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CASES ADJUDGED

IN THE

UNITED STATES CIRCUIT COURT OF APPEALS

FOR THE

SIXTH CIRCUIT,

AT

OCTOBER TERM, 1895.

CENTRAL TRUST COMPANY OF NEW YORK v. ASHEVILLE LAND COMPANY.

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE NORTHERN DIVISION OF THE EASTERN DISTRICT OF TENNESSEE.

No. 342. Argued December 11, 1895. - Decided March 3, 1896.

A Tennessee corporation claimed that an English corporation had unlawfully cut timber on its lands. The agent and general manager in Tennessee of the English company entered into an agreement with the Tennessee company that the matter in dispute should be submitted to arbitrators, and that the award should be final. The agent had no express authority to enter into this agreement. After the award, which was against the English company, had been made, the award itself, together with the agreement of submission and a statement of the circumstances of the case, were forwarded to the home office of the company in England. The directors sought to offset the award by the assertion of counterclaims, and agreed to pay the award provided they could recoup from certain persons to whom the English company had sold timber from its own lands, and who were supposed to be the real trespassers or beneficiaries of the trespass. Held, (1) That VOL. XLIII-1

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Syllabus.

the company had the power to submit the controversy to arbitration, or to authorize its agent in his discretion to do so; (2) that it was the duty of the company, upon its being apprised that its agent had made the submission, to disaffirm his act within a reasonable time, and notify the other company of its disapproval; (3) that if it failed to disaffirm the submission in a reasonable time a ratification of the agreement would be presumed; (4) that the assertion of counterclaims was not a disaffirmance, but was such conduct as justified a presumption that the company affirmed the submission; and (5) that the act of the agent in submitting the claim to arbitration was subsequently affirmed by the direction of the English company.

The law of Tennessee permits counties to lay the same, or a less, tax for exercising privileges within the county as that levied by the State for state purposes. The revenue law of the State definitely specifies the subjects of the tax and the rate to be paid to the State on each. A county court appointed a committee to recommend to the court a proper tax levy on both property and privileges, which report was received and adopted. This report included a recommendation as to the necessary rate of the direct property tax for state, county, school and special purposes, and concluded by reporting that the rate "on privileges should be the same as the State." Held, That the report sufficiently specified the privileges subjected to the tax, inasmuch as that is certain in law which by record can be made so.

Under section 4974 of the Code of Tennessee of 1884 (Milliken & Vertrees' ed.), which provides that “three-fifths of the justices entitled to attend, shall be required to levy a tax, or to appropriate public money,” an action of the county court is void which does not on the record appear to have been transacted or ordered by a court composed of the requisite number of justices.

Courts will generally take notice of whatever ought to be generally known within the limits of their jurisdiction. In all these and the like cases, where the memory of the judge is at fault, he resorts to such documents of reference as may be at hand and he may deem worthy of confidence. A court will take judicial notice of the local divisions of the country, — its division into States, and of the latter into counties, districts or townships and the like. So it may judicially know the political constitution of the government, and who constitute those charged with the administration of the government, as the sheriffs, clerks, judges, etc. Section 4974 of the Code of Tennessee of 1884 (Milliken & Vertrees' ed.) provides that " three-fifths of the justices entitled to attend "the county court "shall be required to levy a tax, or to appropriate public money." The record of the County Court of Claiborne County, Tennessee, showed that when the levy for a privilege tax was ordered for 1890 there were 66 present and acting" thirty justices, in 1891 thirty-two justices, and in 1892 twenty-nine justices. The evidence did not show how many justices constituted a full bench of the county court. Sections 81, 82, 83 and 84 of the Code of Tennessee of 1884 provide that counties shall

Opinion of the Court.

be laid off by the courts into civil districts of convenient size, the number of districts being proportioned to the voting population, so that the whole number shall not exceed twenty-five, or four for every one hundred square miles. By section 85 the county court is required to cause a map of the county to be made, exhibiting the districts and giving the boundaries of each, and to record the same in the office of the county clerk, and to file a copy with the secretary of state. Sections 389, 391 and 392 provide that for each district of every county there shall be elected two justices of the peace, and for the district including the county town one additional, and for every county or incorporated town one additional justice. By the act of the legislature of Tennessee of March 28, 1887, Laws of 1887, c. 236, all of the justices of a county are required to attend at every quarterly session of the county court. Every justice holds his office for a term of six years, is elected by the lawful voters of the district, and is commissioned by the governor. Held, (1) That the court would take judicial notice of the records which showed how many justices were entitled to sit at the session of the County Court of Claiborne County when the tax in question was assessed, and from these records would find that the number of justices present and acting was more than three-fifths of the whole number entitled to sit; (2) that the presumption that justices present and acting when the court met continued present and participated in the assessment of the tax could only be rebutted by some other part of the record, which was not done in this case; and (3) that it was not essential for the journal of the court to show that those present constituted the requisite number to lay a tax, if the number of those recited as present was judicially known to the court to be more than the requisite number.

