Page images
PDF
EPUB

*1

surely and gradually undermining his intellect and understanding, and that for about a year he had become wholly non compos mentis, and was incapable of understanding any business transaction;" and in a deposition of George M. Klein, taken in the same case, who says: "My father was in the mental condition that he was at the time of the failure of the bank about a year before that time. I can't say within a few months, but that is my recollection.” In that same deposition he says: “From a period about six months after that time, until the failure of the bank, I perceived that his mind was growing so much weaker with his physical decline that, although he talked with me frequently about business matters, I saw that his mental condition was such as not to warrant me in acting upon any suggestion he might then make me.” The time from which he measures a period of six months was the time of signing a power of attorney, which was July 5, 1882. A period of six months would carry it to January 5, 1883, or some days after the date of the execution of the deed. These are the only items of evidence tending to show the mental incapacity of John A. Klein. His mental condition at the time of executing this deed was not a question under consideration in the suit in which this answer was made, and deposition taken, but from this answer alone it is claimed that Mrs. Klein is stopped from denying his condition as set up in that answer at that time. Even were these assertions direct and positive, (which they are not,) we do not consider they would estop her from setting up and proving a different condition of things in this case. Judicial admissions and pleadings of a party in another suit than the one under consideration are open to explanation or rebuttal, or it may be shown that they were made by mistake. "Pleadings of a party in one suit may be used in evidence against him in another, not as estoppel, but as proof, open to rebuttal and explanation, that he admitted certain facts.” 2 Whart. Ev. § 838. “The qualities of an estoppel which are imputable to a party's plea, so far as concerns the particular case in which they are pleaded, are not imputable to such pleas when offered in evidence collaterally.” Id. S 1117. If the allegations of this answer are not accepted as an estoppel, (as we do not consider they are,) they can be contradicted by the direct and positive evidence of eight witnesses, including the medical attendant and the pastor of Mr. Klein, as well as the explanation of Mrs. Klein, as to the circumstances of her signing the answer referred to without reading it; and we can but come to the conclusion that Mr. John A. Klein was mentally competent to contract at the time of the execution of this deed, and that, when made, it was valid and binding

It matters not the manner of payment,—whether the proceeds of her mother's property in New Orleans were remitted in cash or by credit to the bank, and so placed to her account. The amount stood there to her credit, properly and legally obtained, whether in cash, checks, or credits. Whether or not she was aware of the manner in which the collections and transmissions had been made could raise no presumption of a collusive or fraudulent intent on her part.

George M. Klein had had charge of the transaction of his mother's business, the collecting and keeping accounts of rents, for years. She

[ocr errors]

1

had implicitly trusted him, and there is nothing to show that she had the least cause to believe or suspect that her confidence was misplaced, or that there was any reason why that course should not be continued. He collected the rents from her other property, and the fact that he still continued to collect the rents from this property after the purchase is, to us, no evidence that she must have permitted him so to do with a fraudulent knowledge. Had the transactions been between strangers, who had never before had such intimate business relations, the presumption would have been much stronger; but a change of the confidential business relations which had existed between Mrs. Klein and her son so long would have been more apt to awaken suspicion of her knowledge of the embarrassed condition of their affairs than would a continuation of such trust and confidence. It does not appear that she ever examined or scrutinized the accounts of the bank as to her rents or their collections, but left the keeping of them entirely to the employes, and accepted them without question. We can see nothing in her course of trust in her son, and her confiding her business transactions to his care, that can raise the presumption of bad faith.

In regard to the holding of the deed from record, the language of the supreme court of Mississippi in the case of Day v. Goodbar, 12 South. Rep. 30, (recently decided, and not yet officially reported,) may well be cited as expressing the law of that state upon that subject. Campbell, C. J., in that case, says:

“This appeal presents another instance of the misleading influence of Hilliard v. Cagle, 46 Miss. 309, a case valuable only as showing a state of facts which led the court to the conclusion that the scheme then condemned was fraudulent as to subsequent creditors. In so far as it may be deduced from the opinion in that case that the withbolding from record of any instrument which by law is good as to third persons not having notice only from the time of its being filed for record is anything more than a circumstance to be considered on the question of fraud, we have corrected that error in Klein v. Richardson, 64 Miss. 41, 8 South. Rep. 204, where the announcement is made that one who fails to record an instrument simply takes the risk of a supervening right to or lien on the land or other thing.

