RICE 11. EGE.
661
answered the com plaint judgment would be taken by default. What then would have been his course tested by any rational standard? Surely confidence in Ege would have ceased with the commencement of this suit. There would have ben an angry interview, a sharp dismissal and no further joint undertakings. Treat would have retained his own lawyer, taking good care that he was not Ege's lawyer, and would have put in a separate defense. Having been betrayed once he would have been vigilant not to place himself in a position where he could be betrayed a second time. His answer would have exposed the fraud of which he was the victim and would have denounced the conspirators. But, on the other hand, if plaintiff's version is the correct one, Treat's conduct in leaving the defense. toEge is perfectly natural and in accordance with the rules which govern the actions of men. In other words, is not Treat's conduct in intrusting the defense to Ege in direct conflict with his present position that Ege's act!; in making the contract and putting in the answer were without authority from him? A party sued on a forged note does not, usually, intrust the defense to the forger. It seems incredible that the action should have been oommenced, the attachment levied, Messrs. Annstrong & Brown retained to defend, the judgment pro conjessoentered, the answer prepared at Bradford, the home of the defendant, the default opened and issue joined, without Treat's knowledge and consent. Either he was cognizant of all this, or he bas no standing in court, and the action so·far as he is concerned is undefended. No such inference is permissible. The fact that the management of the defense was left solely to Ege is in hannony with the theory of the plaintiffs that he was the trusted agent of Treat and Huff as to their joint interests in Allegany county. that the answer states the defendants' strongest ground .ofdefense, and that it did not occur to anyone to dispute the authority of Ege until the turn of fortune's wheel made Treat the only responsible -defendant. The motion is denied.
RICE et
ale
V. EGE
et ale
(Circuit Co'Urt,N. D. New York. June 80, 1890.) 1.. PRINCIPAL AND AGENT-LIABILITY OF PRINCIPAL.
Upon making division of several oil leases in which plaintiffs and defendants were jointly interested, plaintiffs took a lease for land which had not been tested for oil, and received a written agreement, signed by one defendant in behalf of all the defendants, to pay plainti:IIs $1,000 in case the oil-wells on the land transferred to plaintiffs should be unproductive. The defendants who did not sign this ag-reement knew of the exchange, and acquiesced in it. Their did not deny the execution of the agreement, and there was evidence to show that they authorized their co··defendant to sign the agreement, and afterwards ratified his act. Held, that they were bound by the agreement. ' Said agreement having defined an unproductive well as one in whi<!h oil is not produced in'Paying quantities, evidence that the wells were drilled through the str!\tum.in Wh.icn oil W!\S fQun.,ll,ifat all, in that countY,at $3,000, and only a trace of oil discovered, is sutllcient to ahow that the we1lll were .
.J.
662'
Jl'EDERALREPORTER,
vol. 42.
'l!amilum· Ward, for plaintiffs. <JharlesH. Brmon and JohnE. Brandegee, for defendant Treat· . .George L. Robert8, for other defendants. Cmm, J. Many of the facts appear in the opinion rendered upon the motion to amend the answer, ante, 658.. These need not again be stated. Upon thernerits, but two questions are presented. First, did the defendants enter into the agreement set out in the complaint? Second, were the wells on the Nelson and Dodson farms drilled to a sufficient depth to determine that they were unproductive? . Upon!thefrrst of these questions the issue, as before determined, is a narrow one. The answer admits that the defendants were interested with the plaintiffs in a large number of oil leases in Allegany county; that on July 1, 1881, a settlement was had, and a division of the leases was made between the plaintiffs and the defendants, and, recognizing the binding force of the agreetnent upon both parties; and relying upon its provisibns for their exculpation, the defendants allege that pursuant to its proVisions they were entitled to notice, and an opportunity to examine the Nelson and DOdson wells, in order that they might satisfy themselvesoftheir unproductiveness: It is true that the answer avers "that said agreement was 'signed by J. A. Ege, and that the defEmdants H.B.'Huffand M. C. Treat never signed said agreement," but this alle-gatioIi'ilddsnonew element to the discussion. The plaintiffs do not contend that'Treat and l{ure,I'with their own hands, affixed their signatures to· the paper. : In fact the agreement on its face shows that they did not. The c{)nrention of the plaintiffs is thatEge, as the representative of the other defendltnts and with authority from them, negotiated the agree-merttwith Norton, who ha.d like authority to lact for the plaintiffs. This statement of the situation seems nowhere to be denied in the answer and is not now disputed by Ege or Huff. But were the question of Ege's authority an open one a similar conclusion must be reached. The contract of July 1st was an equitable one. In the division of the leases the lease, was assigned to the defendants. most valuable, the Every consideration of fairnells requireclth'at the plaintiffs should receive or at least that ,the expense of testing it should property of not fall entirely upon them. .For his interest alone in the Richardson lease the defendant Treat received $1 ,292.50. On the other hand the· testimony fails to show tha,t' the leases assigllp.d to the plaintiffs had any value at all. Besides, the plaintiffs were liable t9 lose, and they have since lost, the IaJ;'ge sume:;,pended in drilling the two wells in question. included, there The contract »eing a fair ()ne to. all the is no rooqlJ<;>r the suspicion thatits terms were from him. Were the positive testimony of Treat's participation in alI of these transthe c:;aee the presumption that he 'had knowledge actions elip,J"nate4 of them.is!ilTesistible. .Tbecl:efendants lived together in the same town. Treat hlJ.4"d'elUtJnoijfor'20 YElar$.H'eWB/l 110 Mvice." His place of business directly across the street from Ege's bank. . Their relations
At 1.law/ Tried by the court, ajury having been waived.
