to do business on March 20, 1891, and, as receiver, brought an action at law against the defendant to recover the sum of $6,784.94. The complaint alleged that between October 1, 1888, and September 7, 1889, the defendant's deposits in said bank amounted to $6,058.65; and that his drafts upon the bank amounted to the sum of $12,843..59; and that the difference had been overpaid him, and was on May 9, 1891, due to the bank and to the plaintiff. The defendant's answer was a general denial. Upon trial of the case to the jury, the plaintiff proved by one Ege, who was a bookkeeper in the bank, and kept the ledgers for 1888 and 1889, which contained the defendant's account, that his account was balanced on October 1, 1888, and showed an overdraft on that day of $1,608.53; that the ledger showed an overdraft at the close of 1888 of that the leaves in the ledger of 1889 containing Trenholm's account were cut out, before the bank suspended, by some unknown person; and that the witness' recol· lection was that the ledger showed an overdraft by Trenholm of about $6,000. It was proved by the cashier that 30 checks of Trenholm's, amounting to $3,619.16, were paid in,1889, and that the deposits were made with the receiving teller, and not with the bookkeeper. There was no evidence of the amount of deposits In 1889, or that none had been made. The deposit slips were not produced,

,'l'X4

FEDERA:L: UPOR1ER,' ,vol.

63.

or the fact that there were no such. slips was not proved. Neither the accuracy with wMch the :i:iHssmg leaves in the 1889 ledger were kept,<oor'the accuracy .ofthe ledger pf1888, was proved. At the close of the plaintiff's testimop,y, 1,WOn motion. the court directed.a .. .. tho.il.. defen.d.a.llt,.,.. .u.p t.he. grO.lllld that, there. was ..o.,q. .. . suffi· cIent. to. enJJ:tl,e, reco,er.The aSSIgnment of error" in v'aiiousfomJUl,thecorrectness of the ruling of I the cou:r1J.> . The J;he, circuit.cour.t) ,for decision was .pri#ia required a defense,,"! ·. ,whati:wassh.own,only byway of inference, that bank OctobeI'I, 1888, and that he must 'Be considered, liS having aBsented to the correctness of the .the E\qle the jury, could have of ledger the,statelil£:the 3;ccountoIt September 7, 1889, was the recollection O-f the bookkeeper that the ledger showed an overdraft of about ,6,OQ9." rr.l\Wrecollect\911 n.othing, in, the absence of .I1:tlle ledger bad evidence tnat the book was accurately been i.v., havep.iYvtrd itself: its probable ac.curacy bY.We testllp,ony of those who 4ad ang, it was to "furnish such mformatlOn to the in regard to Trenholm's. ,because, although. payment of his checKs';Was proved, was RresumptioIl,tijat they were not drawn and paid 'fhnds to' his' credit in' 'the possession of the bank./, Wihite"v.. ,A,'mbler', 8 N.Y. 170: Theorlginal entries of deposits, if any there were, were not produced, and it was not shown that, were no such entries. ,The bookkeeper did not testify, from:; was il;l the habit of obtaining notice of deposits, orthttt' he 'entered,.all of whieh he receiYt>d notice. When ,has no of the correctthe persofi 'fHb. Jll.akes'{lie hlSinfoI'lilationentirely from anness of party to, the transaction, it isneeessary to show by some teStitrloay i'tlie probable accuracy of. ·the system or course of 'business whic,:Ji:''W'RS employed to makeonginal memoranda, and to .transmit infoNnlition of to the per.son whqse' sole business it is to make the ,entries.. For testimony frIJm the tellt"r that correctl1' taade .true reports of'. an. deposit$' to the bookkeeper, or in :discharge of his duty, and in which were dulyhandeq to the bookan4his 1:estimonythai 'he. correctly entered all the reports, IWOllld, if 'h(\d "beeIi ,'destroyed, make prima facie pt'QOf of of 'the final ,entries. Kent v. Garvin, 1 Gray, 148f Harwo1?d.v."Mulry, 8:Gra)t, 250; etc., Of York v. Sec· ;,oDd Ave.n-/Co,,102:N. Yl 572, 905. In this case the coun· ,'$el for the evidence which was 'l1ccessib1e;,1 is ett(lugh record to those· officers wh'0t,at'the time of the bad maJlagemeut of ttiebank, were concealment'of'tlleir condlu:t. .., privy to it; We :find l1?e'rrorin the actioJl' of'the circuit court, and the judg· n,ent isaffirm with costS; d, " , .
t

I

,'\-; ';

LITTLE ROCK & M. R. CO. V. ST. LOUIS S. W. RY. CO.

