Albany & Rensselaer Co. v. Lundberg, 121 U.S. 451 (1887)
Case details
Bluebook Citation
Albany & Rensselaer Co. v. Lundberg, 121 U.S. 451 (1887)
Full caption
ALBANY AND RENSSELAER COMPANY v. LUNDBERG.
Country
United States
Jurisdiction
Federal
Court
Supreme Court of the United States
Decided
Apr. 25, 1887
ALBANY AND RENSSELAER COMPANY v. LUNDBERG.
ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK.
Argued April 1,1887. — Decided April 25, 1887.
A written contract, macle in this country, by which “ I, Gustaf Lundberg, agent for N. M. Hoglund’s Sons & Co. of Stockholm, agree to sell, and we, Albany and Rensselaer Iron and Steel Co., Troy, N. Y., agree to buy ” certain Swedish pig iron, which contains no other mention of the Swedish firm, and is signed by Lundberg with his own name merely, as well as by the purchaser, will sustain an action by Lundberg in a court of the United States within the state of New York, by virtue of § 449 of the New York Code of Civil Procedure and § 914 of the Revised Statutes of the United States, if not at common law.
Upon the question whether a warranty, in a written contract of sale of Swedish pig iron, of a particular brand, that the iron shall contain no more than a specified proportion of phosphorus, has been complied with, evidence of the proportion of phosphorus in pig iron made in previous years at the same furnace out of ore from the same mine is irrelevant and incompetent.
This was an action at law on a contract. Verdict for the plaintiff, and judgment on the verdict. The defendant sued out this writ of error. The case is stated in the opinion of the court.
Mr. Edwin Countryman for plaintiff in error.
Mr. Everett P. Wheeler for defendant in error.
Mr . Justi ce Gray delivered the opinion of the court.
This action was brought by Gustaf Lundberg, an alien and a subject of the Kingdom of Sweden and Norway, residing at Boston in the State of Massachusetts, against the Albany and Rensselaer Iron and Steel Company, a corporation of the State of New York, upon two contracts for the sale and purchase of Swedish pig iron, the first of which was as follows:
“N. M. Hogl und ’s Sons & Co., Stoc kh olm ; “Gust af Lund ber g , Succ ess or to Nils Mit an der :
“38 Kilby Street, Boston, February 10, 1880.
“I, Gustaf Lundberg, agent for N. M. Hoglund’s Sons & Co. of Stockholm, agree to sell, and we, Albany and Rensselaer Iron and Steel Co., Troy, N. Y., agree to buy the following Swedish charcoal grey pig iron, viz: 500 tons of brand NBGPH, at a price of forty-eight ($48) dollars, American gold, per ton of 2240 lbs., delivered on wharf at New York, duty paid; said iron to be in accordance with an analysis furnished in Gustaf Lundberg’s letter of 6th February. Payment in gold in Boston or New York funds within 30 days from date of ship’s entry at custom-house. Shipment from Sweden during the season, say May next, or sooner, if possible. The above quantity hereby contracted for to be subject to such reduction as may be necessitated by natural obstacles and unavoidable accidents. The seller not accountable for accidents or delays at sea. Signed in duplicate.
“Accepted, Gus taf Lundberg . “ Accepted, Albany & Rens sela er Iron & Stee l Co .”
The other contract differed only in being for the sale and purchase of “ 300 tons of brands SBVE and NBBBK.”
The analysis referred to in both contracts showed, in the first brand .03, and in the two other brands .024, of one per cent of phosphorus.
The above amount of iron was made in Sweden, that of the first brand at the Pershytte furnace of the Ramshyttan Iron Works, out of ore from the Pershytte jnines, and that of the two other brands at the Svana Iron Works; was bought and shipped from Stockholm by N. M. Hoglund’s Sons & Co. in May, 1880; arrived at New York, in June, 1880, and was thence taken to the defendant’s works at Troy. An analysis there made by the defendant’s chemist showed in the three brands respectively .047, .042 and .049, of one per cent of phosphorus. The defendant therefore refused to take the iron, and returned it to the plaintiff, who afterwards sold it for less than the contract price, brought this action to recover p. 453the difference, and obtained a verdict and judgment for upwards of $15,000. The defendant sued out this writ of error.
The first question presented by the bill of exceptions is, whether this action can be maintained in the name of Lundberg, or should have been brought in the name of his principals, N. M. Hoglund’s Sons & Co.
The paper upon which each of the contracts in suit is written has at its head, besides the name of that firm, the name of “ Gustaf Lundberg, successor to Nils Mitander,” followed by the street and number of his office in Boston. The contract itself begins with a promise by him in the first person singular, “ I, Gustaf Lundberg, agent for N. M. Hoglund’s Sons & Co. of Stockholm, agree to sell; ” the description added to his name in this clause is the only mention of or reference to that firm in the contract; his promise is not expressed to be made by them as their agent, or in their behalf; and the agreement is signed by him with his own name merely.
There are strong authorities for holding that a contract in such form as this is the personal contract of the agent, upon which he may sue, as well as be sued, in his own name, at common law. Kennedy v. Gouveia, 3 D. & R. 503; Parker v. JFw7ow,.7 E. & B. 942; Dutton v. Marsh, L. IL 6 Q. B. 361; Buffurn v. Chadwick, 8 Mass. 103; Packard v. Nye, 2 Met. 47. In Gadd v. Houghton, 1 Ex. D. 357, the contract which w'as held not to bind the agent personally was expressed to be made “ on account of the principals; ” and in Oelricks v. Ford, 23 How. 49, in which the contract, which was held to bind the principal, more nearly resembled that before us than in any other case in this court, the important element of a signature of the agent’s name, without addition, was wanting.
