·
CHURCH t1. CHEAPE.
961
was noted upon the plats, the first section ot the act vested the right of way in the railroad company. The language ot that section is 'that the right ot way through the public landS of the United States is hereby granted to any railroad company duly organized under the laws of any state or territory,' etc. The uniform rule of this court has been that such an act was a grant in praesenti of lands to be thereafter identified. Railway Co. v. Alling, 99 U. S.463."
It is not clear what appellant claims from this language, but assuming it claims, as it claimed in the original briefs, that the grant took effect at the time of filing its articles of incorporation with the secretary of the interior, it is certainly disputable if the language of the court sustains the claim. It must be interpreted by the facts of the case. Contending rights, depending upon the time of the vesting of the right of way, were not involved. The authority of the secretary of the interior over the acts of his predecessor only was involved. The facts as to the papers filed, as stated by the court, were as follows: "In January. 1889, the company, desiring to avail itself ot an act of congress of March 3, 1875 (18 Stat. 482), granting to railroads a right ot way through the public lands of .the United States, filed with the register of the land office at Seattle a copy of its articles of incorporation, a copy of the territorial law under which the company was organized, and the other documents required by the act, together with a map showing the termini of the road, its length, and its route through the public lands according to the public surveys. These papers were transmitted to the commissioner of the land office, and by him to the secretary of the interior, by whom they were approved in writing, and ordered to be filed. They were accordingly filed at once, and the plaintiff notified thereof."
All the documents required by the act were filed. Of course, therefore, the profile of the road, as required by section 4, was filed, and then, by approval of the secretary of the interior, as the court said, "the first section of the act vested the right of way in the railroad company." This is not contrary to our decision. But if this language of the court be construed as holding that the right of way vested upon filing the articles of incorporation, the judgment of the circuit court was nevertheless correct, because the pre-emption claim of appellee antedates the filing of the articles of incorporation, and the land was not then public land. The authorities justifying this conclusion are cited in our original opinion, and need not be repeated. Petition for rehearing denied.
CHURCH v. CHEAPE. (Circuit Court, S. D. California. November 26, 1894.) 1. OPTION CONTRACT-:MoDIFICATION-CONSTRUCTION.
Plaintiff gave P. an option on the stock of an irrigation company for $200,000, with a provision that, if paid by a certain time, all water rents due should be included. P. acted for himself and defendant, his interest to be half the profits after defendant had been reimbursed for the price which he was to pay. Afterwards the contract was modified by agreement that $100,000 should be paid at a certain date, and the balance when certain litigation should be concluded. Thereafter, when defendant sent the $100,000 to P. with which to make the first payment, P. secured a
v.64j<'.no.8-61
FEDERli'tJ 'REPOR'i'ER, vol'; I 64.
to take $90,000 In 11ell btt the,Was to' h'aVt!been paldat' that time. At the ,same time, P.' e%t!6Utelitvv.o instrl1DfutiUt,'one providing that, i,f be tooka.n intereBt with the compal'lY, 'and succeeded'in making a certain sale of. it,<he '\J?1'tId paYJ)laltitU'("$10;OOO, otherwise notj the other reciting 'payreceipt by P. for defendant of the stock of the company, and the agreement by defendant to pay the remaining to of as, twice, J,llodifled betweel1P. and plllintl,tt. 'P. accounted todet'(mdant for the $10,000 reo tarDedi IHild, that ni>thlnlt more was due from defendant to plaintiff' on, payment. ' , ' for the purchase of the stock ,of an should n,ot be.made till a1I'l;lle ll'tigationin Whl<!l:i, We company waseoncerlled was satIsfactorily eoncluaM, the burden is 'on'the seller to prosecute the litigation at his pwn ,expense. ' 8"BAMJJl.' ,,\,' ',j, , "'';1,'' ",,', ,,' ,_ Suits between an irrigation company' and others, in it the paramount right to all the waters of a river to the'extent of the' which was feet, Of Itseanals, cannot be said to have where ilie ,{lecree gave the: 'company the first ')Ul0feet of the ,and the other parties the next:350 teet, after whlcl't'there wits ,no IImttation on the company's rights, the 110w at low Wattir rbl!1ng 300 feet,though during the period of low water the company: mayl1<Wneed more than 100 feet, irrigation not'being much practiced at that time. " ", , ", 4: ' _' , ' is$pes as to what,Wany, contracts were made, the testimony being cbn1lietlng,resort must, be had to corrobOrating circumstances and the probabilities of the case. Ii, 2. SAltllH-CloN))lTI()NS OF PAYHIllNT
, "Upder, t1le,proVision, ,hi
"
,,
'
r-t'he (act that, ,after We payment by defendant to plaintiff of all but the deferred paynie)1ts' ot' on a purchase, which the contract stipulated should not be paid tillcel'tain litigation should'be satiSfactorily concIu'<ied, defendant gave to !plaintiff 25 bOuds, on which a third persOn agreed to loan tor six months, the Q9uds to be taken by him as paymeut for tIle loan If plaintiff fiO desired, l!il not an admlssiou that the $100,000 deferred payment was fully due, where plaintiff, on recelving' the' bonds, indotSed 'on' the contract ,an acknowledgment' that he had received.-$25,OOOas Yan ,additional payment on the $100,000 due when all litigatioJ:l is ended," anll an agreement to accept, at any time within seven monthli!, seventy-flye _ the bon4s "in Pllyment in full for all sums qf now due or to becolDe due t() me in accordance with this agreement."
'l:HAT PAYltENTS ARE DUE.
Action by M. J. Church against George O. Cheape for balance due on contract. Judgment tor defendant. Frank H. Short, Edwin A. Mf::serve arid Groff & Lefroy, for plaintiff. W. S. Wood and Lam!Ue& Wilde, for ,defendant. ROSS, District Judge. "It is surprising that the agreement in respect to so large and im;r;>ortant a as that involved in this case should have been drafted in such vague and indefinite terms; and the irreconcilable conflict that exists in the testimony devolves ripon the cout1 ti,te, duty of ,'carefully ,ctmsidering eve,ry circumstance lll. the case, to the end that the con,tract of the partIes may be truly interpreted, and then enforced as th themselves made y it,without regard to the person or persons upon whom the loss or suffering may' fall. Neitherthe great value of the property, as compared
. CHURea: ",.CHEAPlll.
963
iWith the 'price for which the plaintiff sold it, if such disparity e:x:ists, .nor the large additional. investments made by the defendant to secure its advantagf's, will justify the court in at all departing from what the parties themselves stipulated. The case shows the subject of the contract to have been the capital stock, of ",000 shares of a California corporation. called the "Fresno Canal & Irrigation Company," which company claimed, by appropriation, the right to divert, by means of its canals, a large part of the waters of Kings river, in Fresno county, of this state, for sale and distribution for irrigation and other useful purposes. The plaintiff was the owner of the entire capital stock of the corporation, 994 shares of which stood in his own name. The remaining six shares stood in the names of other persons, to enable them to serve as directors of the company, but the plaintiff was the real owner of those 1'lhares also. Being such owner, on the 18th day.of August, 1886, he gave, in writing, to Dr. E. B. Perrin, of the city of San Francisco, this option:
"San. Franci1iicQ, August 18th, 1886. "For and in consideration of the sum of one thousand dollars, to me in hand paid, the receipt of which is hereby acknowledged, T, M. J. Church, president of the Fresno Canal and Irrigation Company, and owner of five thousand sha1'es, which includes all the· capital stock of said corporation, do hereby bind myself, my heirs and assigns, to grant to E. B. Perrin the exclusive option to purchase the capital stock of said corporation, including all canals, machinery, books,maps,and property, of every description, belonging to said eorporation, and all land and money due the same; the price of said purchase to be two hundred thousand dollars, gold coin. It being understood and agreed that, if the two hundred thousand dollars is paid to me by the 15th day of September next, I am to transfer the above property, including all assessments for water rights and moneys now due or to become due to said corp('r!ltion by that date; but, if the above sum is not paid before theIst of December next. then I reserve the right to collect the assessments that may be due on or before that date. In witness, I have hel'eunto set my hand and seal, this 18th day of August, 1886, M. J. Church. "Witnessed: Robert Perrin."
