« EelmineJätka »
this, there is nothing in the history of these transactions .rom which it can be inferred that either Hopper & Co. or Wood & Co. advanced money or gave credit to Bullock & Co. on the faith of the engines, or under the belief that they would constitute a part of the real property of the water company.
But it is contended that it would be against the policy of the law to enforce the lien against an integral part of the property of a public corporation, and in support of this proposition reference is made to the case of Foster v. Fowler, 60 Pa. St. 27, in which the court decided that the buildings, etc., of such a corporation, necessary for carrying on its operations, are not subject to a mechanic's lien. In that case the plaintiff attempted to enforce a statutory mechanic's lien, which, if effectual at all, covered not only the machinery and building containing it, but also the entire premises on which they stood. Here the Holly Company claims a contractual lien on a specific piece of property, which, in fact, had not been delivered to or accepted by the water company before the filing of the bill, September 19, 1888, and which up to that time had not become a part of the real estate. The Holly Company had not parted with its possession of the engines which had been placed on foundations for trial, to test their capacity and efficiency, and, had they proved to be defective, would have been removed and thrown back on the vendor's hands. By attaching the engines to the foundations the Holly Company did not intend to waive their lien, which they continued to maintain by actual possession of the property. The sale to Bullock & Co. was not an absolute one, the lien was not a secret one, and up to the filing of the bill possession in fact of the property had not passed to the water company.
It is conceded that the validity of the lien depends on the laws of Pennsylvania, and an examination of the judicial decisions of that state will put at rest any doubt that may be entertained on this subject. These decisions hold that the intention of the parties to the contract is the main thing to be considered in deciding whether they meant to give the vendor a lien on the property sold. Thus, in Shell v. Haywood, 16 Pa. St. 523, where manufacturers had fixed parts of machinery in a building attached to a mill, the owner of the latter, becoming embarrassed, agreed that the boilers and the machinery attached or to be attached to them were the property of the manufacturers, who were to be left to their legal remedy for the materials already furnished, or to the removal of the same at their option; and the court held that, as the parties had agreed that the property sold to the mill owner should be considered as personal property, it was immaterial whether or not, or in what manner, it was attached to the realty. In Hill v. Sewald, 53 Pa. St. 271, the court said that it was not the physical character of the connection with the realty which constitutes the criterion of annexation, but the intention to annex, whether rightfully or wrongfully, is the true legal criterion. In Vail v. Weaver, 132 Pa. St. 363, 19 Atl. Rep. 138, it was decided that the engine, machinery, and appliances of an electric light plant do not pass, with the real estate upon which it is operated, to the purchaser of the realty, at a sale under a mortgage judgment, unless it was the intention to make the plant a part of the realty when it
was erected. If, therefore, under the law of Pennsylvania, as declared by its highest judicial tribunal, the intention of the contract. ing parties is the standard by which the character of boilers, engines, and their appliances which may be placed upon the premises of another, is to be judged, it will not be necessary in the present case to pursue the inquiry as to whether or not a mortgage of the premises will cover after-acquired property; for we have only to discover what was the intention of the parties to the contract of August 3, 1887, to ascertain whether the pumping engines manufactured by the Holly Company were to be considered as personalty or realty. In Vail v. Weaver, supra, the court emphasized its conclusion by saying, “No matter what the law formerly may have been,” mere physical attachment with the realty is no longer a criterion of annexation, but the latter depends on the intention of the parties; citing Hill v. Sewald, supra; Seeger v. Pettit, 77 Pa. St. 437; Morris's Appeal, 88 Pa. St. 368.
It is admitted by counsel for the appellants that, while the engines remained detached and separable from the real estate, the Holly Company was entitled to its lien, but it is claimed that when they were incorporated into the real estate the rights of the defendants, as mortgage creditors and bondholders, attached, and the lien was lost. If, however, this question is to be determined by the law of Pennsylvania, as announced in the cases just cited, then the intention of the parties to the contract of August 3, 1887, must prevail. What the intention was is to be gathered from the terms of the contract, and the parties to it could not have used plainer language than they did to express their understanding of the conditions on which the engines were to be made and placed in position, namely: “It is expressly understood and agreed that the party of the second part (the Holly Company) shall have a lien on all of said engines and connections, and the party of the second part may remain in and have full possession thereof until the whole amount of the purchase price of said engines and connections shall have been fully paid to the party of the second part or its assigns." The parties did not intend an absolute sale of the property. The sale was not to be perfected until the property had been paid for, and to secure the payment of the price the vendor was to retain possession until this condition had been complied with. Retention of possession under such circumstances is inconsistent with an absolute sale. Hineman v. Matthews, 138 Pa. St. 204, 20 Atl. Rep. 843. The words used by the contracting parties must be taken in their ordinary sense, and there is no rule of construction which admits of any other meaning being given to them than that the sale was made subject to the payment of the price agreed on; and this interpretation is confirmed by the action of the Holly Company in holding on to the possession of the engines, and by the proof that there had been no delivery of the property to Bullock & Co. or to the water company, or of acceptance by either of the latter.
