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PARDEE, Circuit Judge. At a preceding day of this term a judgment was rendered herein reversing the judgment of the circuit court and remanding the cause, with instructions to dismiss the action with costs. This judgment was given on the ground that the record did not affirmatively show the jurisdiction of the court. Through inadvertence, the directions with regard to costs provided for the costs of the circuit court only, leaving the costs of this court under the rule to be taxed against the defendants in error, who were also the defendants in the circuit court. As the judgment of the circuit court was reversed, and the cause remanded with instructions to dismiss for want of jurisdiction, all of the costs, both of this and the circuit court, should be paid by the plaintiff below, plaintiff in error here. Railway Co. v. Swan, 111 U. S. 379, 388, 4 Sup. Ct. 510. It is therefore ordered that the judgment of this court entered in the above-entitled cause on the 11th day of December, 1894, be, and the same is hereby, amended so as to read as follows: It is now here ordered and adjudged by this court that the judgment of said circuit court in this cause be, and the same is hereby, reversed, at the cost of the plaintiff in error, and this cause is remanded to said circuit court, with instructions to dismiss the action at the costs of the plaintiff.
SOCIETY OF SHAKERS AT PLEASANT HILL et al. v. WATSON et al. (Circuit Court of Appeals, Sixth Circuit. June 4, 1895.)
No. 272. 1. FEDERAL COURTS-JURISDICTION-CITIZENSHIP.
W., the owner, and S., the pledgee, of a note, prepared and verified a bill to charge such note as a lien on the property of the maker. The bill contained proper allegations of diverse citizenship. Before it was filed, S. died, but the bill was filed without change. Subsequently, the executris of S. filed a so-called "supplemental bill,” setting out the preparation and filing of the original bill and her interest in the subject-matter, but making no allegation as to her citizenship. Held, that W. was the only party to the bill as originally filed, and, his title to the note being a sufficient foundation for the suit, the court had jurisdiction, which was not ousted by the
subsequent intervention of S.'s executrix, whatever her citizenship might be. 2. EQUITY-JURISDICTION-MULTITUDE OF PARTIES.
The Society of Shakers at P., in Kentucky, are an unincorporated community, having a membership of about 100, which is constantly changing by additions, withdrawals, and deaths. The property of the community, pursuant to articles of covenant between the members, is held in a mass in common, without any individual interest in any member, and is managed and disposed of, for the purposes of the society, by certain trustees chosen by the society from time to time. Held, that a suit upon a note executed in behalf of the society by the trustees was properly brought in equity, even without regard to the statute of Kentucky (Act Feb. 11, 1828) giving the right to sue in equity in such cases, and that it was sufficient to make parties the society and the trustees for the time being, who were
also members of the society. 3. SAME-LIEX.
Held, further, that an instrument in the form of a promissory note, exe cuted in behalf of such society by its trustees, in the form in which they were accustomed to do business, and in return for money which went to increase the funds of the society, created an equitable lien upon the property of the society.
4. PRINCIPAL AND AGENT-SIGNATURE BY AGENT.
Where the language of an instrument, with respect to the party to be charged, is equivocal, and such instrument is signed by an agent in his own name, with the addition of the titie indicating his agency, evidence is admissible, as against the principal, to show that the instrument was in fact intended as his obligation, and not that of the agent.
Appeal from the Circuit Court of the United States for the District of Kentucky.
This was a suit by Oliver Watson and Letitia Souther, as executrix of Henry Souther, deceased, against the Society of Shakers at Pleasant Hill, Ky., Napoleon D. Brown, James W. Shelton, and Mary Jane Sutton, trustees of said society, to subject the property of the society to a charge for the payment of a note.
The circuit court rendered a decree for the complainants. Defendants appeal. Affirmed.
The original bill in this case was filed on the 11th day of May, 1891, in the names of Oliver Watson and Henry Souther, as complainants, against the defendants above named, for the purpose of subjecting the property of the said Society of Shakers, one of the above-named defendants, to an equitable charge for the payment of a promissory note alleged to have been executed by the said society on the 18th day of October, 1882, and given to one M. M. Mays, of which the following is a copy: "$9,985.