"San Frnncisco, Aug. 18, 1886. "The Fl'esno Canal and Irrigation Company was incol'porated under the laws of the state of California on Feby. 16th, 1871. The canals have a capacity of one thousand cubic feet of water pel' second. Number of cubic feet of water sold, per second, 430; number unsold, 570, which at $800:' per foot, the regular price of selling, will bring $456,000. Annual payments due Sept. 1st. about $30,000, which amount will be much greater next year at same time. on water rights alreauy sold. Annual payments that will be due on the entire Emount of 1,000 cubic feet, when all is sold, will be about $95,000 annually. There is now due the company on water-right contracts $14,000. Annual pa.yments due for last year. $7,009.85; also due the com· pany, one and %. sections of land. There are noW pending contracts with .T. B. Haggin for forty, and with 1\1. Kearney for forty-six, cubic feet of water. :aI. J. Church. "\Vitnessed: Robert Perrin."
At the same time the plaintiff signed and presented to Dr. Perrin this statement:
Prior to the giving of the option, Dr. Perrin had met the defendant, Cheape, who is a Scotch gentleman of large means, and had con· fessedly talked with him with a view to inducing him to make in'1estments in California; and in view of the circumstance that, nearly:
964
J'EDEkAL REPORTER,
vol. 64.
the date of that"is to say, on the 23d of:'.)"lIn&, 1886,--the defendant, Cheape, had appointed a Mr. Cuyler, who illl:'8; lawyer residing in the city of Philadelphia, his attorney in fact, for him, and in ids name, place, and stead, "to do and perform any andalbacts, matters, and things, of every nature and character, related to, connected with, or growing out of, anY'and all contracts, engagements, or other writings entered into between myself, of the one part,and Edward B. Perrin, of the other part, or in which I may be in anywayior manner conjointly interested with the said Edward K Perrin'''iand· of the further circumstance that between the 18th of August'and the 9th of September, 1886, Cuyler, as the attorney of the defendaint,Cheape, came to California with respect to the option, I think> it does not admit of doubt that, in securing it, Dr. Perrin really ac1;ed for himself and ilie defendant, Cheape, jointly; the interest of Dr.·Pemn then being, according to the testimony, one-half of all oftheproftts that might be made out of the transMtion after the reimbursement of the defendant, Cheape, of the purchase price of the property, which he was to pay, together with interest mereon, at the rate of'7 .pet-cent. per annum. A few JtipDJlls prior to the giving of the option, to wit, on the 26th orApril, 1886, the supreme court of California decided, by a vote of four to then justices, that there could be, upon the public lands in Oalifornia, no valid approprilltion of any-of the water of a nonnavigable',streani as against a lower riparian proprietor thereon, and that'6uchproprietor is entitled to an injunction to prevent the diversion by 'such appropriator of any part of such water. Lux v. Haggin, 690al.255, 10 Pac. 674:. And at the time of the giving of the optiQU, on September 9, 1886, there were pending against the Fresno Canal & Irrigation Company, in the courts of California, a large number of suits contesting the right claimed by it to divert the waters of Kings river. Among thOde suits, and the most important of them, were: (1) A suit in equity brought in the superior court of Fresno county, by Poly, Heilbron & Co., who claimed to hold a valid contract for the purchase of a rancho called "Laguna de Tache," which rancho' borders upon Kings river for about 30 miles, and below the point at which the Fresno Canal & Irrigation Company divertecl the water therefrom claimed by it, and by which suit Poly, Heilbron& Co. sought to obtain an,injunction preventIng that company from diverting any of the water of the river. (2) A suit in equity, brought in the superior court of Fresno connty by John Heinlen, as a lower riparian proprietor upon Kings river, to obtain an injunction the Fresno Canal & Irrigation Company, enjoining it from diverting any of the water of the river; (3) A similar suit by Heinlen, in the superior court of Tulare county. (4:) A suit in equity, in the superior court of Tulare county, by the Lower Kings River Ditch Oompany, claiming, as a prior appropriator to the Fresno Canal & Irrigation Company, the right to divert certain of the waters of Kings river, and seeking an injunction against that company, preventing it from diverting any of the water of the river until the claim of the Lower Kings River Ditch Company should be satisfied. (5) A: similar suit, by the Last Chance Water-Ditch Company, in the super-
CHURCH 11. CHEAPE.
965
ior court of Tulare county. And (6) a similar one by the Centerville & Kingsburg Irrigation Ditch Company, in the superior court of Fresno county. In this condition of affairs, Cuyler, as the attorney and representative of the defendant, Cheape, came to California, with a view to exercise, on behalf of the defendant, the option that had been secured by Dr. Perrin. Cuyler finding that the Fresno Canal & Irrigation Company was in litigation respecting the water claimed by it, there was, on September 9, 1886, made and indorsed on the piece of note paper on which the original option was written this modification: "The above agreement is modified so that it is agreed that, if one hundred thousand dollars of the above amount be paid by Oct. 25th, all sums now due and to become due by said date shall be paid over. It is also agreed that the remaining one hundred thousand dollars shall not be paid until all of the litigation in which the canal company is concerned is satisfactorily disposed of and concluded. M. J. Church. "Sept. 9, 1886. "Witness: Thos. Dewitt Cuyler."
Prior to October 25, 1886, the defendant, who was in Europe, caused to be sent to Dr. Perrin, at San Francisco, $100,000, to be paid to the plaintiff on the contract. Plaintiff went to San Francisco to receive it, and appeared so anxious to get the money that Dr. Perrin saw a chance to induce him to accept a less sum in lieu of that amount. The talk between them in regard to that matter resulted in Dr. Perrin paJing to and plaintiff receiving $90,000 in cash, and the execution by plaintiff of the following writing, indorsed upon the paper on which was written the original option and the modification of September 9, 1886, to wit:
"San Francisco, Cala., Oct. 25, 1886. "This agreement is hereby modified to this extent: In lieu of the $100,000 to be paid at this date, I agree to take the sum of $90,000 ::i'., and I agree that this agreement in all respects shall remain in full force and effect. "M. J. Church. "Witness: M. P. Minor."
-And the execution by Dr. Perrin of the following instrument: "San Francisco, Cala., Oct. 25, 1886. "This is to certify that if I take an interest with Capt. George C. Cheape in the Fresno Canal and Irrigation Company's property in Fresno county, California, lind succeed in selling whatever bonds may be mine at ninety cents on the dollar, at any time within eighteen months from this date, that at suc!JJ time I agree to pay to' M. J. Church the sum of ten thousand dollars: otherwise not. E. B. Perrin. "Witness: M. P. Minor."
"San Francisco, Cala., October 25th, 1886. "On the payment by me to M. J. Church of ninety thousand dollars, I have this day received for Capt. George C. Cheape certificate No. 81, containing 4,994 shares of the capital stock of the Fresno Canal and Irrigation Company, and the further obligation of M. J. Church to deliver the remaining six shares of the capital stock of said corporation, and that Capt. George C. Cheape has in writing promised to pay the remaining one hundred thousand dollars, subject to the terms and conditions of a written agreement made by M. J. Church, August 18th, 1886, and modified September 9th, 1886, and fur-
At the same time, Dr. Perrin executed to the plaintiff this instrument:
,:966 /In
FEDERAL. REPORTER,.
vol. 64. tQ
thereor. ' "Witness: M. P. Minor."