As to the general rule of law, uncontrolled by local statutes, governing conditional sales, the opinion of the supreme court of the United States, in Harkness v. Russell, 118 U. S. 663, 7 Sup. Ct. Rep. 51, contains an elaborate discussion of the whole subject, with a full review of the adjudged cases both in England and in the courts of our own country; and the decision of the court was that, both on principle and authority, a conditional sale of personal property, even where it has been accompanied by delivery, is valid both as against the parties and third persons; and the court stated the general rule, as established by overwhelming authority, to be “that, in the absence of fraud, a conditional sale is good and valid as well against third persons as against the parties to the transaction."
The present case does not fall within the class of cases cited by appellants' counsel, in which it has been held that the rails and bridges of a railroad, of necessity, become a permanent part of the whole structure, and therefore cannot be made the subjects of special liens, but is more analogous to the class in which the rolling stock of a railroad company has been held to be the subject of a conditional sale, and on which a lien may be reserved by the vendor. And this appears to be reasonable. Locomotive engines and cars are as essential to the operation of a railroad as pumping engines are to waterworks, but it has been held that the former may be treated as personal property, and as such may be liable to a lien in favor of the seller, which will not be lost in consequence of a prior mortgage which, by its terms, was made to cover after-acquired property. U. S. v. New Orleans & 0. R. Co., 12 Wall. 362. See, also, Gregory v. Morris, 96 U. S. 619; Harlan v. Harlan, 20 Pa. St. 303; Benedict v. Marsh, 127 Pa. St. 309, 18 Atl. Rep. 26; Haak v. Linderman, 64 Pa. St. 499; Krause v. Com., 93 Pa. St. 421; Peek v. Heim, 127 Pa. St. 500, 17 Atl. Rep. 984; Summerson v. Hicks, 134 Pa. St. 566, 19 Atl. Rep. 808; Levan v. Wilten, 135 Pa. St. 61, 19 Atl. Rep. 945; Hineman v. Matthews, 138 Pa. St. 204, 20 Atl. Rep. 843.
As between the parties to the contract, there can be no question of the validity of the lien, or of the right of the Holly Company to enforce it against Bullock & Co.; and it must not be overlooked that Bullock & Co., at the date of the contract, were substantially the owners of the whole capital stock of the New Chester Water Company, and that Samuel R. Bullock held the legal title to the real estate on which the pumping engines were erected, and did not convey it to the water company until long after this suit had been instituted.
It has not been deemed necessary to consider the question of the invalidity of the bonds, issued by the water companies, on the ground that the companies had no power to issue these obligations because of the failure to comply with the requirements of the Pennsylvania statute which authorizes the issue of bonds by stock corporations to an amount proportioned to the value of their paid up shares. The facts found by the circuit court, and confirmed by an examination of the evidence, are sufficiently conclusive to establish the creation of the lien of the Holly Company, and to satisfy us that this lien was not lost or waived by any act of that company, and that no one of the appellants had acquired a superior equitable right to the property in dispute. The decree of the circuit court is therefore affirmed.
WATSON V. STEVENS et al. (Circuit Court of Appeals, First Circuit. October 29, 1892.) BILL OF REVIEW-APPEAL-MANDATE.
After the decision of an appeal it was made to appear by suggestion of counsel in open court, and by a verified petition supported by affidavits, that counsel for the defeated party conceived himself entitled to make application for leave to file a bill of review. Held, that the circuit court of appeals would not itself determine the right of such party to file the bill, but would, in its mandate, reserve to him liberty to file an application therefor in the circuit court, and to proceed thereon and on the bill of review, as the circuit court might determine.
Appeal from the Circuit Court of the United States for the District of Massachusetts.
In Equity. Bill by Jeremiah M. Watson against George H. Stevens and others for infringement of letters patent No. 367,487, issued August 2, 1887, to the complainant, for the method of” and apparatus for compressing shank stiffeners. Thecircuit court held that the alleged invention consisted only of the mechanical adaptation of well-known machines and processes to a new use, and dismissed the bill. 47 Fed. Rep. 117. The complainant appealed to tbis court, which, on September 6, 1892, rendered the following decision, (see 51 Fed. Rep. 757:)
“The decree of the circuit court is reversed. The first and sixtb claims of complainant's patent are sustained for use in producing sbank stiffeners from leather board; and the case is remanded to the circuit court, with instructions to enter a decree for complainant for an accounting, and for a perpetual injunction against making, vending, or using, for producing shank stiffeners from leather board, any machine or method infringing the first or sixth claims; and for other proceedings in conformity with this opinion; the complainant to recover his costs in this and the circuit court."
