662
FEDERAl, REPORTER,
vol. 42.
HARDIN
v.
CASS COUNTY.
(Cvcuit Oourt, W. D. Mis8ouri, W. D. June 9, t890.) 1. LIMlTA'l'ION OF ACTIONS-RUNNING OF STATUTE-NoNSUIT.
Where plaintifl', in an action in the federal court on county bonds, declares on fictitious ponds in addition to those held by him, merely for the purpose of giving the court jurisdiction of thtl amount,a1;ld takes a voluntary nonsuit, the institution of such sUit: and bringing of another su.it within one year, as provided by Rev. St. Mo. § 6784, aoes not arrest the running of the statute of limitations. The equitable construction given the statute allowing a new action after sufl'ering a nonsuit cannot be invoked by one who knowingly practices a fraud on the jurisdiction of the court. After a successful plea of the statute of limitations to a part of plaintifl"s claim, judgment may be rendered for the balance, though it is less than the amount necessary to give the court jurisdiction, and though the petition on its face shows that the part of the claim agatnst which the statute was pleaded was barred at the commencement of the action; since plaiJ;ltiff in bringing the suit was not boun.d to anticipate that defendant would plead the statute. ,
S. JURISDICTION-JUDGMENT FOR PART OF DEMAND.
At Law.
Action on bonds. '
Karnes, Holmes Krattthoff, for plaintiff. W. S. Shirk and J. F. Lynn, dl'lfendant. PHILIPS, J. This is an nction founded on certain ,bonds and coupons issued by the defendant couuty. The petition contains three counts. bonds, of $500 each, issued August 26, 1869, The first counts on due si:l(,years,after date. The counts on three bonds and twentythree coupons, two bonds for $500 each, and one for $250, dated July 11, 1870, due nine years after,date, with interest at 10 per cent. after maturity. The answer interposes tpe plea of the s14tute of limitations. It is conceded that the statute has run against the bonds set out in the first count, and the cause of action, therefore, is bll.rredas to them. The statute of limitations is also interposed as to the c!1use of action set up in the second count of the petition. It appears that the statute of limitations has run as to coupons from 6. to 20, inclusive, attached to bonds 1, 2, and 13, described in the count, and the cRuse of action as to said coupons is therefore barred. , , The more important question arises on the third count. At the time this action was begun the two bonds numbered 25 and 26 were prima facie barred by the statute of limitations. To avoid this plea, the plaintif;f alleges that on the 5th day of July, 1889, 13 days before the statute of limitatipns had, completed the bar, he instituted suit in this court on said bonds 25 and 26, and on the 12th day of September, 1889, he took a voluntary nonsuit therein, and instituted the present suit January 29, 1890, within the year allowed by the state statute after such nonsuit. To this defendant makes answer that in such action begun by plaintiff on the 5th day of July, 1889, he alleges "that he was the owner and holder for value of bonds number 23 and 24, and of the bonds herein described as Nos. 25 and 26, and that said bonds remained due and unpaid, amounting in the aggregate to the sum of $2,000, and prayed judg-
«
HARDIN V. CAS!!I COUNTY.