CPHtrRrt betw!!e!?l ,}1. J.. Churcp and .E. B. Perrin, and made J,',!,: ',; ":,' , ',' ,,:,: ' "', "
.." tlf
1886.
hereby II. part E. B. PerrIll.
a,t,.law tor the balance alleged to be and defendant, the first ! )Vhat is t:4e effect of those lU t\w :6.rstp,alment? Dil1they constitute Ii discharge of as thep'j:lrt of the defendan.t, ?r did they due fro,mpefendant to plllmtIff, as conwndedon behalf of the latter? If it be conceded that in that mat,ter 'Dr. 'terrin was driving a hardpargain, it does not answer the ,,:It butfa,ir,however, tristate that his is ,that her and, his brother,' Robert Perrin, ,with whom he consulted retransaction,' had become so alarmed in regard to the litigatldn: that his brother wanted him to withhold any payment, but that he concluded to offer the plaintiff in lieu of the $100,000, upon the stated, which pJaintiff accepted. The testimony is. Promptly notified defendant's attorney in fact in PhiladeJIphia' and his business agent in Europe that he had thus dedncted' and, retained. $10,000 of. the first payment, and that he acde"fendant. therefor. . While this testimony might, under 'be overcome by-the fact that the defendant stateSinih\s deposition that he did not know of that deduction until the sPrlligof 1893, it 1snot so in this case, for it clearly appears that the was a mti.n of large pec'qniary affairs, and left the managementof his business matters largely to his agents, and, so far as can from the evidence, paid but little attention to them. The of Dr. Perrin was .not only explicit that he did ,protnpflY notify Cuyler,as well as th.e defendant's business agent in Scotland, of his action in respect to the $10,000, but he further testified· that his books, in the hands of his secretary then in court, would verify his statement. No attempt was made to show that his testimony regard was untrue, and. I think the court should accept it as As Dr. Perrin's pecuniary interest in the undertaking wasiri,Jl;J,e, profits that might arise from it after reimbursement of the def@dant of the purchase price of the property, with interest, the less the purchase price of the property, the greater of would .be)iis·profit. It was no doubt this pecuniary advantage that · induced'him. to endeavor to get the plaintiff to accept, in lieu of the first payment of $100,000, the sum of $90,000. He evidently induced the plaintiff to do so by giying him his (Perrin's) written promise that, if he should take an interest with defendant, Cheape, in the Fresno Canal,&' ComP1'l:ny's property in Fresno, and succeeded in selling w4ateyer .bonCl.s ,lW should acquire at cents on the dollar at any tiUil:l within 18. :months thereafter, he would at such time pay to the plaintiff, $10,000 jotherwise not. However hard a bargain · this may have been, and: notwithStanding the fact that Dr. Perrin already had a with the defendant, Cheape, the court, at least in at. is powerless to relieve either · party from it. The acceptance by the plaintiff, in lieu of the
,.. .
:>
I,
CHURCH V. CHEAPE.
967
$100,000 payment, of $90,000 in cash, with this promise of Dr. Perrin to pay an additional $10,000 upon the conditions stated in the written promise, is inconsistent with the claim now made by plaintiff that he still looked, and had the legal right to look, to the defendant, Cheape, for the remaining $10,000 of the first payment. The remaining $100,000, it was agreed by the modification of September 9, 1886, should "not be paid until all litigation in which the canal company is concerned is satisfactorily disposed of and concluded." By whom and at whose expense the litigation was to be carried on is not expressly stated, nor is it expressly declared to whom it should be "satisfactorily disposed of and concluded" before the remaining $100,000 should become due. The complaint contains two counts. In the first it is alleged that the plaintiff sold and delivered to the defendant 4,994 shares of the stock, for the agreed price of $200,000, which the defendant agreed to pay as follows: "Ninety thousand dollars ($90,000) in cash, which was then paid by the defendant to plaintiff, and the balance of said purchase price, to wit, the sum of one hundred ten thousand dollars ($110,000) as soon as the litigation in· which the said corporation was concerned and engaged, in so far as such litigation affected the right of said corporation to divert water from Kings river, was satisfactorily disposed of and concluded."
It is then alleged that thereafter, and prior to the 1st of January, 1891, a certain action was brought in the superior court of Fresno county, Cal., by Charlotte F. Clark, as plaintiff, against August Heilbron and others, as defendants, in which action the defendant herein was the person chiefly interested; that, at or about the time of the commencement of that action, the defendant herein agreed with the plaintiff herein that if he (the plaintiff) would pay the sum of $2,000 towards defraying the expenses of the action of Clark v. Heilbron et al., so soon as that action should be disposed of and finally terminated, then, and in that event, the condition upon which the balance of the purchase price of the 4,994 shares of the capital stock of the Fresno Canal & Irrigation Company was made to depend "should be and would be regarded and considered by said defendant [Cheape] as fully performed, and said balance of said purchase price of $110,000 should thereupon become immediately due and payable from the said defendant to said plaintiff"; that the plaintiff, prior to the 1st day of April, 1891, paid said sum of $2,000 towards defraying the expenses of the suit of Charlotte F. Clark v. Heilbron et al., and that that suit was begun, prosecuted, determined, and fully terminated and disposed of on or about the 1st day of April, 1891; that the plaintiff has fully performed all the terms and conditions to be by him kept and performed in the matter of the sale of t.he stock, and in the matter of the litigation in the :first count mentio.ned; but that the defendant has failed and refused, and still fails and refuses, to pay the balance of the purchase price, except the sum of $25,000, paid thereon on March 25, 1890, and the further sum of $3,000, paid September 25, 1892, etc. . 'rhe second count of the complaint alleges that on or about the
968 25th
}fEDERAL R;EPORTER,
plaintifl; sold and to the deinstance and requ.est, goods, wares, and merchandiae,;forthe agreed pmce of $200,000, and that defendant paid on thereof the sum of $90,000; that, by agreement and understanding between. plaintiff and defendant, the balance of the pur· namely, the sum of $110,000, became due and owing to plltintiff on or about the 1st day of April, 1891; thattlle defendant has, not made the said deferred payment, or any part thereof, except the sum of $25,000, paid on account theli'eof,pn the 25th of ;March, 1890, and the sum of $3,000, paid on account thereof eeptember 25, 1892; and that the balance, together with interest thereon, remains due and unpaid from defendant to plaintifl\, . , In I:1Upport of the second count, it is 'contended on the part of the plaintiff, first, that under the contract it devolved upon the defendant to dispose of the litigation, and that any unreasonable neglect in the prosecution of it by him entitled the plaintiff to treat tM'second paYUlet:j.t as due, and to bring suit therefor. It is doubtlesl:1 true that if,oy the contract, the burden was cast upon the defendant to prosecute the litigation to a conclusion, the law would not permit him to unreasonably neglect it, and thus defer the payment of money he contracted to pa;y; but it is not, in my opinion, a fair ,or reasonable interpretation of the contract to say that the burden wasup/:m the defendant. He was the purchaser, not the sl1l1er, of the property. The plaintiff, by virtue of his own· ershipof all of the stockof the canal company, claimed the right to (iiveJi; 1,000 cubic fee,t of the waters of Kings river by means of the canalS of the company, and to sell and dispose of it. It was thil:1 property, with