362
B,Jl!OIf,l'ER,
vol. 51.
the la:l,lllsJncontrQversYicost slxthou5tmd dollal'tl';,lttld'tblit there Was loaned' bri' them as security two thousand two liundr'M and tWenty dollars.' The deed executed by Whittaker to Mrs. Saunders Was aiquitelaim deed andwasteCGffied, and it stiltes.that the consideration J'eOOlIVOO for the lands was five dollars. Wasnottlils factsutIicient to put IIolJY on inquiry? possible that any !!lane man, having good title to.'lld worth two thousand or six thousand dollars, wO.uld sell it for five question"suggests itso}Vn answer. Add to this the fact that the COtl'vey$D'Ce executed was a' deed, and the .concillsion that Mrs. saunders did not acquire a good arid 'valid title, in the. absence of an explanation,would'be irresistible. It was at least sutlicip.nt tobava put appellants on inquiry. wbich, if they prosecuted, with ordinary diligence, would doubtto actual notioe of the facts as shown by the evidence in this :)Jlltthey prosecuted 0,0 inquiry, and it follows that they are not bona, ftd81hlfcliilsers DQiice. " , .' FlM'P!';r,.haviIlg no title, hill toVunn,pa,ssed none. As the .never had a,ny title to lose by laches, it is unnecessary to question., The decree of the circuit court is affirwed. i
TOWN8HIP OJ' WASHINGTON WI. CO'tlm ft Coun Q/ Eighth
at
O£rcuu..ruJT 1i,1899.)
No. 88. L' TO'W1'r8ltrl'tl-lbILllOUAID' BONDs-Au'l'B:OBITY TO I!I!lUII-CON8TBtfll'l'IOl'f 0:' VTII. ..'" . '
Bu'1'-
Laws Ka\l. ;1876, eo 1q7, autborizing munlciP.. al townsbiPs ,to subscribe for ru.ilroad . Itook, requires (sectioil, 1) a petition by two fiftbsof.the taxpayers, the county commilslonerlto lubmit to the towUBhip electors a proposition ot subscription; :sucbpetiti,n to dlisig'uate (section 2) th.e amount of the stock, "the terms ot , payment;" aJid l)ther l)f the sUbBcription; the propoSitiou to be accepted (seCtloUl) by· two thirds or those, votiug at tbe electiou held for that purpose, and tne bonils to b,ll,ve c;lOUPO,nsattached "as maY,be required by the terms of su.id prop.. osition; It the county commissioners to levy a tax (sectloIl6) "sufficient to pay the interest on suob bouda as, the same shall beoome due(.and to create a sinking fund , lufficieut to PIloY sucb maturity; It pf tbe to be made , payable (section 18) "at any 'time that· may be jilted in tbe propositIOn voted on, It not .er;ceed{ngllO yeo,rs. . Election 14 declarest 'among other tbings, that to the su.id bonds l\b.All be attacbed coupons tor annual Installments of "the principal and interest accruIng trom time to time by the terms ot the bonds.;' Held that, in view of the p.riO.r prov.iBions, th. lauguage quoted trom the.: last, se.ction did n.ot require that,lIJ.l issued under the act sbould provide for aunual payments on the , 'Prin.cIPat;:but merf'I.Y that,lt tbe proposition voted' on pro.vided tor'such anuuu.i paym.enta,ooupou8 therefor should be attached; and thetownsbip had authority by proper J;lr9posltion,vote, eto., to lasue bonds, the wlloie prinoipllJ. ot which should Dot matul'e untl1 80 y!lara. ' ,! ' In an ac;ti91l:byan iI/nQ\'!lnt a on railway ald bouds, Which on their face refer to the act authorIzlIIg tbeir issuance and specifically recite ,the takiilg oteach 'step:required :thereby. the tow-nehip Ie estopped to allege invlIJ.iditY,of boud.,on except. they issued in violation of IOUle constitutioiial or .\i£tutOry requirement.· , , " , ..
e
;.
,
In Error to the CirOuit Court of the United States for the District of Kansua. Affirmed.' (, i . , .,. .
OF WASIlINGTO!t,,;' COI.EB.