653
ment thereon; that at the time of the bringing of said mit the said plaintiff was not the owner of said bonds Nos. 23 and 24, nor did the said bonds 23 and 24 remain unpaid, but, to the contrary, no .such bonds were ever issued by the defendant, and that bonds of that number had been issued by the defendant dated August 26, 1869, and due August 26, 1878; that judgment had then long since been rendered upon the first, in case No. 1,082, and the second in case number 942; and that the said judgment had long since been fully paid, and satisfaction of the same entered upon record, and second bonds fully canceled. Defendant avers that said second bonds Nos. 23 and 24 were only mentioned and declared Upon in plaintiff's p.etition for the purpose of enabling the plaintiff to perpetrate a fraud upon the jurisdiction of this court, by apparently giving the court jurisdiction as to the amount of said action; that this defendant at the September term, A. D. 1889, of this court, filed in said cause an answer stating the aforesaid facts,and that thereupon the plaintiff dismissed ita said suit. The defendant avers that the bringing of said action, and the dismissal thereof as .aforesaid, was not the commencement of an action, and the su.fi'ering of a nOhsuit therein, within the meaning of the statute of the state of MissourLin such case made and provided." The court finds thefadts thus cbarged by defendant are substantially true. The aggregate amount of the four bonds sued on in the first action was just $2,000; and, in order to increase "the amount in dispute" to over $2,000, $100 of interest coupons attached to said bonds 25 and 26 were counted 011. Waiving here any discussion of the question whether, under the act of March 3, 1887, said interest coupons cotild have availed to make the debt" exclusive of intel'est" over $2,000, it is indisputable that, without the two bonds 23 and 24, the sum sued for was not over $1,100. The question, therefore, to be answered is, was sUdh action taken by plaintiff in the first attempt such institution of a suit as was contemplated by the law-maker as sufficient to stop the running of the statute of limitations? Section 6784, Rev. St. Mo., provides that, "if any action shall commenced within the times respectively prescribed in this have ehapter, and the plaintiff· therein suffer a nonsuit, * * * such plaintiff may commence a new action from time to time within one year after such nonsuit suffered or such judgment arrested or reversed." A voluntary nonsuit, such as the voluntary dismissal of the action, is held by the supreme court of the state to be within the terms of this statute. It is also to be conceded to the plaintiff that authorities entitled to the greatest respect hold that a suit begun within the statutory period of limitation, in a court not having jurisdiction of thesubJecl-lllatter, may be within the saving clause of the one-year provision. Theleadihgcase; perhaps, is that of Coffin v. Cottle, 16 Pick. 383. The plaiiItiff brought his action withiIl: the time limited by law against th'e admh;iistrator recover deM due from the intestate, obtained judgInent, an execution, which was returned nulla bona, and plaintiff then ,$ued out a writ of sci; fa., suggesting waste, and before judgment the defendant's letters were to be void,on the grouUdthat
to
854
FEDERAL REPORTER ,
'vol. .42·
. the probate jUdge, ha\1ing an interest in the estate, was technically with6ut jurisdiction them. The' plea to the sci. fa.; alleging the invalidity of the jqdgment 'by reasoDof the nullity of the first letters of administration, was sustained by the ,court. Within,,,ne yp,ar thereafter the action was l'ellewed,in'ld it was held by the court th'at tpe first action in contemplation of the statute. This case was the was'f011owed inOaldwell v: Harding,' 1 Low. 326. Therethe defendant was administrator appointed by the court in Massachusetts. The plaintiff brought his actiiQn against the administrator in the circuit court of the United Stl1tesin: Netv York, which was dismissed for want of jurisdibtion.Afterwards,and within the year, he renewed the'action against tne administraior in ,the United States circuit court for the district of Massachusetta. ' ]O)WltLL, J., applied the doctrine in' Coffin v. Cottle to the facts of this case, ·iJ.ndheld that the action was not barred. This was predicated of'theprovision of the Massachusetts statute of limitations, whioh,;provided,intetlflUa f that if an, action is brought in d\ltlseason, and is abated or defeated in of any defect in form, elc., or of &"mietake in the.fQrm of proceeding, the plaintiff may commence a new 8etionforthe same cause within one year after the determination oftheoriginlllsuit. InJJllathetBlyv: 'Weathersly, 31 Miss. 662, the plaintiff'filed his bill in <lhatwery, which was alterwardsuismissed by the court for 'Want of prosecution. Afterwards, Oll' motion, the cause was reinstated on the docket, anJin the further progress a final decree was rendered in favor of tlie complainant. Upon appeal to the supreme court', the decree' of the'lower court' :was reversed, on the· ground that the tnl1J! had 'no jurisdiction of the cause at the time the decree was tetidehid, "iriasmuchasthesuit"badbeen dismissed by the chancery court, and after the expiration of the time at which the dismissal took pliloe' Jurisdiction the suit ha.'1 ceased." Within two months after· the judgment and reversal the suit was renewed. ,It was helJ that the drst suit stopped the running oflthe statute of The court
all
say:: : \
H:Jt,,! ( ::. - . ,.· , " · ; , ; ' " " , ' I ,. _ ;
I
..It is,true that' the' decree rendered ..in behalf of the complainant was deelated void because lobe j\\l'lsLiiction of the chancer)' court over the cause had ceasMtiefdre,the decree wit'smaLie; yettbe dt'cree. though void in law, was operativeauo efft'ctuaHn form,in so; intich that the defendant found it 8ary1 W fljsQrt to this (:PUI;t in order to Jlave it declared ;I, nullity. It was a in law by tl)ill court, decree of a court o.f<:<>tnpetent it c\luld not beton, properly set at, naught until it reversed. Its .1:' ., depelldedoij. Ii doubtful question of jurisdiction." .' .. ,
,'L'he'lcase most relied on by defendant is that of Railway 00. v· ·'Jfanees, 49 -Ark'. ,248,4 S. W. Rep. 778. The plaintiff instituiJed the first action before 1ft jl!lstice of the peace to recover damages for the sum of $125, in which ,he p.revailed.. 'Onappeal i tel thesupreme court the judgment was vacated';on, the :ground 'that the justice' had not jurigdietion in such cases overa'&nM'exceeding:$liOO··, Within a yel1r'thereafterlheaction was ramstitllted,. and' it 'Washela tooe-withiu the provision olthe statuteo No jmparti81 eye :<ian :read, auyof the decisions in question without
,"
HARDIN II. CAEm COUNTY.'
