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to which neither of the appellants contrib- | mately to convey to each his proportionate uted any part; that in November, 1890, a large body of rich ore was discovered, and since that time gold to the amount of several hundred thousand dollars has been taken out. Both of the appellants left the territory of New Mexico during the year 1885, and resided abroad up to the time of the beginning of this suit. Both were aware that Hewitt had refused to deed them their interest in the mine and in the patent which he, in the meantime, had obtained to the property.

share. In this connection it is sought to apply the familiar rule that neither laches nor the statute of limitations is applicable against an express trust, so long as that trust continues. Conceding all that can be claimed as to the existence of an express parol trust in this case, the refusal of Hewitt to execute the deed to H. J. Patterson of his interest in the property, of which both appellants had notice, was a distinct repudiation of such trust, which entitled the complainants to immediate relief, and opened the door to the defense of laches. Speidel v. Henrici, 120 U. S. 377–386, 30 L. ed. 718, 719, 7 Sup. Ct. Rep. 610; Riddle v. Whitehill, 135 U. S. 621-634, 34 L. ed. 283-287, 10 Sup. Ct. Rep. 924.

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The supreme court of the territory also found that the case was within § 2916 of the Compiled Laws of the territory, requiring that all actions founded upon "unwritten contracts or for relief upon the ground of fraud, and all other actions not herein otherwise provided for and specified," shall be brought within four years; and that this defense was not answered by § 2930, declaring that "none of the provisions of this act shall run against causes of action originating in or arising out of trusts, when the defendant has fraudulently concealed the cause of action, or the existence thereof, from the party entitled or having the right thereto." As there was no evidence that the defendants had fraudulently concealed the facts from the appellants, and abundant proof that the facts were known to them, the latter section was held not to apply. While the case does not necessarily involve it, we see no reason to question the correctness of the court's conclusion on this point.

It thus appears that the right of action accrued to the appellants in April, 1885, and that this suit was not begun until eight years thereafter,-in 1893. Whether the refusal of Hewitt to make the deeds was right or wrong is not material here. There is no doubt from the findings that appellants had no share in the subsequent development of the mine or the discovery of ore in 1890, and that it was through the efforts and perseverance of the defendants, and the aid they received from Fergusson, that they were put in possession of this valuable property. If appellants had expected a share in this property they should either have brought a bill promptly to enforce their rights, or at least contributed their proportionate share to the subsequent work and labor, and the expenses then incurred. To award them now a deed to their original interest in the property would be grossly unjust to the defendants, through whose exertions the value of the property was discovered and the mine put upon a paying basis. While it is true the court might impose upon the appellants the payment of their proportionate share of labor and expenses as a condition of relief, it could not compensate the defendants for the risk assumed by them that their exertions would come to nought. There is no class of property more subject to sudden and violent fluctuations of value than mining lands. A location which to-day may have no salable value may in a month become worth its millions. Years may be spent in working such property, apparently to no purpose, when sud- CLARENCE T. BIRKETT, Plff. in Err.,

denly a mass of rich ore may be discovered, from which an immense fortune is realized. Under such circumstances, persons having

We are clearly of the opinion that the delay of eight years in this case was inexcusable, and the decree of the court below must, therefore, be affirmed.

v.

(195 U. S. 345)

COLUMBIA BANK.

scheduled knowledge of creditor.

claims to such property are bound to the Bankruptcy-discharge effect on debts not utmost diligence in enforcing them, and there is no class of cases in which the doctrine of laches has been more relentlessly en

forced.

3. But little need be said in reply to appellants' argument that a trust relation was established between these parties by the oral agrement of 1883, under which Hewitt was to take possession, hold the property for the benefit of all concerned, and ulti

Knowledge of bankruptcy proceedings on the

part of a creditor of the bankrupt, which is not acquired until after discharge, though in time to prove his claim under the bankruptcy act of July 1, 1898 (30 Stat. at L. 563, chap. 541, U. S. Comp. Stat. 1901, p. 3448), § 65, and to move, under § 15,1 to revoke the discharge, is not the "actual knowledge of the proceedings in bankruptcy" which, under § 17,1 is essential to the release, by the discharge, of

1 U. S. Comp. St. 1901, p. 3428.

provable debts which have not been duly scheduled in time for proof and allowance.