863
Statement by SANBORN, CircuitJudge : W. N. Coler & Co. brought suit in the United States circuit Murt for the district of Kansas against the township ofWasldngton, in the county of Chautauqua, Kan., upon a large number of coupons detached from a series of bonds issued by the board of ccmnty of that county, on behalf of the township of Washington, on July 1, 1886. The plaintiffs recovered judgment for $5,803.46. The defendant sued out its writ of error to reverse this judgment, and the only question presented by the assignment Of errors, and argued here, is whether the law under which these bonds were issued restricted the power ofthe defendant, and those authorized to issue bonds on its behalf, to the issuance of bonds that provided for the payment of an installment of the principal annuaJly, commonly called "installment bonds." The case was tried below by the court upon an agreed statement of facts, from which it appears that the plaintiffs were innocent purchasers for value before maturity, and owners of the coupons sued upon and the bonds from which they were detached. One of the bonds and coupons reads 88 follows: Number Dollars, --. UNITED STATES OF AMERIOA. 600. STATE OF KANSAS. COUNTY OF CHAUTAUQUA. TOWNSIJIP Oll'WASHINGTON.
Know all men by these prespnts, that the municipal township of Washington, in the county of Chautauqua, in the state of Kansas, for value received, hereby promises to pay to the bearer, thirty years after date, at the fiscal agency of the state of Kansas in New York city. the sum of live hundred dollars, with interest thereonfl'om date untUpaid, at the rate of seven per centum per annum, payaule semianuuallyat the fiscal agency aforl'said, on presentation of the proper COUPOllS hereto attached. and at the times therein mentioned. respecti vely. This is one of a series of thirty.six bonds of like tenor, date, and amount, numbered from one to thirty-six. inclusive, issupd to the Leroy and Caney Valley Air-Line Hailroad Company, a railroad corporation of the state of Kansas. in full payment of a suuscription by sal<1 municipal township of Washington for one hundred lind eig-hty shares. of one hu.nLlrpd dollars each, of the cavital stock of said railroad company, said SUbscription of stock lind issue of 1IonLlII being made uuder and by virtue of authorIty of. and in oom· pUanee with, the act of the legislature of the lItate of Kansas entitled" An act to l'nable- counties, townsllips, and dUes to aid In the construction of railroads, and to repeal section eight, chapter thirty-nine, of the Laws of 1l:l74, It approved February 25th. ll:li6, and the acts amendatory thereof, and other acls upon the Ilame subject, and in pursuauce of the authority of a special plel'tion regularly wamed and beld on the 27th day of April, A. D. 1886. and which was duly petitioned fOl' in writing by more thlln the reqUisite number of qualified petitioners, and more than two fifths of thl! resiLIent taxpayers of said municipal townShip of Washinj(ton,· and 1I10re than the requ'lsite Dumber of qualified voters, an14 mnre than the tequisite majority of the qnaliliell electors of said township voting in favor of said subscription of Btock. and the issue of thell.e bonus in payment thereof, which issue of bonds with,and not inexctl8s of, the limitation is in every resppct in prescribed by law. ' Executed and issuelt for and on behalfofsald mnnicil'altownship at Washmgton hI order of the ,bO',nd of cuunt,y CVlllwLtlsioue1'5 of saidouunty ot
npER.u. ·.REPORTER,
Chautauqua, at Sedan, the county Eleat, and signed by thecbairman of said lind attested by the county derk, under the seal of 8.aid county, the I1rstday of July, 1886. ----, Chairman of the Board of Commissioners, ", Attest:_-. County Clerk. on face: "$500."] TilE TOWNSHIP OF WASHINGTON, IN CHAUTAUQUA COUNTY, KANSAR, $17.50 . will pay the bearer $17.50 seventeen 50·100 dollars on the first day of Jany., A. D. 1887, at the fiscal agency of the state of Kansas in the city of New York, being interest due on that' date on bond No. - - - for $500, dated July first, A. D. 1886, issued to the Leroy and Caney Valley Air.Line Railroad Company. Chairman of the Board of County Com'rs. .' ,Attest: . - - - - , County Clk;. '[Stamped on face: "I."]
