463
94 FEDERAL REPORTER.
action tq be regular and valid, such irregularity will not be permitted. to injustice. '.fhe officers representing the city in the issuance of the ,bonds believed that the;y were clothed with authority by the proce<lure of 1883. Ip this they mistaken. The charter of 1873 'was stilI in existence. It authorized the election of officer(il of the city. These officers ha,d been elected. Although they that they held office under the new organization,' they were offi<;ersdefacto of the, city, actually filling places created by the of 1873. ''J;.'he special act of incorporation authorized the issuance, of the bonds for public improve;r:nent. ,An ordinance, Wlit(il passed to issue them. The. bond.s, we hold, were not made invalid by reason of the illegal effort at incorporati'on made in 1883. , There are other defense,s sllggested in argument, but it would serve no liseful purpose to extend this opinion. The whole of the findings of fact by the Circuit court will appear in the statement of the elise, anll it is sufficient to say that we concur in the conclusion of the learned judge presiding in the circuit court that the plaintiff was entitled to judgment. The judgment of the circuit court is affirmed. , UNDERWOOD v. PATRICK. Court of Appeals, Eighth April 24, 1899.) No. :1,,146.
1.
VJ;NDOR AND PURCHASER - SALE OF LAND TO SYNDICATE NOTES OF O,NE MEMBER FOR PURCHASE, ,MO,NEY.
ACCEPTANCE OF
A ven40r who sold land to a syndicate, conveying to one member and accepting his' Individual nMes, secured by, mortgage on the property for the unpaid purchase money, with knowledge that such arrangement was made for the express purpose of' relieving another of the purchasers from personal ,liability for such unpaid purchase moneJ', is estopped to claim such liability, ,and has no right of action against him on the notes, or otherwise, to a deficiency remaining due after foreclosure of the mortgage; nor was such right given by a declaration of trust executed by the. grantee, declaring the interest of each member of the syndicate in the property and their several liabilities as between themselves.
2. 3.
LIMITATION OF ACTIONS-WHAT LAW GOVE,RNS.
A plea of .tM statutE of limitations relates to the remedy, and is governed by the law of the forum.
SAME-ACCRUAL elF CAUSE OF ACTION.
'Where a vendor sold land to a syndicate, taking notes of one member for deferred payments of purchase money. a right of action by the vendor 'against another member of. the sJ'ndicate for the recovery of such purchase money, if any existed, accrued on the maturity of the notes. As an action against another of the purchasers, who did not sign the notes, would not be based thereon, but on a collateral promise,. a payment on the notes after their maturity by the maker or a subsequent grantee would not extend the time within which such action could lJe brought.
4.
SAME-EFFEC'l' OF ,PAYMENTS.
In Error to the Circuit Court of the United States for the District of Oolorado. Eliza ,V, Patrick, the dMendant in error, brought this action against Frank L, Underwood. the plaintiff in error, to recover certain sums of money daimed to be due her on executed by one Kathan D. Allen. The substance of
UNDERWOOD V. PATRICK.
469
the facts set out in the complaint are: That Mrs. Patrick was the owner of a tract of 615 acres of land adjoining the city of Omaha, Neb., which Underwood; Craig, and Allen wanted to purchase from her. That they to her that they wanted to form a syndicate consisting of themselves and other parties. That on the 12th of :\fay, 1887, the sale was completed for the sum of $510,000. That the deed for the property was executed and delivered by Mrs. Patrick to Allen, who paid her $110,000 of the purchase money, and for the other $400,000 executed to her his four notes for $100,000 each, due, respectively, on the 1st days of Janpary, 1888, 1889, 1890, and 1891. That, to secure their payment, Allen executed to her a mortgage on the real estate conveyed by her to him. That at the time the transaction took place she knew these parties (Underwood and Craig) were to be interested in the purchase of the property, but that the title should be taken in the name ot Allen, the others to have an interest in proportion to the amounts to be paid by them respectively of the purchase money. That Underwood was the organizer and promoter of the syndicate, and the title of the property was taken in the name of Allen for the purpose of avoiding any personal liability on his part on the notes to be given on the deferred payments. 'l'hat, after the conveyance had been made by her to Allen, he executed '.'for the benefit of the said persons composing said syndicate" a declaration of trust, of which the following is a copy: "Know all men by these presents, that I, Xathan D. Allen, of Kansas City, of the state of Missouri, do make the following declaration of trust: That whereas, I have this day bought from Eliza W. Patrick, and she has conveyed to me by warranty deed, dated on the 12th day of May, and recorded in tbe records of Douglas county, :Nebraska, certain lands in said county, in said deed more particularly described: Now, therefore, I do declare that the said land was bought by me for the following named persons: Frank L. Underwood. trustee; William B. Clark; William A. Clark, trustee; Theodocia I. Underwood; William H. Craig; and Nathan D. Allen,-and that the said F. L. 