Davis v. Patrick (122 U.S. 138)/Opinion of the Court

The point taken is, that, as the bill of exceptions was signed after the beginning of the term of this court at which the writ of error was made returnable, and during a term of the circuit court succeeding that at which the case was tried, it cannot be considered. But we are of opinion that this objection cannot avail. The stipulation of September 14, 1883, shows, on its face, that the matter of the settlement of the bill of exceptions had been submitted to the judge, and that the delay was agreed to for the convenience of the judge. The purport of the stipulation is, that the bill had, with the knowledge of the plaintiff, been tendered to the judge for signature. This being so, the consent of the parties that the judge might delay the settlement and signature did not have the effect to cause any more delay than would have occurred if the judge had delayed the matter without such consent. The defendant was not to blame for the delay beyond the time named in the stipulation. He appears to have done all he could to procure the settlement of and signature to the bill, and he cannot be prejudiced by the delay of the judge. The bill of exceptions shows, on its face, that the several exceptions taken by the defendant were taken and allowed at the trial and before the verdict. The cases cited by the plaintiff (Walton v. U.S., 9 Wheat. 651; Ex parte Bradstreet, 4 Pet. 102; Sheppard v. Wilson, 6 How. 260, 275; Muller v. Ehlers, 91 U.S. 249; and Coughlan v. District of Columbia, 106 U.S. 7, 1 Sup. Ct. Rep. 37,) do not contain anything in conflict with this ruling. It is supported by U.S. v. Breitling, 20 How. 252. The motion to strike out the bill of exceptions is therefore denied.

The claim of the plaintiff is, that he was employed, not by the defendant personally, but by the plaintiff's brother, M. T. Patrick. The defendant, not disputing the rendering of the services or their value, denies that they were rendered for him, and denies that M. T. Patrick was his agent. He contends that the services were rendered to the Flagstaff Silver Mining Company of Utah, Limited, an English corporation; that M. T. Patrick was the agent of that company; and that, as such, he employed the plaintiff. The question of this agency was the principal question in dispute at the trial.

The Flagstaff mine was owned in 1870 by certain parties in Utah territory, who sold it, through the defendant, to the Flagstaff Silver Mining Company That company continued to own and operate the mine until December, 1883, when J. N. H. Patrick, another brother of the plaintiff, went from New York to London, the defendant being then in London. On the day that J. N. H. Patrick arrived in London the company received a telegram from one Max well, superintendent of its mine in Utah, stating that the mine was attached for debt. It applied to the defendant for a loan of money; whereupon the following written agreement was made between the company and the defendant, on the sixteenth of December, 1873:

'This agreement, made this sixteenth day of December, one     thousand eight hundred and seventy-three, between the      Flagstaff Silver Mining Company of Utah, Limited, of the one      part, and Erwin Davis, now of the city of London, of the      other part.

'Whereas, the said Erwin Davis, on the twelfth of June, one     thousand eight hundred and seventy-three, advanced the said      company the sum of five thousand pounds, at the rate f  six      per cent. per annum interest;

'And, whereas, the said sum of five thousand pounds is now     due and owing to said Erwin Davis, with the interest thereon;

'And, whereas, it is necessary that the said company should     have a further advance of money for the purpose of continuing      the development of their mine, and for carrying on their      business;

'And, whereas, the said Erwin Davis doth hereby agree to     advance to said company at such time or times as may be      necessary for the purpose aforesaid, not to exceed in amount      the sum of ten thousand pounds, in addition to the said sum      of five thousand pounds already advanced;

'And, whereas, the said company has, at different times and     dates, sold to the said Erwin Davis five thousand one hundred      and ninety-five tons of ore, which said ore the said company      agreed to deliver to the said Erwin Davis at the ore-house of      said company, free of cost; 'And, whereas, they have so delivered two hundred tons   of said ore, leaving a balance of four thousand nine   hundred and ninety-five tons yet undelivered, the cost   of said ore having all been paid to said company by said   Erwin Davis:

'Now, therefore, it is agreed between owing to said Erwin     Davis by the said of the said sum of money now due and woing      to said Erwin Davis by the said company, and the further      advances to be made by the said Erwin Davis, as herein      agreed, and in further consideration of the premises      heretofore stated, J. N. H. Patrick, of Salt Lake, is      appointed manager of all the property of said company in      Utah, and the said J. N. H. Patrick, as said manager, by      himself or his agents, is to have the exclusive, sole, and      irrevocable (except as hereinafter mentioned) management of      all the said company's properties in Utah, and of all the      business in Utah of the said company in mining and smelting      silver and other ores, and any and all other lawful business,      and, as such manager aforesaid of the business and properties      aforesaid, he is hereby authorized and empowered to do,      execute, and perform any and all acts, deeds, matters, or      things whatsoever which ought to be done, executed and      performed, or which, in the opinion of the said J. N. H.      Patrick, ought to be done, executed, or performed in or about      the concerns, engagements, or business of the said company,      of every nature and kind whatsoever, as fully and effectually      as it could do if the said company were actually present,      hereby ratifying and confirming whatsoever the said J. N. H.      Patrick may do in and about the company's concerns and      business. And it is hereby further agreed, that the said J.     N. H. Patrick, or his agents, in furtherance of the purposes      aforesaid, is to enter into the possession of all the said      company's properties in Utah necessary for conducting the      business and management thereof as aforesaid, until such time      as, out of the profits of the workings of the properties      aforesaid, he, the said J. N. H. Patrick, has repaid to Erwin      Davis the said sum of five thousand pounds, with the interest      thereon, and also has repaid to him all and every sums of      money he may have advanced to the said company under this      agreement, together with interest thereon at the rate of six      pounds per centum per annum, and also until he has mined and      delivered to Erwin Davis all the ores sold him by said      company, as per agreement herein stated, and also until he      has smelted the ore so mined and delivered to him, in the      said company's furnaces, according to the terms and agreement      dated the twelfth day of September last, made between the      said company and Erwin Davis, and when he, the said J. N. H.      Patrick, has so paid to him all the moneys so advanced said      company and interest as aforesaid, mined and delivered the      ores so sold and contracted, and smelted said ores, and done      and performed all the agreements herein contained, then the      said J. N. H. Patrick may resign the management aforesaid,      and shall, upon being called upon so to do, deliver to said      company all of said properties in as good conditiona §      possible after the necessary workings, mining, and smelting,      as herein agreed to be done and performed. And it is hereby     further agreed, that the said mine is to be worked and mined      by the said J. N. H. Patrick in a proper and minerlike      manner, and that the said business of said company is to be      managed with economy, and for the best interests of the      parties hereto; that a statement of all the business      transactions, with accounts of the same, showing all moneys      received and the source from whence so received, and all      moneys paid out, with the proper vouchers therefor, is to be      made monthly to said company, at their office at the city of      London, by the said J. N. H. Patrick. And it is hereby     further agreed, that nothing herein contained shall be      construed to defeat or impair any legal rights the said Erwin      Davis may have for the moneys now due said Erwin Davis, or so      to be advanced by said Erwin Davis, or for the delivery of      the ores so sold said Erwin Davis. And it is hereby further     agreed, between the parties hereto, that if, at any time, the      said Erwin Davis becomes dissatisfied with the management of      the business and the property in Utah, he may suspend and      remove the manager and appoint another manager in his place,      with any or all rights, powers, or authority delegated under      this agreement; and, should the said Erwin Davis proceed to      act upon the powers contained in the last preceding clause,      he will consult with the board of directors of the said      company as to the new manager from time to time to be      appointed.

'In witness whereof the said parties here unto have set  their hands the day and year first above written.

J. R. GOLE,

'Secretary, for and on behalf of the Flagstaff Silver Mining     Company of Utah, Limited.

'ERWIN DAVIS.

'Witness to the foregoing signatures: E. JOHNSON.'

