476
FEDERAL REPORTER.
UNITED STATES V. MOONEY.
{Otrcuit Court, D. Massachusetts. PENALTIES-FALSE INVOICES-J URISDICTION.
May 2, 1882.}
The district courts have exclusive jurisdiction of all actions of penalties and forfeitures under the customs laws; and the act of l'farch 3, 1875, § 1, does not confer jurisdiction in such cases on the circuit courts.
The U. S. Attorney, for plaintiff. Chas. Levi Woodbury, for defendant. LOWELL, C. J. Action at law by the United States to recover $20,000 penalties alleged to have been incurred by the defendant in an importation of goods from Canada by means of false invoices. The defendant moves to dismiss the suit for want of jurisdiction in the circuit court to entertain it. The government relies on the statute of March 3, 1875, c. 137, § 1, (18 St. 470,) "that the circuit courts of the United States shall have original cognizance, concurrent with the courts of the several states, of all suits of a civil nature at common law, or in equity, where the matter in dispute exceeds, exclusive of costs, the sum or value of $500, and arising under the constitution or laws of the United States, or treaties made, or which shall be made, under their authority, or in which the United States are plaintiffs or petitioners, or in which there shall be a controversy between citizens of different states," etc. This language, in its terms, includes this case, because the suit is of a civil nature, at common law, and the United States are the plaintiffs; nevertheless, I am of the opinion that the circuit court has no jurisdiction of it. Down to 1875 it is admitted that the district courts had exclusive cognizance of all suits for penalties and forfeitures under the customs laws. The jndiciary act of 1789, § 11, (1 St. 78,) is, in its language and its intent, substantially like section ] of the act of 1875. The latter enlarges the scope of the former in some particulars, but not in its general pnrport. The judiciary act was comprehensive enough to include actions for penalties in which the United States were plaintiffs; yet it did not include them. That statute, in its ninth section, gave to the district courts exclusive cognizance of all suits for penalties and forfeitures incurred under the laws of the United States, (1 St. 77,) and this modified the scope of the eleventh section. The Cassius, 2 Dall. 365; Evans v. Bollen, 4 Dall. 842. Since that time the circuit courts have received concurrent jurisdiction with the distric t courts of many suits of a similar nature,
STATES V. MOONEY.
4:77
under the laws for the collection of internal revenue, to secure civil rights, to prohibit the slave trade, and many others; and, under the shipping act, it has exclusive cognizance of some cases which would seem to belong more properly to the district courts; but it has not, in so many words, been invested with jurisdiction of suits for penalties and forfeitures under the" customs laws. The question is whether this is intended to be included in the grant of 1875. The Revised Statutes of 1874, § 629, has 20 distinct paragraphs re-enacting the laws which granted original jurisdiction to the circuit courts, of which the first three represent section 11 of the original judiciary act, concerning civil suits between citizexis of different states, or aliens and citizens, or where the United States are plaintiffs; the amount in dispute being, in all cases, more than $500. Then follows: (4) All suits at law or in equity, arising under any aot providing for revenue from imports or tonnage, except oivil causes of admiralty jurisdiotion, seizures, and suits for penalties and forfeitures. This is another mode of saying that the jurisdiction of suits for penalties and forfeitures remains exclusively vested in the distriot courts as before. In the succeeding clauses the jurisdiction given by a great variety of statutes is carefully restated and re-enacted. If the statute of 1875 were intended to cover the whole ground of jurisdiction, and thus to repeal, by implication, all former laws, and blot out these numerous clauses of the Revised Statutes, it would diminish considerably the province of the circuit courts, while it would enlarge very much that of the state courts. It would limit the circuit courts by confining them, in suits upon patents, oopyrights, and a great variety of other cases arising under the laws of the United States, to those in which the matter in dispute exceeds $500. Such a construction, says McCrar.1J, C. J., would be disastrous. Third Nat. Bank of St. Louis v. Harrison, 8 FED. REP. 721-2. It would enlarge the powers of the state courts by giving them concurrent cognizance of all such suits where the amount exceeds $500; for a recognition of concurrent jurisdiction is a grant of it, though it may not have existed before. Postmaster General v. Early, 12 Wheat. 