[No. 26.]

at any time given to defendant in error by, or by the direction of, the bankrupts or either of them. It was decided that the claim of defendant in error was not barred by the discharge in bankruptcy, and judg

Argued October 28, 1904. Decided Novem- ment was directed for defendant in error.

ber 28, 1904.

N ERROR to the Supreme Court of the State of New York to review a judgment entered in that court in accordance with the direction of the Court of Appeals of that State, which affirmed a judgment of the Appellate Division of the Supreme Court, First Department, which had, in turn, affirmed a judgment of the Supreme Court at a term held in and for the county of New York, in favor of plaintiff in an action on a promissory note, in which defendants set up a discharge in bankruptcy as a bar. Affirmed. See same case below, 174 N. Y. 112, 66 N. E. 652.

The facts are stated in the opinion. Messrs. John Murray Downs, Robert G. Scherer, and Thomas Carmody for plaintiff in error.

The judgment was successively confirmed by the appellate division of the supreme court and the court of appeals. 174 N. Y. 112, 66 N. E. 652. Thereupon judgment was entered in the supreme court, in accordance with the direction of the court of appeals. This writ of error was then sued out.

Section 7 of the bankrupt law of 1898 devolves a number of duties upon the bankrupt, all directed to the purpose of a full and unreserved exposition of his affairs, property, and creditors. Among his duties he is required to "prepare, make oath to, and file in court, within ten days a schedule of his property showing the amount and kind of property, the location thereof, its money value in detail, and a list of his creditors, showing their residences, if known; if unknown, that fact to be stated, the amounts due each of them,

Mr. Julius J. Frank for defendant in the consideration thereof, the security held

error.

This is an action on a promissory note for $750. The defense is discharge in bankruptcy. The making of the note was admitted, and the only question presented is the effect of the discharge.

by them, if any, and a claim for such exemptions as he may be entitled to, all in tripli

Mr. Justice McKenna delivered the cate, one copy of each for the clerk, one for opinion of the court: the referee, and one for the trustee. To the neglect of this duty the law attaches a punitive consequence. Section 17 provides: "A discharge in bankruptcy shall release a bankrupt from all of his provable debts, except such . have not been duly scheduled in time for proof and allowance, with the name of the creditor, if known to the bankrupt, unless such creditor had notice or actual knowledge of the proceedings in bankruptcy ." [30 Stat. at

The facts as found by the court are: Plaintiff in error and one Calvin Russell, who died before the commencement of this action, were partners, doing business under the name of Russell & Birkett, and in that name made and delivered to the Manhattan Railway Advertising Company a promissory note for $750. The latter company indorsed the note to defendant in error, of which Russell & Birkett had knowledge before its maturity. On the 13th of April, 1899, the firm of Russell & Birkett and plaintiff in error, upon their own petition, were adjudicated bankrupts in the United States district court for the northern district of New York, and were discharged September 12, 1899. The claim of defendant in error was not scheduled, either as a debt of the firm or of plaintiff in error, in time for proof and allowance with the name of the defendant in error, though defendant in error was known, at the time of filing the schedules, to be the owner and holder thereof by plaintiff in error, and that defendant in error had no notice or actual knowledge or other knowledge of the proceedings in bankruptcy prior to the discharge of the bankrupts. No notice of the proceedings in bankruptcy was

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L. 548, 550, chap. 541, U. S. Comp. Stat. 1901, pp. 3424, 3428.]

But plaintiff in error urges that defendant in error did have actual knowledge of the proceedings in bankruptcy, and that Congress contemplated that there might be an intentional or inadvertent omission of the names of creditors from the schedule of debts, and provided against it by other provisions of the law; especially by that which makes it the duty of the referee to give notice to creditors (§38), and by that which imposes the duty on the bankrupt to appear at the meeting of creditors, for examination.