At the same time, and as a part of the same arrangement, the company, on the sixteenth of December, 1883, executed to J. N. H. Patrick the following power of attorney:

'Know all men by these presents, that we, the Flagstaff     Silver Mining Company, do hereby constitute and appoint John      Nelson Hays Patrick, of Salt Lake City, Utah, in the United      States of America, their true and lawful attorney to take      possession of and carry on and manage the workings of the      mine or mines belonging to the said company, and for that      purpose to appoint officers, clerks, workmen, and others, and      to remove them and appoint others in their place, and to pay      and allow to the persons to be so employed such salaries,      wages, or other remuneration as he shall think fit; also, to      ask, demand, sue for, recover, and receive of and from all      persons and bodies politic or corporate, to pay, transfer,      and deliver the same, respectively, all sums of money,      stocks, funds, interest, dividends, debts, dues, effects, and      things now owing or payable to the said company, or which      shall at any time or times hereafter be owing or belong to      the said company, by virtue of any security or upon any      balance of accounts of other wise howsoever, or of any part      thereof, respectively; to give, sign, and execute receipts,      releases, and other discharges for the same, respectively,      and on non-payment, non-transfer, or non-delivery thereof, or      of any part thereof, respectively, to commence, carry on, and      prosecute any action, suit or other proceeding whatsoever for      recovering and compelling the payment, transfer, or delivery      thereof, respectively; also to settle, adjust, compound,      submit to arbitration and compromise all actions, suits, accounts, reckonings,      claims, and demands whatsoever which now are or hereafter      shall or may be pending between the said company and any      person or persons whomsoever, in such manner and in all      respects as the said John Nelson Hays Patrick shall think      fit; also, to sell and convert into money any goods, effects,      or things which now belong or at any time or times hereafter      shall belong to said company, and, also, to enter into, make,      sign, seal, execute, and deliver, acknowledg,  and perform      any contract, agreement, writing, or thing that may, in the      opinion of him, the said John Nelson Hays Patrick, be      necessary or proper to be entered into, made, or signed,      sealed, executed, delivered, acknowledged, or performed for      effectuating the purposes aforesaid, or any of them, and for      all or any of the purposes of these presents, to use the name      of the said company, and generally to do, execute, and      perform any other act, deed, matter, or thing whatsoever      which ought to be done, executed, or performed, or which, in      the opinion of the said John Nelson Hays Patrick, ought to be      done, executed, or performed in or about the concerns,      engagements, and business of the said company, of every      nature and kind whatsoever, as fully and effectually as it      could do if the said company were actually present; and the      said company do hereby agree to ratify and confirm all and      whatsoever the said John Nelson Hays Patrick shall lawfully      do or cause to be done in or about the premises, by virtue of      these presents.

'In witness whereof the said company have hereunto affixed     their official seal this sixteenth day of December, one      thousand eight hundred and seventy-three.

A. MALES,

'RUSSELL GOLE,

'Directors.

'J. R. GOLE, Secretary.

'Witness: E. JOHNSON, 5 & 6 Gt. Winchester St., London.' J.     N. H. Patrick testifies that, in consequence of the      arrangement made between the company and the defendant,      though prior to the actual execution of the papers of the sixteenth of December, 1883, he, J. N. H. Patrick,      telegraphed, from London, to M. T. Patrick, in the United      States, instructions to take charge of the mine, directing      him to stave off all debts he could, and saying that money      would be forwarded to him to keep the mine running, and that      full instructions had been written to him; and that the      company telegraphed to Maxwell to turn the mine over to M. T.      Patrick. J. N. H. Patrick testifies that the defendant did     not send any such telegram to M. T. Patrick. On the other     hand, M. T. Patrick testifies that he received a telegram      from London with the name of the defendant signed to it,      instructing him to go to Utah and take charge of the mine;      that that was the authority upon which he did so; that he      received possession of the mine from Maxwell; and that he      employed the plaintiff to do the hauling of the ore. J. N. H.     Patrick testifies that when the news of the financial      difficulties of the company arrived in London, and the      company applied to the defendant for a further loan of money,      he refused to make it unless the company would give him the      management of the mine; and that the company declined to do      so, but agreed to make the arrangement evidenced by the      papers of December 16, 1873.