But it is unnecessary to express a definitive opinion upon the question in whose name, independently of any statute regulating the subject, this action should have been brought.
The Code of Civil Procedure of the State of New York contains the following provision:
“ Sec. 449. Every action must be prosecuted in the name of the real party in interest, except that an executor or administrator, a trustee of an express trust, or a person expressly p. 454authorized by statute, may sue without joining with him the person for whose benefit the action is prosecuted. A person with whom, or in whose name, a contract is made for the benefit of another, is a trustee of an express trust, within the meaning of this section.”
Under this provision, the Court of Appeals of that state has held that an agent of a corporation, to whom, “ as executive agent of the company,” a promise is made to pay money, is “ a person with whom, or in whose name, a contract is made for the benefit of another,” and may therefore sue in his own name on the promise. Considerant v. Brisbane, 22 N. Y. 389. The rule thus established is applicable to actions at law in the courts of the United States held within the State of New York. Rev. Stat. § 914; Sawin v. Kenny, 93 U. S. 289; Weed Sewing Machine Co. v. Wicks, 3 Dillon, 261; United
States v. Tracy, 8 Benedict, 1.
The case then stands thus: If the agreement to sell is an agreement made by Lundberg personally, and not in his capacity of agent of the Swedish firm, the price is likewise payable to him personally, and the action on the contract must be brought in his name, even at common law. If, on the other hand, the agreement must be considered as made by Lundberg, not in his individual capacity, but only as agent and in behalf of the Swedish firm, and for their benefit, then the price is payable to him as their agent, and for their benefit, in the same sense in which an express promise to pay money to him as the agent of that firm would be a promise to pay him for their benefit, and therefore, by the law of New York, which governs this case, an action may be brought in his name. In either view, this action is rightly brought.
The clause, in each of the contracts sued on, “ said iron to be in accordance with an analysis furnished in Gustaf Lundberg’s letter of 6th February,” is doubtless a warranty that the iron shall not contain a greater proportion of phosphorus than is specified in that analysis. The question of fact most contested at the trial was whether the iron tendered by the plaintiff to the defendant fulfilled this warranty.
There was evidence tending to show that any excess of p. 455phosphorus in pig iron would affect the quality of wrought iron or steel made from it, rendering it more brittle, and could be detected by bending the rods after they had been made; and the court, at the request of the defendant, and with the consent of the plaintiff, instructed the jury as follows: “ If the jury find that either lot of iron differed as much as one one-hundredth of one per cent in excess of the limit of phosphorus stated in the analysis referred to in the contract, that constituted a breach of the warranty and entitled the defendant to refuse to receive the iron.”
Each party called as witnesses many experts, who had made analyses of the iron in question since its arrival, some of whom testified that the amount of phosphorus in each brand was no greater than in the analysis referred to, and others testified that it was more than two hundredths of one per cent greater, or nearly twice as much.
The plaintiff also introduced several depositions taken in Sweden, so much of which as is material to be stated was as follows:
O. Anderson, the manager and a part-owner of the Ramshyttan Iron Works for the last seventeen years, testified that his experience was in the practical part only of the iron manufacture; that he knew the quality, and the percentage of phosphorus, of the iron sold to N. M. Hoglund’s Sons & Co. in 1880, only from an analysis made by Bernhard Fernguist of pig iron from the same furnace in 1878; that no special analysis was made of the iron sold to the Hbglunds, and “no new analysis was made, because no change in the ore was observed; ” that other iron was made in the same furnace in 1880, “ but all of exactly the same quality; ” and further testified: “In the process of manufacture no special tests were made on this pig iron, but I know that this iron is used in the manufacture of Siemens & Martin’s steel and iron, and there found to be good.”
Fernguist, a professor of chemistry at Orebro, who had made analyses of irons and ores for twenty years, testified to the analysis made by him of pig iron from the Pershytte furnace in 1878, which showed it to contain .028 of one per cent of phosphorus.
Harold Dillner, “an officer in the metallurgic department in the Board of Iron Masters,” who in 1880 and for some years before had assisted the owners and manager of the Ramshyttan Iron Works “as technical assistant at Pershytte furnace,” being asked his means of knowledge in regard to the percentage of phosphorus in the parcels of iron sold to the Hbglunds, and whether he knew of these parcels, or any of them, having been put to any practical test, testified : “ We have trustworthy analyses of the ores from Pershytte mines and of pig iron from Pershytte furnace, which verify the always excellent quality of the ore and the pig iron manufactured of it.” “ It is generally known that the iron is of excellent quality, and I made no special tests.”
A. E. Cassel, manager of the Svana Iron Works in 1879 and 1880, having testified, as to the iron from those works sold to the Hbglunds in 1880, that the inspection of its manufacture at the furnaces was conducted “ in the same manner as during the preceding years, with the greatest care and attention,” and that his means of knowledge as to the percentage of phosphorus in this iron were derived from previous analysis of iron that they manufactured, further testified : “ In the pig iron we made, the percentage of phosphorus is about .022 per cent, and of sulphur, 0.22; and I think that the pig iron in question contained about these quantities.” “ Complete journal is kept of how much of each kind of ore is used for each day. The quality of the ores has not changed materially during the last five years.”