-.---,
Each 'of these bonds was duly registered in the office of the auditor of state of the state of Kansas, and bore the following indorsement: of KansaB. I, Timothy McCarthy, auditor of the state of Kansas. do certify that tbis bond has beeD regularly and legally issued; that thereto are genuine ; and that it was registered in my office according to law this 11th dl\Y of January, 1887. WitH!'ss my hand and official seal. [Auditt)J!'s Seal.] TIMOTHY MCCARTHY, Auditor of State. Section 1 of the act recital! in the bonds, approved Fflbruary 25, 1876, ",hich is chapter 107 of t\ie Laws of Kansas for 1876, provides that, whenever two fifths of the. resident taxpayers of any municipal township petition the board of county commissioners to submit to the qualified voters of the township a proposition to subscribe to the capital stock of a railroad through such county the any railroad company county commissioners cause an election to be held to determine whether such SUbscription shall be made. Section 2 provides that the petition shall designate the railroad company, the amount of stock proposed tobe taken, and the terms of payment, together with the conditions upon which it is proposed .to make such subscription. Section 3 provides that the county commissioners.shall, upon the presentation of sU,ch petition, convene and make an order which shall embrace the terms and conditions set forth in the petition, and fix the time for holding the election. Section 5 provides that, if two thirds of the qualified electors voting at such election shall vote for such subscription, the board of collntycomwissioDers shall order the county clerk to make the subscripin, the Dame the ,township, and shall callse I;luch bonds, with required by the terms of said proposition, tQ be, issued in the Dame of such township. Seotion6 provides that, WHenever any bonds shaH. be issued in pursuance of the foregoing pro"fisionsjit Shall be the duty of the board of county commissioners to levy and oollect' lI.tmually a tax on all taxable property in such township to. paX. the interest on such, bonds, as the same shall become and to 'a sinking fund sufficient to pay such bonds at rna.I
or
TOWNSHIP OF WASHINGTON ". COLER.
365
turity. Section 7 provides that, whenever any sum of the foregoing taxes collected for interest or sil:1king fund shall remain in the hands of the treasurer after paying all the interest due, the board of county commissioners for such township shall cause the treasurer to buy up the bonds at their market value, not exceeding par. Section 10 provides that all the township taxes levied upon the property of and collected from any company to which aid is extended under the provisions of this law shall be applied exclusively to the payment of the coupons, and to provide a sinking fund for the payment at maturity of the principal of the bonds issued by sucb township. Section 13 provides that the principal of the bonds of such township shall be made payable at any time that may be fixed in the proposition voted upon, not exceeding 30 years from their date. Section 14 provides that all bonds issued under the provisions of this law shall be made payable at the fiscal agency of the state of Kansas in the city of New York, and shall be registered in the office of the auditor of the state of Kansas, and to the said bonds shall be attached coupons for annual installments of the principal and the interest accuring from time to time by the terms of said bonds, which shall be receivable as they shall become due for taxes due the county, township, or city issuing such bonds which were levied to pay the interestand installments on such bonds. The petition of the taxpayers to the county commissioners to submit the question of the issuance of these bonds to a vote, provided that the principal of said. bonds should "mature and be payable thirty years from the day upon which they are executed;" the proposition for the issuance of-the bonds submitted to and carried by the vote of the people contained the s&me provision. Joseph G. Waters, for plaintiff in error. Charles Blood Smith, (Ro8sington, Smith &- Dallas, of counsel,) for defendants in error. Before CALDWELL and SANBORN, Circuit Judges, and SErnAs, District Judge. SANBORN, Circuit Judge, after stating the facts as above, delivered the opinion of the court. The act recited in the bonds (chapter 107, Laws Kan. 1876, under which these bonds were issued) gave the authority to and imposed the duty on the county commissioners of determining whether the various provisions of the act and the various terms of the proposition adopted had been complied with before they issued the bonds. They did determine that there had been a full compliance with these terms and provisions, anll so recited in the bonds, and it is conceded by counsel for the defendant that it is estopped by these recitals. as against the plaintiffs, to claim that the bonds are invalid on any other ground than that upon their face they appear to have been issued in violation of some constitutional or statutory restriction. Chaffee 00. v. Potter, 142 U. S. 355-364, 12 Sup. Ct. Rep; 216; Town of Ooloma v.Eaves, 92 U. S. 491; Lake Co. v. Graham, 130 U. S. 674-681, 9 Sup. Ct. Rep. 654.