The purport and bearing of these papers is very plain on their face. The company owed the defendant 5,000, with interest at the rate of 6 per cent. per annum, for that amount advanced by him to it on the twelfth of June, 1873. A further advance of money was necessary to enable it to carry on its business. The defendant agrees to advance to it not to exceed 10,000, in addition to the 5,000 already advanced. It had previously sold to him a quantity of ore, which it had agreed to deliver to him at its ore-house, free of cost, the cost of it having all been paid to the company by the defendant, and a balance of 4,995 tons being yet undelivered. In consideration of the premises, the company appoints J. N. H. Patrick manager of all its property in Utah, he, by himself or his agents, to have the exclusive and irrevocable management, except as thereinafter mentioned, of all its properties in Utah, and of all its mining and smelting business there. He is to conduct and manage the above business until such time as, out of the profits of the working of the properties, he has repaid to the defendant the 5,000 and interest, and also all moneys the defendant may advance to the company under the agreement, with interest, and also until he has mined and delivered to the e fendant all the ore so sold to him by the company, as stated in the agreement, and also until he has smelted in the furnaces of the company the ore so to be mined and delivered to the defendant, according to the terms and agreement of September 12, 1873, made between the company and the defendant. When all this is done, J. N. H. Patrick may resign the management. He is to work the mine in a proper manner, and manage the business of the company with economy, and for the best interests of the parties to the agreement, and is to render a monthly statement, with vouchers, to the company at London. If at any time the defendant becomes dissatisfied with the management of the business and the property in Utah, he may suspend and remove the manager and appoint another manager in his place, with any or all rights, powers, or authority delegated under the agreement; and, should the defendant proceed to act upon such power of suspension and removal, he is to consult with the board of directors of the company as to the new manager to be appointed. The power of attorney from the company to J. N. H. Patrick appoints him to be the attorney of the company, to take possession of and carry on the mine, and for that purpose to appoint workmen and others, and to pay and allow them such remuneration as he shall think fit.

The relation between the defendant and the company was strictly that of creditor and debtor. The agreement of December 16, 1873, in connection with the power of attorney, was simply a method of securing the defendant, as a creditor of the company, for past and future advances, and to ensure the delivery of the ore which he had bought and paid for. The irrevocable character of the appointment of J. N. H. Patrick as manager, with the power given to the defendant to suspend and remove him, and to appoint another manager in his place, on consultation with the board of directors of the company, was an incident of the security to the defendant, and a means of having the operation of the mine continued until the debt to him should be discharged. Any new manager to be appointed was to have the rights, powers, and authority delegated to J. N. H. Patrick under the agreement, and none others. The agreement did not in any manner make the defendant a partner with the company, or with J. N. H. Patrick, or make J. N. H. Patrick the agent of the defendant in managing the mine, so as to make the defendant responsible for any contract entered into by J. N. H. Patrick, as its J. N. H. Patrick. The company continued it through J. N. H. Patrick as its manager, agent, and attorney, and responsible for his contracts as such. Cox Cassidy v. Hall, 97 N. Y. 159. v. Court of Wards, L. R. 4 P. C. 419; Cassidy v. Hall, 97 N. Y. 159.

This being the proper legal view of the papers of December 16, 1873, the defendant, at the trial, asked the court to charge the jury as follows: 'The jury are instructed that the contract between the Flagstaff Mining Company and the defendant, and the power of attorney from the company to J. N. H. patrick, constituted J. N. H. Patrick the sole manager and comptroller of the mine, for the time being, as the general agent and rer esentative of the company, and that the attitude of Erwin Davis, as a creditor of the company, to whom J. N. H. Patrick was bound to pay all profits of working the mine, did not render him personally liable for any of the expenses incurred by J. N. H. Patrick while working and operating the mine pursuant to the agreement and situation created by the contract and power of attorney. The legal effect of the contract and power of attorney was to give to the defendant, Davis, security for the indebtedness of the company to him, and was not in any way to render him liable personally for any debts of the company incurred in working the mine, in hauling ores or otherwise.' The court gave this instruction, with the following qualification and comment: 'Of course that is to be taken in connection with the other instructions, if the r iginal transaction between J. N. H. Patrick and the Flagstaff Company was what it purports to be; but if Davis was the real party, then he is liable here.' The defendant excepted to the giving of this qualification and comment. This qualification and comment put aside entirely the legal effect of the agreement and the power of attorney, as those papers were construed by the court, and which construction was the correct one, and left it to the jury to determine what was the relation of the defendant to the business, and to ignore entirely the legal effect of the instruments. There was nothing ambiguous in the terms of the agreement, and there is nothing in the record to show that it did not truly represent the actual relations between the company and the defendant, and the actual circumstances of the connection of the defenant and of J. N. H. Patrick with the enterprise.

