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other, as to any transaction with, or statement by, the testator, intestate, or ward, unless called to testify thereto by the opposite party or required to testify thereto by the court. In all other respects the laws of the state in which the court is held shall be the rules of decision as to the competency of witnesses in the courts of the United States in trials at common law, and in equity and admiralty."

Maloney & Cobb, for plaintiff in error.
Lorenzo S. B. Sawyer, for defendant in error.

Before GILBERT and ROSS, Circuit Judges, and HAWLEY, District Judge.

HAWLEY, District Judge (after stating the facts as above). 1. The objections presented by the first assignment of error are based upon the ground that the testimony of Dr. Leonhardt comes within the provisions of section 858, Rev. St., and that by this section he was not a competent witness to any transactions and conversations between himself and defendant's intestate. We are of opinion that the court did not err in admitting the testimony objected to. It is perhaps true, as claimed by the plaintiff in error, that there is no decision directly in point, but the decisions bearing upon the general question lead us to the conclusion that section 858 does not apply to territorial courts. Good v. Martin, 95 U. S. 90, 98, 24 L. Ed. 341; McAllister v. U. S., 141 U. S. 174, 11 Sup. Ct. 949, 45 L. Ed. 693; Thiede v. Utali, 159 U. S. 510, 515, 16 Sup. Ct. 62, 40 L. Ed. 237; The Coquitlam v. U. S., 163 U. S. 346, 351, 16 Sup. Ct. 1117, 41 L. Ed. 184; Jackson v. U. S., 42 C. C. A. 452, 102 Fed. 473, 479.

In Good v. Martin, supra, the court said a “Territorial courts are not courts of the United States, within the meaning of the constitution, as appears by all the authorities. Clinton v. Englebrect, 13 Wall. 434, 20 L. Ed. 659; Hornbuckle v. Toombs, 18 Wall. 618, 21 L. Ed. 966. A witness in civil cases cannot be excluded in the courts of the United States because he or she is a party to or interested in the issue tried, but the provision has no application in the courts of a territory where a different rule prevails."

Page v. Burnstine, 102 U. S. 664, 26 L. Ed. 268, cited by the plaintiff in error, is not in opposition to these views. That decision was rendered under certain provisions of the act providing a government for the District of Columbia, which are not applicable to Alaska. In the course of the opinion the court said:

"These views do not at all conflict with the previous decisions of this court, holding that certain provisions of the General Statutes of the United States relating to the practice and proceedings in the 'courts of the United States' are locally inapplicable to territorial courts."

By the provisions of section 3 of the "Act providing a civil government for Alaska,” approved May 17, 1884 (23 Stat. 24), there was “established a district court for said district, with the civil and criminal jurisdiction of district courts of the United States." By section 7 of this act it was provided "that the general laws of the state of Oregon now in force are hereby declared to be the law in said district, so far as the same may be applicable and not in conflict with the provisions of this act or the laws of the United States.” At the time this law was enacted there were no restrictions excluding witnesses from testifying in any case. i Hill's Ann. Laws Or. $ 710. These laws were in force in Alaska at the time this suit was brought and at the time of Robert Duncan's death, and were applicable to the proceedings had in this case.

In so far as this case is concerned, there was ample evidence to sustain the verdict in the testimony of Dr. Leonhardt, independent of his testimony relating to "any transaction with or statement of the intestate.” The testimony as to his services, the value thereof, and that no part thereof had been paid, was clearly admissible. In Cowdery v. McChesney, 124 Cal. 363, 366, 57 Pac. 221, the plaintiff was asked questions as follows:

*Q. Has anything been paid to you since his death on account of any services rendered by you to him during his lifetime?

Q. If any balance upon any account was due to you upon the death of George M. Kasson, does that balance still remain unpaid ?"

Objections were made to both questions on the ground that the plaintiff was not a competent witness to testify to such facts, under the provision of section 1880 of the Code of Civil Procedure, which is substantially the same as section 858, Rev. St. The court sustained the objection, to which ruling of the court plaintiff excepted. The supreme court said:

"The inquiry contained in these questions did not relate to anything that occurred before the death of deceased, and does not fall under the inhibition of section 1880 of the Code of Civil Procedure. The ruling of the court was therefore erroneous.”

In relation to these matters there was no conflict. In fact, they stand admitted by the evidence contained in the record.