'C'nderwood, trustee, is entitled to two-elevenths (2/11) of the said property. That the said William B. Clark is entitled to one and one-half eleventh (11;2-11) of the, said property. That the said 'V. A. Clark, trustee, is entitled to oneeleventh (l/l1).That the said Theodocia I. Underwood is entitled to fout and one-{juarter elevenths (4%-11) of the said property. That the said W. H. Craig is entitled to one-eleventh Phd of the said property. And that the said Nathan D. Allen is entitled to one and one-quarter elevenths (1%-11) of the said property, and that the same are liable in the' 'same proportions upon the mortgage given to secure the deferred payments upon the said property. Dated this 12th day of l\Iay, 1887. Nathan D. Allen." -That the' plaintiff .in error was the owner of two-elevenths of the property. That the object of the parties in purchasing this tract of land was to lay it off in lots and sites, and then dispose of it. That in pursuance of this agreement they did form a corporation under the laws of the state of Nebraska, named the Patrick Land Company, and the shares of sfock in the corporation were issued and delivered to the parties in proportion to their respective interests in the propert3'. That some of the property was sold and certain payments made to the plaintiff, but leaving the sum of $28il,277.:n due on the 11th of October. 1891. That foredosure proceedings were instituted by her and the land sold, leaving a deficiency of $101,27il.76 still due her, for which deficiency a judgment was rendered against Allen but never collected, Allen being wholly insolvent. That the proportion of said deficiency for which defendant is liable by reason of his interest in the land amounts to $32,225.06, together with interest from :\Iay 7, 1894. for whieh sum judgment was asked. The suit was commenced morc than six years after all of the purchase.money notes had become due. There was a demurrer to the eomplaint, assigning for grounds of demurrer that the complaint did not state facts sufficient to constitute a cause of action, and pleading the three and six years statute of limitations of Colorado. The demurrer was overruled, and the defendant filed au answer pleading the statute of limitations, and denying most of the material allegations in the complaint. The eause was tried before a jury, and the court directed a verdict for the plaintiff, and the cause has been remOYl'd to this court by writ of error.
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rBol/ef,tW.<Patrick, OharlesJ".Greene, and<Ralph'W. BreckenrIdge, '" j, , , i' "': I , , ' fori:de'endant in errol'. ,, ; i '," .' ,:'" 'H ; , Oircuit Judges. "I;'.
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Judge '(after stating,tbefac1:si' as above). 'view of .thiS unnecessary to (1) ,show that,.Mrs. Patric,itev'er had a. Cl;l,U$e of acti911 agl\inst (2) If she eMer, had a cause' of. action, is it barred' by the. statute of limitations?" '" ,'," " It the complaint that :Mis. Patrick, at the timetlui trausac,tion an interest in ,the ''Purchase, "bu:t,for the:pul1pOse ofaV'oiding any immediate 'obligation't1p:on the given for the de.fer.ted.,.,.'paym.ent. S.,be.,.'. 'the W, Fran.k L.;..U,.,Iide. r.w ;;"'h.a d .the.,. titles . ·.OOd"" .. to ,said, lan9.s ,the "fsaid ,Allen.',' 'Xpe undisputed ,'and ,also, that, to ielieve hirp.self of any'personaJ -liability in, ,case' the venture proved, unprofitable, to, johl,ln,the 'execriti&n of the, notel;l'given for the known to ''!VItA k,nowledge Qf fact!', shg e;s:ecuted the con· S' veyanceo,t6 ·Allen. and; ,accepted his, individual! not 101' the unpaid ptircfWIe"IDoney 11lnds conveyed, and' Of or. Mrs. Patrick hallkno,wledge, and t<;> w:i\tch .$.ela,nds were con. veyed,byAllen to the ..oorporation created for that purpose, and she sUlps of money rt'lalized by it lots, 'which sums intereStd1,1 and reduced,thepI;i.ncipaLfrom,$400,OOQ, These faets clearly estop her from setting up a claim of personal liability on the part ofUrtderwood to bel'. Had Allen acted' as agent for Underwood and tbis agency not been disclosed to 'Mrs. Patrick,or had he been a dorml\nt partner, sh(>' have had:agood cause of action against we hold, ,as the question is not before us; him, but when she consented, to accept, Allen's notes, with .lull knowledge of all the facts, she, in effect, agreed that in the case· of a deficiency she would not look to him for payment of any part of the deficiency. '1'0 hold would be to very object of Underwood which he had wade known. to ·Mrs.. Patrick, and to which she must be held to have assented. There is no allegation in the complaint and no proof that there was any promise or contract by Underwood with,her to pay anypart'of the notes; but, on the contrary, the transaction, itself, as well. l\S the allegation in the complaint, shows conclusively that she looked to Allen alone and the mortgage exe·, cuted by him: for the payment of the :balance of the purchase money due. bel', and upon sucb'a,stateoffad.ts Underwood is clearly not liable to her' On the noteS, ,Oragin 'v. Lovell, 109 U. S. 194, 3 Sup.ot.132; ,Tuthill v. WilS()n,,90 N. Y. 423; Stackpole v. Arnold, 11' Mass'. 27; Williamsv. Robbins, 16 Gray, 77; Williams v. Gillies, 75 N. Y. 197. ' sa.