663
were intimate. The evidence shows many joint ventures. They were in consultation regarding their oil interests immediately subsequent to the transaction of July 1st, and thereafter they bought property jointly and gave their joint note in payment, taking the title, however, in Ege's name alone. On the lst.day of July, the same day that the agreement in question was made, the plaintiffs assigned to the defendants, Treat being na.med in the assignmant,'all their interest in except 10 acres taken from the west aide Of the property. This assignment was recorded July 25,'1881. On the 13th of.July, 1881, Treat assigned all his interest in the Richardson, lease, and other leases, to Huff andEge for&1,292.50j but he testifi,esthat at that time he had -ascertained, from recent deve1Qpments, thaHheRichardson lease was the only ODe of value. On the 20th of July, 1882, Huff and Ege assigned to John Coast & Sons and H. and W. in the Richardson lease, covering :46. acres of land. A.s the originll1lease was for 57 acres,' this assignment,. evidently, did notQOver the 10 acres reserved .bythe assignment of July.!, 1881. On the trial Treat produced the :originalRiehardson lease, the assignment by the plaintiffs wthe defendants of July 1st, and his assignment to Ega and HUff.. The fact that Ege delivered the assignment of. the Richardson lease to, Treat .is pel'$uasive evidence that the latter knew otthe 8$signment. Tpe evidence regarding the 10 acres iaunsatisfactory and obscure. ,IUs difficulUo determine from the proof:in whom the titleJo the 10; .acres vested aftel the settlement of July: lst, and there is nothing authentic to show who first· conveyed this property after that· settlement. No written'll8signment or· conveyance of the property has been introduced in evidence. The accounts of its disposition are not in harro.ony, ,the evidence leaving the matter very muchin dOUbt. It is entirely clear,howeverj that the defendant Tl'eatnever obtained title to the 10 acres-until after his assignment ofJuly 13,18M, to Huff and Ege, He swears that heobtainedtheassignmentof the 10acres .between the 15th and 30th of July, 1881.· No one pretends that it was prior ,to July 13th., It seems, therefore, impossible to account.{or his receipt of nearly $.1,300, except upon the theory of the settlement of July 1st. He certainly knew thatiUhis 46 acres was owned by eight persons instead of three, &1.300 was too -large a sum for one of them to receive for his interest. And it can hardly be insisted..that this sum covered the other· leases, for he swearS that before that time, the ,parties had 'ascertained' that there was no value to apy of the lea&es eJlcept the Richardson lease. The impression derived from all·these facts is that Treat could not b,ll.vebeen ignorant of the tions carried,on for his benefit and in his. n/l.me. must have known ofthem, 'and, had would have eome of 9.;i$satisfll,ctiQn· on p.ispart, But in addition to these cogent inferences the record Contains positi.ve testiInopy, that Ege's authority from Treat was ample, besides evidence from Ege, and others, that Treat not only had knowledge of Ege's acts but subsequently ratified and confirmed them. Treat denies this, but in many important instances his denial consists merely in a failure to recollect. The de-
664
FEDERAL REPORTER,
voL 42.