136. I do not mean that congress can confer jurisdiction directly upon the state courts, but if congress creates rights between party and party, the state courts, by the necessity of their organization, are bound to enforce them, unless prohibited. From these considerations I infer that the broad language of the first section of the act of 1875 was intended to apply to those ordinary suits to which similar words in section 11 of the act of 1789, and in
clauses 1, 2, and 3 of section 629, Rev. St., by their connection and context, were necessarily confined, and was not designed to affect, either affirmatively or negatively, the exclusive jurisdiction of the circuit courts under the various statutes to which I have alluded, nor their concurrent jurisdiction with the district courts under other statutes, nor the exclusive jurisdiction of 'the district courts of suits for penalties and forfeitures under the customs laws. In short, the argument is that section 11 of the act of 1789, and its reproduction in the Revised Statutes, included within itself the exception of cases. not otherwise provided for by more special and definite provisions; and that the act of 1875 carries a similar limitation, being intended simply to enlarge that part of the jurisdiction conferred by section 11, applying it to more cases, but to cases of a similar character. The restricted meaning attached to the general words by the usage of 86 years is presumed to continue. Motion to dismiss granted.
PERRY
and others v.
MEOHANICS' MUTUAL
INs. Co.
(Oircuit Court, D. Rhode Island. March 11,1882.)
1.
1NBURANCE-CoNVEYANCB BY MARRIED WOMAN-CONTRACT, WHEN
Vom.
A parol contract to convey land made by a married woman without her hUllband joining in its execution, even if made with her husband's consent, is void ab initio under a statute which provides that a married woman may convey real estate by deed in which her husband joins. No insurable interest can exist under such a contract, 2. INSUUABLE INTEUESTB-SEVEUALTY ON .'OINT INSURANCE. Where Ii building was located on the division line of the
lands of two different persons,each being a half owner of the building, and they jointly take out a policy of insurance on the building, and it afterwards transpires that one of them had no insurable interest in the building, this fact alone will not prevent the other party from recovering the insurance, in case of loss of the building by fire, to the full extent of the interest she has in the policy. Insurance without insurable interest, if included in the same policy with interests which are insurable, does not vitiate the policy except as to the non-existent interest. Where property insured is alienated, and all rights under the contract of insurance are properly assigned, the contract becomes an insurance on the property of the assignee, and ceases to be an insurance on the property of the assignor; but where, in case of loss, payment merely is to be made to a third party, the insurable interest in the property muat belong to the assignor at the time of the loss.
S
ASSIGNMENT OF POLICy-EFFECT ON INSURABLE INTERESTS.
v.
MECHANICS' MUTUAL INS. CO.
479
4. SAME-SUFFICIENT PROOF OF LOSS-WAIVEH-EsTOPPEL.
Where the insurance agent; clothed with full po wers, specifically agreed to a waiver of proof of loss, such waiver is conclusive, and the company is estopped to deny such waiver on the ground that a written stipulation for arbitration, afterwards signed but never carried out, says that the agreement to arbitrate shall be sUbject to the terms and conditions of the policy. 5. PRACTICE-CONFORMITY WITH STATE RULES.
United States courts conform as near as may be to the practice, pleadings, and modes of procedure in civil cases, other than equity and admiralty, with the rules of practice of the states in which they are held. 6. SAME-MISJOINDER OF PARTIES.
Where the state statute provides that no action shall be defeated on account of the misjoinder of parties, if the matter in controversy can lie properly dealt with and settled between the parties before the court, and that the court may order aDy party improperly joined to be stricken out, the same practice will be adopted by tIle United States courts held in that state.