866 It;isrl1otclaimedthat ,these'oonds- were issued in violation of any rastri<ltioniof:'the' c0Dstitution, l:ind,'ithe; ohly provision of statute which is <tIM,me,d: ,to so restrict the power of the board of county commissioners to iSBuElr ,these bonds as to make them void is the c1ausecontained in section .i4 i0fthe act, which reads as follows: I' And to the said bonds shall be'attached COUpCll1S for annual installments of the principal gnd interestaacruing from time to time by the terms of said bonds." If this clause 1J0ntained theJorrly reference in the law to the time when these h0ud,should mature, there might be some force in the defendant's canbut the law must be considered, and the intent of the legislature drawn, not from a single .clause, but from the entire body of the When this is done, the claim of the defendant is seen to be utterly,without foundation. Section 13 of the' act expressly provides that the principal of the bonds "shall be made payable at any time that mayibe fixed in the proposition voted upon, not exceeding thirty years froin :·their date." Section 2 provides,that the petition for the submissiolloLthe.proposition to subscribe for stock shall state "the terms of payment" therefor. Section 3 provides that these terms of payment shall be submitted to the. vote of the people liS a part of the proposition. Section 9 provides that, if the proposition is carried by the vote of the people, the county commissioners shall cause such bonds, with such coupons attached, ss maybe required" by the terms of said proposition" to be issued., Doubtlpss a:proposition have been submitted snd carried to issue. bonds which should provide forthe piayment of annual installments of the principal, but the terms of the propoE'ition actulllly Bubmittedand carried did,not so provide, hut provided for the issuance of bonds whose principal should be due in 30 years from their date, and in view of the express provision of section 13, that the principal "shall be .at any ti'me that may inthe proposition voted upon, not exceeding thirty years from date," it is very clear that the .clause in section 14, that "110 ,the said bonds shall be ntluchetl coupons trom for anllual installments of the princilJul and the interest time to tinle by the terms of said bonds," cannot be held to mean more :dian that 'if tpe proposition submitted and the ternJS of the bonds issued in compliance therewith provide Jor the payment ot the principal in annual illstallruent!i, then c6i.1ponsfor such installments shall be llttached :to,the bonds;t\nd, as neither the proposition nor the terms 01 the bonds in this case did require the payment of any installments of the principal before the entirE! ,principal became due, uo such coupons were necessary, ' and this clause had no llpplientioll to these bonds: .. Again, section 6 of this law provides that it shall be the duty of the 'countycommissidners to, levy and collect annually' a tax ".$ufficient to PAY th.6 ;interest .0nsPcb:bonJs as the' same shaH· become due, and. to al'inking fund,8,uffichll1t to plt:yisaid bonds at maturity." Section thatwtlen ,the hands of, the treasurer any par(:oCtb,e ,mon<eYltcQUected n:lJm .thia,tnx. paying "all the interest qUEl,"thebpard ofcounty commissioners shall cause the treasurer to buy up the bpnds . ex.ceeding' vat.. A:ndsection 10
TOWNSHIP OF"
WA8HIN<huN :V; COLER.
provides ihnt th'e taxes levied upon tneproperty of any company. aided under pro'v:isions of this law, shall be applied to the payment of the coupons, andHto provide a sinking fund for the payment at maturity of of the bonds issued by such township." If the Iature intended by this law that installment bonds only should be issueq. under it, nO sinking fund would be either necessary or useful. 4- tax could be, and naturally would be, levied each year for the amountnecessary to pay interest and the installment of principal coming due the' succeeding year, and no surplus funds would be accumulated tabu)' bonds before maturity;' The fact that a sinking fund was thus provided for is very persuasive that bonds could be issued under this law, the entire principal ot!'which would faUdue at one time; and when, this law is compared with others passed by the same legislature, which do provide for the issuance of installment bonds, and it is found that in those laws no provision for a sinking fund is made, it becomes almost conclusive. Chapter 37 of the Laws of Kansas for 1876 provides for the issuance by the county of Wyandotte of $123,000 of fundipg bonds, payable in installments. It declares the exact amount that shall be payable in each year, and direyt8'.a levy annually of a sum sufficient to pay the interest aud the instaUment coming due the succeeding year, but makes n.o provision for any sinking fund. Chapter 38, Laws Kan. 1876, authorizes the city of Lawrence to issue bonds payable in not more than 30 years fr.om:their.datei and provides that, "if said bonds shall be made payable in annual installments, they shall have separate coupons attached for such installments they fall due.» It also provides that the mayor and council shall levy in each year a sum sufficient to pay the installments, if. the bonds. are made payable in installments, and that if they are hOt they shall levy a sum sufficient to provide a sinking fund for the redemptionofthebonds at maturity. Chapter 49, Laws Kan.1876, authorizes the counties of Douglass, Franklin, and Anderson to issue bonds in certa.in amQunts, "each payable in equal semiannual installments,"atld provides that a tax shall be levied in each year sufficient to pay the interest .and the installment of prircipal falling due in the succeeding year; :,and makes no provision for a sinking fund. Chapter 50, Kan.1S76, provides that· the city of Chetopa may issue bonds in certain amounts, "payable in equal annual installments," and that a levy of a tax,shall be made in each year sufficient to pay the interest and the inst,alhnent of the principal falling due in the succeeding year,l:>ut vision for a sinking fund. In each of these acts authorizingthe of installment bonds only, .the times of payment and the amounts ()f the installments are expressly fixed, and it is made the duty of theprbper pfficers to levy and collect each year t;tX6SjUSt sufficient to est and the installment of principal falling due the ensuing year, ,but no sinking fund is provided for; while by chapter 38, in which authority is given to the city of issue either installmen,t bonds'ot bonds the ellth:iqjrincipal ofwhieh shall fall due at one time, as'tbe,pebple ,ulliyelect,'the policy of the legislature is. made plain by the< fact.' that this act' provides that mease' installment; bonds are issued;: no 'sinking
368
FEDERAL REPORTER,
voL 61.