its incidentals, that he offered and contracted to sell for $200,000, and that the defendant agreed to buy. Surely, neither party contemplated that the defendant was to pay the plaintiff $200,000 unless he got the water. It was the water that he was buying. It was that which constituted the very substance of the contract. It was that only which gave to the property any value. And, as the vendor's right thereto was then clouded by litigation, it was but reasonable and natural that he should undertake to remove the clouds. It would be unreasonable and unnat· ural to hold, from the language employed, and under the circumstances appearing, that the purchaser assumed that burden. The defendant, through his agents, evidently thought the purchase sufficiently desirable, notwithstanding the litigation, to make a large cash payment; but it was agreed that $100,000 of the purchase money .should not be paid until not only the litigation should be ended, but should be "satisfactorily disposed of and concluded." Satisfactory to whom? Manifestly,to the purchaser, to whom was given the· right to withhold the deferred payment until that was It follows from this construction of the contract that the burden waR upon the plaintiff to prosecute and conclude, llt his own expense, the litigation in which the canal company was engaged at the time of the making of the contract. ,That burden, the evidence shows, the plaintiff carried until the latter part of the
969
year 1890, at which time he refused to pay any other or further expenses of the litigation. If the evidence showed tbat the defendant in any way prevented the plaintiff from performing the obligation thus assumed by him, it might be held that his nonperformance was excused. But the evidence in the case furnishes no just ground for that contention. The defendant did not stand in the way of the prosecution of the suits, or in any way prevent their trial and determination. There is nothing to show that the defendant was not at all times willing that the litigation respecting the property be brought to trial and disposition upon the payment of the expenses thereof by the plaintiff. It is not shown that he, or the company controlled by him, ever refused any request of the plaintiff to bring the cases, or either of them, to trial at plaintiff's expense. To do so at his own expense was not his undertaking, and for that reason, if for no other, no negligence on his part is shown. It is further contended, in support of the second count of the complaint, that all of the litigation pending at the time of the making of the contract had been, prior to the commencement of this action, practically ended, and should be held by the court to have been "satisfactorily disposed of and concluded." 'rhe suit .of Poly, Heilbron & Co. against the canal company had been disposed of in the manner hereinafter explained in considering the first count of the complaint. Two of the other pending suits, namely, those brought by the Lower Kings River Ditch Company and the Last Chance Ditch Company against the canal company, were tried in the superior court of Tulare county, and by that court decided in MarchI 1892. The Lower Kings River Ditch Company alleged in its complaint that it had a canal 32 feet wide, 4 feet deep, and with a grade of 20 inches to the mile. It claimed the right to divert sufficient of the water of Kings river to fill its ditch, except at low water; and during low water it claimed all of the water of the river to the extent of the capacity of its ditch. Besides damages, it asked a perpetual injunction against the defendant, Fresno Canal & Irrigation Company, enjoining that company from diverting the waters of Kings river, or in any manner obstructing or interfering with the free flow thereof, except such surplus water as there might be over and above a sufficient quantity flowing in the river at the mouth of the Lower Kings River Ditch Company's ditch to supply its entire carrying capacity, and to supply all other ditches and all riparian proprir:>tors having rights superior to that company. The result of the trial in that case was a decree of the superior court giving to the Fresno Canal & Irrigation Company the first 100 cubic feet of the low water of Kings river. and giving to the Lower Kings River Ditch Company the next 159 cubic feet of the waters of the river, after which, as against the complainant in the suit, there was no further limitation in respect to the diversion of the waters. One hundred dollars damages, expressly adjudged as nominal damages, were allowed the complainant against the Fresno Canal & Irrigation Company. The Last Chance Ditch Company alleged in its complaint that it had a canal
970
FEDE<ML REPORTER,
30 feet deepnwith a grade of HHnches to the mile. It asked for.aninjunction.similar to that prayed for in the case of the Lowery Kings HiveI' Ditch Oompany,besides $5,000 damages. The. result of the trial ill the superior court was a decree 'giving to the'iE\'esno Canal & Irrigation Company the first 100 cubic feet of low water of Kings river, 'and giving to the complainant in the suit, the, LastOhance Ditch Oompany, the next 190 feet, after which,' as against the complainant in the suit, there was no limit respecting the diversion of the waters of the river. One hundred dollars damages, expressly adjudged as nominal damages, were also allowed the complainant in that case agaillst the defendant therein, the Fresno Canal and Irrigation Oompany. The plaintiff in the present case contends that the result in those cases was, or should have been, reaSOnably, if not highly, satisfactory to the Fresno Canal & Irrigation Oompany. It got, says his counsel, "the first 100 feet of the low water, and then its rivals got the'inext349 feet,and after that.it was not limited in these suits. ·[email protected] damages only were'given against it. Unless it was to have all the water, this should have satisfied it." The evidence sho'Wsthat at loW.. water Kings river. only carries a little over 30Q cubic,feet of· water. The finllings Of fact in the Last Ohance Ditch Company's Case puts it at not exceeding 320 feet. The stream: varies greatly at different seasons of the .year. Rising in the mOllntains, and being mainly fed by the melting snow, in the winter its: flow,Jssmall.W'hen the warm rains begin to fall,-gen'crally 'a:bout t,pe middle of February, in some seasons as earlJ as the middle ,of January, and in others not until:the end of FebruarY,-the'iwater begins to rise. By the 1st of March, generally, the river,.carries many thousand cublc feet of .water, and it increases during the months of April, ,May, June, and a part of July_ It then begins, to decrease, going down rapidly. The low-water period commences about the beginning of October, and continues until the COmtnancement of the warm trains, in the early part of the succeedingyeat'. The ordinary irrigation season ip that section . of the country is from February to September, ILndln January new .' land is often irrigated. The bulk of the irrigation, however, is , done from A.prilto August, during the period of high water. The contention of.plaintiff1scounsel that the result reached by the trial court in the snits of Lower Kings River Ditch Company and Last Cp.ance Ditc)l <OOmpanyagainst the canal company should be held to ha'\Te been sati9factory to the defendant rests largely upon the negativeanswergiven on the trial by the plaintiff to this question: "If Oanal' and Irrigation Company has the right to take out 100 feet befol'e theoo'is any restriction thereon, apd then other parties have a right to take out, numbers, 350 feet,. and then there Is no further restrlctlon, would that restrlctloll of 350 foot at ltny time when the Wltter is needed interfere with the company taking out wltter to the extent of the capacitY of its canals?" .
As has been said, thee-'\Tidence shows that during low water the entire flow of the stream:isbut little over 300 cubic feet. Accord. ing to the decision of court of Tulare county in the
CHURCH V. CHEAPE. .
