CROSBY LUMBER CO,_ t/. SUlTlt
this case is gained. It may his whole cas, may be decided. Beside' this, while the right of examination of books is l1B Stated, this qualification must also be noted. If the defenddents denythaf complainant is a stockholder, oruverthat the charter or by provisi,onstherein, modify this right, be raised which co'uld not be tried at this stage of the, case, The defendants :need not e\7en present them at this stage. On the whole" it seems'prematute to grant order, now. The motion is dismissed to the renewal of the motion at a later stage of th' without case.'" ,
CROSBY LWBER
Co.,
".SUlTlI. '
',(Ctrcuit CIrWI't Qf Appeals, Third Circuit. April139,189lJ.)
L
OoRPOlt.l'HONS-EXcLUSlON
and others formed a to which plaintiff contributed 1I1arp part ,Of the capital, in tbe fO,rm, of real and personal property. Afterwards it wu ,ag'reedtio form a corporation, the partners to take stock tberein .. to We full aJllQunt Ofttleir :i:qterest in ilie Jirni as' sucb interest shall appear on the 1st day of October, 1888." A dispute arose as to the of plaintitf's interest, and in Janllary, 1ll89" the corporation declared his interest in the concern forfeited, and excluded him from any share in its management. He then brought an action for damages. ,which. em the trial, took tbe form of an accounting as to his interest. HeW. tllat p"laintiff was entitled to recover the value of his Interest at the time it wa.i1 take!' trombim, and tllat in 110mputlng the same there should· be included, not ollly the technlcalprqfits, but also tl1e.increase in of the of the cOl1cern. , On tbe amount thus found to be due, plaintltf time he was excluded from the concern. W88
B.
entitled to interest trom the "
a.
Plain.ittf testified tbat he. also yut into tbe concern a steam' boiler owned by him, f But on the bQoks the company he was credited with only 1200, the other $200 being credited to, N.· another stockholder. who, had formerly been in P8.rtne.rshipwith plaintiff. . Defendant otfered in evidence a pa.per executed lonlr &fte.rllle.f<irm.ation of the co.rlloration, and purporting to beana.ssignment bIR. of a half interest in tne boner. . BeJel, that tile paper W88 properly exclude4, 88 it could have no etfect upon any title previousiy vested in plaintiff.
°
"
ERROR.....I'lIISTRUchoNS.
Where instructions to the jury are proper in themselves, tile' glvillR erroneouda reason,the,l'efor, which is not applicable to the, case, and which manifestllcoul not have udsled the jury, is'nt) ground for reverilal. IL BAMB-REvlBW-AsslGNlIlINTS OJ' ERROR. '.rile assignments of error are to be considered with reference to thetbeory on which the ,cause was actually tliad by mutual consent of the parties, and the f011llal claim madein'the statement and declaration is not controlling. 0. BAME-W1Il1GBTQJ'
Where is evidence to sustain a verdict. a circuit court.of appeals baa 110 power to reverse the judgment on the ground 'that' the 'jul.'l erred in the amoullt of,theirll.nding.' '
01' VIl:RDlCT.
'$rJ'or Court ofthe United .States for the Weatern Distpct of Pennsylvania. . , , . '. · . iAction J.ohn Smith against the Crospy Company, IAwitEid;brought, ,originally in a state court, .a.nd removed to the below. Verdict and judgment for .plamtiff ill .the Bum of &10,527.84. Defendant brings ,agreement, John Smith, LouisL. Newerf, and punder the name of Smith,
FEDERAL REPOBTEB;voL 51. lumber. After conducting for some time, they converted the firm ,into a corporation Called the ",CrosbyLumber Company," turning over to it all the firm partner Was to have stock in proportion to his interest in assets. ' the firm 84,itsbould appear October 1, 1888. A dispute arose between Smitb'il.nd the directors of the corporation as to the amount of Smith's interest,andnostock was issued to him. In January, 1889, the comtherein forfeited. Smith thereupon brought pany decl,ared' this action for damages. At the trial the case took the form of a statement of accounts between the parties. Smith testified, among other things, that he put into the firm of Smith, Newerf & Meyer various items of real and personal property, which were turned over to the corporation; that he and Newerf had been in business together prior to. the formation of that firm, and, had turned {ntoit; that afterwards they had a settlement between themtheir it appeared that all property so turned in belonged selves, from in facUo'Smith,and that it was thereupon credited to him personally upon the newftrtil'g books. 