'655
discovering that the existence of good faith on the part of the actor in the first action instituted is the'basis .of the "equitable' oonstruction" supra, after statgiven the:statute. Chief Justice SHAW inOoffin v. ingthat'the statute is remedial; and should, have such construction as would best carry into effect. the intent'Of the legislature, and that after a fixed time the presumptjona:rising from the creditorS remaining a certain length of time silent would be that thEi debt was discharged, observed: "But this presumption does notarise if the creditor resorts to legaldiligence to recover his debt within the time limited." So LoWELL, J;, in . Oaldwell v. Harding, observes: "The statute intends to guard suitors against 'mistakes .which are not of, substance, whether large or smidl." And again, in the Manees C'ase,49 Ark. 248,4 S. W.Rep. 780, the same thought was' the mind oUhe court. The chief justice 'observed: ' "Itcantlot be saId to be of theatate to encourage the citizen ,to ,take upon, himself the task or the hazard of dere.rminiDgthevalidity of tbe proceedings of the courts. *, * * It is Dot.to'be presumed tMtthe framell! of this remedialla w, the only object of which was to relieve meritorious creditors,intended to invite tbe debtor who had,'gonethrougliall the fOI'OOS 'ota -,trial of hia c3use!ina judicial tribunal. andse6tl' the result recorded ill ,the form and with'tbeapparent effect of a binding jUdgment 01; decree, afterWards to take the law in his oWil"bands, and wholly disregard thecouWs proceed"j , I '':" ' Ings."
Ootae,
":':1'4e statJte in question, ag"all'the courla be equitably c(m,suued, as its purpose is to protect honest,suitors.': ,As itisdeaignedto accomplish the ends ofjusti<ie"6I: mquoetbono.it iSito!be,presumed tha.t', whenever and wherever it should ,be made to appear to the, court adminthat there was no of no istering the. sion oOaw,in the inind of the actor infirat'selecting his remedy o.r the forum, but that tpok the course he, to evade theJaw obtairi im uURuthorized'ju,d'gment, ,the court, would say'to such,.!-" suitor: "Yon are not withinthe equity of thElStatute. It was to promot¥ justice, and, not 'to 'aId fraud on .Ill Smith" v. McNedl, 109:U. S. 426,,3 Sup. Ct. Rep. 319, the first action failed simply by reasoll of the, omission in the plead,ngs of the allegation of a jUwhich fact, hpwever, actually existed. The plaintiff was allowed to reinstitute his action within the year, as provided by the Tennessee statute.' Mr. Ju'stice WOODS mad'e the following suggestive observation:", ' " '" " "Defendari,ts in, error, however, conteno, that, the bringing of a ,SUit in a Was gross nE'gligence, and that the. curcourt haVing nO extendmg the terms of the statllte to let in o:np rent of authbrity 1S gUilty of it. ,Cases might be'supposed, perhaps, where the want of juri$diction in the oou.rt was so clear that the bringing of the suit therein would &hQW 8uch gros!! Ii"gligence and Ils to Cqt the party QtJ (rom the benefit ,of the, as ihn act\OD: pf qe, brOllgllt in of admiralty or a bill in equity should be filed before ,a the peace. l3utthe between these parti,es, wWcq was .begun December 31; 187.3, is iarfrolll being!sllcliaca.'le.' nl?tbirig irithe '.retlord tq':iJhow tliatlt fori any' inherent want· ofjnliisaictioll' 'wbi'cIHt ,was " ;':' , "" .,; :d;;,u' ,'" ,:-N 'J!." ,d;