October 18, 1882. "Seven years after date, we promise to pay to the order of M. M. Mays, or bearer, the sum of nine thousand nine hundred and eighty-five dollars —/100 dollars, value received, with interest at the rate of 6 per cent. per annum from (late until paid. Negotiable and payable at the Fourth National Bank, Cincinnati. If not paid when due, to bring 8 per cent. from date.
"Dunlavy & Scott, "Trustees of the Society of Shakers at Pleasant Hill, Kentucky.” At the time of the bringing of this suit, the defendants Brown, Shelton, and Sutton were the trustees of the society, and were made parties as such, and also in their individual capacities as members thereof. Dunlavy and Scott and one Boisseau were, at the time of making the note, trustees of the society. This note was sold and indorsed by Mays to the complainant Watson on or about July 2, 1889, in part payment for a farm known as "Chatham,” near Fredericksburg, Va. In August, 1889, Watson borrowed from the complainant Souther the sum of $5,000, and, as collateral security for the payment of that sum, pledged the above-mentioned note to Souther, and delivered it to him, but did not indorse it. The original bill was prepared and signed and sworn to by Watson in New York on the 13th day of March, 1891, and by Souther in Virginia on the same day, and was thereafter transmitted to their attorneys in Kentucky, to be filed in the proper court. It was not filed, however, until May 11th following. In the meantime said Souther died, leaving a will, which was probated on April 17, 1891; and his wife, Letitia Souther, was appointed and qualified as the executrix thereof. On the 7th day of September, 1891, Letitia Souther, as executrix, filed what is termed in the record a “supplemental bill,” setting out the circumstances above stated relating to the preparation of and swearing to the original bill of complaint and the filing thereof, the death of said Henry Souther, his leaving a will, the probate thereof, and her appointment as executrix. In this supplemental bill she adopted and reaffirmed the statements and allegations of the original bill, and prayed to be substituted as complainant in the place of the said Henry Souther.
The defendants appeared, and on the 2d day of November, 1891, filed their demurrer to the original bill and supplemental bill, in which they set out as special grounds thereof: "First. That it appeareth on the plaintiff's' own showing by the said bill that their only cause of action, if any, is for money due upon the alleged note exhibited with the bill, for which they have an adequate and complete remedy at law. Second. That it appeareth on the face of the note sued upon and exhibited with the bill that the same is not the obligation of the Society of Shakers at Pleasant Hill, Ky., and is not binding upon the defendants or either of them. Third. That it appears from the bill and exhibits filed
that the said Dunlavy and Scott had no power or authority to bind the Society of Shakers at Pleasant Hill, Ky., by the alleged obligation sued on."
After a hearing upon the demurrer, it was overruled by the court; and, upon the suggestion of the court, the bill was amended, but no new fact material to the questions presented was set out in the amendment. Thereupon the defendants answered, setting out the following grounds of defense: First. (a) That the society never executed the note. (b) That the society never by the note promised to pay according to the tenor of the note or otherwise. (c) That the note was not signed in a proper manner to bind the society or its estate, nor in accordance with the custom and usage of the society or its trustees. (d) That the alleged note or contract was not authorized by or consented to or approved by said society, or the ministry or elders thereof. Second. That the note is not the act and deed of Dunlary & Scott, nor of said Dunlavy, Scott & Boisseau, or either of them. Third. That the note was not signed, executed or delivered, or its execution or delivery authorized or consented to, by all or any or either of said trustees. Fourth. That the note is without any good or valuable consideration. Fifth. That neither said trustees, nor any or either of them, had any power or authority to bind the said society or its estate or property by the execution of the note. Sixth. That the alleged holders or owners of the note were not innocent purchasers thereof, but took the same with notice, and fully protected themselves in the transaction. Seventh. That neither Dunlavy & Scott, nor either of them, as trustees of said Shakers at Pleasant Hill, Ky., or otherwise, had any authority to make or use the paper sued upon, or to bind the society thereby.