U71
two cases already tried, the Fresno Canal & Irrigation Oompany is, therefore limited during the period of low water to the 100 cubic feet. It is not surprising, therefore, that defendant should be indisposed to regard the result in those cases as a victory for the canal company, claiming the first and paramount right to all of the waters of the river to the extent of the capacity of its canals, and that its counsel should be moving for a new trial of those cases. It is no answer to this to say that, during the period of low water, irrigation is not much practiced, and that during that period the canal company does not need more than 100 cubic feet. That may or may not be so, although it appeared in evidence that during J anuary last the canal company was supplying water for the irrigation of a large body of land, embracing some 60,000 acres. But, without, regard to its necessities, the defendant cannot be held bound to accept as satisfactory the result of litigation subjecting a paramount claim of substantial right to the adverse claim of others. . Of. course, no merely pretended or capricious dissatisfaction on defendant's part would be allowed to avoid payment of the money he con· . tracted to pay. Such dissatisfaction "must be actual, not feigned; . real, not merely pretended." ExhaustVentilator 00. v. Chicago, M. & St. P. Ry. Co., 66 Wis. 218, 28 N. W. 343; Gray v. Railroad Co., 11 Hun, 70; McCarren Y. McNulty, 7 Gray, 139; Silsby Manuf'g Co. v. Town of Chico, 11 Sawy. 183, 24 Fed. 893; Brown v. Foster, 113 . Mass. 136; Zaliski v. Clark, 44 Conn. 218; Gibson v. Cranage, 39· Mich. 49. The views thus taken in respect to the decisions in the eases of· . the Lower Kings River Ditch and the Last Chance Ditch Compa- . nies against' the Fresno Canal & Irrigation Company render it un· necessary to say anything upon this point in regard to the other pending litigation against that company. The first count of the complaint, as has been seen, sets up that after the making of the original contract, and about the time of the commencement of the action of Charlotte F. Clark v. Poly, Heilbron & Co., the defendant agreed with the plaintiff that if he (plaintiff) . would pay $2,000 towards defraying the expenses of that action, upon its termination, the condition upon which the balance of the purchase price of the 4,994 shares of the capital stock of the Fresno Canal & Irrigation Company was made to depend "should be and would be regarded and considered by said defendant as fully performed," and said balance of the purchase price should thereup()n become immediately due and payable. The answer puts in issue all of the allegations in respect to that matter, and upon tbat issue there is much conflict in the evidence. Poly, Heilbron & Co. were tenants in possession, under one Jere· miah 01 ark, of the Rancho Laguna de Tache, with a covenant giving them the right to purchase the rancho upon certain conditions. n was under that lease that they had brought the suit against the Fresno Canal & Irrigation Company to enjoin it from diverting any of the water of Kings river. Tbat rancho was of such great value, and was so largely riparian to the river that the suits based upon its riparian rights were regarded by the parties to this action, aa'
972
FBDEBAI. .BEPOBTER,
also byotheJ:!' appropriators of the waters of Kings river, against whom PolY', Heilbron & Co. also had pending suits for injunctions, as the IUmstformidable obstacle to the asserted rights of the appropriators.Charlotte F. Clark, the widow of Jeremiah Clark, had brought, .Or .was about to bring, suit in one of the courts of the state against Poly, Heilbron & Co. to annul the Ieaae under which they held possession of and claimed the right to purchase the Rancho Laguna. de TacM, and to that end had employed, as her Craig & Meredith, a prominent law· firm of the city of San Francisco, un.der a written contract, wIiich provided thattheY1were to bring and. prosecute the suit at their own expense, and for their services were to receive 30 per cent. of what they should reCQver by the suit over and above the sum which, by the covenant in the leaae, Poly, Heilbron & Co. were to pay for the rancho, to wit, $160,000; and Craig & Meredith had, for value received,assigned to Robert Perrin twenty-thirtieths of whatever should inure to them under their contract with Mrs. Clark, and had associated. hiro. with them aa associate counsel in all proceedings under the contract, agreeing to pay him therefor $2,000, he (Perrin) to pay his own personal expenses. The purpose of the assignment by Craig & Meredith of twenty-thirtieths of whatever fee should inure to them from the suit of Clark v. Poly, Heilbron & Co. to Robert Perrmwas to enable him to raise money with which to pay the expenses of that suit, which was expected and proved to be very costly; Perrin representing to Craig & Meredith, and expecting, that he could obtain the money from those appropriators and claimants of the waters of Kings River adversely affected by the riparian claim UPOll which the suits of Poly, Heilbron & Co. were based. Hjs plan was to ask $1,000 for each thirtieth of the twenty-thirtieths of the Craig & Meredith fee assigned to him, which money should be turned over to them, with which to pay the expenses of the suit of Clark v. Poly, Ileilbron & 00.; and, according to all of the evidence. in the case, the general plan was to induce the appropriators of the waters to take interests in the Craig & Meredith fee at the rate of $1,000 for each one-thirtieth thereof, by representing to them that the suit of Clark v. Poly, Heilbron & Co. would surely be won by the plaintiff therein, as a result of which the purchasers of interests in the Craig & Meredith fee would get their money back, with. some p.roftt, and at the same time work the substitution of Mrs. Clark to Whatever rights as riparian proprietors Poly, Heilbron &. Co.llad to the waters of Kings river, the disposition of whom, according to the assurances of her attorneys, was friendly to the irrigators, and who was willing. that the appropriators should divert all of the waters of the river except so much thereof as should be needed tor 'UJ,e uses of the rancho. Many of tb,e appropriators and claiman1js .of the waters of Kings river, upon tlJ,ose representations,: to()k in the Craig & Meredith fee"paying therefor $1,000 thereof, and receiving from Robert Perrin awritteJil:assignment Qf the same. Some of them took two-thirtieths, an,4t:Qneof them (Dr. who had, apart from his interest ill,the ·a.large quantlty,of land in the vicinity need,-
CHURCH t'. CHEAPE.
973
ing irrigation) took five-thirtieths, at the same rate. But the contention on the part of the plaintiff, Church, is that he did not contribute to the expenses of the suit of Clark v. Poly, Heilbron & Co. upon any such basis or understanding; on the contrary, that the distinct agreement between him and Dr. Perrin, acting for the defendant, Cheape, was that, if he (Church) would pay $2,000 towards defraying the expenses of that litigation, then, upon its settlement, the deferred payment for the stock of the canal company should become immediately due and pa:rable from the defendant to the plaintiff. There can be no doubt, I think, that Dr. Perrin was anxious for the successful consummation of the contract into which he entered on behalf of the defendant with the plaintiff. Indeed, his reward depended upon the success of the undertaking. As has been seen, one of the obstacles, and the principal one, as the parties seemed to think, in the way of that success, was the injunction suit brought by Poly, Heilbron & Co. against the canal company; and, becoming satisfied that the suit of Clark against Poly, Heilbron & Co. would be successful, Dr. Perrin entered into negotiations with Mrs. Clark by which he should have the right to purchase the rancho for a stipul8;ted sum in the event she won her suit, and thus get rid of the injunctions secured by the proprietors of that rancho. In order that the necessary money might be secured for Craig & Meredith with which to prosecute the suit of Clark against Poly, Heilbron & Co., Dr. Perrin, therefore, took an active interest in inducing those adversely affected by the injunctions that had been secured by Poly, Heilbron & Co. to contribute towards the raising of that fund. He first BOught the plaintiff, who was one ot the pioneer appropriators of water in the district in question, and a man of much infiuence among the irrigators, to induce him to contribute, not only for the direct benefit to be derived from the money the plaintiff might put into the fund, but also for the indirect benefit oJ' his. infiuence with his neighboring irrigators similarly affected by the injunctions. He sent for the plaintiff to come to San Francisco, and there, at different times, had several inteI'Views with him on the subject. The first is related by the plaintiff as follows: "He said that he had a scheme by which, if he carried it through, it would -settle all the litigation and all the troubles connected with the waters of Kings river, not only with the Fresno Canal Company, but with all other ditch companies; and he said that on the eve of the settlement of the title to the Laguna de Ranch,-a title which Poly-Heilbron set up to It,-on the eve of the settlement of that title, he said he had a pledge f-rom the parties that would obtain the land, a clear title to the ,and; that he should have it at a stipulated price; and he thought there was a great bargain In It, and he wanted to effect that arrangement. 'And,' says he, 'if you wiII pay a portion towards defraying the expenses of the lawyers In prosecuting It, If you will pay a portion, or if you will return home, which perhaps will suit ycm better, and you will go to all these ditch companies, and get them to put up,-just set forth to them what you are going to do, going to take the injunction off -of all these dltches,-If this is effected, I will take the land, and the injunction wiII be set aside, and they will all have -water.' 'Now,' says he, 'if you will .even go and get them to pay, so that we can prosecute this, and carry it through, and get the title, get a settlement of that case, why,' says he, 'you .shall have your money whenever that thing is effected. And,' says he, 'you <can wellaff'ord to pay a good sum towards prosecuting the suit, and you caD