say,
he
656
FEDERAL REPORTER,
In the case at bar there was not only an "inherent want of jurisdiction in the court iii it [the suit], was brought," but the plaintiff knew it, and BOught, to evade the admission of the legal fact on the face of his petition by declaring On two other bonds he did not have, and which were not in He was not guilty of "gross negligence," it is true; but, if in the opinion of the supreme court the benefit of the 'statute should be denied to a suitor guil ty of inexcusable negligence, how much more so should it be denied him when it is manifest that he counted on a fictitious demand in order to give his cause a colorable standing in court, merely to get a demand below the jurisdiction of the court into jUdgment, as he preferred a judgment on his genuine claim from the federal rather than, a'state coutt. 'The, whole legislation of congress respecting the jurisdictiOn of the United States courts, especially since indicates that. its policy was and is to restrict the numperand of suitsin,thisjurisdiction. This is made quite manifest by 'section 5 bfthe judiciary :act of 1875, which " in in a circuit court, or removed from a state 'C9JUrt to. a circuit court of the U nUed it shall appear to the sa.tisfaction Of sa,il,leh;cl)it court; at 8JlY time after .uch suit h8&been brought or removed that sucb sujt does not really ;andsubstantially jnvolve a dispute or controversy properly within the jurisdiction of said circuit court ... ,* ... for the ,purpose of creat\ng a case cognizable or removable under this act. the said 19rcnitcourt shaUproceed no filrther therein; but shall dismiss the suit. Qr remand 'it to the court from w.hich it was removed, 8S justice may requh·e. anq .shall make suCIUlrdeX' as ,to C08tSl)8 shall be justo·· latter clause pi this secti9n, such action of the circuit court w:as:'ffiwe reviewable. hyJhesut>remecourti but, as further evide,ncing the ri),ihd and policy of congress in this direction,by the act of .March 3, this right ,of aI>pe81 is taken away. ,Al:ld the action of the su:preIne pourt on this indicates a determined and settled policy on 'its Jl8rt to carry the very letwr this legislative policy. So that no at what ,stage of the whether the parties raise.or such question or not, the moment the .court observes, from the actual facts,that the matter in litigation is not within the of the cOl:lrt, it will sumntarily dismiss the proceeding. Hawleyv. 'Po,irbanks, 108 U. S. 548, 2 Sup. Ct. Rep. 846; Hawes v. OakvJ,nd, 104 U.' S. 459; G,'ace v. Insurance Co., 109 U. S.278, 3 Sup. Ct. Rep. 207; Bernard v. Stebbins, 109 U. 8.341, 3 Sup. Ct. Rep. 252; Farmingta:nv;fia;bu,ry, 114 U.S.138,5 Sup', Ct. Rep. 807, Mr. Justice MILLER in r. Oakland, awpra, observed of this statute that it 'I strikes a blow,J;iy,its fifth secticJn, and to impose upvn; those courts the cogUlzance of. cases not Justlybelongmg to them. **'>11:'. It is believed tbat a rigid"Emforcement of this statute by the circuit WOUld, relieve them ?f m'any cases, which have no proper placeorl'thedocket" . . . . . ·. ,., . ' , ' is, fine 'of. carrying ()utthe spirit .of both l!ta.tu1e/l '\luder coos14eration to leave where he, voluntarily placed himself the suitor who has sought to misuse and abuse the jurisdiction
,:n'
HARDIN 'V. CASS COUNTY.