The admission of this testimony in the depositions was duly excepted to, and we are of opinion that it was incompetent. Much of it, and especially Anderson’s remark that this iron was found to be good in the manufacture of steel and iron by Siemens & Martin, was mere hearsay. All the statements of the deponents as to the proportion of phosphorus in the iron in question were based on analyses by other persons of pig iron made in previous years, none of which were produced, or their contents proved, with the single exception of Fernguist’s analysis of iron from the Pershytte furnace two years before. It is not shown, and cannot be presumed, that p. 457a difference of one or two hundredths of one per cent in the amount of phosphorus in pig iron could be detected by observation of the ore, or by inspection of the manufacture of the pig iron. Under these circumstances, evidence of the amount of phosphorus in iron made in previous years was wholly irrelevant to the question of the amount of phosphorus in iron made in 1880; and the general expressions of opinion as to the excellence of the pig iron and the care taken in its manufacture did not render that evidence competent, but rather tended to divert the attention of the jury from the real issue, which was ■whether the particular iron tendered by the plaintiff to the defendant conformed to the express warranty in the contract between them.
The case differs from that of Ames v. Quimby, 106 U. S. 342, where, in an action to recover the price of shovel-handles sold to the defendant, evidence of the good quality of other like handles sold by the plaintiff at the same time was admitted, accompanied by direct evidence that the latter were of the same kind and quality as the former.
This testimony being irrelevant and incompetent, and manifestly tending to prejudice the defendants with the jury, its admission requires the verdict to be set aside; and it becomes unnecessary to consider the rulings upon other evidence and upon the question of damages.
Judgment reversed, and case remanded to the Circuit Court, with directions to set aside the verdict and to order a new trial.
BOYNTON v. BALL.
ERROR TO THE SUPREME COURT OF THE STATE OF ILLINOIS.
Argued April 4, 5, 1887. — Decided April 25, 1887.
A discharge in bankruptcy may be set up in a state court to stay the issue of execution on a judgment recovered against the bankrupt after the commencement of the proceedings in bankruptcy and before the discharge ; although the defendant did not before the judgment ask for a stay of proceedings under Rev. Stat. § 5106.
In the year 1865 Ball, the defendant in error, and one Griffin, since deceased, recovered a judgment against Boynton, the plaintiff in error, for $6223.99. In April, 1875, Ball commenced an action of debt in a state court of Illinois against Ball, to recover the amount of that judgment and interest.
On the 19th of March, 1878, a rule was made that the defendant should plead, and on the 4th of the following April he pleaded as follows:
“ And the defendant, by James I. Neff, his attorney, comes and defends the wrong and injury when, &c., and says that he does not owe the said sum of money above demanded or any part thereof in manner and form as the plaintiff hath above thereof complained against him. And of this the defendant puts himself upon the country, &c.”
On this plea issue was-joined, and, a jury being waived, the case was submitted to the court. At December Term, 1879, judgment was entered in the plaintiff’s favor against the defendant for the sum of $6233.99 debt, and $5234.99 damages. Execution issued therefor, which was returned unsatisfied on the 20th May, 1880.
On the 25th March, 1881, Boynton filed a motion for a perpetual stay of execution on that judgment, supporting it by proof that he was declared a bankrupt on the 15th day of April, 1878, and that he received his certificate of discharge on the 23d December, 1880. Notice of this motion was served on Ball, who appeared and opposed the granting of it, setting up the appearance of Boynton in the suit, his plea, the joinder of issue, the submission to the court, and the entry of judgment — all after the commencement of the proceedings m bankruptcy, though before the date of the discharge. At the hearing in the Circuit Court at March Term, 1881, the motion for the stay of execution was denied. This judgment was affirmed on appeal by the Supreme Court of Illinois in March, 1882. Boynton v. Ball, 105 Ill. 627. Boynton then sued out this writ of error.
3/>. Leonard Swett, (with whom was 3Z>. Edward B. Swett on the brief,) for the plaintiff in error cited — English cases: p. 459Bouteflour v. Coates, Cowp. 25 (1774); Blandford v. Froud, Cowp. 138 (1774); Scott v. Ambrose, 3 M. & S. 326 (1814); Willett v. Pringle, 5 Bos. & Pul. 190 (1806); Dinsdale v. Eames, 2 Brod. & Bing. 8 (1820); Dawis v. Shapley, 1 B. & Ad. 54 (1830); Barrow n . Poile, 1 B. & Ad. 629 (1830); Humphreys v. Knight, 6 Bing. 572 (1830). Cases under the act of 1841: Graha/m v. Pierson, 6 Hill, 247 (1843); McDougald v. Reid, 5 Ala. 810 (1843); Rogers v. Western Marine Ins. Co., 1 La. Ann. 161 (1846); Curtis n . SlossOn, 6 Penn. St. 265 (1847); Mechanics Banking Asdn v. Lawrence, 1 Sandf. 659 (1847); Harrington v. McNaughton, 20 Vt. 293 (1848); Turner v. Gatewood, 8 B. Mon. 613 (1848); Blake v. Bigelow, 5 Geo. 437 (1848); Johnson v. Fitzhugh, 3 Barb. Ch. 360, 372 (1848); Peatross n . McLaughlin, 6 Gratt. 64 (1849); Cogbum v. Spence, 15 Ala. 549, 554 (1849);1 Clark v. Rowling, 3 Comst. 216 (1850);2 Fox v. Woodruff, 9 Barb. 498 (1850); Dick v. Powell, 2 Swan (Tenn.), 632 (1853); Downer v. Rowell, 26 Vt. 397 (1854); McDonald v. Ingraham, 30 Mississippi, 389 (1855);3 Imlay v. Carrpentier, 14 Cal. 173 (1859). Cases under the act of 1867: Cornell v. Dakin, 38 X. Y. 253 (1868); In re Stephen Brown, 3 Bankr. Peg. 585 (1870); In re Crawford, 3 Bankr. Beg. 698 (1870); In re Stevens, Bankr. Beg. 367 (1871); Monroe v. Tipton, 50 X. Y. 593 (1872); Shurtleff v. Thompson, 63 Maine, 118 (1873); Norton v. Switzer, 93 IL S. 355 (1876); In re Stamfield, 4 Sawyer, 334 (1877); Dawson v. Hartsfield, 79 Xo. Car. 334 (1878) ; Dresser v. Brooks, 3 Barb. 429 (1848); Anderson v. Anderson, 65 Geo. 518 (1880); Arnold v. Oliver, 64 Howard Pr. 452 (1883); Windley v. Tankard, 88 N. C. 223 (1883); Root v. Espy, 93 Ind. 511 (1883); Easley v. Bledsoe, 59 Texas, 488 (1883); Braman n . Snider, 21 Fed. Bep. 871 (1884); Balliett v. Dearborn, 27 Fed. Bep. 507 (1886).