Before TAFT and LURTON, Circuit Judges, and HAMMOND, District Judge.

The opinion states the case.

Mr. John K. Shields (Messrs. Shields & Mountcastle were also on the brief) for appellants.

Mr. Jesse L. Rogers for appellees.

LURTON, Circuit Judge, delivered the opinion of the court.

The Central Trust Company of New York, trustee under a mortgage made by the American Association, Limited, an English corporation owning lands in Tennessee, filed its fore

Opinion of the Court.

closure bill in the Circuit Court of the United States for the Eastern District of Tennessee. Subsequently Henry Holbrook Curtis filed an independent bill in the same court, for the purpose of winding up the affairs of the American Association, Limited, as an insolvent corporation. Clarence Cary and J. H. Bartlett were appointed receivers, the property of the corporation was placed in their possession, and the two causes were consolidated. The Asheville Land Company, a corporation of the State of Tennessee, and the county of Claiborne, one of the counties of the State of Tennessee, became parties by intervention, for the purpose of asserting claims against the American Association, Limited. Each of these interveners obtained decrees, from which appeals were allowed to this court.

The claim of the Asheville Land Company, as presented by its intervening petition, was that it was the owner of lands in Tennessee upon which the American Association, Limited, had trespassed by cutting and removing timber to the value of about $2,000, and that its claim for damages had by agreement between the two corporations been submitted for arbitration to one John M. Brooks, who assessed the damages at the sum of $1,933.71, which sum the American Association, Limited (hereafter called the " English Company”), had not paid, although it had accepted the award and promised to pay the sum thus awarded. The English Company denied the trespass, denied the authority of its agent to submit the matter to arbitration, and denied any agreement to pay the award of the arbitrator. It also set up a claim for money paid for and on account of the Asheville Land Company, amounting to $600, and pleaded this by way of offset. The issues thus presented were referred to D. A. Gaut, as special master, to take proof and report his conclusions of law and fact. The special master reported that the claim of the Asheville Land Company had been submitted to the arbitration of John M. Brooks, through the action of A. A. Arthur, general manager and representative in Tennessee of the English Company, and that the arbitrator had found that the English Company was liable by reason of the trespass mentioned to pay the sum of $1,933.71.

Opinion of the Court.

He further reported that this award had been ratified by the directors of said English Company. He found in favor of the set-off claimed by the latter company, and that after crediting same there was due $1,462.86, with interest from May 28, 1892, and that this sum was entitled to priority over the mortgage to the Central Trust Company by virtue of priority in date and the statute of Tennessee giving preference to domestic creditors out of the assets of foreign corporations doing business within the State. The exceptions filed to this report were overruled and a decree was rendered accordingly. The errors assigned involve two questions: First, the authority of A. A. Arthur as an officer of the English corporation to submit the claim of the Asheville Land Company against the English Company to arbitration; and second, if his authority was insufficient, then has his act in excess of his agency been ratified by the corporation?

Arthur's position is designated as that of "general manager." Whether his duties and powers were defined by any by-law of the company does not appear, though no such office or officer is mentioned in its charter. The company whose agent he was, in respect of such matters as were properly within the scope of a "general manager," was, as before stated, an English corporation managed by a board of directors from its principal office in London. Its charter powers were very wide, and contemplated the conduct of a varied business in America. It had authority to buy, own and sell lands, lay off and build up towns, engage in iron and steel making, railroad building, and generally to do all that pertains to a town building, mining, manufacturing and land speculating company. Arthur was its chief representative in America, where these varied enterprises were to be chiefly conducted. Α power of attorney of limited character was given him, and evidently intended as only partially defining his powers, for it related only to his power to make sales of town lots or parcels of land, lay off roads, streets, etc. It is, however, difficult, on this record, to say that he had authority by reason of either the recorded power of attorney or the general and undefined powers of a general manager to submit a claim

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