At Law. Tlwmas A. Jenckes, Charles A. Wilson, Francis W. Miner, and Wm. G. Roelker, for plaintiffs. Beach <t Allen and Henry B. Hyde, for defendant. COLT, D. J. this is an action upon a policy of fire insllrance, and the case was heard by the court, jury trial having been waived. The policy insures Ellathea Perry and A. J. Perry in the sum of $500 on a. barn upon their farm in Barrington, Rhode Island. It is dated January 21, 1880, and runs five years. It is in evidence that the fire occurred September 24, 1880, and that the building was totally destroyed. It further appears from the testimony that in 1877, when the title to the whole farm was in Ellathea Perry, she and her husband, John A. Perry, made a verbal agreement with their son, Adelbert J. Perry, to convey to him one-half of the estate; the understanding being that he was t6 live upon the farm and erect a house and barn upon his portion. The son entered into possession. A cottage was built on the land called his. The barn covered by this policy of insurance was also built, one-half being situated on the land considered as his, and the other half on the' land of his mother, Ellathea Perry. The son, according to the evidence, paid for the cottage and one-half the barn. He first advanced $1,000 and then from $400 to $500. He afterwards built an addition to the house. From 1877 until the summer of 1880 he remained in possession of the premises including the house and one-half of the barn. Then it was decided and agreed that he should give up his interest in the estate to Ellathea Perry, in exchange for some property in Providence. As part of this transaction we find, under date of September 3, 1880, an assignment on the back of the policy, by A. J. Perry, of aU
480
his right, title, and interest in the policy to Ellathea Perry; alid an indorsement of assent by the company through Snow & Barker, agents. The company now resists payment on several grounds. It is contended that the parol agreement or contract to convey being made by a married woman, even with the husband's consent, and though the person pays the purchase money, enters into possession, and makes improvements, is absolutely void under the laws of Rhode Island, which provide that a married woman may convey real estate by deed in which her husband joins; and that consequently A. J. Perry, at the timo the policy was taken out, had no insurable interest in the property, and that therefore the policy is void, at least to the extent of this claim under it. But admitting that this agreement is void, as it appears to be, (Bishop, Married Women, vol. 1, § 601, and vol. 2, § 180; Pitcher v. Smith, 2 Head, 208; Lane v. McKeen, 15 Me. 304; Warner v. Sickles, Wright, 81; Miller v. Hine, 13 Ohio St. 565 ;) and admitting further that no insurable interest can exist under a contract which is ab initio void, and not enforceable in law or equity, as it seems is the law, (May, Ins. § 96; Stockdale v ·. Dunlop, 6 M. & W. 224; Steinback v. Fenning, 6 Eng. L. & Eq. 41; Tuckerman v. Home Ins. 00. 9 R. 1. 414; Oolumbian Ins. 00. v. Lawrence, 2 Pet. 25, 47,)-still it does not follow that because one of the parties to a policy has no insurable interest it thereby becomes invalid. Insurance without interest, if included in the same policy with interests which are insurable, does not vitiate the policy except as to the non-existent interest. It remains valid for so much as constitutes a legitimate insurable interest. May, Ins. § 74; Peck v. New London Ins. 00. 22 Conn. 575. If A. J. Perry, therefore, had no insurable interest, Ellathea Perry could still recover to the extent of her interest; and in this case it so happens that if no interest in the land or buildings passed to A. J. Perry under the agreement and subsequent proceeding, all right and title to the whole premises, and so to the whole of the barn insured, remained with Ellathea Perry, and consequently her insurable interest would cover the whole of the property, and she could recover the full amount of the claim. This would clearly be so in the absence of any condition in the policy requiring the true title or interest of the assured to be stated, which is the case here. That one of the assured should prove to have a good title to the whole of the property can hardly be considered the concealment of a material fact, for it is difficult to see how it affects the risk. On the other hand, if we assume that an insurable interest of some kind in the building existed
PERRY V. MECHANICS' MUTUAL INS. CO.