The finding of the trial court is that defendant "had no notice or actual knowledge, or other knowledge, of said proceedings in bankruptcy prior to the discharge of the bankrupt therein." This is made more definite as to time by the court of appeals. Defendant in error, upon making an inquiry by letter November 6, 1899, about Russell & Birkett, was informed that they had gone

through bankruptcy; and subsequently (November 17) the northern district was given as the district of the proceedings. The discharge was September 12, 1899. Knowledge, therefore, it is contended, came to defendant in error in time to prove its claim (§ 65), and to move to revoke the discharge of the bankrupt (§ 15). It is hence argued that defendant in error must be held to have had "actual knowledge of the proceedings in bankruptcy," as those words of § 17 must be construed. We do not think so, nor is that construction supported by the other provisions of the law urged by plaintiff in error. Actual knowledge of the proceedings, contemplated by the section, is a knowledge in

pality to impose a tax for the purpose of erecting a waterworks plant, or the alleged invalidity of any method of acquiring such works except by purchasing existing works, are excluded from consideration by a stipulation in the agreed statement of facts, on which the case was tried, that if the city has the right to erect and maintain an independent plant of its own, in view of the contract rights of a private waterworks company, it contemplates raising funds and revenues therefor in the manner provided by law, and will raise revenues within the limits of indebtedness authorized by the state Constitution and laws.

[No. 27.]

28, 1904.

time to avail a creditor of the benefits of the Argued October 28, 1904. Decided November law, in time to give him an equal opportunity with other creditors,-not a knowl

edge that may come so late as to deprive

him of participation in the administration
of the affairs of the estate, or to deprive him
of dividends (§ 65). The provisions of the
law relied upon by plaintiff in error are for
the benefit of creditors, not of the debtor.
That the law should give a creditor remedies
against the estate of a bankrupt, notwith-
standing the neglect or default of the bank-
rupt, is natural. The law would be, indeed,
defective without them. It would also be
defective if it permitted the bankrupt to
experiment with it,-to so manage and use
its provisions as to conceal his estate, de-
ceive or keep his creditors in ignorance of
his proceeding, without penalty to him.
It is easy to see what results such looseness
would permit,-what preference could be ac-
complished and covered by it.
Judgment affirmed.

(195 U. S. 383)

HELENA

WATERWORKS
Appt.,

v.

CITY OF HELENA.

A Court of Appeals for the Ninth Circuit to review a decree reversing a decree of the Circuit Court for the District of Montana, in favor of complainant in a suit to restrain a municipality from acquiring a waterworks system except by purchasing an existing plant, and from incurring any indebtedness therefor, and remanding the cause, with instructions to dismiss the bill. Affirmed.

PPEAL from the United States Circuit

See same case below, 58 C. C. A. 381, 122 Fed. 1.

Statement by Mr. Justice Day:

This case was begun by a bill filed in the circuit court of the United States by the Helena Waterworks Company, successor to the Helena Consolidated Water Company, to restrain the city of Helena from erecting, purchasing, or acquiring a waterworks system for said city, and from acquiring water for such purpose, except it purchase the plant of the complainant company, and from COMPANY, incurring any indebtedness or expenditure of money for such purpose.

Contracts--impairment of obligation-implied contract of municipality not to build waterworks-agreed case.

2.

The rights in controversy are alleged to result from a contract made by the passage, and acceptance by the company, of a certain ordinance, number 248, passed and approved in January, 1890.

It is also alleged that the Helena Consolidated Water Company, predecessor of the

A city does not impliedly contract not to complainant company, complied with all the

construct its own waterworks system by requiring a waterworks company, as a condition of its franchise, to provide all the inhabitants of the city with a water supply on the terms and conditions therein expressed, when read in connection with a previous provision requiring the company to furnish water to those desiring to purchase it, at least, after the five years have expired during which the company was bound by such franchise to furnish water to the city at a

definite price, for which an appropriation was

therein made.

Questions respecting the right of a munici

terms of the ordinance, and expended large sums of money in erecting and maintaining the plant for supplying water to the inhabitants of the said city of Helena.