fund shall be provided for, but, in case bonds the entire principal of which shall fall due at one time are issued, a sinking fund shall be provided for. In, OPllpter 107, the act under which the bonds in question no provision fixing the amount of any installments were issued, of the prinGlip!1lPrtbetiples when they shall fall due, there is no provisito pay any installment; but there is a provision for ion for the levy of taxes to'provide a sinking fund, there isa provision for buying bonds before they mature, and an express declaration that the bonds issued under this act shall be made payable at any time that may be fixed in the proposition voted upon. The conclusion is irresistible that authority was intended to be and was here conferred to issue these 30year bondll,aad tbejudgment must be and is affirmed, with costs.
ROSENSTEIN
et aZ.
tI. TARR
et al.
(OO'cuitCoun. D. Ma8saC'husetts. July 20. 1892.) No. 8,467. 1. A st$erseaeas Mnd, conditioned according to the statute for prosecuting an appeal,with e:tfect aqd.answering all dalI1s.ges and costs, covers not merely com· pensation for the delay arising from the'af-peal, but also the amount of the decree appeal.ed from, so far as the latter directs the payment 'of money by appellant to , appellee. But in an action on the bond neither the principal nor sureties can be mulcted beyond what was adjudged, as the result of the appeal; and where a sum deposited in court by a receiver was til-ere retained pending an appeal, and no provision was made for interest thereon In the mandate or the decree entered in pursuance thereof"no such interest could be recovered in an action on the supersedeas bond. A.decree for the payIll,entof money by defendant to oomplainant was aftlrtned On appeal, and thedecroo entered, in pursuance of the mandate allowed interest. from the date of the apl'eal. "Notice was at once given to thesuretielil on the 8upersedeas bond that pll,iftti:tf looked to them for payment of the decree. Two days later the sureties were summoned as trustees in a suit against the plaintiff. but gave no attention to the same, and were defaulted therein. Hdd that, as they were in actual person,al default to plainti:tf from the date of receiving the notice, they could not escape. payment of interest to him because of the trustee proc611s, especially as they did, not set aside and cause to remain idle any fund to meet the decree or the judgment in the trustee action. OF TRUSTEE PROOESS. SUPERSEDEAS BONP-LUBILTTY ON.
2. S,urn-INTEREST-MoNEY D:Il:POSITED IN COURT.
8.
SAME-LIAllILlTY OF,
4. 'SAME-FEDERAL AND STATE'COURTS.
No restraint or embarrallSD1-ent can lawfully be puton the enforcement of judgments, or decrees of the federal courts, by means of trustee process issued by a state court; and. as execution could have issued against the principal debtor upon the decree entered in pursullonce of the mandate, the enforcement of such decree aglloinst his sureties oould not be prevented by the trustee suit, for while execu· tion· could not have gone against them. they were so intimately conneoted with him lUI to stand in the same position.
At Law. This,is an action of contract, upon a bond. Thefacts, as agreed upon, w;ere, in substance, as follows: A suit in equity had brought by the in this suit against Joseph J. Burns and Robert Tarr, one of
ROSENSTEIN 'D. TARR.