Mr. J. A. Crain for defendant in error.
The very numerous authorities cited by the plaintiff as to whether, after a judgment against a bankrupt pending his bankruptcy proceedings, but before discharge received, the
1 & C. 50 Am. Dec. 140. 2 8. C. 53 Am. Dec. 290. 8 8. C. 64 Am. Dec. 166. p. 460court will stay execution, are each and every of them decisions made upon bankrupt acts having nothing like the section of the act of 1867 found in the Rev. Stat. § 5106; that being a new section, and they are no authorities as to the duty that section imposes upon the bankrupt.
Section 14 of St. 49 Geo. Ill, c. 121, quoted by plaintiff in error, prohibits any creditor who shall have brought action or instituted suit against a bankrupt, on any demand arising prior to bankruptcy, or which might have been proved, from proving a debt unless on condition of relinquishing such suit or action. St. 6 Geo. IV, c. 16, § 59, also quoted by plaintiff, is to same effect.
Section 5 of the act of Congress of 1841, cited by plaintiff, provides that no creditor coming in and proving his debt shall be allowed to maintain any suit therefor, but shall be deemed to have waived all right of action; and it declares, as the effect of so proving, all actions commenced and unsatisfied judgments already obtained surrendered. Section 5105 of the Revised Statutes is to precisely the same effect. But inasmuch as Ball, the here defendant, has never proved his debt against Boynton, the plaintiff in error, nor has Ball in any way or manner connected himself with Boynton’s bankruptcy proceedings, it is submitted that all the above mentioned sections have no bearing whatever on any question in this case.
St. 34 & 35 H. VIII, c. 4, enacted in 1542, was the first bankrupt act. Its preamble is as follows: “ Whereas, divers and sundry Persons craftily obtaining into their hands great substances of other Men’s Goods, do suddenly flee to parts unknown, or keep their Houses, not minding to pay or restore to any of their Creditors their Debts and Duties, but at their own Wills and Pleasures, consume.the Substance obtained by Credit of other Men for their Pleasure and delicate Living, against all Reason, Equity, and good Conscience; therefore, be it enacted, etc.”
Every succeeding act up to St. 4 & 5 Anne, c. 17, contained like severe denunciations against this class of delinquents. By this last mentioned act it is provided that if the bankrupt has fully turned over all his estate to his creditors, and made full p. 461disclosure, he shall have a certain allowance or exemption, and shall also, having fully conformed to the act, be allowed a certificate. This is the first statute giving either, and was continued into the more permanent act of St. 5 Geo. II, c. 30, where, by the 7th section, a discharge is given from all debts by him owing at the time he became bankrupt; and in case he should, after having received his certificate, be arrested, prosecuted, or imprisoned for any debt due before the time he became bankrupt, he was to be discharged on common bail, and might plead that the cause of action accrued before his bankruptcy.
No such provision, or anything having even a resemblance to § 5106, is to be found in either the Bankrupt Act of 1800, 2 Stat. 19, or that of 1841, 5 Stat. 440; consequently, any decision predicated on those acts has no weight, and is of little authority in determining the effect of, and duties imposed on the bankrupt by, this new section in the act of 1867.
This was a new feature of the bankrupt law; neither it, nor anything like it, had ever existed, either in England or this country, and experience indicated, and justice demanded, that there should be some mode provided by which, when a suit was pending against a defendant (as was Ball v. Boynton), and he went into bankruptcy, that wThen adjudicated a bankrupt he could stay such suit until the question of whether he was to get a discharge should have been first determined.
The act created this privilege and defence, which, if defendant had then interposed in this case, the judgment in question never could, on his own theory of the effect of his discharge, have been recovered against him. His duty, after going into bankruptcy, is clearly pointed out in Holden v. Sherwood, 84 Ill. 94, where the defendant, after verdict, suggested his bankruptcy, and filed his discharge, but did nothing more. Uniformly, since our very first act on the subject, the bankrupt having a certificate of discharge, has been required to plead it. Fellows v. Hall, 3 McLean, 281; Steward v. Green, 11 Paige, 551; Manwarring v. Kouns, 35 Texas, 171; Parle v. Casey, 35 Texas, 536; Seymour v. Browning, 17 Ohio, 362; Horner v. Spellman, 78 Ill. 206.