Replication having been filed, proofs were taken upon the issues presented by the answer. The defendants the Society of Shakers at Pleasant Hill are a community of people living in Mercer county, in the state of Kentucky, and are commonly known and described by the name last mentioned; and the defendants Brown, Shelton, and Sutton are members of the community, and at the time of the commencement of this suit were its duly appointed and authorized trustees or agents, selected in pursuance of the articles of covenant of the community, and, as such trustees, hold all the property of the society. The society has an actual membership of more than 100 people, and the membership is constantly changing by additions, withdrawals, and deaths. Upon the coming together of the community, the several members of it subscribed to certain articles of covenant, a copy of which is attached as an exhibit to the bill. The articles were duly recorded in the register's office of the proper county. All their property, both personal and real, is held in a mass in common; no one of the members claiming any specific interest therein, everything being devoted to the joint interest of the church. The articles of covenant state that it is “fit and proper that certain individuals should be intrusted with the care of the temporal interest of the church as trustees or agents”; and then it is therein covenanted that the said trustees or agents and their successors, shall be duly invested with the said office of trustees or agents, and "empowered to exercise all the duties thereof,” and “that it shall be the duty of the trustees or agents to take the general charge and oversight of all and singular the property, estate, and interest dedicated, devoted, and given up as aforesaid to the joint interest of the church, with all gifts, grants, and donations that may at any time be given or devoted for the benefit of the church or for the relief of the poor or any such charitable use or purpose; and the said joint interest, estate, gifts, grants, and donations shall be held by them in the capacity of trustees or agents, and shall be and remain forever inviolably under the care and oversight and at the disposal of the trustees and agentship of the church in a continual line of succession." The said articles of covenant contain this further provision or covenant, to wit: “And we do by these presents covenant, promise, and agree that all the transactions of the trustees or agents in the use or disposal of the joint interest of the church shall be for the mutual benefit of the church, and in behalf of the whole body, and to no personal end or purpose whatever; but the trustees or agents shall be at liberty, in union with the body, to make, present, and bestow deeds of charity upon such as they may consider the proper objects, that are without; and when, by death or other means, any trustee or agent shall cease to act in his office as aforesaid, then all and singular the power invested in or duties incumbent upon him shall be transferred and devolved upon his successor, who shall be appointed to fill his place in said office and trust, so that each individual appointed to the office of trustee or agent of the church shall be vested with the power and authority of managing and disposing of the property and interest of the church as aforesaid, and of making all lawful defense for the security and protection of the joint interest and privileges of the church, and all the transactions of such members shall be valid so long as they act in the official capacity of trustees or agents in union with the body according to the tenor of the covenant, and no longer." The said articles contain this further provision or covenant, to wit: “And we further covenant and agree that it shall be the duty of the trustees to keep or cause to be kept in a book or books provided for that purpose a true copy of this covenant, together with all other records or matters of a public nature that may be necessary for the information and satisfaction of all concerned, and for the security of the joint interest of the church committed to their care; and, further, that the trustees shall make application to the proper authority for the covenant to be duly recorded in the county office of this county, together with the names of all the subscribers who previously shall have subscribed to it; and in all deeds, wills, grants, etc., which may thereafter be given or conveyed to the trustees or agents aforesaid for and in behalf of the joint body or church, express reference shall be had to the same, specifying the date or time when it was subscribed or first begun to be subscribed.” The said articles contain this further provision or covenant, to wit: “We do freely and cordially covenant, promise, and agree together for ourselves that we shall never hereafter make any account of any property, labor, or service devoted by us to the purpose aforesaid, or bring any charge or debt or damages or hold any demand whatever against the church or community, or any member thereof, on account of either property or services given, rendered, or consecrated to the aforesaid sacred and charitable uses." These articles of covenant, originally established in 1815, were amended somewhat in 1844, but not in respect to any matter deemed material to the result. The article providing for trustees distinctly declares the trust, and in regard 10 real estate says that they shall “have in trust the fee of all the land belonging to the church."