775

LITTLE ROCK & M. R. CO. v. ST. LOUIS S.. W. RY. CO. (two cases. Nos. 394, 399). SAME v. ST. LOUIS, I. M. & S. RY. CO. (two cases. Nos. 395, 398). SAME v. LITTLE ROCK & FT. S. RY. CO. (two cases. Nos. 396, 397). (Circuit Court of Appeals, Eighth Circuit. September 24, 18tH.) 1.
CARRIERS-INTERSTATE ACT-CONNECTING LINES-DISCIUMINATION-PREPAYMEN1' OF CHAIWES.

An interstate carrier does not subject another canier to an "undue or unreasonable disadvantage" (Interstate Commerce Act, § 3, cl. 2) by exacting the prepa;rment of freight on all property received from it at a given station, although it does not require charges to be paid in advance on freight received from other indiViduals and competing carriers at such station. 59 Fed. 400, affirmed.

2.

SAME-THROUGH Bn,LING, RATING. AND LOADING.

An interstate carrier which enters into an arrangement with a connecting caiTier for through b11ling, rating, and loading, and for ilie use of its tracks and terminals, is not obliged to make the same arrangement with other connecting carriers, though the physical facilities for an in. terchange of traffic are the same. 59 Fed. 400, affirmed.

Appeals from and Writs of Error to the Oircu.it Oourt of the United States for the Eastern District of Arkansas.
These were six suits which were brought by the Little Rock & Memphis Railroad Company against the St. Louis Southwestern Railway Company, the St. Louis, Iron Mountain & Southern Railway Company, and the Little Rock & IJ't. Smith Railway Company, for alleged violations of the third section of the interstate commerce law (24 Stat. 379, 380). A suit at law and a bill in equity were filed against each of the defendant companies above named, in which the Little Rock & Memphis Railroad Company counted UP(}ll the same violation of the law; asking in the one case for an injunction, and in the other for damages. 'Ihe six suits against the three companies involved similar questions. They have been argued as one case, and it is found most convenient to dispose of them in a single opinion. SUbjoined diagrams will serve to illustrate the relations which the several railroads concerned occupy to each other. It will be seen by a glance at diagram No.1 that the Little Rock & Memphis Railroad runs east and west from Little Rock, Ark., to Memphis, Tenn. Its total length is about 135 miles. Coming down from the north, the St. Louis Southwestern Railway crosses the Little Rock & Memphis Railroad at Brinkley, a point intermediate between Little Hock and Memphis. It also crosses a branch of the St. Louis, Iron Mountain -& Southern Railway, leading from the main line of that road into Memphis, at Fair Oaks, which is a point about 20 miles north of Brinkley. Diagram No.2 illustrates the situation further west, in and about Little Hock. It will be seen that the main line of the St. Louis, Iron Mountain & Southern Railway Company enters Little Hock from the north, and thence runs south' west through Arkansas into Texas, with a br[lllch leading from Little Roel. to the southeast. The Little Hock & Ft. Smith Railway runs west from Little Rock to Ft. Smith on the western border of the state of Arkansas, and to Ft. Gibson in the Indian TelTitory. Its length is said to be about 165 miles. Diagram No. 2 does not show the main line of the St. Louis Southwestern Hailway, which is disclosed by the first dia6'1'am; but it is sufficient to say that, after passing through Brinkley, it runs in It sQuthwesterly direction through Arkansas, and far into Texas. As against the St. Louis Southwestern Company, complaint was made that it refused to receive freight or passengers coming over the Little Roclt & Memphis RaJlroad except at local rates, and that it refused to honor through tickets or through bills of lading issued by the latter road, and that it required all freight to be rebilled and relo-aded, and all passengers to purchase new tick-