Thereafter, on September 28, 1892, the appellees (defendants below) filed in the circuit court of appeals a petition supported by affidavits alleging that, since the publication of the opinion on the merits of the appeal, they had discovered the existence and use of two machines for more than two years prior to the application for the patent, which machines were an anticipation of the alleged invention. The machines were described in full, and the petition alleged that their existence and use were well known to complainant before applying for his patent. The relief prayed was:
“(i) That this case be reopened for the purpose of introducing the newly-discovered evidence herein referred to. (2) That this case be remanded to the circuit court, with instructions that the case be reopened for the purpose of introducing the newly discovered evidence herein referred to. (3) That the decree in this case shall be without injunction, or that injunction proceedings shall be sus. pended until such time as your petitioners shall have an opportunity, when the case is remanded to the circuit court for further proceedings, to move in that court for the reopening of the case for the introduction of the newly-discovered evidence herein referred to; and, in case said motion is granted by said circuit court, that the injunction proceedings shall be suspended, pending the final determination of the cause on the new evidence. (4) That the decree in this case sball not be entered or recorded, and that all proceedings therein shall be stayed pending the consideration of this petition. (5) Your petitioners pray for such other or further relief in the premises as to this court may seem meet, and as is required by the principles of equity and good conscience.
The appellant thereafter filed a motion to strike this petition and its accompanying affidavits from the files, which motion was heard before Colt and PutDam, circuit judges, and Aldrich, district judge. At this hearing the court sug. gested that under the decision in Southard v. Russell, 16 How. 547, 571, permission should be obtained by application to the circuit court of appeals to tile a bill of review or supplemental bill in the nature thereof, and thereupon counsel were granted leave to file briefs on the question of the appropriate procedure.
Frederick P. Fish and W. K. Richardson, for appellant. At the hearing it was suggested by the court that under the decision in Southard v. Russell, 16 How. 547, 571, permission to file a bill of review or a supple mental bill in the nature thereof should be obtained by application to the appellate court. Upon examination of that case and all other cases we could find, we frankly admit that such appears to be the law. (For convenience we will speak of defendant's remedy as a “bill of review,” though it is technically a “supplemental bill in the nature of a bill of review,” for the same rules apply to both.)
The petition of defendants, (appellees,) however, is entirely insufficient to be taken as a petition for leave to file a bill of review which is of a definite form. See 2 Daniell, Ch. Pl. (5th Ed.) p. 1578, note 1. We do not, however, desire to oppose any technical objections, but we submit that the petition ought to be amended to clearly state what it desires. As it stands, it gave no notice whatever to us that leave to file a bill of review was to be applied for; and, as we therefore filed a motion to suppress, we submit that we should be allowed costs on the mo. tion and argument, as is done when a bill of complaint is amended after demurrer.
Treating this petition, then, as amended into a petition for leave to file a bill of review, a difficulty at once occurs, namely, is the question whether a bill of review should be allowed to be filed to be decided by the circuit court of appeals or by the circuit court? It was suggested by the court at the argument that the application to the appellate court was merely formal, and leave would be granted as of course. This can be so only if the appellate court simply reserves to defendant the right to apply to the circuit court for leave to file, for it is plain that the preliminary questions of diligence and materiality must be settled by some court before leave to file is finally granted. This will appear from the following considerations:
It is well established generally tbat granting of leave to file a bill of review is not a matter of course. “The granting of such a bill of review for newly-dis. covered evidence is not a matter of right, but it rests in the sound discretion of the court.” Story. Eq. Pl. (10th Ed.) $ 417; 2 Daniell, Ch. Pl. (5th Ed.) p. 1577. note 2. This rule is expressly stated by Mr. Justice Story in the leading case on bills of review. Dexter v. Arnold, 5 Mason, 303, 315.
The principal preliminary question to be examined by the court before granting leave to tile such a bill of review is whether the alleged newly-discovered ev. idence was not discovered by the party until after publication of the decree, and could not have been known to him by the use of reasonable diligence. In Dexter v. Arnold, above cited, at page 312, Story, J., says: "In regard to new matter, there are several considerations deserving attention.
* In the next place, the new matter must bave come to the knowledge of the party since the period in which it could have been used in the cause at the original hearing.
A qualification of the rule, quite as important and instructive, is that the matter must not only be new, but that it must be such as that the party, by the use of reasonable diligence, could not have known it, for, if there be any laches or negligence in this respect, that destroys the title to the relief."
The court cites numerous English decisions to this effect. (In this case, affidavits from both sides were received in order to determine whether the matter was newly discovered or not.) See, to tbe same effect, Story's Eq. Pl. (10th Ed.) § 414, citing numerous English and American cases. The rule as to diligence is stated as follows by 2 Daniell, Ch. Pl. p. 1578:
"Upon the application (for leave to file a bill of review] the court must be satistied that the new maiter has come to the knowledge of the applicant and his agent for the first time since the period at which he could have made use of it in the suit, and that it could not, with reasonable diligence, have been discov. ered sooner.
1 Fost. Fed. Pr. (2d Ed.) $ 355, states the rule as follows:
“Leave should be obtained by a petition praying for leave to file the bill, supported by an affidavit showing that the new matter which it is desired to prove was not known to the petitioner, and could not have been discovered by him with the exercise of due diligence, in time to prove it before the entry of the decree sought to be reviewed."
The reasons for this rule are vigorously stated by Lord Eldon,-Young v. Keighly, 16 Ves. 348, 351, where he says, after stating that the evidence newly offered is very material:
“On the other hand, it is most incumbent on the court to take care that the same subject shall not be put in the course of repeated litigation, and that, with a view to the termination of the suit, the necessity of using reasonably active diligence in the first instance should be imposed upon parties; and the court