The defense interposed by plaintiff in error, that Dr. Leonhardt was not entitled to recover anything for medical services rendered Robert Duncan, Jr., because the services were performed under a contract with St. Ann's Hospital, is not sustained by the evidence. The testimony on behalf of the plaintiff in error tended to show that Duncan was in the employ of the Alaska-Treadwell Gold Mining Company, and was a subscriber to St. Ann's Hospital, and that a verbal contract existed between the mining company and the hospital that all of its employés, by paying $1 per month to the hospital, were entitled to medical attendance at the hospital free. There is a conflict in the evidence as to whether the subscribers were entitled to treatment at their homes. Dr. Leonhardt testified that the subscribers were entitled to be treated free by the hospital physician “if they entered the hospital, but not if they were treated at their homes." He further testified that he never entered into any “contract to attend such subscribers away from the hospital.” This is not denied. Any contract made by the subscribers with the mining company or with St. Ann's Hospital might be binding upon them, whether the subscribers were treated at the hospital or at their homes; but the physician could not be bound unless he had agreed to the contract, assented to it, or acted under it.

2. The court did not err in refusing to give the instruction asked for by the plaintiff in error. The language of the instruction was misleading, if not erroneous. The receipt in question reads as follows:

“Juneau, Alaska, March 26, 1895. "Mr. Robert Duncan, Jr., to S. O. Leonhardt, Dr. To attending Mrs. Duncan and baby...

$25 00 To ferry bills for Jan., $14.00; Feb., $10.00; Mar., $10....

34 00

$59 00 "Rec'd payment in full to date.

"Saml. C. Leonhardt, M. D." It will be observed that this receipt does not include any services rendered to Robert Duncan, Jr. It was only prima facie evidence of what appears on the face of the receipt. It was for attending Mrs. Duncan and the baby, and, independent of the receipt, the doctor testified that he had been paid for such services. There was a direct conflict in the evidence as to whether or not at the time of its payment the doctor had not stated that it was in full of all charges for treating Mr. Duncan, as well as his wife and baby. That conflict was settled by the verdict of the jury. Moreover, the court gave proper instructions to the jury with reference to the receipt, and was not required to repeat it in language used by counsel, even if it was admitted to be correct in all particulars. Railroad Co. v. Roller, 41 C. C. A. 22, 100 Fed. 738, 759, 49 L. R. A. 77; Swensen v. Bender, 51 C. C. A. 627, 114 Fed. I; II Enc. Pl. & Prac. 288.

The judgment of the district court is affirmed, with costs.

(114 Fed. 14.)

FARMERS' LOAN & TRUST CO. V. EATON et al.

(Circuit Court of Appeals, Eighth Circuit.

March 10, 1902.)

No. 1,512.

1. RECEIVER-AUTHORITY TO LEASE PROPERTY.

A court, having possession of property through its receiver, may au

thorize him to lease the same. 2. SAME-TERM-RESERVING Right OF CANCELLATION.

Such lease should not be given for a period that will needlessly prolong the litigation, and, if necessary, a provision for cancellation, at the

court's option, should be inserted. 3. SAME-OUSTER OF LESSEE BEFORE ExpirATION OF TERM--Right To DAMAGES.

Where property is leased by a receiver for a fixed term, with the express sanction of the court, and no right to terminate the lease is reserved, and the lessee is ousted by order of court before the natural termination of the lease, compensation should be awarded him for such

actual damage as he has sustained. 4. SAME-- ELEMENTS OF DAMAGES--Loss OF PROPERTY.

Loss of expected profits sustained by a lessee of a railroad lease ere cuted by a receiver, due to the termination of the lea se prior to its natural term by order of court, is a proper element of damages to be awarded the lessee. Appeal from the Circuit Court of the United States for the District of Kansas.

W. H. Rossington, Charles Blood Smith, and Clifford Histed, for appellant. J. D. McFarland and George H. Whitcomb, for appellees.

Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

THAYER, Circuit Judge. The questions to be determined in this case arise on the following facts: In a certain action which was brought by the Farners' Loan & Trust Company, as trustee, to foreclose á mortgage on the property of the St. Louis, Kansas & Southwestern Railroad Company, the circuit court of the United States for the district of Kansas, on November 27, 1896, appointed Dwight Braman as receiver of the mortgaged property. On January 27, 1897, the receiver aforesaid presented a petition to the court, requesting leave to lease the property of said railroad company to Francis S. Eaton, one of the appellees, for the period of one year from January 30, 1897, until January 30, 1898. Such leave was granted, and the proposed lease was submitted to the court and approved. On June 30, 1897, the receiver filed another application for authority to enter into another lease with said Eaton for a term of one year from July 1, 1897, with an option to said lessee to continue such lease in force for a second year. The proposed lease was authorized and approved by an order made and entered of record on June 30, 1897, and was duly executed. By the terms of the latter lease Eaton, the lessee, was to pay a deficit, in the sum of $2,780, which had accrued from the operation of the railroad from March 17, to July 1, 1897. The lessee also agreed to assume and pay certain notes, which had been given for equipment, amounting to $2,400, and were payable at the rate of $200 per month. He also agreed to pay the interest which accrued during the tern of the lease on certain receiver's certificates, to the amount of $12,000, to insure the buildings along the road, to put in at least 2,000 new ties, and to place the road generally in safe condition. The receiver, on his part, was to pay all the taxes upon the property, but the lessee was to receive all the income and earnings of the property, together with all cash then in the hands of the lessee as manager, and also all accounts and bills receivable, which accrued or were received from the operation of the road while the same had been under the charge of the lessee. On September 23, 1897, the court entered a decree of foreclosure and sale, by virtue of which the mortgaged property was sold and the sale confirmed on Deceniber 20, 1898, at which time the purchaser at the foreclosure sale was placed in possession of the mortgaged property. In the meantime, on November 30, 1898, Eaton, who had been or was about to be dispossessed of the leasehold property, filed a petition, asking, by way of relief, that he might continue to operate the road which he had leased until the 1st day of July, 1899, in accordance with the option which he had reserved by the terms of the lease. This petition on the part of Eaton was subsequently referred to a master, to report what, if any, compensation should be allowed to him as lessee, on account of the wrongful termination of his lease. After a full hearing and report, and after exceptions to said report had been heard and considered, the lower court allowed the lessee, as damages for the cancellation of his lease before the termination thereof, the sum of $8,298.88, which was a sum somewhat in excess of the amount recommended by the master. The present appeal was taken by the Farmers' Loan & Trust Company, the complainant in the foreclosure proceedings, from such order or allowance.

51 C.C.A.-41

The principal question which this court is called upon by the appellant to determine is whether Eaton, the lessee, is entitled to any damages on account of being dispossessed of the leasehold property, prior to the natural termination of his lease. It is conceded, apparently, that a court, having possession of property through its receiver, may authorize him to lease the same; but, if such proposition is not fully conceded, it is, at least, well sustained by the authorities. In the case of Mercantile Trust Co. v. Missouri, K. & T. Ry. Co. (C. C.) 41 Fed. 8, 11, it was held by Judge Brewer that receivers, acting under the direction of the court which appointed them, have power to execute leases without the consent of ihe mortgage bondholders. And in the case of Vault Co. v. McNulta, 153 U. S. 554, 560, 14 Sup. Ct. 915, 38 L. Ed. 819, it was taken for granted that such power exists. See, also, Weeks v. Weeks, 106 N. Y. 626, 13 N. E. 96; Beach, Rec. $S 288, 289. The point relied upon by the appellant seems to be that when such leases are made, even with the approval of the court, the court has the right to terminate them whenever the necessities of the litigation so require, and that, if terminated, the lessee is not entitled to compensation for any damages which he may have sustained. We are at a loss, however, to discover any good reason by which such a doctrine can be upheld. A private person has the right to break his contract only on condition that he pays the damages incident to the breach. In some cases the right of an individual to break his contract on condition that he makes compensation in damages is not conceded, but courts of equity will compel specific performance.

And no reason occurs to us why a judicial tribunal which has power to authorize a receiver to enter into a contract should be exempt from the rule which obtains as between individuals. If anything, it would seem that courts ought to be more scrupulous in keeping their engagements, and more ready than private individuals to award damages, when, in the exercise of their powers, they find it necessary to violate agreements which they have unwittingly made through their receivers. A judicial tribunal, as was said in one case (Farmers' Loan & Trust Co. v. Burlington & S. W. R. Co. [C. C.) 32 Fed. 805), “should be chary of promises, eager of performance. It was also held in a New Jersey case (Vanderbilt v. Railroad Co., 43 N. J. Eq. 669, 12 Atl. 188) that the contracts of a receiver, made with either express or implied authority, cannot be annulled or revoked at the mere pleasure of the court, except on the same conditions that an individual may break his engagements. When a court authorizes its receiver to lease, for

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