657
of this court to obtain its aid in the collection of a claim not cognizable by it. With full knowledge of his rights, the plaintiff saw fit to let the statute of limitations run against his demand while he was juggling with the court and the defendant; and he ought not to expect the same court to invoke the spirit of "equitable construction" to release him from the trap he sprung on himself. This practice in bond litigations has, dou btless, been pursued by other suitors, until plaintiff regarded it but following precedent to adopt it. But it is a bad precedent, and one that can never ripen into a right by prescription. I feel constrained, therefore, to hold that the statute of limitation has also run against the cause of action stated in the third count of the petition· .Defendant insists that the "matter in dispute" involved in the second count, being the only real cause of action left to the plaintiff, is below the of the court, the plaintiff ought not to recover on this count, arid the action should be dismissed. To this I cannot consent. In Leev. Watson, 1 Wall. 337, the court say: "By matter in dispute is meant the subject of litigation, the matter for which the suit is brought, and· upon which issue is joined, and in relation to· which jurors are called· and witllesses examined." Prima facie, the amount claimed in the petition is the amount in dispute, and this determines the jurisdictionin the first instance. Id. This governs the question of jurisdiction until it is made to appear that the real demand is less. Hilton v. Dicki'il8cm, 108 U. S. 166, 2 Sup. Ct. Rep. 424; Gray v. Blanchard, 97 U. S. 565. Although the petition may have shown on its face that the causes of action stated in the first and third counts were barred by the statute of limitations, yet, unless the defendant· had seen fit to interpose the bar by appropriate plea, the plaintiff would have proceeded to judgment thereon. The plea of the statute is personal to the defendant. It might, as debtors often do, have waived the privilege. A creditor is not required to anticipate, in every case, such defense, and on the bare expectation of the plea refrain from suing. After a successful defense· to one or more causes of action counted on in the petition, the jurisdiction of the court is not ousted to prevent it from proceeding to judgment for the amount found on trial to be due and owing to the plaintiff; forsooth it may be less than $2,000. Upton v. McLaughliJn, 105U. S. 640. It results that the issues are found for the defendant on the first and third counts of the petition,. and for the plaintiff on the second count, except as to the coupons numbered from 6 to 20, inclusive, as hereinbefore stated. Judgment accordingly. v.42F.no.12-42
658
FEDERA.L . REPOR1'ER,
. Ib:ciE et al.v.· EGE et at (Clb'cw/:&Court,N. D. Neio Jrork.
.
In:anaction against severafdefendants upon a contract signed byone of them for '811, a joint answer was interposed whioh practieally admitted the exot Six years after,j;be m.aking ot suob .answer, and aftertbe eVldenoe had all been. tllo)l:en, and SOlDe of the wltnesses had dled, one of the defend'antsaBked leave to IDe an amended answl'l;r denying the aUllllority of'hiB co-defend,'''nt to eXl)cute the contract forhi!Do Beld,that the applicaUon came'too 1.ate.
OF PLs,U)l1'l,Gs,.,LAOJI1lS.
.,
'.
:,,:A,t, .Law.
On motion bydefendaJ;l;t Milo C. 'rl'reatfor.leave to amend aSUJ>plementalanawer. Ward, for,plllintiffs. ,:: ',.: ',., ", [,Ohg.rlea H.. . BrCYW1l. ""nd John E. for defeqdant Treat.