Y9JllT,J:!.orse go to all 0rJ,t them. Jnto. I,t. 4-nd,· saYS.. he, 'I hav.,e.,a.gre.ed.to d, <,tbHars, more thatt rcan pay alone when"W .it ' mlltly parties interested;: and especially· you;' i. I wll1ml1ke it interestibg 'to .yotl.'He told me befoteuthllt whenevertbat sriit was settled, tbat J; ii1hOlllQ. get my m.oneY. 'Bpt,'aa:tf:\ 'he, 'here is the it can be 4PljI;J; told hilA,I what Ipo1;ild,do. I was interestlld.!,ll 4,1: this thne.when Y<lU#e:re. in the city. was anything said in 'regar,d':,o' attorneYs bis 'interests ib." that matter'!' A; Not: I come doml:. again. I wentback:.Q.: Before Wp leave r111lelli Was: anything s\lrid this conversation that you have been now.-any than 'you recounted,7 Was that the 8ubstance(j,( oJl! .1that wasi said? A. That is the. substance of it." L', ..l:i ";" :; ltlld. P
ffir;.s,. ,and
I ; t,)
,!' ,
,
,.,
··
The sooQlldinterview is,ith'Us state4 by the plaintiff: ,,"When"JIcame the se:cond to Fresno [San Francisco], he wanted I shoull\ ,go,4!Qw;nall,d talk with J:1,ls Mrs. IWlWt 9<>:'o/n 1Aere, alld me to Qraig and Merl!d,ii;h;,/ a" Mr,. Or,Rig say's;:Yes; tllisiS. Mr. Church, is it?' A,nd he says: n has been talkill.gto me 'about his indebtedness to you, and he wanted l,sh<illldexplainto you tbesltuatiollof the title.' And 1:le said that D9<Mr told :h;lm .,'tllat,y<>li' ..ope that911ght to PlI-Y liberally t<n,v.llJ' 4s '.p .f .... .... .. . ... tbat.. . we.,.ha.ve got the II.Uifon ha.nd.,and it is as .gOod a: SPit; .and I am. just as of winning It; as any suit that I ever Md;andM'r.'i :PetTh{ teHsme tliat on the settlement, on their getting this land thrbughll'J!eremilthl Jl:al'k,+M had got a proffer, he says, from M,rs. Plarl{ fpr :wvld.,ingc he :wWdefend. the title,. and carry it through, and get th.e title"em\llQ4ied ,ill her. he. says Mrs. Clark. there is an lieI', part to. deed. Mr, Perrin. certain cOlld1tions, which tie can Minjly .with,' andtbtswUl settle all' lItIgatIou, And Mr. Perrin tells lIie that.,oIl!ltbe"settlemelit· of! ,pay, .(Vou yQ\ll!' money,' And 1\JLr.. Is.s(). /twe.AA¥ p,ayhJmh!SWo:uey.' :M.;J:. Perrin .l\ll'i!t,igatiQJ;li, viJ.:'tually. out the power .<>t ,ally. dftC:hcOIDJ;lRti:r.·. On the river,-thelr do!p,g:;tnythinj:t,-from the sImple' fliCti,' :'hiesays;"i'f t1ie'Y'icbme in, which s4)mer them are coming in, (he: told m,e!: tihat he had seall' Helm), and they are coming in, and we are going. to :tMse that pay this, we aregqing to give . IAlld tb:erewas,.soinethat was, going to help in the mattl'1" wlI,S goiIig tilke an .ntel1lst. in t!;le land. And lie says: 'They ate all going to get 1iHelr 'money 1\ack..L.thbse· thlit help,-eitlIerin money or in land. or get ,he says': ,IYOUlShali have your money as soon as the ca!'!e they get a title to the land.' '! , rP.
While there is much confusion in the testimony of the plaintiff, think,. is pr.Eerrin agreed that if the plaintiff would help.pay'the expenses of the Olark-Heilbron suit, and it should bew<;)]}:,'bY:)frs;' Clark, and. he should acquire the rancho at the ul?0n, himself an.d Mrs. Clark, then all litigation subject O!f contract plaintiff and defendant should ,be considered: ended, and the deferred paYlllent become imMediately and payable.' .;version, 0f.tge which he, contributed to SUIt IS to ,SOme extent corrobol'ated.,pytthe witness Helm, who testified that he had conversati01J.swith,hotQ, D,r,Pel'rinand ;Robert Perrin in regard to that t6:state, ;11iQse conversations were, all:. , 'I .. '
:.' "Before tbesuit'w3S 'commenced, they 'wanted to raise 80: much money to '\!ll'osecute the suit/but'when it was I dOl notkno'W <.now. It wa.s· in regard tl) ItlllS tmnsIHlti(jil'With' tbe Laguna de '£a.che:lbmcho; It I couid'raise ilSO much
,'CHURCH V. CHEAPE.
975
money, they could win that suit for Mrs. Olark, and then they would lift tl;le Injunctions from our canal. I was Interested In a canal olit bere. And at the same time, if that 'was done, then they would be in a position to settle with Ohurch,-to pay Ohurch what the canal company was owing to him."
On cross-examination, this witness testified that the principal inducement for his contribution to the fund was to enable Mrs. Clark to prosecute, and, if possible, win her suit, in the hope that upon her success the injunction against the canal in which he was> interested would be removed, but that another consideration was, according to his understanding, that the contributors to the fund were to have an interest in any of the excess over $300,000, for whi,ch the rancho should be sold. Both of the Perrins explicitly deny all of the testimony on the part of the plaintiff tending to show that plaintiff contributed to the Clark-Heilbron suit upon the agreement or understanding that, upon its settlement in :Mrs. Clark's favor, the litigation referred to in the contract between the plaintiff and defendant should be considered ended, and the deferred payment therein mentioned become due and payable from defendant to plaintiff, or for any different reasons or considerations than applied' to and governed the contributions of all other contributors to that fund. And Mr. Craig denied that he had etersaid to the plaintiff that Perrin had told him that, on the settlement of the Clark-Heilbron suit, lie would pay the plaintiff money. , In this conflict of testimony, the court must look, in its endeavor ,to ascertam the truth, to corrobol'ating circumstances, and to thl' probabilities of the case. The suit of Clark against Poly, HeilbroJ!' & Co. was commenced in April, 1887; was tried during the winter of 1888-89; was decided by the trial court in favor of Mrs. Clark, sullsequent to which the supreme court of the state interfered with its further progress before the trial judge by writ of prohibition; and the suit was finally compromised and settled in the summer of 1890, one of the essential conditions of the compromise, secured by Dr. Perrin, being that the Rancho Laguna de Tache should be sold to the defendant, Cheape. Towards the expenses of that suit;.parties interested in irrigation, and injuriously affected by the injunction suits brought by Poly, Heilbron & Co., contributed, at the instance of the Perrins, $20,000. Beyond controversy, one, at least, of the considerations moving each, was the desire to get rid of the injunctions ob· tained by Poly, Heilbron & Co., and the hope that such aid would bring about that result; and, at least, as to all but two of the con· tributors to the fund, a further consideration was the assignment by Robert Perrin of one of the twenty-thirtieths of the Craig & Meredith fee for each $1,000 so contributed, under which the contrib· utor hoped, in the event Mrs. Clark should be succeSlSful in the suit, to get back the amount of his contribution, with some profit. To one of the ditch companies that contributed $1,000 no interest in the Craig & Meredith fee was assigned, and the plaintiff, Church, testifies that no interest therein was assigned to him in consideration of his Perrin's testimony is directly to eontribution to the fund. the contrary. The probabilities that the plaintiff received from
976 hini
FEDERAl. REPORTER,
at any in the next seven mouths seventy-five (75) of the bonds, of one thousand dollars ($1.000) each pf the Fresno Canal and Irrigation, Company now issued, in payment in full, for all sums due or to become due to me in illcco):"dance with, this agreement. M. J.C!lurch. "San Francisco. Cala., March 17, 1890. "Witness: M. P. Minor."
thojlsand 011/100 dollars ($25,0Q0 00/100), being an additional payment on the $100,000 00/100 due when llll)itigation is.ep.ded; and I hereby agree to accept
tr:aEi'
. . , "San Francisco, March 17, 1890. "I hereby agree my !leirs and assigns, to loan to Mr.M. J. Church ..yithiJi t$ndays twenty thousand doUarsfor seven months, Rt six (6) per' cent;, interest,' (In the security given to' me of (25) twenty-five bonds of the Fresno Canal & Irrigation Company, of' one ·thousand dollars each, asse<,lurity; ,and I also bind myself, my heirs and assigns, to take said bonds as pa;nnel1t W fulI for said loan aJi4,intenlst, provided the said M. J. Chjlrch asks or desires me to do so at t1te' expitatiou of same. , ' , "E. B. Perrin."