It is averred that the said city has adopted certain ordinances and taken certain proceedings to acquire and build a water system of its own, and that said ordinances and proceedings are in violation of the contract rights of the complainant company, guaranteed by § 11 of article 3 of the Constitution of the state of Montana, and § 10 of

article 1 of the Constitution of the United | nishing water to its inhabitants. We mainStates, and that the proceedings of the city in this behalf will amount to taking the property of the complainant company without just compensation, in violation of § 14 of article 3 of the Constitution of the state of Montana, and that its rights and property will be taken without due process of law, in violation of the 14th Amendment to the Constitution of the United States.

It is further averred that the taxation necessary for the construction of the city plant is in excess of any that can be lawfully levied for such purpose.

The case was tried upon an agreed statement of facts. In the circuit court a decision was rendered in favor of the waterworks company. Upon appeal to the circuit court of appeals that court reversed the decision of the circuit court, and remanded the case, with instructions to dismiss the bill. 58 C. C. A. 381, 122 Fed. 1.

The terms of the ordinance relied upon, and so much of the agreed statement of facts as is necessary to a determination of the case, sufficiently appear in the opinion.

Messrs. M. S. Gunn, B. Platt Carpenter, and Stephen Carpenter for appellant.

Messrs. Edward Horsky, Edwin W. Toole, Thomas C. Bach, E. C. Day, and R. Lee Word for appellee.

tain that by the contract contained in this ordinance the Helena Consolidated Water Company [predecessor of appellant] for itself, its successors, and assigns, expressly agreed to furnish water to all of the inhabitants of the city during the term of twenty years; and that by reason of the contractual obligation thus assumed by the company there is the implied promise or undertaking on the part of the city that it will not, during such period, become a competitor of appellant." A consideration of this contention requires an examination of the sections of the ordinance pertinent to a determination of the question:

"Sec. 1. There is hereby granted to the Helena Consolidated Water Company, and its successors and assigns, for the full term of twenty years from the passage hereof, the license and franchise of laying and maintaining water mains and pipes in and through all of the streets, alleys, avenues, and public grounds of the city of Helena for the purpose of conveying and distributing water throughout the said city, and for the purpose of selling the same to all persons, bodies, or corporations within the said city desiring to purchase the same, and to said city for fire, sewerage, and other purposes, in case said city desires to purchase the same, subject, however, to the provisions of this ordinance, hereinafter contained, es

Mr. Justice Day delivered the opinion of tablishing maximum rates, and generally to the court:

As the ordinance under consideration contains no express stipulation that the city shall not build a plant of its own to supply water for public and private purposes, and the grant is expressly declared not to be exclusive of the right to contract with another company, this case, unless it can be distinguished, is ruled by recent decisions of this court. Long Island Water Supply Co. | v. Brooklyn, 166 U. S. 685-696, 41 L. ed. 1165-1168, 17 Sup. Ct. Rep. 718; Joplin v. Southwestern Missouri Light Co. 191 U. S. 150, 48 L. ed. 127, 24 Sup. Ct. Rep. 43; Skaneateles Waterworks Co. v. Skaneateles, 184 U. S. 354, 46 L. ed. 585, 22 Sup. Ct. Rep. 400. These cases hold that the grant of the franchise does not of itself raise an implied contract that the grantor will not do any act to interfere with the rights granted to the waterworks company, and that, in the absence of the grant of an exclusive privilege, none will be implied against the public, but must arise, if at all, from some specific contract, binding upon the municipality.

have and exercise all the rights, privileges, and franchises necessary to the proper and successful furnishing of water to the inhabitants of said city if required; provided, however, that nothing herein contained shall be so construed as to give to the said Helena Consolidated Water Company, or its successors or assigns, the exclusive right of occupying the streets, avenues, alleys, and public grounds of said city with water mains and pipes, or the exclusive right of conveying, distributing, or selling the same throughout the said city, or of furnishing the same to said city, except as hereinafter set forth."