'l'he books themselves contained among the credits to John Snitth the following item: "Account ofL. L. Newarf, $3,312.15." S'mith also testified that he put into the Crosby Lumber Company a steam boiler, ,worth 8400. It appeared that the company only credited him with $200 for this item, and that it credited the other $200 to Newerf. Defendant offered in evidence a paper, executed in January, 1889, purporting to be an assignment by Newerf to the corporation of one half interest in the boiler. but it was excluded on plaintiff's objection. charged ltgainst Smith an item of $200, which The company had one of the directors testified was paid to one Rose for a tract of 5 acres of had agreed to convey to the company, but which land, he. had failed,todo·. Smith testified that this piece: of land was not included in the agreement; that he had purcnased it..individually some time before, but had failed to obtain title because of some outstanding claim; that he had used the lands for banking logs, but because of the imperfect title was compelledto abandon it, whereupon he obtained permission of one McKean to use a certain tract belonging to him for purpose; that when'theCrosby Lumber Company was formed McKean refused to allow furtherttse. of this land without compensation, whereupon it was purchased by. the concern for the $200in question. In respect to this matter the <lourt charged the jury as follows: "There is another question as to the shortage of $200 on tbe five-acre claim. If you believe the statement as to that, you will consider that item,'as it i'3within Ure-statute of frauds. If you believe the defendant's statement iJl regard to that, * * * then you will find the value of that, and deduot it {rom the total amount of the valuation of the plaintiff's interest. " IIpon this question the plaintiff proposed the . following point;· "1'hecontract to convey.the properly afterwards purchased from Rosewas8.n oral one,aridis within the statute of frauds; and hence the qharge against the p]ainmr of $200, the amount paid to Rose, cannot· be' sustaihed." To this the court·all.swei'ed;"Affirmed
in ,tbebll$me$8 of manufacturing and
the
CBOSBYLUMBEB CO. II. SMI'rH.
65
if you find the facts in relation to this item to be as claimed by the plaintiff." The other facts fully appear from the opinion. Simon Fleischmann, (Joseph L. Greenwald and Sheridan GO'I"fnn, on the brief,) for plaintiff in error. J. M. McClure and P. R. Cotter, (Eugene MuUin, on the brief,) for defendant in error. Before ACHESON, Circuit Judge, and BUTLER and GREEN, District Judges. ACHESON, Circuit Judge. By a written agreement dated September 20, 1887, John Smith, (the plaintiff below and defendant in error,) Louis L. Newerf, and Oscar Meyer formed a copartnership under the firm name of Smith, Newerf & Meyer, in the business of manufacturing and selling lumber, and in some related enterprises. Smith was to contribute to the partnership his undivided one-half interest" in about twenty:'eight acres of land," with the appurtenances, at the agreed value of $7,500. and also his like interest in certain personal property, to be inventoried within one week before October 1, 1887, at its then market value. Mter the partnership business had begun,-on March 29,1888, -the three named persons and Theodore H. Meyer, Jr., entered into a written agreement for the formation of an incorporated stock company, to be called" the Crosby Lumber Company, Limited," to prosecute the slime business, and the said firm thereby agreed to sell, transfer, and convey to the incorporated company a.ll the property, real and personal, then owned by the firm, and all which should be owned by the finn on October 1, 1888; "the stock of said company" (the agreemeut provides) "to be held by five persons, four of whom Ilhall be the parties to this contract for a sum of money equal to the value. of the property of said firm, as shown by the inventory taken and dated on the 1st day of October, lS87, less any and all debts of said firm, together with threesevenths of any and all profits made during the year ending October 1, 1888, as shown by an inventory to be taken on the 1st day of October, 1888." The agreement thus concludes: "It is further agreed that the said John Smith, Louis L. Newerf, and Oscar Meyer shall take stock in the propoaedcompany to the full amount of their interest in the firm, 8S such interest shall appear on the 1st day of October, 1888." On or about the date last mentioned a dispute arose between Smith and the directors of the Crosby Lumber Company as to the value of his interest in the concern, and the amount of corporation stock to which he was entitled. No stock was ever issued to him, but in January, 1889, hie stock, so called, or his interest in the concern, was declared by the corporation to be forfeited, and was so treated by the company. Thereafter Smith was excluded from participation in the affairs of the company. In March, 1889, he brought this action against the Crosby Lumber Company, Limited. At the trial the defendant did not insist upon the forfeiture. and the case was tried upon its substantial merits, without reference to the pleadings. The judge below, in overruling a motion for 8 new trial, eaid: v.51J'.no.3--6