0A,.lillWELL,
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Williams T. Gillies, supra, is a case on all fours with the case at bar. In that case the finding of facts was that the maker of the note executed it with the consent and knowledge of the defendants; that the defendants were really the partners of the maker of the note in the purchase for speculative purposes of the real estate for which it was given, but that the transaction was made in the name ot Dobbs,to whom the land was conveyed, and whose notes secured by mortgage were executed for the deferred payments of the purchase money. It was claimed that this made the defendants liable as partners of Dobbs, Qut the court said: ' ''The substance of the transaction was that Dobbs was to tah.-e title and give his. bond and mortgage In his own name and representing himself and no one else, and this Is not inconsistent with the agreement that Raynor and Gillies [the defendants] were to have an interest in the speculation."
And the court held that they were not liable for the Dobbs debt, or any part thereof. But it is earnestly urged that when Underwood' accepted Allen's declaration of trust which contained the provision, "and that the same [the persons interested with Allen in the purchase} are liable in the same proportions upon the mortgage given to secure the deferred payments upon said purchase," Underwood thereby became liable to Mrs. Patrick for the proportion of his interest under that declaration of trust executed by Allen. The plaintiff was not. a cestui que trust, or beneficiary in this declaration of trust. Its purpose was to declare the rights, interests, and obligations of the purchasers of the land as between themselves. It is in the complaint that the declaration of trust was executed "for the benefit of the laid persons composing said sYndicate." Mrs. Patrick was content to take Allen's notes for the purchase by a mortgage on the land. She neither stipulated for nor desired other security. The claim now set up against Underwood is plainly an afterthought. We proceed to theeonsiderationof the defense of the statute of limitations. While the transaction took place. in the state of· Nebraska, yet, the suit having been instituted in the courts ofOolorado, the statute of limitations of the latter state must control; for it is the laws of the forum govern the plea of the statute of limitations. McCluny.:v..Silliman, 3 Pet. 270; Townsendv. Jemi8On, 9 How. 407; Walsh v. Mayer, 111 U. S. 31, 4, Sup. Ct. 260; Willard v. Wood, 164 U. S. 502, 17 Ot. 176. In McElmoyle v. Cohen, 13 i Pet. 312, the' court' said: "Whatever diversity of opiIiion there may be among jurists upon this point, we think it well settled to be a plea to the remedy, and, consequently that the lex fori must prevail. It would be strange if in the now well-understood rights of nations to organize thejr judicial tribunals according to their notions ot it should be conceded to them in every other 'respect than' that of prescrIbing the'time within which suits shall be litigated in their courts."
" 'l'his is cited and approved in the late case of v. City of Haverhill, 155 U. S. 610, 618, 15 Sup. ct. 217. This doCtrine is too well settled to require further or citation of aut1;lorities. But, if in an,y jurisdiction the doctrine was doubtful, Ulere ,ts no room conteJ:!.tion in cases arising i:J;l the courts of
e4FEDERAL REPORTER.
(l::tlldrlR}o, because tht:it :state has;m.ade 2915,Mil1s' Ann. 'St Colo., reads; as follows:
Section '
action without the statHix years. It shall be lawful for any person against whom any action shall be commenced, in any ,court, of this state, where the cause of 8,ction the statE;), upon a contract or agreeII.\ent,e;x:press or implied, or, upon: allY sealed instrument, in writing, or judgmljuf pr decree of any court, more than six years before the commencement of U}e action, to plead the same and give the same in bar of the plaintiff's right , of actiIJnj" ,
Otherprovisiohsof the statute of limitations of Colorado applicable the caEe read as follows: :followillg actions shall he commenced within six years" next after the of /l-ction shall accrue, and not First. All actions of debt con1:l'acti or liability in action. *" * * Fourth. All actions founded upon of assumpsit or on the case founded on any' contract or liability, express or huplied." Mills' Ann. St. Colo. '§ 2900. ' "All personal actions, oll any contract not limited by the foregoing sections, ,or by any other law, in this state, shall be brought W:ithin three years after the,ac<;ruing of the cause of action, and not afterwards." ld. § 2905.
