572
FEDERAL REPORTER.
contract, or correct a mistake in one, is to change the language of it in some material particular concerning the subject-matter or parties thereto. When reformed, as compared with the contract contained in the imperfect or erroneous writing, it may be said to be a new one, but in fact it is the true and only contract between the parties. The defendant has had the benefit of the premium paid on this risk by these parties; but by reason of the plaintiff being erroneously named in the policy as the assured, instead of the owners thereof, it is not liable, as the policy stands, to pay the loss incurred and insured against to anyone. Upon the transaction, as stated in the bill, there is a strong implication that there was a mistake in this particular. Spare, who is merely a creditor of the owners, does not appear to have had an insurable interest in the property, and therefore any insurance in his name was nugatory. Spare v. Home M. Ins. Co. 8 Sawy. 618; [So C. 15 FED. REP. 707.] Lurch Bros. were the owners of the property, and they wished to insure it for the benefit of Spare, their creditor. As this could only be done by insuring it in their own names for his benefit, it is not unreasonable to suppose that such was the understanding or agreement. Either this must have been the case, or the parties, more intent upon the end to be accomplished than the choice of proper means, carelessly or ignorantly effected the insurance in the name of Spare, rather than their own. But the bill alleges that the agreement was to insure in the name of the owners for the benefit of the creditor, and that the mistake occurred in the writing of the policy; and this the demurrer admits to be the truth. See Brugger v. State Invest. Ins. Co. 5 Sawy.304. Putting aside the technical points made in the argument for the defendant, the equities of this case, as stated in the bill, are all with the plaintiff. An insurance on this property was duly effected for his benefit, and whether the mistake in the name of the assured was made in the application for the insurance, or in reducing the understanding of the parties to writing in the policy, is,'in justice and right, of no material consequence to the defendant. The demurrer is overruled.
UXITED STATES v. FIELDIXG and others. (Circuit Court, D. Missouri. )Iarch,1882.)
1.
ox SALES-REV. ST. § 3425. Commissions to purchasers of internal-revenue stamps, under Rev. St. § 3425, must be paid in cash, whether the stamps purchased are paid for in cash, or the purchaser obtains a credit of 60 and gi,es bond as pro,ided by such section. SAYE-PAYMEXT IX STAMPS.
2.
The practice of the internal re,enue department of paying such commissions in stamps instead of money, is not authorized by the ,tatute.
UNITED STATES V. FIELDING,
573
At Law. William H. Bliss, Dist. Atty., for the United States. Noule tf; Orrick and James T. Allen, for defendants. MCCRARY, J. This is a suit upon a bond executed to the plaintiff by defendant 1\lansfield as principal, and the other defendants as sureties, under the provisions of section 3425 of the Revised Statutes of the United States, which is as follows: "The commissioner of internal revenue is authorized to sell and supply to collectors, deputy collectors, postmasters, stationers, or any other persons, at his discretion, adhesive stamps, or stamped paper, as herein provided for, in amounts of not less than fifty dollars, upon the payment, at the time of delivery, of the amount of duties said stamps or stamped paper, so sold or supplied, represent, and allow, upon the aggregate amount of such stamps, the sl1m of not exceeding live per centum as commission to such purchasers; but the cost of any paper shall be paid by the purchaser of such stamped paper. The proprietor of artkles named in Schedule A, who furnishes his own dieor design for stamps to be used especially for his own propriet"ry articles, shall be allowed the following commissions: On amounts purchased at one time of not less tllanlifty dollars nor morethan live hundred dollars, !lve per centum; and on amounts uver live hundred dollars, ten per centullI on the whole amount puchased: provided, that the commissioner may, from time to time, deHvel' to any manufacturer of friction or other matches, cigar-lights, or wax-tapers, a suitable quantity of adhesive or other stamps, such as may be prescrihed for use in such cases, without prepayment therefor, on a credit not exceeding sixty flays, requiring, in advance, such security as he may judge necessary to secure payment therefor to the treasurer of the Unitell States, WIthin the time prescribed for s11ch payment. And upon all bonds or other securities taken by said commissioner, under the provisions of this chaptpr, suits may be maintaine<l by said treasurer in the circuit or district court of the United States, in the several districts where any of the persons giving said bonds or other securities resille or may be found, in any appropriate form of action."
Defendant Mansfield, under the firm name of F. Mansfield & Co., was engaged in the manufacture of matches, and under the section above named the commissioner of internal revenue was authorized to furnish to him a suitable quantity of adhesive stamps, on a credit cf not more than 60 days, upon taking bond and security for the payment therefor within the time prescribed. It was for this purpose that the bond sned on was executed. The case of the government is set out fully in It second amended petition, to which the defendant Mansfield answers in substance as follows: Firs:. He admits the execntion of the bond sued on. Second. He avers that defendant furnished his own die and design for stamps to be used especially his own matches, and was therefore entitled to 10 per cent. as COlllmissions upon all purchases over :3:>00. Third. That he purchased stamps amounts at each time of over $500, in all to the amount of 8il3,955, on a. predit of 60 days upon each order; and that he was entitled as commissions thereon to the snm of :3i1,39,j.50. Fourth. That he has received as such commbsions only the sum :36:3,305, and that he has paid on account of such purchases the sum in all of :3633,030. Fifth. Defendant admits that there is due plaintiff, on settlement, the sum of :39,509.50. which he has tendered to plaiiltiff and now offers to pay.