fend ants must, therefore, be held to the contract for the following reasons: Jilir8t, the answer practically admits that they executed it. Second; the presumption is strong that Treat must have known of its existence and assented to its terms. Third, the preponderance of testimony establishes Ege's authority to make the contract. Fburth, Treat subsequently' ratified and confirmed it. Upon the remaining question the proof, establishing the unproductiveness of the wells, is.clear. The character and extent of the test required must be measured by the contract and not by the opinion of witnesses. The contract provides for the payment of $1,000 if the Dodson and Nelson wells "prove to be unproductive as oil-wells, or not paying wells, viz. : wells in which oil is· produced· in paying quantities." If the testimony establishes the proposition that the plaintiffs pushed their investigations ·sufficiently to show· that neither the Nelson nor Dodson well was one'itlwhich oil could be produced in paying quantities they are entitled to reCover. Their right (lannot be defeated by proof that a trace of oil Was discovered or even by proof thtitone of the wells might be made to produce a few barrels, for such production was not sufficient to make it a paying well. 'l'he Nelson well was put down 1,600 feet. ' The Dodson feet. Oil in Allegany county is found, if at all, in the third sand. ' 'Both of these wells were drilled through the third sand, and little, if;:&ny, oil was Subsequent developments still further demonetrtited their unproductiveness. They are surrounded by a circle of dry'holes. No oil has been found iIi their vicinity. The plaintiffs are criticised because the wells "were not shot, torpedoed or tubed," but it would seem that it is not necessary to do this unless the drilling shows sorhepromise of oil. Ato'rpedo may make oil flow more freely, but it will not produce oil from barren sand. There was no motive for the pla.intiffs to omit anything reqUired to make the wells a success. It was ulIlnifestly for their interest that the wells should pay. rrhere is no direct proof as to the. amount agreed to be paid for drilling the two wells, but if it were at the rate which the evidence shows was paid for similar, wells in Allegany county the plaintiffs were obligated to pay nearly $3;000. The, comparatively,small sum which they were to receive from the defendants in case the wells proved unproductive was no inducement to them to stop the work until every reasonable test had been made. Every incentive was in this direction. If the wells proved successful it meant a for£une to the plaintiffs. If they failed, it meant a large loss even after the $1,000 had been paid by the defendants. I that the plaintiffs didl111 that the agreement required, and am that nothing which they could have done would have developed oil in pitying quantities in either of the wells in question. It follows that the j)laintiffs are entitled'to the judgment demanded in the complaint) with interest and costs. ,
lrI'ALEERV. CLAY COUNTY.
665
McALEER et al.
tI. CLAY CoUNTY.
(Oircuit Oourt, 8. D. Iowa, O. D. June 16,1890.' HANDuros-JUDGHENT-LIMITATIONS.
The holders of a judgment against a county obtained a writ of mandamu8 commanding the supervisors to levy a tax to discharge the judgment. The decree awarding the writ was reversed by the supreme court, and the cause remanded, whereupon an amended petition formandamu8 was filed. Pending the proceedIngs in the supreme court the period during which, under Code Iowa, § 3025, an execution could issue on the judgment, expired. Held, that the collection of tbe judgment could not be enforced by mandamu8, since the judgment was no longer operative, and the pendency of the mandamus proceedings created no liel'.
At Law. Proceedings for mandamus. On demurrer to answer. MitcheU &; Dudley and Hughes &; Ha8ting8, for plaintiffs. A. a. Parker, for deftmdant. SHIRAS, J. On the 2d day of October, 1864, a judgment was rendered in this,court in favor of Michael McAleer, and against Clay county, Iowa, for· the sum of $9,172.50. On the 2d day of May, 1881, an information for a mandamus was filed by Hugh McAleer and HughMcAleer, Jr., administrators of the estate of Michael McAleer, who had died in the state of New York on February 22, 1881, in which it was charged that the judgment in question remained in force, that a large part thereof remained unpaid, that an ex;ecutioh had been issued and ,returned unsatisfied, that it was the duty of the county board of supervisors ,to levy a tax; for the payment of the portion of the judgment remaining unpaid, and praying that a writ of mandamus be issued, commanding the su pervisors to levy, collect, and pay over a tax sufficient to discharge said judgment in full. On the 15th day of May, 1882, the court, upon the hearing, granted a writ of mandamus requiring the board of supervisors to levy a tax of one mill on the dollar of the assessed value of the taxable property in Clay county for the year 1882, and to collect and pay the same upon the McAleer judgment, and that they levy and collect a tax of one mill for each succeeding year until the said judgment, interest, and costs should be paid in full. Upon a writ of error the supreme court reversed this judgment, on the ground that the answer to the information averred that the whole of the six-mill levy for the year 1882, which was the limit of taxation permissible under the statute of Iowa, was needed to meet the ordinary expenses of the county, and that the court could not reqdhe the county to set aside any part of the levy to pay the judgment when the whole of the levy was needed to meet the current expenses of the county. See 115 U. S. 616, 6 Sup. Ct. Rep. 199. The mandate showing the reversal of the judgment by the supreme court was filed in this court May 17, 1886. On the 13th day of May, 1890, an amendment to the information was filed, in which it was averred that, if the full levy of six mills on the dollar of the taxable property in the county be levied each year, there will be realized therefrom a sum sufficient to defray the ordinary current expenses of