It is clear that, under the foregoing provisions of the Colorado statute of limitations, if Mrs. Patrick ever had any right of action against Underwood for an amount of the purchase money equivalent to his interest 'in the land, it is barred. Authorities are not wanting to support the contention that the action would be under the three-years statute of limitations. Willard v. Wood, 164 U. S. 502, 17 Sup. Ct.'176; Dismukes v. Halpern, 47 Ark. 317, 1 S. W. 554; Willard v. Wood, 135 U. S. 309, 10 Sup. Ct. 831. But, as the action isnnquestionably barred under the six-years statute, we express no opinion as to the applicability of the three-years statute. If Tnderwood was liable for any portion of the purchase money, the caUSe of action a.gainst him' therefor accrued when the purchase money was due, and, as more than six years elapsed after the 'last note matured before this suit was brought, the action is barred. It is conceded that Underwood, if liable at all, is not liable on Allen's note, but on a different .contract, and the payment alleged in the bill as hl;lving been made on January 23, 1893, was a payment on Allen's note, and will not serve to prevent the running of the statute in favor of Underwood on the a.lleged collateral promise on which ,he' is sued. Moreover, that payment is not alleged to have been made by Allen. On the contrary, it is quite clear from the language of the complaint that it was notniade by him, ,but by the Patrick Land Company, to W'hichAUenbadconyeyed the land, and certainly no payment madeby thatcompanJlcould have the effect to suspend therunnip.g of the statute of limitations as to Underwood. Wood, Lim. Act. 226, 228. We do not wish, as)ntimating that, if the pa.yment had been made by Allen, it would have the effect to the running of the statute as to Underwood, even though Underwood ha<l ,been. a',joint maker, of the' note -with 'Allen. Bergman v. my; 27 U. S. App.G50, 13 C" C. A. 319" and 66 Fed. 40. That qut:lstion is not the case. B,ut it is urged in argument that Mrs. Patrick had no cause of action whatever until after the foreclosure proceedings arid the ascertainment of the deficiency, and
JOHNSON V. CHICAGO, ST. P., M. & O. RY. CO.
473
as that deficiency was not determined until May 7, 1894, the statute of limitatioJ!l was not set in motion until that date. We are referred to the decision of the supreme court of Nebraska in Meehan v. Bank (Neb.) 62 N.W. 490, as determining that proposition. But examination of that case does not sustain the contention of learned counsel. All that is decided by that case is that in that state a creditor w40se debt is secured by mortgage may either sue at law on his debt or proceed by foreclosure; but, having elected which means he will adopt, and commenced proceedings accordingly, he must exhaust the remedy so chosen before resorting to the other. But this Nebraska law can have no extraterritorial operation. It cannot 8uspend the running of the Colorado statute of limitations. Unquestionably Mrs. Patrick might have sued Underwood in Colorado, on the cause of action now declared on, at any time after the maturity of the notes. It is not believed that such suit would have precluded her from foreclosing the mortgage on the land in Nebraska at the same time; but, assuming that it would, she had her election to do the one thing or the other, but her election could in no manner operate to deprive Underwood of any right under the statute of Colorado. She could not exercise her election to his prejudice, further than to bring suit against him immediately upon the maturity of the notes, which she had an undoubted right to do, if he was liable, as claimed, for any part of the purchase money of the land. It results that the lower court erred in instructing the jury to find a verdict for the plaintiff, and refusing to direct a verdict for the defendant. The judgment of the circuit court is reversed, and the cause remanded, with instructions to proceed in accordance with this opinion. So ordered. JOHNSON v. CHICAGO, ST. P., M. & O. RY. CO. (Circuit Court, N. D. Iowa, W. D. June 7, 1899.)
RAILROADS-RIGHT TO FORCE TRESPASSERS FHOM TRAIN.
Where one attempting to beat his way persists in boarding a moving train, notwithstanding repeated warnings to desist, and he finally to drop from the cal' by the brakeman, and receives injuries, the railroad company is not liable.
At close of plaintiff's testimony the question was presented whether there was sufficient evidence to go to the jury, upon which the court ruled as follows. Hallam & Stevenson, for plaintiff. Wright, Call & Hubbard, for defendant. SHIRAS, District Judge. The question now presented to the court is whether, under the evidence adduced on behalf of the plaintiff, there is any ground upon which the plaintiff is entitled to go to the jury, or, to state the proposition in another form, whether the plaintiff's own testimony does not conclusively show that he is not entitled to a verdict against the defendant company, in which case it becomes the duty of the court to, instruct the jury that the verdict