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and determine whether or not G. W. Smith objected to the commissions on cotton not shipped in the latter part of the summer of 1892, and whether or not this was an objection to the accounts within a reasonable time. But when the evidence upon a question of fact is so clearly preponderant, or of such a conclusive character, that the court would be bound, in the exercise of a sound judicial discretion, to set aside a finding in opposition to it, it is its duty to withdraw the question from the jury and direct its finding. Southern Pacific Co. v. Pool, 160 U. S. 438, 440, 16 Sup. Ct. 338, 40 L. Ed. 485; Union Pac. R. Co. v. McDonald, 152 U. S. 262, 283, 14 Sup. Ct. 619, 38 L. Ed. 434; Delaware, Lackawanna, etc., Railroad v. Converse, 139 U. S. 469, 472, 11 Sup. Ct. 569, 35 L. Ed. 213. The testimony of Smith upon this question, in view of the denial of Exall, and of the writings which have been recited, and which so clearly portray the attitude of the parties during the two years. when this account was current and during which the two itemized statements were rendered, is too incredible to sustain a finding that he made the complaint or objection to which he testified. The court rightly withdrew the question of timely objection to the accounts from the jury.
It is assigned as error that the court refused to instruct the jury that if they found that there was fraud or mistake in entering any of the items in the account they should deduct these items from the amount claimed by the plaintiff, and that it charged them that there was no evidence of any fraud or mistake that would justify a reexamination of the accounts, save in regard to two small items, which it specified, and directed the jury to disallow. A careful examination of the record, however, discloses no evidence sufficient to sustain a finding of fraud or mistake in the entry of any other item in these accounts. Our attention has been especially called to the testimony relative to $300 of the item of $1,025 charged in the account of July 1, 1892. This $300 consisted of a commission of $1.25 per bale on 240 bales of cotton not shipped, and it was based on a charge to the defendants on December 18, 1891, of $2,406.26, a balance of the account of the plaintiff against G. W. Smith & Bro. This $2,406.26 was the amount which G. W. Smith & Bro. owed to the plaintiff on September 1, 1891. It was the balance of the plaintiff's spring and summer advances to Smith & Bro., and this balance was charged to the defendants, who were their successors, on December 18, 1891. There was no agreement between G. W. Smith & Bro. and the plaintiff that the former should pay commissions on cotton not shipped. The plaintiff asserted and the defendants denied that this $2,406.26 advanced to Smith & Bro. in the spring and summer of 1891 fell within the disputed agreement between plaintiff and defendants. The evidence in the record discloses the fact that the right to charge every dollar of the commissions was in dispute at the trial as well as the right to charge that portion of the commissions which was based upon the $2,406.26. There was, however, no evidence that the charge of the $300 commissions based upon this balance was fraudulently or unintentionally made in the itemized account delivered to the defendants, or
that the latter did not receive the same notice of this charge, and did not become bound to pay it by their failure to object to it as firmly as they were to every other portion of the $1,025 of which it formed a part. Indeed, the evidence that this charge was not mistaken is full and clear. The plaintiff not only sent to the defendants the account which contained it on July 1, 1892, but on June 24th preceding they wrote them that "Smith, Patillo & Company and G. W. Smith & Brother owed us on the 1st of September, without interest, $15,219.00, so they should have shipped us 1,522 bales of cotton. They only shipped us 702 bales, so we are entitled to commissions on 820 bales, at the rate of $1.25 per bale, which was the agreement between Mr. Smith and ourselves. You probably saved money by not shipping the cotton as the market during cotton shipping time was declining, so we charge you with $1,025.00 commissions on cotton not shipped, as per agreement, which we hope you will find correct and satisfactory." There was surely no fraud, deceit, or concealment in this charge. It certainly was not made by mistake or inadvertence, for this letter shows that the amount of it was carefully computed upon the indebtedness of both Smith & Bro. and the defendants. The latter had complete notice of the charge, of the amount, and of the basis of it, and there is no evidence that it was through any mistake that they failed to object. to it. There was no error in the charge of the court upon the subjects of fraud and mistake.