869
the defendants, to wind up a partnership. A receiver had been appointed, and he had paid into the registry of the court a large sum of money, to await the disposal of the suit. On May 6, 1886, it was decreed that the amount in said registry be paid over to the plaintiffs, and it was further decreed that the said defendants pay to said plaintiffs $1,679.14, together with interest thereon from the date of said writ, and cost of this suit, amounting in all to $3,105.28. An appeal to the supreme court of the United States was taken by the said defendants, and a supe:rsedeas bond was filed, in which Joseph J. Burns and Robert Tarr are principals and William C. Dolliver and John S. Dolliver are sureties, in the penal sUm of $8,000, conditioned to answer all damages and costs if they fail to make their plea good. Joseph J. Burns died during the progress of the suit. Robert Tarr and the said sureties are the defendants in this suit upon the bond. The supreme court affirmed the decree of the circuit court in said case, and thereupon the mandate in said supreme court issued, commanding said circuit court thatl:luch execution and proceedings be had in said cause as, according to right and justice and the laws of the United States, ought to be had, the said appeal notwithstanding. A decree was accordingly entered June 28, 1890, by the circuit court, affirming its previous decree, with costs and expenses, as provided in said mandate. Execution upon and in accordance with said decree of June 28, 1890, was issued July 10, 1890, which execution is in no part satisfied. Notice was given the sureties on the aforesaid bond, and received by them July 2, 1890, of the decree of the said supreme court, and that the plaintiffs looked to them for payment of the amount of the decrees, including interest and costs from the date of the appeal. But the said sureties paid no attention to. the notice. On JUly ,10, 1890, the aforesaid sureties were duly summoned as alleg&d trustees of the plaintiffs in this case in a writ brought against the plaintiffs in this case, returnable before the superior court in the county of Essex and commonwealth of Massachusetts, but the case was later removed to this court, where it is now pending, on the ground that these plaintiffs-the defendants in said action-were residents of another state. The aforesaid sureties did not appear and answer as alleged trustees, and were defaulted in the state court. The aforesaid sureties, 'Villiam C. and John S. Dolliver, were and are copartners at Gloucester. Since July 11, 1890, they had had a balance in the bank to be drawn upon, varying from $2,894.71 to over $4,000, and had also had in their office safe about $500 constantly, and they had always been ready and able to pay the amount legally due from them on said bond. The aforesaid money was kept for the uses of their business, and especially for the payment of the amount due on said bond j and they had reo ceived no interest on the money in said bank and safe. However, as said alleged trustees, they had set apart no money to await the decision of thij court in said trustee process, or to be applied to the payment of said bond, separate from the money used in their business. It was agreed that the condition of the bond had been broken, and that judgv.51F.no.7-24
FEDERJil'J.':REPORTER
51.
ment'mi'ghbbarenlered in fay"or of the plaintiffs against. the defendants for ,thepenaJ: sum therein named. . The question here raised for the COllrtis, for what shall the execution issue?,:$hlllil the exeQutibn issue for an alllount· including (1) the amount of the .decree i from of' :May .6, ,18'86; (2) interest on the amount lefiin the registry'of the court from the date of the decree appealed frOIll ,(3), interest; bn the' further amount of the final decree of June 28, 1890; a,fter ,the trustee process was served on the aforesaid llureties,July 10, 1890? W. F. &: W. Slocwni, for com plainants. E. J. Hadley 'and B. F. Butler, for delandants.
r
PUTNAM, Circuit Judge. .There is no doubt that a8Upersedensbond,: conditioned according to.: the: statute for' prosebuting an appealwith effect and answering all damagfis and costs, covers not merely compensation for the delay arising'fromthe appeal, but also the amount of the decree appeaJ:edfrom, sofarastha latter directs the payment of money by the appellant t6 the 'appellee. Catlett v. Brodie, 9 Wheat. 553; Jerqmev. McCarter, 21 WaU.'17. . It appears thaUhere hasheen rio judgment nor decree, by either tribunal, directing payment of any: interest, or other damages for delay, with reference to the arriounHn the registry of the court. It is elementarythat, in a suit onawper8edeas bond, neither the principals nor the sureties can be mulcted beyond what the courts have adjudged as the result ofitheappeal to which the bond was incident. Whatever questions may' be raised in some courts as to recovery in actions on injunction bonds of da'mages :not assessed, in the principal suit, none such are admitted here. If plaintiffs claim mterest on the fund in the holden to estabHsh theircIaim in the original proregistry, they. ceeding as a condition precedent to any demand for it here, though it is probable the circuit court had no authority in this suit to award such inwrest after themanclate Wl\8 received. Ex parte Washington &:G. R. 00.,140 91, 11 Sup. Ct. Rep. 673. But, on the other hand, the decree entered June 28, 1890,' expressly provided that complainants should receive interest from. that date on all sums which the original defendants were ordered to pay them. This was authorized by Rev. . St. § 966. ,The originailrespondents were in legal defimlt:from the ,instant the decree was entered: and their sureties, who are also defendants in the present soit, were inacttlal and personal default fromtlte instant they received (July 2, 1890) the letter' from complainants' demanding payment of the decree, 'and particularly so after the expiration (July 8th) of the 10'days within; whieh !the issue of anexecutiQIl was forbidden. ' The trustee process set up by -defendants was not served till July 10,1890. There is nothing; in the Icase:showing that eithet surety set apart any fund with which to :discharge I his liability on the 'aup'eTsedeas bond or in <the trustee suit, or had on 'deposit any amount beyond what was reasonable land usual for his current business needs, or that"either has
,.'R9SENSTEIN V. :rARR.