We submit that the precedents established under a statute unlike any act of Congress ever existing here, established no principle that can be deduced from any bankrupt act ever in force in this country. And we maintain that § 5106 Rev. Stat, afforded defendant an ample opportunity and remedy, of which he neglected to avail himself for over nineteen months before our judgment. He then came into court, and without any intimation that he had’ gone into bankruptcy, or should rely on his bankruptcy, actually joined us in submitting his case for trials by which we obtained our judgment incurring the costs thereof, and of the execution issued thereon, and he is, therefore, now estopped from interposing his discharge.
The rendition of the new judgment upon the old decree ‘ made such a new and essentially different debt that it thereby became not provable against his estate, and is not affected by his discharge. See In re Gallison, 2 Lowell 72, and the reasoning of the court, and the authorities on both sides cited in the opinion of the court. In re Williams, 3 Bankr. Reg. 79; Dimock v. Revere Copper Co., 117 U. S. 559; Holbrook v. Fo^s, 27 Maine, 441; Pike v. McDonald, 32 Maine, 4181 Fisher v. Foss, 30 Maine, 459; Sampson v. Clark, 2 Cush. 173; Woodbury v. Perkins, 5 Cush. 86;2 Faxon v. Baxter, 11 Cush. 35 ; Carrington v. Holahird, 17 Conn. 530; Kellogg v. Schuyler, 2 Denio, 73; Gould v. Hayden, 63 Ind. 443; Steadman v. Lee, 61 Geo. 59; Rutherford v. Rou/ndtree, 68 Geo. 725; Evarts v. Hyde, 51 Vt. 183; Hersey v. Jones, 128 Mass. 473; Miller v. Clements, 54 Texas, 351; Bradford v. Rice, 102 Mass. 472; McCarthy v. Goodwin, 8 Missouri App. 380; Wise’s Appeal, 99 Penn. St. 193; Bown v. Morange, 108 Penn. St. 69; Brackett v. Dayton, 34 Minn. 219; Boynton v. Ball, 105 Ill. 627; Bowen v. Eichel, 91. Ind. 22.
Mr . Jus tic e Mill er delivered the opinion of the court.
This is a writ of error to the Supreme Court of the state of Illinois. The question of Federal law, which gives jurisdiction p. 463to this court to review the judgment of the state court, arises out of the refusal of that court to give effect to a certificate of discharge in bankruptcy to Boynton, the plaintiff in error.
1
Ball, the defendant in error, brought suit against Boynton in the Circuit Court of the state of Illinois for Stephenson County, on April 16, 1877. To this Boynton filed his answer April 4, 1878, and judgment was rendered against him on December 9, 1879, for $6223.99 debt, and $5234.99 damages and costs. Pending this suit in the state court Boynton, on his own application, was declared a bankrupt April 15, 1878, and received his discharge from all his debts December 23, 1880. An execution on the judgment against Boynton in the state court was issued February 21, 1880, and returned unsatisfied. On March 25, 1881, Boynton filed a petition in the state court, asking for a perpetual stay of execution on the judgment rendered in favor of Ball, and filed a certified copy of his discharge in bankruptcy, together with certain affidavits. Ball was served with notice of this motion and appeared’ and made defence. The motion was overruled by the circuit court, from which ruling Boynton appealed to the Supreme Court of the state, which court affirmed the judgment of the court below with costs. 105 Ill. 627.
The question presented for us to consider is, whether the discharge in bankruptcy was, under the circumstances of this case, a discharge from the judgment rendered in the circuit court of Stephenson County while the proceedings in bankruptcy were pending. It will be perceived that the suit in the state court was commenced before the proceedings in bankruptcy in which the discharge was finally granted. It will also be perceived that the case lingered in the state court from April 16, 1877, until December 9, 1879, when the final judgment was rendered, a period of over two years, but that the plaintiff in error did not obtain his final discharge in bankruptcy until December 23, 1880, which was more than a year after the judgment was obtained against him in the state court.
In Dimock v. The Revere Copper Co., 117 U. S. 559, decided at the last term of this court, a case very similar to this was p. 464presented to us for our consideration. Dimock, being sued in the state court of Massachusetts, made defence, and pending the action was discharged from all his debts under bankruptcy proceedings, receiving his certificate of discharge as a bankrupt a few days before final .judgment against him in the state court. Notwithstanding he had this discharge at the time the judgment was rendered against him in the state court, he did not plead it in bar of that action nor bring it in any manner to the attention of the court. He was afterwards sued upon this judgment in the Supreme Court of the state of New York, and there pleaded his discharge in bankruptcy in bar of the action. That court, however, held the certificate of discharge not to be a bar, and rendered judgment against him. This judgment was reversed in the Supreme Court, in General Term, and that judgment was in turn reversed by the Court of Appeals, which restored the judgment of the court in Special Term. This court, in reviewing that judgment, said that the Superior Court of Massachusetts, in which the first suit was brought, had jurisdiction of the case, which was rendered complete by the service of process and the appearance of the defendant; that nothing that was done in the bankruptcy court had ousted the jurisdiction of that court, which, accordingly, proceeded in due order to judgment; that this judgment having been rendered after the certificate of discharge in bankruptcy which had not been called to the attention of the court in any manner, nor any stay of proceedings in the state court asked on account of the pendency of the bankruptcy proceedings, the question before the Massachusetts court for decision at the time it rendered judgment was, whether Dimock was then indebted to the Revere Copper Company, and we held that it had jurisdiction and rightfully rendered judgment on this question in favor of that company, notwithstanding the proceedings in the bankruptcy court of which it could not take judicial notice. This decision was supported by references to cases heretofore decided involving similar questions in this court and in the courts of the states.