We are unable to perceive a distinction between a contemporaneous instrument and one executed before, and brought into being as to third persons by being filed for record before such persons obtained a lien. I may trust my debtor in the assurance that he will protect me when danger threatens, and, if he does, by a judgment confessed, or a mortgage, or a deed of trust, or sale, before any. body else acquires a specific claim, I am entitled to my advantage; and it is no legal ground or complaint by others that they did not know of my claim, or that there was an understanding or agreement that I was to be protected. The law does not require a proclamation of debts or credit. It only requires good faith. and it does not denounce as bad faith confidence reposed between debtor and creditor.”

This we consider the law applicable to this case, and we find no evidence of bad faith in withholding the deed from record. Had the deed been given for full consideration, and in payment of a valid debt, the very day before the failure, when it was filed for record, it would have been valid, and passed the property to Mrs. Klein. Can it make such transaction less valid that the deed had been executed and in her possession some months before? We think not.

We find no evidence that the grantor concealed the deed or had any connection with retaining it from record. It was delivered to the grantee at the time of execution, and in her keeping until the day

of its being filed for record. Nor do we find any evidence or anything to raise the presumption that it was through the connivance or suggestion of the grantors that it was kept from record, or that there was any fact calculated to put her on inquiry, and which, if followed up, would have led to the discovery that the vendor's intent was fraudulent.

We also fail to find satisfactory evidence that the nonrecording of this deed of conveyance affected injuriously the interests of the bank's creditors, or that on that account it was enabled to obtain greater credit, or that the withholding of it from record in the least affected the business of the bank, or that appellants gave credit upon the faith of the ownership of this property. Several witnesses have testified generally that, had they known that this property had been sold to Mrs. Klein, they would have had their confidence in the bank shaken to some extent; but there is no evidence that any of them searched the records for the purpose of ascertaining whether or not any of the property had been conveyed away, or that they would have known it if the deed had been placed on record at the time of its execution, or that they kept informed upon the purchases and sales of property by the bank. When we consider that these lots were but a small part of the real estate that was held by the Kleins, which was estimated at something over $400,000, and that their liabilities exceeded $1,000,000, and that a very large business was done, large payments made, and deposits received, the very day preceding the failure, we cannot believe from the evidence that the sale of these pieces of property for a full cash value would have affected the standing of the bank or the action of the complainants in making deposits, had it been known at the time of the execution of the deed. In the entire case we fail to find evidence of bad faith on the part of appellee herein, or any presumption arising from her conduct which would render void the title by which she holds the property in question, and the judgment of the court is affirmed, with costs.

UNITED STATES v. TRANS-MISSOURI FREIGHT ASS'N et al.
(Circuit Court, D. Kansas. November 28, 1892.).

No. 6,799.
1. CARRIERS--COMBINATIONS TO MAINTAIN RATEs.

An agreement between several competing railway companies, and the formation of an association thereunder, for the purpose of maintaining just and reasonable rates, preventing unjust discriminaticns by furnishing adequate and equal facilities for the interchange of traffic between the several lines, without preventing or illegally limiting competition, is not an agreement, combination, or conspiracy in restraint of trade in violation of

the act of July 2, 1890, $ 1. 2. SAME-MONOPOLIES.

Nor is such an agreement in violation of section 2 of such act, as tending

to the monopolization of trade and commerce. B. SAME-PUBLIC POLICY-TRANSFER OF FRANCHISE.

Where each company, by such agreement, maintains its own organization as before, elects its own officers, delegates no powers to the association to govern in any respect the operations or methods of transacting the routine

1

business of the several competing lines, but simply requires that each company shall charge just and reasonable rates, and provides for certain regulations in regard to changes in such rates, such contract or agreement is not forbidden by public policy as amounting to a transfer of the fran

chises and corporate powers of such companies. 4. SAME-MONOPOLIES-INTERSTATE COMMERCE ACT.

It was not the intention of congress to include common carriers subject to the act of February 4, 1887, within the provisions of the act of July 2, 1890, which is a special statute, relating to combinations in the form of trusts and conspiracies in restraint of trade.