,',f!The case. bow&\'Ierj,*astried by bothparties,wJtbnut I:egard td tbe amdavlt or pleas. and· reB.c)ly,ed.ltself praqtically Jnto a of accounts be-. .. view to, 8llcert!\ining tb,e value. ot hfs interest 1n the assets of the defendant company at of its forfeiture, by defendaut company." . ', ," " ,,:' :'"f"i.'i,l, '.I'::', ",_ :,;+.',:".", , "',, /'.: ._ ,: ", "_;.' . The'record shows that this is'll correct stafein'ellt; and the printed :plaimlff in. submitted to states:' "The trial in fact took the form of an accounting between the and the questions and figures submitted to the jury were numerous and' Clellrly,thl1v,.tb.e be considered to aQ?rSll the trilllactually took by the mutual con-, ·pf, tl;1,e' (orrxuit c1\li Ol made py. the plaintiff in his lj.p'd declllrat!on is not .', plaintiff the court the ',J, ." , must firstalm-rtain w,hat,hls [John ,Smith's] interest was worth in the corporation defelldapt toQk the business, or i!ls,U,IlHyi¥ld, have it, under In order to find that, both ,1lS of money value of thousand 'dollars. .There is · his. contributions to the ftrt!1,-,-,s<:lIlie disp'utebetween the parties to the actua,l amount of his contributions. On tlieol'le'Mnd, he claiins'tol1ave put'i-nto the firm, in addition to the $40,890.40, which is conceded., a ;further item of $7, and a further item of, $4VO for, a J>oiler". You thetesthn\>IJcy:,as to those two amounts, and it is for lOU 19 say, in tl!ed,rlitp/Il.!le. the amount of his contribution i J to tl)atyqu.\,$houldadd i,ncrease in the value of the interest In,the,partnership, 8S sb,Own. by tile profits made by the partnership. Or any inCrease' hi· i'tsllssets. as shOWn. by a ebrilp,uison between.'the resources and liabilities, and addt9 the'!$40;OOO his proportionate part Of that increase in vl11ue.off,bO!!eptofits. "Ttrat will then. pring you to the 1st of October" 18l:l8; lljUd.. tbnt should'addJlis proportion of the profits rnade by the (}rosby Lumbf-r:polPp,allY bbtween January. 18&9.the time of the fo,:feiture. if suffiClenp! enable yoil to do so."
us
. 0ne'dftheassignment8 of above-quoted part of the charge,aftd it isstrenudtlsly contended that the court erred. in authordirecting the Jury to 'add to the plaIntiff's contributions' and llhare profits,a furtber allowance. for the increase in the value of the'l1Ssets.. Thepositioh thus taken is that, in ascertaining the'value of entitled',tti aahare of the profits in the reIltrlcted seiisetlf gainstelilized from a business, and distributilbleas ac. t*al earningsatnong the:membersofa firm or the stockholders ()f a cor" poration, but excluded :from participating in the increased "lIlue of the unsold assets Of thecoheern. Is this a sound view of the plaihtiff'snghtsupon' thefa'cits oftha 'case? By the terms of the contrllct firm, respectively, were to b'avest06k in the newr'¢oitlpa'riy' "to.'the full arnoont of their interest in the firm, as such interest shall app.ear on the 1st d:ayof October, 1888." Eut, so far ItSthe i plitintilffiwascon(jerned; that contract, in effect, was wholly repudiated by'the corporation defendant. Not only did the plaintiff receive' no stoekl'but his entireinterestin thecohcem was ap-; propriated hy the defendant. In any just accounting, then. 'between
OROSBY LUMBER
67
the parties; cOuld the plaintiff be deprived of allbertefit resulting· ftom the increased value of the general assets? Surely not; for so' to hold would be to give a premium to wrongdoing. We filld nothing in the written contracts, nor in the authorities cited, to give countenance to a result so inequitable. The decisions relied on arenM inpoint,'for they simply define what the technical profits ola business 'are in the sense of net gains upon com pleted transactions. We are of the opinion that the plaintiff was justly entitled to recover the 'value of his interest in the company at the time it was wrongfully taken from him, ltnd that a legitiInate item in computing such value wll.S'the plaintiff's share of the increase in 'the-value of of the concern, in addition to his proper share of the earned profits in the technical seilse of that term. It does not appea'r that it made any difference in result whether the value of the plaintiff's interest was ascertained as of October 1, 1888, when the contract should have been carried out, or as of January, lS89, when the for· feiture was enforced. But, the earlier date having been adopted" fOl Buch valuation, we see nothing wrong in allowing the plaintiff a proper share of the profits between October lst and the succeeding January, when his interest was absolutely lost to him by the action of the delendant. We cannot sustain the assignment of error