The question whether or not any agreement was made in 1891 to the effect that the defendants should pay commissions on cotton not shipped, the question whether or not the contracts of the parties were usurious, and the question whether or not the defendants were liable for the two items of $1,025 and $1,198.75 on an account stated were submitted to the jury for their determination. The court charged that, if there was a contract in 1891 to pay these two items, the plaintiff might recover upon that ground; and that, if the two accounts of July 1, 1892, and December 20, 1893, contained charges of these two items, and those accounts were received and retained by the defendants without making any objection to them within a reasonable time, then the plaintiff was entitled to recover these amounts whether there was any previous express contract to pay them or not. The latter portion of this instruction is assigned as error. But it is not indispensable to a cause of action for the balance of an account stated that the defendants should have been legally liable for every item in it upon some other ground before the itemized account is delivered. Such a rule would nullify the effect of the stated account, and destroy the cause of action upon it. The only legal effect and virtue of an account stated is that it estops its recipient from denying his liability for the charges it contains, whether he was actually liable for them or not, and that it raises a legal presumption that he promised to pay the balance of the account. It is the law of this case, under the decision of this court in Allen-West Commission Co. v. Patillo, 90 Fed. 631, 632, 33 C. C. A. 197, 198, as well as the general and salutary rule upon this subject, that one may become bound by virtue of an account stated
to pay charges contained therein for which he was not previously legally liable. "The balance is a debt as a matter of contract implied by law. It is to be considered as one debt, and a recovery may be had upon it without regard to the items which compose it." 90 Fed. 632, 33 C. C. A. 198; Marye v. Strouse (C. C.) 5 Fed. 483, 496; Porter v. Price, 80 Fed. 655, 658, 659, 660, 26 C. C. A. 70, 73, 74, 75; Backus v. Minor, 3 Cal. 231; Young v. Hill, 6 Hun, 613; Bainbridge. v. Wilcocks, Baldw. 536, Fed. Cas. No. 755; Freeland v. Heron, 7 Cranch, 147, 3 L. Ed. 297. There was no error in the instruction of the court upon this subject, or in its refusal to charge to the contrary.
For the same reason the challenge of the instructions of the court and of its refusals to instruct with reference to the liability of the defendants outside of the stated account to pay the items of $1,198.75 and $300, and with reference to the right of the defendants to a credit for 230 bales of cotton not credited to them in the account, cannot be sustained. The criticism of the charge and of the refusals to instruct might be worthy of consideration if the question to be considered now was whether or not there was error in the trial of the issue whether or not the charges and credits in the itemized accounts were correct. That is not the question we are now considering. The stated account estopped the defendants to deny its correctness. Counsel for the defendants concede-nay, more, they insist-that this record demonstrates the fact that the jury found that there was no agreement between the parties to the effect that the defendants should pay any commissions on cotton not shipped prior to the rendition of the itemized accounts. The evidence and the verdict of the jury sustain this contention. If there were any errors in the charge of the court or in its refusals to instruct the jury relative to the question of the defendants' liability under the alleged agreement of 1891, those errors were not prejudicial to the defendants, because the verdict was in their favor upon that issue. It is therefore useless to consider them, because error without prejudice is no ground for reversal.
The only question remaining is whether or not there was any error in the charge or the refusals to instruct as requested relative to the issue whether or not there was a stated account. Upon this issue the correctness of the items in the account was not open to dispute. The question was, in the absence of mistake and fraud, whether the accounts were received and retained for an unreasonable time without objection. Upon this issue there was no error in the instruction of the court, and, so far as the refused instructions related to this question, and were not embodied in the charge, they were either immaterial or incorrect. The answer to all the contentions of the defendants with reference to the items of the account is that upon the issue of stated account or not, where an account current of many items, some of which represent a just indebtedness, is delivered to the debtor, its receipt and retention without objection estops the recipient from denying liability for the items which it contains and the balance it discloses. It was not fatal to the cause of action upon the account that one or more of the items
in it were without consideration, provided there was a good or valuable consideration for other items which were merged in the balance. If there is a valuable consideration for the single 'debt evidenced by the balance, the promise to pay it implied by the law. from the silent acceptance of the statement will sustain the action. A careful examination of the various assignments of error to which reference has not been separately made, and of the record, satisfies us that there was no prejudicial error in the trial of this case, and the judgment below is affirmed.
LOCKARD et al. v. ASHER LUMBER CO. et al.
(Circuit Court of Appeals, Sixth Circuit. July 6, 1904.)
1. FEDERAL COURTS-STATE STATUTES-STATE DECISIONS.
Where an action in the federal court depends on the construction of a state statute providing for the sale of state lands, the federal court is required to adopt the construction placed on the statute by the highest court of such state.