In Eqnity. Bill by the United States against the Trans-Missouri Freight Association, the Atchison, Topeka & Santa Fe Railroad Company, and others, for the dissolution of an association or combination alleged to be in restraint of trade in violation of the act of July 2, 1890, and for an injunction restraining the several companies from carrying into effect the agreement under which the association was formed. Bill disinissed.

J. W. Ady and S. R. Peters, for complainant.

George R. Peck, B. P. Waggener, Wolcott & Vaile, Wallace Pratt, J. P. Dana, Spencer, Burnes & Mosman, J. D. Strong, W. F. Guthrie, J. M. Thurston, A. L. Williams, N. H. Loomis, R. W. Blair, John R. Hawley, W. F. Evans, M. A. Low, James Hagerman, and T. N. Sedgwick, for defendants.

RINER, District Judge. This is a bill in equity, brought by the United States attorney for the district of Kansas, by direction of the attorney general, in the name of the United States against the Trans-Missouri Freight Association and 18 railway companies, which, it is alleged in the bill, constitute the association.

The object and purpose of the bill is to obtain a decree declaring said freight association dissolved, and enjoining defendants, and each of them, from carrying out the terms of a certain memorandum of agreement entered into by and between the 18 railway companies forming this association, which agreement, it is alleged, is unlawful, because maintained by said railway companies in violation of an act of congress, entitled “An act to protect trade and commerce against unlawful restraints and monopolies," approved July 2, 1890.

It is alleged in the bill that the defendants (the 18 railway compavies) are common carriers incorporated under public statutes of sereral states and of the United States, and are engaged in moving, carrying, and transporting freight and commodities in the commerce, trade, and traffic which is continuously carried on among and between the several states of the United States, and among and between the several states and territories of the United States, and between the states and territories of the United States and foreign countries; and that prior to March 15, 1889, each of the defendant railway companies owned, operated, and controlled separate lines of railroad, and furnished to persons engaged in trade and others, among the states and territories of the United States, separate, distinct, and competing lines of transportation between the states and territories of the United States lying west of the Missouri river and east of the Pacific ocean, and that to encourage and secure the benefit of the competing lines of transportation throughout that region of country the government of the United States and the states and territories within the region just mentioned had granted to the defendants public franchises, land grants, securities, and subsidies of great value. That on the 15th day of March, 1889, the defendant railway companies, not being content with the rates of freight they could receive with free competition among themselves, but contriving and intending unjustly and oppressively to .establish and maintain arbitrary rates of freight and transportation in the interstate commerce throughout said region, did combine, conspire, confederate, and unlawfully agree together, and did enter into a written agreement and contract, known as the “Memorandum of Agreement of the Trans-Missouri Freight Association," by the terms of which said agreement the association has control of all competitive traffic between points in that region of country lying west of a line commencing at the ninety-fifth meridian, on the Gulf of Mexico, and running north to the Red river, and thence to the eastern boundary of the Indian Territory; thence along the eastern line of said territory and of the state of Kansas to Kansas City, Mo.; thence, by the Missouri river, to the point of intersection of that river with the eastern boundary line of Montana; thence by said eastern boundary line to the international line between this country and the British possessions. That the said association, by a board created by each company appointing one person to represent it in the association, and that the several railway companies, members of the association, gave to the association the power to establish and maintain rules, regulations, and rates on all competitive traffic, through and local, within the region of country described in the agreement; and that said association, by the terms of the agreement, is given the power to punish by fine any member that reduces the rate fixed by the association.

It is further alleged in the bill that the said agreement took effect on the 1st day of April, 1889, and that ever since that time the said railway companies, by reason of said agreement and combination, and under duress of the fines and penalties prescribed in the articles of agreement, have put in force and maintained, and now maintain, tariffs and rates of freight fixed by said association; and that the officers and agents of said railway companies have, ever since said agreement took effect, refused to put in force reasonable rates of freight, based upon the cost of construction and operation of their several lines of railroad and other proper elements to be considered in the making of freight rates; and that the people engaged in trade and commerce within the region of country mentioned in said articles of agreement are, by reason of said combination and association, de prived of rates of freight, benefits, and facilities which might reasonably be expected to flow from free competition between said several lines of transportation. It is further alleged in the bill that, notwithstanding said association is in violation of the act of congress of July 2, 1890, said defendants, since the date of said act, have, and still continue to maintain, the arbitrary rates of freight fixed by the

« EelmineJätka »