In another portion of the instruction of the court to the jury, it stated to the jury, under the exception of the defendant, that if they should conclude 'that Davis was the Flagstaff Mining Company, operating the mine for his own use and benefit, then his liability is fixed, and he cannot escape it. That is plaintiff's theory, and it may be a reasonable or an unreasonable one. If the testimony convinces you that the plaintiff's theory is correct, then you are justified in finding a verdict for the full amount claimed for these services, if they are according to contract price.' This was substantially an instruction to the jury that they might conclude, from the terms of the agreement, that the defendant was the company, and that, if they should conclude that the agreement made J. N. H. Patrick the agent of the defendant and not the agent of the company, in the management of the mine, then the defendant was liable to the plaintiff. This instruction overrode the legal purport of the agreement, and was erroneous. The court further instructed the jury as follows, under the exception of the defendant: 'There is another view of the case, in which there may possibly be a liability. It is claimed that the ores hauled by Patrick were really the ores that belonged to Davis, independent of any person operating the mines. If that be so, and Patrick undertook to haul them for the defendant, by direction of the superintendent of the mines, representing Mr. Davis, the defendant would be liable. If the ores belonged to him, then he would be required to pay for the hauling, if his agent represented him in the matter of making the alleged contract. If you are satisfied that the mines were operated by Davis, that he received the profits arising from the same, or that the ores belonged to Davis, and Patrick was employed by a representative of Davis to haul the same, then Davis would be liable for the hauling of the same.' In this instruction, the theory of the liability of the defendant was, that he really owned the ores which were hauled by the plaintiff, and that J. N. H. Patrick represented the defendant in procuring the plaintiff to haul them. This assumed liability of the defendant was not made to rest upon any connection which the defendant had with the management of the mine, or upon the written agreement between the defendant and the company, or the relation created by that agreement. But we do not understand the testimony of M. T. Patrick, or any other testimony in the case, as showing that the ores hauled belonged to the defendant, independently of his relations with the company, created by the written agreement; nor that the testimony purports to show anything as to the ownership of the ores by the defendant, other than that the ores taken from the mine belonged to the defendant as the operator of the mine for the company. The testimony of M. T. Patrick shows that the proceeds of all the ores mined and hauled by A. S. Patrick to the smelting furnace, and smelted and sold, were deposited in bank in the name of the company; that the books and accounts were all kept in the name of the company and that the mine was run in the name of the company. The entire testimony is to the effect that the ores taken from the mine did not belong to the defendant, independently of the fact that he was operating the mine for the company. J. N. H. Patrick testifies as follows: 'There were no ores delivered to Davis during my management; all ores mined and hauled by plaintiff were smelted and sold, and the money put in the bank to the credit of the company, and went to pay expenses of running the mine.' It does not appear that any ore taken from the mine was delivered to the defendant as a portion of the ore referred to in the written agreement as purchased by him from the company, or that that portion of the agreement was ever carried into execution. The last instruction quoted was, therefore, based upon an erroneous theory, unsupported by evidence, and the jury may have rendered its verdict upon this erroneous theory, ignoring the view that the defendant was the company. This second erroneous instruction may, therefore, have misled the jury to the injury of the defendant.

For these errors the judgment is reversed, and the case is remanded to the circuit court, with a direction to award a new trial.