481
in A. J. Perry at the time the policy was made, which is <loubtful under the authorities, still we are of the opinion that the assignment was a valid transfer to Ellathea Perry of that interest, so that she thereby became the holder of the right to the whole policy. Fogg v. Middlesex Mut. Fire Ins. Go. 10 Cush. 337. We are also of the opinion, the testimony being that the agent of the company was notified that A. J. Perry had given up his interest in the property insured to Ellathea Perry, followed by the assignment, on the back of the policy, of all his right, title, and interest to her, with the written assent of the company, that this was a substantial compliance with that condition in the policy which provides, among other things, that "if said property is sold, (except when payable to a mortgagee,) or if this policy is assigned without the written consent of the said compauy, or if the assured makes any attempt to defraud the said company, that in every such case the risk thereupon shall cease and determine, and the policy be null and void, unless confirmed by a new agreement written thereupon, after a full knowledge Qf such facts or circumstances. " The form of assignment is the kind adopted where the property is alienated, and the purchaser desires all rights under the contract transferred to him. Upon such an assignment the contract becomes an insurance on the property of the assignee, and ceases to be an insurance on the property of the assignor. It is different from another species of assignment where, in case of loss, payment merely is to be made to a third party j for there the insurable interest in the property must belong to the assignor at the time of the loss. Fogg v. Middlesex Mut. Fire Ins. Co. 10 Cush. 337. As to the failure to furnish proofs of loss, the evidence of John A. Perry and A. J. Perry, standing uncontradicted, to the effect that an agent with full powers specifically agreed to a waiver, is conclusive. After making such a verbal agreement, upon the faith of which the assured may have acted, the company cannot now deny any waiver upon the ground that a written stipulation for arbitration, afterwards signed, but never carried out, says that the agreement to arbitrate shall be subject to the terms and conditions of the policy. It is true that, in our view of the case, Adelbert J. Perry, trustee, has no interest in the subject-matter of the suit, and that he is, therefore, improperly joined. as plaintiff. But the United States courts conform, as near as may be, to the practice, pleadings, and modes of procedure in civil causes, other than equity and admiralty, of that v.ll,no.5-31
482,
FEDERAL
of the states in which such courts
held.
Rev. St.§ 914.
And it
is provided in the Public, Statutes of Rhode Island, (1882,) p.555, § 33. that no action shall be defeated on account of the misjoinder of parties, if the matter in controversy can be properly with, and settled between the parties before the court, and the court may order any party improperly joined in any action to be stricken out. The name of Adelbert J. Perry, trustee, may be stricken out. and judgment entered in favor of the other plaintiffs for the amount of the policy, with legal interest from November 24, 1880.
and Wife v. F ANEUIL
HALL INS.
Co.
(Oircuit Court, n. Rhode Island.
March 25, 1882,)
INSURANCE-TERMS IN POLICY OONSTRUED.
Where a policy of insurance contained the following clause: U If the interest of the insured in the pollcy be any other than the entire, unconditi9nal, and Bole ownership of the property for the use and benefit of the insured" or if the building insured stand on leased ground, it must ,be so represented to the companv, and so expressed in the written portion of the policy, otherwise the policy shall be void,"-a policy taken out by husband and wife on the wife's separate property, without disclosing how the husband and wife were respectively interested in the property, is not void. All that is requisite under such a condition in the policy is to satisfy the insurers that the estate is absolute and unencumbered in the insured; or,if not, to what extent encumbered, or what estate less than a fee-simple is owned by the insured. 2. SAME-WIFE'S ES'fATE-JOINDER OF HUSBAND.
Where the property insured was the property of the wife, held as ber sole and separate estate, according to chapter 152 of the General Statutes of Rhode Island, which gives the husband only a revocable right to receive rents, and a vested remainder for his life after the death of the wife, there can be no objection to his joining in the application for insurance. S. SAME-PROOF OF LOSS-WAIVER.
The condition in a policy reqUiring proofs to be furnished in some detail, with the certificate of a magistrate, and undertaking to pay the loss 60 days after these proofs have been received. may be waived; and where the company sent an agent as adjuster with authority to find out the amount of loss, and such agent told the insured to forward a memorandum of items of the things burnt to the company, and he would return in a day or two and settle, it constitutes a waiver of formal proofs of loss.
Motionfor a New Trial. Tkos. A. Jenckes, Chas. A. Wilson, Wm. G. Roelker, and F. W. Miner, for plaintiffs. Beach cf: Allen, for defendant.