The principle on which the case was decided was that, while the discharge in bankruptcy would have been a Valid defence
Opinion of tbe Court.
to the suit if pleaded at or before the time judgment was rendered in the Massachusetts court, it had in that respect no more sanctity or effect in relieving Dimock of his debt to the company than a payment, or a receipt, or a release, of which he was bound to avail himself by plea or suggestion of some kind as a defence to the action in proper time; that, showing no good reason why he should not have presented that discharge, and permitting the judgment to go against him in the Massachusetts court, without an attempt to avail himself of it there, the judgment of that court was conclusive on the question of his indebtedness at that time to the copper company. That case, so parallel in its circumstances to the one now before us, would be conclusive of the latter if Boynton had had his certificate of discharge, or if the order for it had been made by the bankruptcy court before the judgment in the state court. But, as we have already seen, the judgment in the state court was rendered more than a year before the order of discharge in the bankruptcy court, and Boynton therefore had no opportunity to plead a discharge which had not then been granted, as a defence to that action.
Two propositions are advanced by counsel for defendant in error, in support of the judgment of the Supreme Court of Illinois, as reasons why the certificate obtained so long after the judgment in the state court should not have the effect of a discharge of the debt evidenced by that judgment. The first of these is, that the original debt on which the action was brought in the Circuit Court of Stephenson County no longer exists, but that it was merged in the judgment of that court against Boynton, and was therefore not released under the act of Congress, which declares that all debts provable against the estate of the bankrupt at the time bankruptcy proceedings were initiated shall be satisfied by the order of the court discharging the bankrupt. The argument is, that the judgment now existing against Boynton is not the debt that existed at the time bankruptcy proceedings were initiated; that by the change of the character of the debt from an ordinary claim or obligation to a judgment of a court of
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record it ceased to be the same debt and became a hew and different debt as of the date of the judgment. Some authorities are cited for this general proposition of a change of the character of the debt by merger into the judgment, and some authorities are also cited by counsel for plaintiff in error to the contrary. See Judge Blatchford, In re Brown, 5 Benedict, 1; In re Hosey, 6 Benedict, 507.
But this court, to which this precise question is now presented for the first time, is clearly of opinion that the debt on which this judgment was rendered is the same debt that it was before; that, notwithstanding the change in its form from that of a simple contract debt, or unliquidated claim, or whatever its character may have been, by merger into a judgment of a court of record, it still remains the Same debt on which the action was brought in the state court and the existence of which was provable in bankruptcy.
The next proposition is, that under § 5106 of the Revised Statutes of the United States it was the duty of Boynton to make application to the state court, before judgment in that court, to have the proceedings there stayed, to await the determination of the court in bankruptcy on the question of his discharge. That section is in the following language:
“No creditor whose debt is provable shall be allowed to prosecute to final judgment any suit at law or in equity therefor against the bankrupt, until the question of the debtor’s discharge shall have been determined; and any such suit or proceedings shall, upon the application of the bankrupt, be stayed to await the determination of the court in bankruptcy on the question of the discharge, provided there is no unreasonable delay on the part of the bankrupt in endeavoring to obtain his discharge; and provided, also, that if the amount due the creditor is in dispute, the suit, by leave of the court in bankruptcy, may proceed to judgment for the purpose of ascertaining the amount due, which amount may be proved in bankruptcy, but execution shall be stayed.”
This cannot be construed to mean anything more than that where the bankruptcy proceedings are brought to the attention of the court in which a suit is being prosecuted against a p. 467bankrupt, that court shall not proceed to final judgment until the question of his discharge shall have been determined. The state court could not know or take judicial notice of the proceedings in bankruptcy unless they were brought before it in some appropriate manner, and the provisions of this section show plainly that it does not thereupon lose jurisdiction of the case, but the proceedings may, upon the application of the bankrupt, be stayed to await the determination of the court in bankruptcy on the question of his discharge. Even the direction that it shall be stayed is coupled with a condition that “ there is no unreasonable delay on the part of the bankrupt in endeavoring to obtain his discharge; ” and with the further provision that “ if the amount due the creditor is in dispute, the suit, by leave of the court in bankruptcy, may proceed to judgment for the purpose of ascertaining the amount due.”
These provisions exclude altogether the idea that the state court has lost jurisdiction of the case, even when the bankrupt shall have made application showing the proceedings against him. The whole section is also clearly impressed with the idea that this is a provision primarily for the benefit of the bankrupt, that he may be enabled to avoid being harassed in both courts at the same time with regard to such debt. It is therefore a right which he may waive. He may be willing that the suit shall proceed in the state court for many reasons; first, because he is not sure that he will ever obtain his discharge from the court in bankruptcy, in which case it would do him no good to delay the proceedings at his expense in the state court; in the second place, he may have a defence in the state court which he is quite willing to rely upon there, and to have the issue tried; in the third place, he may be very willing to have the amount in dispute liquidated in that proceeding, m which case it becomes a debt to be paid pro rata with his other debts by the assignee in bankruptcy.