At the same time, Dr.. ment:
executed to the. plaintiff this instru-
977
And subsequently Dr. Perrin loaned the plaintiff $20,000, taking as security for its repayment the 25 bonds, and thereafter, at plain· tiff's request, took the 25 bonds in discharge of the loan. Counsel for plaintiff contend that this was "a formal admission of the fact" that there was then $100,000 fully due from the defendant to the plaintiff. I am unable to understand how that can be true. At that time not even the suit of Poly, Heilbron & Co. against the Fresno Canal & Irrigation Company had been affected by any disposition of the suit of Clark against Poly, Heilbron & Co., for the latter case was then still pending. Not one of the suits pending against the canal company when the contract was entered into had then been ended; and, even if the agreement under which the plain· tiff contributed to the expenses of the Clark·Heilbron suit be as contended by the plaintiff, the payment from defendant to plaintiff had not become due, because that suit was then still pending and undisposed of. It is plain, therefore, that counsel for plaintiff are in error in saying that the bond transaction of March 17, 1890, was an admission by defendant of the fact that the deferred payment was then due from him to plaintiff. To the contrary, the receipt which the plaintiff on March 17, 1890, indorsed on the original contract for the $25,000 in bonds, expressly declared that it was "an additional payment on the hundred thousand dollars due when all litigation is ended." Manifestly, that was a recognition of the fact that the litigation was not then ended. But the recognition did not stop there; it contained the further agreement by plaintiff "to accept at any time within the next seven months seventy-five of the bonds of the Fresno Canal and Irrigation Company now issued, in payment in full for all sums now due or to become due to me in accordance with this agreement." Evidently, both plaintiff and Dr. Perrin then thought the bonds were good, for the latter agreed to accept 75 of them at any time within the next ensuing seven months in full for all sums then due or to become due him under the contract, and Dr. Perrin loaned him $20,000 in gold on the 25 bonds he received on the 17th of March. This transaction, as has been said, is wholly inconsistent with the plaintiff's claim that the deferred payment of $100,000 was then due. The plaintiff, as the evidence shows, was in need of money, and, to get it, was willing to make the agreement in respect to the bonds. It turned out afterwards that the bonds could not be negotiated, although Dr. Perrin went to Europe in the effort to dispose of them, and brought back, at his own expense, an agent of foreign capitalists to investigate them, who, upon the advice of an attorney, based upon the fact of the pending litigation, reported adversely to their purchase. That issue was consequently abandoned. During all of this time the relations between the plaintiff and defendant and Dr. Perrin continued friendly, and plaintiff continued in the management of the company's business, and to take an active part in the litigation in which it was engaged. In the latter part of 1890 he refused to pay any further expenses of the litigation against the canal company, and then the trouble between the parv.64F.no.8-62
H78
FEDElU.t:·
REPDRT'ER, . vol.
64.
;tiesf;began,iias Decemberr:23;lBS9"theplaintiff was askiD.g: :fOll: the !balance ! of the purchase: money for the i!ltoclr, although not even had then been ended, . On that day hecaul!le(l the following/letter to be written to Dr. Perrin: IJ "Fresno, cal., Dec.' 23, 1889. "Dr.:FJ. I am requested by my uncle;Y, J. Church, wholshlmaelf verY bus)V to write a few lines to you. He was very much disappol$41:hat he get to see y01,1 while you wer.e here. He has aI'in calling on you fQrhis money. He has beenwMtJug now fot,tbi'ee any interest, and you have had the lUlnual alisessDlent, and Bold about two hundred and fifty thousand dollars worth'of water rights; and,as, the su'ts are so nearly settled, he now IlPpllj:ls:liq yoU. He wllAts the. suit set for·trial immediately, ,and pushed to Lawyerstj:ll1 ,him that he has more than complied with his a agreen;mtltnow, ,but he is disposed to stand by the compllny until the last enemy 'is' put down. His interest in' the matter would not abate any if he were, to! get ,his money now. He has commenced another enterprise that will , county, a,.nd that you, as WEill as all other cann?t but be grj:latly interested in." carry out the,seplane, he must have means, and l),eis in hopes that you WIll not deprive him'df'tbe use of 'hiS money any longer. He has made no demands on you the past) but has patiently, waited until the suits w.ere;all practically settle<l;, not to stop Wli\St have means tOgo ,pJl,wJthhis Sapitarium. The been cQnimenef!d. and it is a tJl,ecou,nty't9 have it stop. When completed, visit from '1111; oVeto·'the country, and Fresno will be Sought for health'; instead of being<:(}enounced as a sickly place. Y. 'J. feels that he must have SOttle ,'I1lQneY, next few weeks and if he can get it. ·'X.PW1\i, Respt.. L. fl. ChurCh, . '" '{!.' /, :; . ,I :
In' the of 1890, as has been said, ;a compromise was arranged'betwoonMrs. 'olark and Poly, Heilbron & Co" an essential ,conditiofi: o:f wJ;1ich was that defe:tidant, Cheape,should acquire the . ,de Tache Rancho;· defendant, through Dr.' Pel'rin, having ,previously secured an option for its purchase froIQ,.¥rs. Clark. AccOlldiIigly,he did acquire it for the canal company for $780,000. A certain 'cash payment ,was made thereon, and a deed therefor was placed in escrow, to be delivered upon the making of the deferred payments. I IIi DeceIQ,ber,1890, defendant contracted ,to sell to a Mr. Menzies, .of England" one-fourth of the, capital stock of the canal company for $250,000 ; and .in the early .part of· 18.91' the agreement was changed to one-third of the stock, for $333,000. Fifty thousand dollars was paid by Menzies to defendant in cash, and $200,000 was agreed to .be paid by him on the 1st of July, 1891. In Ma;)y 1891, the canal company authorized the .issuance of bonds on its property to the extent of $1;000,000, the main purpQseof which· was to realize by their sale the money with which to pay for the Rancho Laguna de Tache. At that time the plaintiff was very sick, and had put his claim>in the hands of his attorney, Mr. Firman Church, for the bringing suit thereon against the defendant. Since their disagreement, in the ,latter part .of 1890, be had been demanding of defendant that the deferred payment be madam full, claiming that it was.: f'l111y due, and threatening to bring suit ,therefor. Dr. Perrill: wen1nieiVerai times to plaintiff'shollae, to $ee ,him respecting
979
the matter. On one occasion, .the defendant, Cheape, accompanied him; on ,another, Robert Perrin; and, on another, it is claimed on the part of the plaintiff that neither of them was along. On that occasion,as well as on the other occasions referred to, plaintiff says Dr. Perrin talked the matter over with him, and said that he ought not to bring suit; that, if he did, he would be kept out of his money a longer time; that the money was due and overdue; and that he felt as badly about the matter as plaintiff did. "But," continued the witness, "he says: 'If you bring the suit,-we are trying to bond this canal, and if you bring the suit, it will stop the bonding. We expect to get a million of money on the bonds, and we expect to pay you right out in full. But, if you go on with this suit, it will so cripple us and embarrass us that we cannot bond the canal, and consequently you won't get YOUI' pay.'" Plaintiff testified that, certain members of his family having come into the room during this conversation, and one of them (his daughter) having started to go out, Dr. Perrin said: ' ' .. 'Look here. I want you to stop. I want to repeat now,' says he, 'In the presence of your people. You are the heirs,' he says, 'will be the heirs, to your father's estate, and,' says he, 'if your father should die, I want you to know just exactly the $ituation.'He says: 'This money is due, due Mr. Ohurch, and was due On the settlement of that quieting of that title on the Jeremiah Clark case, and,' he says, 'it is due, and to have been paid long ago, and if YOur father was to commence a suit, which he talks of doing; why he might not get his pay.' It would make Cheape mad. Tbat be would never pay. ,That is, he said it would. be ten years. , He said he could put up counterclaims against me that would keep me out of it ten years; !!ndhe went tbrough with his story. He says: 'Cheapeand me has talked this matter' aIf over between ourseives, and we are perfectly satisfied that the litigation is all oef and ended. All that amounts to anything is ended, and was ended when the Jeremiah Clark case was settled.' I spoke then, and says I; 'Now, Mr. Perrin, you knOw· wbat the agreement was between you and me. you feel perfectly satisfied that the suits are all ended?' 'Yes,' he says, 'I do.' He says: 'There is some little suits,but they don't amount to nothing.' He $ays: 'We have the land and the water. We can manage them all.'''