,,:, r
defendants, 'who arecitizeIis o,fPennsylvania;lo this court in May, 1884. The ,summons was served personally aIid ,by'publtcation UpOil the defendant. Milo C.· Treat. ,Theservice,was 'completed Febiuary 20, 1884, and answer ·baving ,been' ser\ted, Judgment, by.' default was entered against'all of the defundants. !fhis default was :opened on. the 21st'of April, 1884, upontbe verified'answer'interposed on behalf ofall the de.fendan,t8, the affidavit of 'Charles.H. Brown, who acted,i1S 'OClunsel'for.Treat,and upon :the 'affidavits,of William Armstrong, the law parinerqfBrowh, and Joseph A. ·Ege,one Of the defendants. Thelatter made- the affidavit of merits arid, verined the answell. Pursuantto ,atipulat'ion, tbetestimonywas taken o.ut., of court; dghtto objection !,beingreserved untiltheirial.' The taMng of testimony commenced on the 24tlt ofApril,. 1885, and was coriclq.ded May 18,1.886. Thismotion for l(>,£j;ve ,to amend ·was not made until the cause .came on for trial at the Utica term on the 31st day,of,March, 1890. ,In order, to appreciate the character of the motion a brief review of ,the fac& ill necessaiI'Y. Tbe plaintiffs,at the time in question, were copartners undier the name of. the Ftiendship Oil Company. Prior to the 1st day of JuJy j 1881 ; the parties; to' :the suit had various transactions itUeiaseB. ofJo11 rlandsin.Allegany county, ,N. Y ·· which they held as tenants in common. On that day a setUenient was effected'andthe leases were divided between them.. In this division. the plaintiffs took the leases of the Nelson and Dodilon farms, upon which oil wells had been started, and ,vhere it was expected oil would be found, but the value of the wells had not been demonstrated at the time of the settlement. The theory of the settlement was that if these wells proved productive the division of the leaseR was an equitable one. If they proved unproductive the defendants would have an undue advantage, they having received the Richardson lease covering property of ascertained value. To meet this contingency it was agreed that if the wells then being drilled on the
J. This aotiobwas originally commence<! ilil the supreme court New York in Novembet, 1883, 'and was removed by the
RICE ". EGE.
659
Nelson and Dodson fal'Ilfs, moved failures the defendaQ.ts would pay the plaintiffs $1,000 to equalize the settlement. The agreement upon whi<;lll the plaiQtiffs sue is as follows: "This 'altteement, made this 1st day of July, 1881, between J. A. Ege, H. B. lIuffand M. C. Treat of the first part. and the Friehdship Oil Company of the second, part, witnesseth: That, whereas a settlement of various mattprs bas been made between the parties hereto. it is hereby, for value received. agreed on the part of the parties of the first part that they will. if the well now being, pot down on the Nelson farm in Wirt proves to be unproductive as lUI oil-well, or not a paying well, and the well on the DOdson farm is not, the said first parties will pay to the second parties one thousand dollars; and in case either of those wells are good the parties of the second part shall assign to the 'parties of the first part the M. W. Taylor lease, dated July 2,1879, recorded in Liber 1 of Leases, page 82, in Allegany Co., N. Y. A paying well. abO'ie referred to, shall mean a well in which oil is produced in paying quantities. "J. A. EaE for himself. H. B. Huff and M. C. Treat. , ',,' "THE FRIENDSHIP OIL OOMPANY.
By · .M. NORTON."
Theeomplaint alleges and, the plaintiffs contend that, after necessary tests, the wells on the Nelson and Dodson farms proved unproductive, and they bring this action to recover the $1,000 agreed to be paid, in that event, by the defendants. The answer admits that in the year 188.1 the were interested, as individuals, with the plaintiffs in the ownership, of a. large number of oil leases in Allegany ,county, N. Y.; "that a settlement was had of their affairs on or about July 1, 1881, and a division of said leases was made between the plaintiffs and defendants." 'l'he answer further contains t.he allegation "that the terms of said contract, and the understanding and agreement of the parties at the time. of theexeQution thereof, required that the plaintiffs should have given the defendal)tsan opportunity to ,examine said wells, and an opportunity to convince themselves as to the unproductiveness and non-paying qualities of said wells in said contract and the plaintiffs' complaint referred to,before tlley became liable, if at all, to pay the saiel sum of $1,000 referred. to in said contract." The defendant Treat now asks that these clauses be stricken from the answer so far as they relate to him, and 'that an allegation be added denying the authority of the defendant Ege to execute the contract for him. Hansks further that he be permitted to file a sQpplemental answer, sworn to March 18, 1890. This answer contains.a general denialshnply, except it admits that prior to July 1, 1881, the parties were owners.of the oil leases as allllged in the complaint. It will be seen that the original answer, of 1884. practicallyad. mits theDJaking of the contract by the as alleged in the complaint, the defense there stated being, that the wells upon the Dodson and NE"lson,farD;ls were not sufficiently tested to enable the plaintiffs to maintain Upon the issue th\18 joiner! the testimony has all: beenqli{en" the cB.useprepared fo): trial. The. motion is opposed. upon the grormd ,of laches, and for the reas.on that since the testimony has ,seveflll witnesses who could sustain the plaintiff upon the new