If for any of these reasons, or for others, he permits the case to proceed to judgment in the state court, by failing to procure a stay of proceedings under the provisions of this section of the bankrupt law, or the assignee in bankruptcy p. 468does not intervene as he may do, Hill v. Harding, 107 IT. S. 631, he does not thereby forfeit his right to plead his final discharge in bankruptcy, if he shall obtain it, at any appropriate stage of the proceedings against him in the state court. And if, as in the present case, his final discharge is not obtained until after judgment has been rendered against him in the state court, he may produce that discharge to the state court and obtain the stay of execution which he asks for now. See McDougald v. Reid, 5 Ala. 810.
In Rogers v. The Western Marine and Fire Ins. Co., 1 La. Ann. 161, the court in a similar case, says: “ The proposition that Rogers should have pleaded the pendency of the bankrupt proceedings in the original suit, and cannot disturb the execution of the judgment which is final, is untenable.. The discharge in bankruptcy was posterior to the rendition of this judgment, and operated with the same force upon the debt after it assumed the form , of a judgment as it would have done had the debt remained in its original form of a promissory note.”
These and many other decisions under the bankrupt law of 1841 are to be found in the brief of the plaintiff in error. The same principle is decided in Cornell v. Dahin, 38 N. Y. 253, and in several cases in the District and Circuit Courts of the United States. There is a very able review of the subject by Judge Hillyer of the United States District Court of Nevada, in the case of ’Stansfield, reported in 4 Sawyer, 334.
The same thing was held by the Court of Appeals of New York, in Palmer v. Hussey, 87 N. Y. 303, 310, which was affirmed in this court on writ of error in Palmer v Hussey, 119 U. S. 96.
It follows from these considerations that The Supreme Court of Illinois was in error in failing to give due effect to Boynton? s discharge in bankruptcy, and its judgment is reversed, and the case is rema/nded to that court for further proceedi/ngs in accordance with this opinion.
THE JOHN H. PEARSON.
APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF MASSACHUSETTS.
Argued April 11, 12, 1887. — Decided April 25, 1887.
A vessel was chartered to carry a cargo of oranges from Palermo to Boston. The words “captain engages himself to take the northern passage” were written into the printed blank. The cargo was badly damaged, and the charterers libelled the vessel to recover for the loss. The court below found that “ northern passage ” appeared from the proof to be a term of art, anintelligible without the aid of testimony, that the evidence concerning it was conflicting, and that it was immaterial to decide it, as the claimant was entitled to the least strict definition, and the actual course of the vessel came within that definition. Held, that this was error; that if the term was a term of art, it should have been found by the court; and that if there was no passage known as “northern,” the vessel was bound to take the one which would carry it in a northerly direction through the ‘coolest waters into the coolest temperature, and the court should have ascertained from the proof what passages between Gibraltar and Boston vessels were accustomed to take, and should have determined which of them the contract permitted the vessel to choose.
This was an appeal in admiralty, and presented the following facts:
The barque John H. Pearson was chartered to carry a cargo, consisting mostly of oranges, for the libellants, from Palermo, Sicily, to Boston, Massachusetts. The charter party contained the words “captain engages himself to take the northern passage,” inserted at the instance of the libellants, for the benefit of the cargo, and written into the printed blank. The cargo was badly damaged on the voyage, and this suit was brought to recover for the loss. The controversy is as to whether the vessel, in going from Gibraltar to Boston, took the “ northern passage.”
The court found that “ shippers of fruit consider it of very great importance for the preservation of the cargo that it be kept in as cold a temperature as possible, short of the freezing p. 470point, and have been accustomed for many years to instruct masters to take a northerly course; ” and, after setting forth other facts, stated as “ conclusions, of law ” the following:
“1. The term ‘northern passage’ appears, in view of the testimony of merchants and seamen introduced on both sides, to be a term of art, and is, when taken by itself, without the aid of such testimony, unintelligible.
“ The testimony introduced by the libellants tended to show that the phrase meant a passage from Gibraltar to the Great Banks, and thence direct to Boston, keeping as much to the north as possible during the entire passage; that anything between that and the southern passage was the middle passage.
“ That introduced by the claimant tended to show that it meant anything north of latitudes 30° to 35° or 36°, or of the southern passage; and that the middle passage was anything between the southern passage and the northern, as described by the respective witnesses.
“ It was admitted that the southern passage was in the trade winds. *
“ 2. Upon this testimony, the court, thinking that the true meaning of the term is very doubtful, does not consider it material, and does not undertake to decide whether a preponderance of the evidence favors one of the above definitions or another, and rules that the claimant is entitled to the least strict definition, and that, as the course of the barque comes within such definition, there is no deviation.”
The libel was dismissed, and from a decree to that effect this appeal was taken. The opinion of the Circuit Court is reported in 14 Fed. Rep. 749.
JJfr. Henry W. Putnam, for appellants.
Jdr. Frederic Dodge for appellees.
The facts found do not of themselves establish any construction of the phrase “ northern passage,” still less the construction claimed by appellant. There is nothing in the facts found which casts upon the appellee any burden of proof, cr warrants any presumption which must be rebutted by him.
Upon a resort to evidence for the meaning of the phrase in question, the stricter construction contended for by the appellant is not established by a mere preponderance of evidence in favor of his construction; — still less in the case of an equal balance of opposing evidence as to the meaning. The appellants have to show, in order to establish their interpretation, not merely that there is a usage such as they claim as to the meaning, but that there is a usage so general, so well known and so universally accepted, that the parties to this contract must be presumed to have used the words in the sense so established. The Paragon, 1 Ware, 322; Rogers v. Mechanics' Ins. Co., 1 Story, 603; Robinson v. The United States, 13 Wall. 363; see also Barna/rd v. Kellogg, 10 Wall. 383; Kirchner v. Venus, 12 Moore, P. C. 361; Winsor v. Dillaway, 4 Met. (Mass.) 221; Porter v. Hills, 114 Mass. 106; Mooney v. Howard Ins. Co., 138 Mass. 375; Harris v. Tv/nbridge, 83 N. Y. 92, 100; Lyon v. Culbertson, 83 Ill. 33, 37.