not kept his whole capital active and fruitful, with such margins only as are common and convenient for such pursuits as these sureties are that the other shown to have been in. There is no proof nor defendants have had on hand any moneys for any purpose whatever. Under these c!rcumstances, it is difficult to,see what equity any of these respondents has for disallowance of interest to theJoss of the complainants.They were all in actual personal default before the trustee process was served, and, have been in sucb position that they profited by the delay to an amount presumably equal to the legal rate of interest. Generally a debtor who has been trusteed does not pay interest, unless he is shown to have received interest or had expressly promised to pay it. Abbott v. Stinchfield, 71 Me. 213; Huntress. v. Burbank, 111 Mass. 213; Smith v. Flanders, 129 Mass. 322; Norris v. Insurance Co., 131 Mass. 294. Yet in Huntres8 v. Burbank the court stated that no demand for payment had been made on the sureties; and it has not been brought to my attention that, in any of the suits cited on this point, it appeared that the debtor was in actual personal default before the trustee process was commenced, as in the case at bar. Therefore, if necessary for me to rule on tbis point, I hold that, under the particular facts of this case" the defendants are not relieved by the trustee process from payment of interest. I so hold, although the proposition of plaintiffs that interest on the, decree in this case arises as on contract, and is not merely moratory, or as !iamages, seems to be 1I1et by the supreme court of Massachusetts in Clark v. Child, 136 Mass. 344. On page 348 the court lays down broadly the proposition thnt, in suits all of the courts of sister states, the plaintiff recovers interest according to the law of the forum, and not according to the law of the state in which the judgment was rendered. This could not be so if interest on a ment was presumed to run as by contract. It is true that the original judgment in Clark v. Child was on a tort, and that the court might on that account have distinguished it from a judgment on a contract where interest was promised. But the rule laid down by the Massachusetts court was broad enough to cover every judgment on every cause of action; and, moreover, in the case at bar it appears that the decree was the res'-llt of an adjustment of partnership atlairs, as to which interest is a matter only of equity and arises frolll no express obligation. I do not find that the supreme court has ever ruled directly on this precise proposition, although in Cuyhlan v. Railroad Co., 142 U. S.101, 12 Sup. Ct. Rep. 150, it was hehI that interest on o\'erdue coupons should be computed hy the law of the place of payment, which lor this purpose was the law of the contract, and not by the law of the forum. The same WaS ruled in CrO'lnweU v. County of Sac, 96 U. S. 51, and P",na v. Bowler, 107U. S. ,529, 2 Sup. Ct. Rep. 704. In these cases, however, the suits were directly on the coupons, or for foreclosure, and none of them were on judgments rendered. Moreover, this proposition of the complainants is met, at least for Massachusetts, and therefore lor decrees lind judgments of the circuit court of the United States within this district, by Huntre88 v. Burbank, 8upra; which went expressly on
372
vol 51.