Do
The substance of this testimony of the plaintiff is corroborated by that of his wife, his. daughter, Mrs. Fanning, and his son, Geol'ge F. Ohurch. It is explicitly denied py Dr. Perrin, whose testimony in regard to that matter is, in effect, that what he said and agreed to was that if Menzies paid the money he had contracted to pay, ·of which he felt sure, then, and in that event, defendant would, as a compromise and settlement of plaintiff's claim, the amount of which was in dispute by reason of the plaintiff's refusal to continue the payment of the expenses of the litigation in which the canal company was engaged, pay plaintiff on the 1st of July, 1891, $60,000 in cash. This testimony on the part of Dr. Perrin is supported by that of de, fendant, Cheape, and of Robert Perrin, in respect to the conversa. tions heard by them between plaintiff and Dr. Perrin in plaintiff's housejin which those witnesses say that on those the expressed and distinct understanding was that $60,000 should be paid the plaintiff inmoneyi:>n the 1st of July if Menziesma.de the payment he' had contracted to make, and then only asa compromise andfuU ,settlement of plaintiff's claim.
980
I'EDBU.L REPORTER,
Lftrman Church tes\dfi.ed on behalf of the plaintUf that in May or.Tune,1891, he met Dr. Perrin on the street in Fresno,and told him thM phtintiff was urgiIig him (the witness) to commence suit for the, money claimed by plaintiff, and that Dr. Perrin said it was unnecessary. '''We are going to pay Mr. M. J. Church sixty thousand dollars." '[That Capt. Cheape was standing a little way off, and Dr. PerrinOOlled him, and said, "I want to say this before Oaptain CheapeJ" "Calls CaptainCheape up there," continued the witness, "and 'noWlsays he, 'I want to say in your presence to Mr. Firman Churchtllart weare going to pay Mr. M.' J. Church sixty thousan,d dollars on this claim.'" Being asked by plaintiff's counsel the question, "This -sixty thousand ,dollars,- I,believe you said, was to be _ on thedemand?"the witness answered: "Well, since I think of it, Dr. Perrin said they were negotiating for the Laguna de Tache Rancho, and that matter would be olosed up somewhere during the first days of July, and that, as soon as that was closed up, they would be ready to pay these sixty thousand dollars." The of the defendant, Cheape, is that he has no recollection whatever of having been called up by Dr. Perrin, or to have referred to 1)y Mr. Firman Church. Both Dr. :petrin and Robert Perrin testify that the latter was present at the conversation that was had between Firman Church and Dr. Perrin,but that the conversation was not that $60,000 would be paid the. plaintiff -on account of his claim, but that, if Menzies made the paYUlent on the purchase he had cotltra,cted to make, $60,000 would be paid tQ him in settlement of it. In' the 'sharp conflict of testimony, to which reference has been made, resort must be again had to corroborating circumstances, and to the probabilities of the case. In respect to the testimony of Mr. Firman Church, one strong circumstance tending to support the version given by the Perrins is that, at the time of the conversation with him, the only pending negotiation in regard to the Rancho Laguna de Tache was that pending with Menzies for the purchase by him of an interest in it, together with the other property of the canal company, on which he had agreed to pay $200,000 the 1st of July; so that it must have been that. transaction to which' Dr. Perrin referred when, according to'the testimony of Firman Church, he told him; "They were negotiating for the Laguna de Tache Rancho, and that that matter would be closed up somewhere during the first days of July, and, as soon as that was closed up, they would be ready to pay:the $60,000." And in ,respect to the contention on the part of the plaintiff that said to him that he and defendant, Cheape, had agreed that all of the litigation in' which the canal company'was engaged was practically ended, and that the balance of the purchase price ot'ithestock was due,it seems, apart from the denials of that testimony by the defendant and the Perrins,almost incredible, in view ofthefacts in regard that litigation,that they could have agreed that the litigation was practically ended. , Not a single one of the suits that were pending when the contract1was entered into had been disposed of, or, so far as the recordshows,'hasyet been disposed of,
to
lNTERSTATE COMMERCE COMMISSION V. CINCINNATI, N. O. & T. P. R. CO.
981
except the suit brought by Poly, Heilbron & Co. against the canal company. Two of the other cases then pending against the canal company have since been decided by the trial court adversely to its contentions, and are now pending on motions for new trial. Two of the others (those brought by Heinlen) are based upon a claim precisely similar in its nature to the suit brought by Poly, Heilbron & Co.; namely, that of a riparian proprietor, asserting the right to prevent the diversion of any of the water of Kings river. In view of these facts, it is in the highest sense improbable that defendant or Dr. Perrin agreed that the litigation was practically ended; and when to this is added the testimony of the defendant and of the Perrins that what was agreed to was that if the Menzies agreement was consummated, as was confidently counted on, and he should pay the money he agreed to pay the 1st of July, then, as a compromise of the dispute that existed between the parties here, defendant would pay plaintiff $60,000 in cash, I think there is no room for doubt that the agreement was as stated on the part of the defendant. Without regard, therefore, to the point made by counsel that the contract as testified to by plaintiff is at variance with the allegations of the complaint, there must be findings and judgment for defendant.
INTERSTATE COMMERCE COMMISSION v. CINCINNATI, N. O. & T. P. R. CO. et a1. (Circuit Court, S. D. Ohio, W. D. November 30, 1894.) No. 4,748. L INTERSTATE COMMERCE COMMISSION-QUASI JUDICIAl, POWERS.
The interstate commerce commission is not a court, but an administrative body, lawfully created. and lawfully exercising powers which are quasi judicial, as are tbe powers exercised by tbe commissioner of patents, and, in many respects, uy the heads of tbe various departments of the executive branch of the government. Its rulings and decisions are to tbe highest respect of the federal courts, and they are justly so regarded. Commission v. Brimson, 14 Sup. Ct. 1125, 154 U. S. 447, 474, 489. A preliminary injunction to compel a carrier to obey an order of the interstate commerce commission in reference to freight rates should be denied where the answer denies that the rates defendant charges, and which were passed on by the commission, were unreasonable or unjust. Shinkle, Wilson & Kreis Co. v. Louisville & N. R. Co., 62 Fed. 690, followed.
9.
SAME-INJUNCTION.
8.
SAME-PAYMENT OF EXCESS INTO THE REGISTRY OF THE COURT.
Upon motion for a preliminary injunction to restrain certain carriers from violating an order of tbe interstate commerce commission, the complainant made the alternative suggestion that, if the defendants be allowed to charge and receive present rateB, they be required to keep an account with every shipper, and to pay into the registry of tbe court the excess, same to be disposed of after tbe hearing as tbe court may order. Held, that tbis was in fact an application for a rule nisi, which ought not to be granted unless tbere was a very strong showing of right in favor of tbe complainant, which would authorize tbe granting of a preliminary injunction, and, on the otber hand, suflicient showing of probable Injury to the defendant to authori2lean alternative order, as, for illustration, to give bond and keep and file an account.