Considerable testimony was taken in support of the defenses set up in the answer by the defendants, and considerable also by the complainants in rebuttal thereof. It is not worth while to go into a discussion of the details of it. As gathered by the court, the most material facts in regard to the execution of the note and its subsequent history are as follows: It is sufficiently proved that Dunlavy and Scott were at the time when the note bears date the executive officers of the society. Boisseau was also one of the trustees, but he was not an active member of the board, if we call it such, and the business of the society was actually conducted by Dunlavy and Scott in their capacity as trustees and agents. Such was the general rule. They signed the obligations of the society in substantially the same form in which the note is signed, and it sufficiently appears that this was the method and usage in business dealings generally in which the society was concerned; and that this mode of conducting their affairs and signing their written obligations was well known to and recognized by all the members of the society, no question, so far as appears, ever having been raised as to the authority of Dunlavy and Scott to conduct the business in this way, or of the obligation of the society to respond to their acts so done, as being authorized by the whole body. Mays, the payee of the note, was an adventurer, engaged in speculations of one kind and another in Ohio, and, having some money for investment, went to Pleasant Hill, in Kentucky, and loaned the amount represented by the note to Dunlavy and Scott for the society. It is proven beyond a doubt that the signatures of Dunlavy and Scott are in the handwriting of Dunlavy, Scott being present and assenting to the transaction. There are some circumstances which tend to beget a suspicion that there may have been some unfair dealing on the part of Mays in procuring the note, but the grounds of such a charge are either quite vaguely shown, or rest upon mere conjecture. The note was held by Mays until, as before stated, it was sold and indorsed by him to Watson, and by the latter pledged to Souther. All this occurred before the maturity of the note. There is no proof that Watson, at the time he took the note, had any knowledge of any defense to it, except that he was informed by correspondence with the society during the pendency of the negotiations between himself and Watson for the sale of the farm and the taking of the note that the suciety claimed that the note was never executed by or in behalf of the society, and that the society claimed that it had never received the money for which the note purported to have been given.
The legislature of the state of Kentucky, on the 11th day of February, 1828, passed an act relating to suits against such societies as the one here sued, which is as follows: "An act to regulate civil proceedings against certain communities having prop
erty in common. “Section 1. Be it enacted by the general assembly of the commonwealth of Kentucky. That it shall and may be lawful for any person having any demand exceeding the sum of fifty dollars, founded on any contract implied or expressed against any of the communities of people commonly called “Shakers,' living together, and holding their property in common, to commence and prosecute suits, obtain decrees, and have execution against any such community, by the name or description by which said community is commonly known, without naming or designating the individuals of such community, or serving process on them, except as is hereinafter directed. All such suits shall be by bill in chancery, in the circuit court of the county in which such community reside; and it shall and may be lawful to make parties to such suits, all other persons by name who may have any interest in the matter in controversy, or who may hold any property in trust for said community, or may be indebted to them.
“Sec. 2. Whenever any subpoena founded on any such bill shall be placed in the hands of any officer to execute, he shall fix a copy of such subpoena on the door of the meeting-house of such community, shall deliver a copy to some known member of the community, and shall read the subpoena aloud at some one of the dwellings of said community, at least ten days before the term of the court at which said community are required to answer, and on these facts being returned in substance on the subpoena, they shall constitute a good seryice of process of said community, so as to authorize the court to require and compel an answer agreeable to the rules and usages in chancery.
"Sec. 3. All answers for and in behalf of such community may be filed on the oath or affirmation of one or more individuals of such community, who shall moreover swear or affirm that he or they have been nominated as the agents or attorneys of such community, to defend such suit, and thereupon the individual so answering shall have full power and authority to manage and conduct said suit on the part of such community, or to settle and adjust the same, and all notices to take depositions against said community may be served on such agent or left at their place of residence, provided, that for good cause shown, the court may at any time permit such agents to be changed or substituted by others of the community; provided, however, that the agents or defendants shall not be compelled to answer on oath to any charges or allegations, which are, by the existing rules of law and equity, cognizable alone in the courts of common law; and provided, further, that in all such cases as mentioned in the foregoing proviso, the defendants shall be entitled to a jury, if they, or any one of them, shall signify their desire to that effect at any time before the trial shall have been gone into, and in such case above described either party may require the personal attendance of witnesses and a viva voce examination, as though the suit were at common law, and the court shall direct such process at the request of either party, or summonses may issue as in other cases of the kind.
"Sec. 4. Be it further enacted that nothing in this act contained shall be so construed as to render the communities aforesaid, or any of them, liable upon contracts entered into by any individual or individuals, not authorized by their laws and usages to contract for such community; nor shall it be so construed as to give to any person, who, having been a member of such community, has heretofore left it, or may hereafter leave it, any right, in consequence of such membership, which he or she would not have had if this act had not passed; but such right shall depend upon and be determined by the laws, covenants and usages of such society and the general laws of the land, except as to the mode of suit.