to the charge of the court with respect to the allowance of interest from January, 1889. The plaintiff's claim was not for mllre unliquidated damages. The defendant had in its hands his moneY,-or property, which was the equivalent,-and when the balance was struck, and the amount coming to the thereon was justly demandable. plaintiff was ascertained, We think the court properly refused to affirm the defendant's sixth was evidence for the consideration of the jury point. There that the plaintiff had acquired the interest of Louis 1.. Newerf in the firm of E!J:Dith, Newerf & Meyer. Not only did the plaintiff himself so testify, hut the books of the firm and of the defendant contained entries tending to show the transfer to the plaintiff of Newerf's interest. No error was committed in rejecting the offer of the assignment of January 14,1889, from Newerf to the defendant of a halfintereilt in the iron boiler. The plaintiff was a_stranger to that paper, and his prior rights could not be affected by anything therein contained. As both the fifteenth and twentieth assignments of error relate to the item of $200, the purchase money for land paid to Rose, they may be considered together. Whether the defendant was entitled to credit for that sum depended upon what the true state of facts was. If the defendant's version of the fransaction was correct, then the credit· was rightly claimed; but, if the plaintiff's version was correct, the defendant was not entitled to the credit. So the court distinctly charged. The allowance or disallowance of this credit was made to turn upon the jury's finding of the facts. They were instructed, in substance, that, if they believed the defendant's statement in regard to the matter, they Shotlld allow the credit, but, if they believed the plaintiff's statement, the credit should bEl disallowed. Therefore, if what was said by the court in ra8j>eOt to the statute of .frauds was erroneous, it was altogether a harmless
68
JUlIPORTER,
voL 51.
enor. ItW8S an irrelevtIlntreason fQrinstructions proper in themselves. It U, q1;lite impossible that the jury could have been misled 'Tlle asaignmentoferror is, in substance, that the, couJ:'t to· grant IL new trial upon the ground that it appeared 1;lpon ,record thaHhe verdict u, wbolly unsupported by the evidence. It is hMdly worth whUe ,to say that tlle overruling of amotion for a new trialgfitself cannot he assigned for error. Van Stone v. Manufacturing 00.d42 U. S. 128, 12 Sup. Ct. Rep. 181. It is, however, here urged embodied in theb.il1of exceptions shows .that the l.llholly evidence. But we are unable to adopt that view. Undoubtedly there was evidence to sustain the verdict. yond ,that we cannot look. If the jury erred in the amount of their finding,it is not within our power to rectify their mista.ke. We ha.ve thus specia.lly noticed all the a.ssignments of error which were orally cussed:by oounsel. The other assignments we will not pa.rticularly tion. We must content ourselves with saying that we have carefully aminedanq considered them aU, and. fan to discover in any of them for disturbing the .' judgment below. After a patient considerathe whole record, our conclusion is that the judgment of the court below must be affirmed.
or
NORTHERN PAC. R. Co. fl. WRIGHT, County Treasurer. (OiTC'W&t 00'iWt, D. Montana.
1.
PtlBLIO L,u«!lr-RAILROAD .GR,ANTS-ST.TB T,AUTION.,
'l'he S'rant of lands to the .Northern PaoifIo Railroad Company, underAot Jul)' 9, 1864; was a present grant, whioh attached to the speoifio seotions as they beoame oapablE! ofidentifi08tion 1;>y tlje defilliWlooation, of the road;,l\:nd, upon a report by t'be government surveyors that the lands surveyed are nonmineral, suoh lands become subjeot to state taxatlon, although the land oommissioner refuses to issue patents thjlrefor un,tU fl,lr1;bE/r Batisfied that the lands are'in fact nonminereJ. 'Northern, Pac. R. 00. v. Walker, 47 Fed. Rep. 681, followed.' Since the determination of the mirieral or nonmineral charaoter of suoh landB must be upon evidenoe extriy.sio of any terms of. the grant, it is not neoessary tbat the land oommisBioner shall pails upon' the question, before it oan be judioiaUr determined whether certain sectionB are reBerved by the grant beoause of thell mineral oharacter.
i.SAloIB-:'NoNUiNBlUL LAND.-.LAND COMMIssiONBR'S DBOISIO'N.
of taxes.
E. Wright,treasurer of ]'ergus county, Mont., to enjoin the collection Oullen, Sanders & ShelUrn, (F. M. , ·. J . , ' . ,
,In Equity. Bill by thl3 Northern. Pacifio Railroad COnlpany against F. Heard on demurrer to the, bill.
Demurrer sustained. and J. B. McNamee, of coun-
sel,) for complainant. Henri J. Haskell, for dl3fendlUlt. !U;OWLES,
District Judge. This is llsuit brought by plaintiff to enJoin .treasurer of county, Mont., from selling certain