2. SAME-PUBLIC LANDS-SALE-PATENTS-STATUTES-CONSTRUCTION.
Rev. St. Ky. c. 102, § 3. provides that any person who wishes to appropriate any vacant and unappropriated lands, on application to the county court of the county in which the same lies, paying at such price as the court may allow, not less than $5 per 100 acres therefor, may obtain an order of court authorizing him to enter and survey any number of acres of such land in the county, not less than 25 nor more than 200. Held, following the decisions of the Kentucky Court of Appeals, that such act did not preclude the survey of several tracts of 200 acres each by the same person, and that a patent for lands so surveyed was not void on its face because it conveyed more than 200 acres.
Appeal from the Circuit Court of the United States for the Eastern District of Kentucky.
For opinion below, see 123 Fed. 480.
Morris & Newberger, A. E. Wilson, and Holt & Alexander, for appellants.
W. B. Dixon and Beckner & Jouett, for appellees.
Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.
RICHARDS, Circuit Judge. This was a suit in equity to quiet the title to a tract of land in Harlan county, Ky., containing 40,400 acres. Some of the defendants demurred and others answered. To portions of the answers the plaintiffs filed exceptions. The plaintiffs claimed under a patent issued by the state of Kentucky to C. O. Lockard, their devisor, on November 4, 1873. The patent was issued under chapter 102 of the Revised Statutes of Kentucky, which took effect July 1, 1852. The question raised by the demurrers and exceptions was
1. State laws as rules of decision in federal courts, see notes to Griffin v. Wheel Co., 9 C. C. A. 548; Wilson v. Perrin, 11 C. C. A. 71; Hill v. Hite, 29 C. C. A. 553. See Courts, vol. 13, Cent. Dig. §§ 957, 959. 131 F.-44
whether a patent issued under that act for a greater quantity of land than 200 acres was or was not void on its face. The defendants below claimed it was. The court below, in an able opinion, upheld this claim, sustaining the demurrers and overruling the exceptions. From this an appeal has been taken.
Section 3 of the act in question, under which the patent was issued, provided as follows:
"Any person who wishes to appropriate any vacant and unappropriated lands, may, on application to the county court of the county in which the same lies, and paying at such price as the court may allow, not less than five dollars per hundred acres, therefor, obtain an order of court authorizing him to enter and survey any number of acres of such land in the county, not less than twentyfive nor more than two hundred.
"1. The party obtaining such order may, by an entry in the surveyor's book of the county, describing the same, appropriate the quantity of land it calls for in one or more parcels, as he may think proper.
"2. The surveyor shall survey the entries in the succession in which the same are made, bounding the same by plainly marked trees, stones, or stakes, noting where it binds on a watercourse, or the marked line of another survey, giving names. It shall be made in the presence of two disinterested housekeepers as chainmen, whose names must be placed at the bottom of the plat and certificate. "3. Such survey must be made within two months from and after the date of the entry.
"4. A plat and certificate of the survey must be made out by the surveyor and recorded in his books, and the original thereof, and a copy of the order of the court under which it is made, must be deposited in the register's office within four months after the survey is made.
"5. A patent may issue on the survey within three months after a plat and certificate thereof, and a copy of the order are filed in the register's office.
"G. When a survey has been carried into grant, the register shall write across the face of the order on which the survey was made, 'satisfied,' and sign his name thereto.
"7. The legal title of the land shall bear date from the time of making the survey.
"8. None but vacant land shall be subject to appropriation under this chapter. Every entry, survey, or patent, made or issued under this chapter, shall be void so far as it embraces lands previously entered, surveyed or patented.
"9. A plat and certificate of survey shall be assignable, and the assignment thereof shall authorize a patent to issue thereon to the assignee.
"10. The register may receive plats and certificates of survey after the expiration of the time herein allowed for returning the same; but, in such case, the legal title shall take effect only from the date of the patent.
"11. No land shall be subject to appropriation under this chapter that has reverted to the commonwealth by escheat, or has been forfeited for an omission to list the same for taxation, or for failing to pay the taxes thereon, or which has been once patented and the title of the same has in any way become again vested in the commonwealth."
The construction of this statute the ascertainment whether it does or does not prohibit the issue of a patent for more than 200 acres― is obviously a Kentucky question. The federal courts follow the rule laid down by Chief Justice Marshall in Polk's Lessee v. Wendal, 9 Cranch, 87, 97, 3 L. Ed. 665:
"In the cases depending on the statutes of a state, and more especially in those respecting titles to land, this court adopts the construction of the states, where that construction is settled and can be ascertained."
The statute has been before the highest court of Kentucky in six cases. Register v. Reid, 72 Ky. 103, decided October 21, 1872; Breathitt Coal, Iron & Lumber Company v. Strong, 51 S. W. 189, 21 Ky. Law Rep.