FEDEUAL REPOHTEIl..
To this answer the plaintiff demurs. The controlling questions are-First, whetber the statute contemphttes payment of commissions in casb; seeol/d, whether allY commissions are to be al1vwecl where a credit of 60 clays is given and bond taken under the statute above named. The section above quoted undoubtedly contemplates the payment of commissions to purchasers of stamps in cash. It plainly provides that the proprietor who furnishes his own die or design shall , be allowed commissions, on amounts over $500, of 10 per centum on the whole amount purchased. It seems that the practice of the del)urtment has been to semI to the purchaser his commissions in stamps, counting such stamps as cash. That is to say, upon an order for stamps to the amount of $500, the commissioner of internal revenue would send to the purchaser who furnished his own die or design $550 in stamps, thus assuming to pay $50 of commissions with $50 in stamps. But this is not authorized by the statute. There is no pro\'ision for paying commissions in anything besides money. Power to allow and pay commissions means power to allow and pay the same in cash; that is, in the same which tIle government receives upon the sale. No doubt it is competent for the commissioner, with the assent of the purchaser, to make any arrangement which amounts in substance and legal effect to a sale according to tbe statute. It is not necessary that the purchasers of the stamps should actually pay over their face value to the commissioner and receive hack the commissions in cash; but, unless a purchaser waiY-es his right to it, he is entitled to that which is equivalent to 10 cents in cash upon each dollar's worth of stamps purchased. Nor can it be said, as contended by the district attorney, that the extra amount of stamps sent as commissions should be regarded as an adc1itionaJ and separate purchase of tbat amount, upon which only 5 per cent. commission could be allcyved. In eaeh instance there yvas but 011e single transaction. And if the commissioner saw fit to send upon an order for $1,000 worth of stamps $1,100 in stamps, and the defendant chose to accept them without 01jection, this amounted to one purchase of $1,100 in stamps by the defendant. lYe are also of the opinion that commissions are to b3 allowed ,,-hether the purchaser pays cash or gives a hond and obtains 60 days' time. The bond is in lieu of present payment. It is provideu for in a prm-iso whieh was evidently not intended to affect, in any "ay. the provision previously made "ith the respect to commissivns. There is no reason, founded either in justice or public policy, for holding that the purchaser \\"ho avails himself of the privilege of giving bond should be deprived of his commissions; and there is certainly nothing in the terms of the statnte that requires snch a construction. Such being the trne meaning of the aet, we hold in the present case that the liability of the defendant :'Iansfield as principal in the bond sued on is to be ascertained by charging him with all the stamps purcbasell by him from the gorernment, including such as were sent to him in ex-
OSGOOD'S ADM'nS V. ARTT.
575
cess of the amount ordered by him, and deducting from the total thus ascertained 10 per centum commissions allowed by law. It follows, if the answer is true, that the sum tendered by Mansfield is the sum due, and for which the United States is entitled to judgment. If, therefore, the district attorney stands upon the demurrer to the answer to t?e second amended petition, there will be judgment accordingly agamst the defendant Mansfield. We do not at present pass upon the defense of the sureties on the bond, as it may not be necessary to do so. If the plaintiff accepts the sum tendered and the defendant Mansfield pays it at once, no question as to the rights of the sureties can arise. If this is not done, the court will, upon being so advised, consider and determine the questions raised on behalf of the sureties.
OSGOOD'S ADM'RS V. ARTT.
(Circuit Court, N. D. Illinois. 1. NEGOTIABLE PAPETI-TRANSFER WITHOUT
1883.)
By the rules of the law-merchant, the purchaser of negotiable paper, payable to ortIcr, uniess it be indorscd by the payee, suLJject to any detense which the payor has against the payee. He iJecomes, in snch case, only the equitable owner of the deht or claim evidenced by the security. ON SECURITY.
As a general rule the legal tit'e to negotiahle paper, payable to order, passes only by the payee's indorsement on the security itself, or on a piece of paper so attached to the orrginal instrument as, in effect, to become a part of it, or incorporated into it. nY WORDS IN SEPARATE
3.
'Yords of assignment and transfer, contained in a separate instrument, executed for a wholly ditlerent and distinct purp,)se, arc not equivalent to an indorsement, within the se, tied rules of the law-merchant. OF DEFENSE.
4.
A snbsequent indorsement made after notice of the payor's defense, although the paper was without notice of defense, will not relate back to the time of purchase, su as to cut off the equities of the payor against the payee.
At Law. TV. H. Slcift, for plaintiffs. Edsnll, Hall'ley ,t' Edsall, for defendant. Justice. On the fourteenth day of jlay, 1856, the defendant, Artt, executed and deliwred to the Racine & Rail· road Company his note, whereby, ior yalue receiyed, he promiserl to pay to that company or order, at the expiration of frye years from 10, 1856, the sum of $2,300, together with interest at the rate of 10 per cent. per annum, payable annually on the tenth day of jlay of each year,-principal and interest payable at the office of the com-