;
See, also, Suydam v: Tt'Uesdale, 6 McLean, 459; Rugglesv. Eddy, 11 Blatchf. 524; Loom 00. v. Higgins, 13 Blatchf. 349; Medbury v. Swan, 46 N. Y. 200; Fost. Fed. Pro §§ 167, 168. Upon authority it would seem quite clear, therefore, that the amendment should be denied; certainly there is no precedent for granting it without the imposition of very stringent terms'. i Furthermore, the plaintiffs ask, as they have an undoubted right to do, that, if the motion is granted, they be permitted to amend' their complaint and take further testimony upon the new issue. Surely, it would be unfair to the defendant to require him to pay a large bill of costs, and subject him to the expense of further proceedings, unless it can be seen that the proposed amendment will inure to his advantage. Having read the entire testimony I am constrained to say that it would be unavailing. The amendment would take the question of Ege's authority from under the admission and make it an issuable one, but no amendment can remove from the record the fact that the original answer was til,ed, or the circumstanqes in which it was interposed. As evidence, these facts· are well-nigh as disastrous to the defendant as though crystallized into a formal admission. The'dilemma is a plainone. Let it be assumed for a momentthat the defendant'Treat 'is correct in his theory thal Ege's ittits were unau.thorized. ,Re 'swears that he was personally served with the summons. He knew-he' must have known-that he was being sued on account of Ege's acts!, He knew further that unless hp,
RICE 11. EGE.
661
answered the com plaint judgment would be taken by default. What then would have been his course tested by any rational standard? Surely confidence in Ege would have ceased with the commencement of this suit. There would have ben an angry interview, a sharp dismissal and no further joint undertakings. Treat would have retained his own lawyer, taking good care that he was not Ege's lawyer, and would have put in a separate defense. Having been betrayed once he would have been vigilant not to place himself in a position where he could be betrayed a second time. His answer would have exposed the fraud of which he was the victim and would have denounced the conspirators. But, on the other hand, if plaintiff's version is the correct one, Treat's conduct in leaving the defense. toEge is perfectly natural and in accordance with the rules which govern the actions of men. In other words, is not Treat's conduct in intrusting the defense to Ege in direct conflict with his present position that Ege's act!; in making the contract and putting in the answer were without authority from him? A party sued on a forged note does not, usually, intrust the defense to the forger. It seems incredible that the action should have been oommenced, the attachment levied, Messrs. Annstrong & Brown retained to defend, the judgment pro conjessoentered, the answer prepared at Bradford, the home of the defendant, the default opened and issue joined, without Treat's knowledge and consent. Either he was cognizant of all this, or he bas no standing in court, and the action so·far as he is concerned is undefended. No such inference is permissible. The fact that the management of the defense was left solely to Ege is in hannony with the theory of the plaintiffs that he was the trusted agent of Treat and Huff as to their joint interests in Allegany county. that the answer states the defendants' strongest ground .ofdefense, and that it did not occur to anyone to dispute the authority of Ege until the turn of fortune's wheel made Treat the only responsible -defendant. The motion is denied.
RICE et
ale
V. EGE
et ale
(Circuit Co'Urt,N. D. New York. June 80, 1890.) 1.. PRINCIPAL AND AGENT-LIABILITY OF PRINCIPAL.
Upon making division of several oil leases in which plaintiffs and defendants were jointly interested, plaintiffs took a lease for land which had not been tested for oil, and received a written agreement, signed by one defendant in behalf of all the defendants, to pay plainti:IIs $1,000 in case the oil-wells on the land transferred to plaintiffs should be unproductive. The defendants who did not sign this ag-reement knew of the exchange, and acquiesced in it. Their did not deny the execution of the agreement, and there was evidence to show that they authorized their co··defendant to sign the agreement, and afterwards ratified his act. Held, that they were bound by the agreement. ' Said agreement having defined an unproductive well as one in whi<!h oil is not produced in'Paying quantities, evidence that the wells were drilled through the str!\tum.in Wh.icn oil W!\S fQun.,ll,ifat all, in that countY,at $3,000, and only a trace of oil discovered, is sutllcient to ahow that the we1lll were .
.J.