the groulldrtbat interest on ijudgment does not arise from contract, or certainly is not interest of that particular kind which debtors who are trusteed are presumably holden to pay. Except for Huntress v.Burbank, supra, it would seem clear that the ttustee process could tiethave been maintained by reason of the fourth and fifth clauses of section 34, c. 183, Pub. St. Mass., which clauses, moreover, are declaratory of the common law, and of principles broader than the mere letter of the statute. The court, however, appears not to have considered them, and it seems to have been assumed by all parties' that the trustees were chargeable. I think I must base my decision in this case on a proposition of law which relieves me from further investigating any of the foregoing questions. The original decree was of a circuit court of the United States, and against-the principals in the' supersedeas bond. Since July 8, 1890, execution could properly issue against them, and it could not be lawfully delayed, embarrassed, or controlled by any attachment process from any other tribunal. It is true that execution could issue against only the principals, but, so far as the question involved here is concerned, it is impossible to disconnect the sureties from the other respondents. It would be absurd to rule that the sureties might be holden by a trustee process for the debt due by force of the decree, while 'by simultaneous proceedings the execution of the circuit court might be levied therefor oil the goods of the principal defendants. I think the safe and true ground is that no embarrassment or restraint of the character now in question can be put on the enforcement of judgments or decrees of this court; and in this proposition I seem not only sustained, but governed, by the supreme court in Wallace v. McConnell, 13 Pet. 136. As the trustee proceedings could not in any way embarrassthe decree or execution of this court, no cognizance of them is to be taken by me at this stage, whatever discretion to grant delay might or might not have been exercised on a motion for that purpose, seasonably made and properly framed. If the defendants, or any of them, are subject to double litigation, the misfortune is not unlike that which happens to many; and they had their remedy ,though at some expense and inconvenience. If they have ,lost it, which is not probable, especially as thcsuit has by removal been brought under the control of the common-law side of this court, this comes from their inattention to the trustee process, and does not arise frorn the principles which must control my judgment. Damages will be assessed on the principles of this 'opinion, without interest on any portion of the fund which was in the registry of the court,and with interest on the full amount of the decree entered June 28, 1890, and without any deductions on account of the trustee proceedings brought in the state court; and execution will issue accordingly.
GIOTTLIEB ,. THATCHER.
873
GoTTLIEB t1. THATCHER. (O(rcuit Oowrt oj AppeaZs, Eighth O£rcuu' lul,. II, 1899.)
1.
LnUTATION ow AOTIONS-COLOR ow TITL_WHAT CONSTITUTBS.
A landowner gave a trust deed to secure her promissory note. In an action b,. · tbird person against the payee, the note was levied on and sold, the third person becoming the purchaser. He then demanded payment of the maker, which was refused, and he notified her that he would have the land sold under the trust deed, to which she assented. Before such sale, however, she made a direct conveyance to the payee for an expressed consideration equal to the face of the note. The land was afterwards sold by the trustee, and was purchased by the third person, who received a deed conveying on its face the full legal title. Held, that irrespective of the question whether the sales of the note and of the land, respectively, were valid in law, this deed was sufficient to oolor of title, and, being accompanied with payment of taxes, in good faith, for more than five years, was to confer absolute title, under the Colorado statute of limitations relating to unocoupied lands. Gen. St. 1883, § 2187. FA-ITH.
S.
The fact that the third person took the advice of counsel, and was advised that the note was subject to levy, and that, having purchased the same, he evidently believed· that he had a right to cause .the land to be sold for its satisfaction, was sufficient to show that in paying the taxes he relied on color of title obtained in good faith.
In Enol' to the Circuit Court of the United States for the District of -Colora:!\'>. Reversed. E. 'I'. Wells, R. T. McNeal, and John G. Taylor, for plaintiff in error. J. Warner Mills, V. D. Markham, and H. C. Dillon, for defEmdant in .error. Before CALDWELL and SANBoRN,Circuit Judges, and SHIRAS, District .JudgeSHIRAS, Judge. The defendant in error, Lewis C. Thatcher, brought this8ction in the district court of Arapahoe county, Colo., for 1he purpose of determining the title and right of possession to 20 acres -of unoccupied land situated in said county and state; and the defendant in the action,Joseph Gottlieb, being a citizen of the state of California, -removed the same into the circuit court of the United States for the dis·trict of Colorado, where the cause was tried before the court, a jury being waived. Among other defense..'l, the defendant pleaded that under color ·of title by him held in good faith he had paid all taxes assessed upon the land for a period in excess of five years before the institution ofthis suit, and therefore, under the statutes of the state of Colorado, be had become the owner thereof. The court found the facts to be as follows: .. (I) That the title to the property in question was, at and before the 1st day of January, 1874, in Annie C. McCormick. (2) That on January I, 1874, said Annie C. McCormick and Isaac L. McCormick conveyed the said prop.erty to David H. Moffatt, Jr., in trust to secure to SamuelH. Thatcher the payment of a promissory note of said Annie C. McCormick for thirteen hundred and fifty dollars. ($1.350.) payable two years after date, with interest at -twenty percent. per annum. which said instrument was in the usual form of ,deeds used in· Colorado for the security of money. (3) That said note was in-dorsed In blank by said Samuel H. Thatcher, and by him pledged to and left <With Gra)' and Eicholtz some time prior to September, 11877, to secure a loan