"Sec. 3. All pipes and mains, including service pipes connected therewith, shall be laid at the depth of 5 feet below the established grade, and shall be laid under the supervision of the street commissioner of said city as to grade and location in streets; and all repairs and extensions of such pipes and mains shall be done under the supervision of said street commissioner as to grade and location in streets. Nothing contained herein shall preclude said city of Helena As stated by appellant's counsel: "The from regrading or changing the grade of any position taken by appellants is, that by ordi- street or streets within said city, or from nance 248 the city has precluded itself from the construction or maintenance of sewer engaging in the commercial business of fur-work, or other works or plants of a public

use of the streets, alleys, and avenues and public grounds of the city for the laying and maintenance of its pipes and mains for the purpose of conveying water and selling it to those "desiring" to purchase the same, and to the city for fire and other purposes in case the city "desires to purchase the same."

nature, or from letting, giving, or granting | the ordinance, the company is granted the any franchises, rights, or easements to any person or persons, corporation or corporations, whomsoever, so long as such franchises, rights, and easements do not interfere with the franchises, rights, and easements hereby granted. And that said Helena Consolidated Water Company must and shall look solely and exclusively to the person or persons, corporation or corporations, to whom such franchises, rights, and easements have been given by said city for any and all damages the said Helena Consoli-eration of the franchise and privileges grantdated Water Company may sustain by reason of any interference with any of its pipes, mains, or hydrants, or any exposure of the same caused by such person or persons, corporation or corporations."

"Sec. 6. The said Helena Consolidated Water Company shall furnish and provide a full, ample, and sufficient supply of good, pure, wholesome, and clear water for the use and wants of the inhabitants of said city, and to provide said city with water for fire, sewerage (maintenance and construction), and for other purposes; and such supply shall be full, ample, and sufficient for the present population of said city, and for the future population of the said city, as the same may be from time to time during the full term of five years; and said water shall be pure, wholesome, and free from animal, vegetable, or mineral substances, such as would render it unhealthy or unfit for domestic use."

"Sec. 26. It is hereby declared and understood to be of the essence of the agreement and the acceptance hereof that the said Helena Consolidated Water Company shall, at all times during the term of such agreement, provide all the inhabitants of the city, whatever their number may be, with a full, ample, and sufficient supply of good, pure, and wholesome and clear water, and shall convey, distribute, and sell to them upon the terms and conditions herein provided and expressed."

By 8 the company was required to provide 20 miles of mains within the limits of the city, and by § 10 the company was required to lay and maintain additional mains, of such sizes, at such times, and upon such streets as the city council might, from time to time, direct. Section 17 provided that the company shall not refuse to permit connections to be made by, or to sell water to, persons offering to pay for the same.

Section 16 of the ordinance fixes maximum rates for water to be furnished to the inhabitants of the city. Section 21 makes appropriation for the term of five years from and after January 1, 1890, of certain sums for hydrants and the use of water for the benefit of the city. By the 1st section of

Certainly, there is nothing in this section that savors of a contract beyond the obligation imposed upon the company, in consid

ed, to furnish water at certain maximum rates to private persons or to the city, when such persons or the municipality desire to purchase the same. When we come to consider 6 we find an engagement whereby the obligation of the company to furnish water to the city is limited to the term of five years; and in § 21 we find an appropriation made to cover the compensation to be paid by the city for the term of five years for the use of water for public purposes. If these sections can be construed to amount to a contract between the city and the company, binding the city to take its entire supply of water from this company for five years, which would be broken by the erection or building of a plant by the city to supply itself with water, it had expired before the beginning of this suit, and the contract, if it existed after the expiration of the term named in § 6, must be found in other sections of the ordinance. The contention is that, as by § 26 the water company was bound during the term of the agreement, which, it is claimed, is twenty years, to provide all the inhabitants of the city, whatever their number, with a water supply, this contract will be impaired, and its benefits to the company destroyed, if the city should erect an independent plant of its own. But, in our view, this section must be read with § 1, which requires the company to furnish water to such inhabitants of the city as desire to purchase the same; and there is nothing in this agreement which binds the city to take water from the company beyond the term of five years, expressly provided in § 6, and for which, upon specific terms as to prices, an appropriation was made in § 21. There is nothing in § 26 nor in § 1 undertaking to bind the inhabitants of the city to take water from the company. The city has not and, of course, could not undertake to make any contract upon the subject for the private supply of individuals in the city beyond securing a maximum rate of charge for water supplied. The engagement for their benefit requires the company, during the term of the franchise, to supply water at not exceeding certain maximum prices, which were fixed

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