Such a usage as is thus shown to be necessary for the appellants’ purposes, is not necessarily established by the fact that a preponderance of the evidence favors the meaning they contend for. Pa/rrott v. Thacher, 9 Pick. 426; Porter v. Hills, above cited; Winsor v. Dillaway, 4 Met. (Mass.) 221; Brown v. Brown, 8 Met. 573, 276; Daniels v. Insurance Co., 12 Cush. 416, 429 ;1 Law v. Cross, 1 Black, 533.
The conclusion of the circuit judge, therefore, that “the true mfeaning of the term is very doubtful ” really amounts to a finding of fact, that no such usage existed as was necessary to establish the meaning or definition asserted by the appellants.
If the maxim that the words are to be construed “fortius contra proferentem" has any application to the case, it is important first to determine who is “profevens."
It is said in a recent text-book, “It is often difficult to decide who are the proferentes with regard to special words of a contract, but this is to be determined in each case upon an examination of the substance and character of words, made in the light of the whole contract and the circumstances sur-
rounding it.” Jones on Construction of Commercial and Trade Contracts, New York, 1886, § 230. An examination of the cases shows, however, that whenever the words appear to have been selected by one of the parties for his own benefit, and by him proposed for the other’s acceptance, — although they may be in form a promise'by the other, — yet he who selects them is proferens, within the meaning of the maxim, and the construction is to be most strict against him, and most favorable against the other. This principle has been often applied to policies of insurance: National Bank n , Ins. Co., 95 U. S. 673, 679; Grace v. Am. Central Ins. Co., 109 U. S. 278, 282; Moulor v. Am. Life Ins. Co., Ill U. S. 335, 341. And in like manner to Charter Parties; Hudson v. Ede, L. R. 2 Q. B. 566, 578; Burton v. English, 12 Q. B. D. 218, 220, 222; Airey v. Merrill, 2 Curtis, 8, 11; Issakson v. Williams, 26 Fed. Rep. 642, 644. See also Sandar’s Justinian, 6th ed., 332; Bouvier, Law Dictionary, Stipulatio; Maine, Ancient Law, London, 1870, 328, 329; Code Civil (France), Liv. III. tit. iii. § v. de 1’Interpretation des Conventions, art. 1162; Revue International de Droit Maritime, 1885-6, 44.
Mr . Chief Jus tic e Wait e , after stating the case, delivered the opinion of the court.
As the libellants deemed the agreement to 11 take the northern passage ” of sufficient importance to have a printed form changed, so that it might be incorporated in express ’words into the charter party, and this “ for the benefit of the cargo,” which was perishable, it is evident that the words used had some meaning which indicated clearly to the minds of the contracting parties the direction the vessel was to take on her way from Gibraltar to Bdston. It is also evident, from the fact that the vessel was bound to take the northern passage, that the parties understood there was more than one passage which vessels were in the habit of taking in making that voyage, according as their bills of lading or their charter parties required, or the circumstances made desirable. It implies that there were one or more other passages which those engaged in the trade knew by other names or other p. 473descriptions. What “the northern passage” as used in this contract means, therefore, is either a question of fact or a question of construction applicable to understood facts.
If it is, as the court below says it appears to be, a term of art, which, taken by itself, without the aid of the testimony, is unintelligible, then its meaning in “ the art ” — the trade — is one of the material facts in the case on which the rights of the parties depend, and it should have been found and put into the findings of fact which the Circuit Court was required by law to make. The statement of the court, now in the record, implies that there is in fact some particular passage between Gibraltar and Boston, which those engaged in that trade know as “ the northern passage.” If there is, then that is the passage the vessel was bound to take, and it was error in the court to decide that its determination, according to the preponderance of the evidence, was immaterial, for the choice of passages was matter of obligation, not of convenience merely.
If in point of fact there is no passage to which the name or description of “ the northern ” has been given in the trade, then the question becomes one of construction as applied to the known facts of the business. The inquiry is, not as to which passage would be the quickest, or even the best, or which another contract would require of another vessel, but which is “ the northern passage ” within the meaning of this contract. The evident purpose of the libellants was, to keep the vessel as far as possible in the coolest of the passages that those engaged in the trade were accustomed to take, because it is found as a fact in the case that a cool temperature is necessary to the preservation of the cargo, and that the coolest water is north of the Gulf Stream, owing to the fact that there is a cold current between it and the American coast moving in an opposite direction.
Under these circumstances, if the testimony failed to show that any particular passage had acquired in the trade the name of “ the northern,” it was error to rule that the vessel might voluntarily take any other of the known or accustomed passages than one which would carry it in a northerly di-
Counsel for Parties.
rection through the coolest waters and into the coolest temperature. That this was the expectation of the parties is shown by the fact that the stipulation as to the passage was made “for the benefit of the cargo,” the preservation of which required that it should be kept “ in as cold a temperature as possible, short of the freezing point.” The court should have ascertained from the evidence what passages there were between Gibraltar and Boston which vessels were accustomed to take, and then determined which of them this vessel was allowed by its contract to choose as “the northern.”
The decree is reversed, and the cause remanded for further proceedings in conformity with this opinion.