McBride v. Farrington

• Decision Date: 04 December 1906
• Docket Number: 5.
• Citation: 149 F. 114
• Parties: McBRIDE et al. v. FARRINGTON.
• Court: U.S. Court of Appeals — Second Circuit

149 F. 114

McBRIDE et al. v. FARRINGTON.

No. 5.

United States Court of Appeals, Second Circuit.

December 4, 1906

T. C Becker, for plaintiff in error.

Frank Brundage, for defendant in error.

Before WALLACE, LACOMBE, and TOWNSEND, Circuit Judges.

LACOMBE Circuit Judge.

The plaintiff concedes that, unless he can establish the proposition that the leases executed by the national secretary of the Chickasaw Nation (October 2 and October 20 1890) were wholly void, so that there was a 'total failure of consideration,' he cannot recover. He contends that they are void because of the provisions of section 2116, Rev. St. U.S., which reads:

'No purchase, grant, lease or other conveyance of land, or any title or claim thereto, from any Indian nation or tribe of Indians, shall be of any validity in law or equity, unless the same be made by treaty or convention entered into pursuant to the Constitution,' etc.

The section, however, was modified, before the making of these leases, by Act March 1, 1889 (25 Stat. 784, c. 333), which repealed all laws theretofore enacted to prevent the Indian nation in question or any other from lawfully making leases for mining coal for a period not exceeding 10 years. The leases in question are for the mining of coal, iron, petroleum, oil, gas, asphaltum, and other minerals. If void as to the other minerals, they are apparently valid as to the coal. For what length of time they purported to run is not shown by the record. If for an indefinite time, the terms of the act would no doubt restrict them to 10 years. It is difficult to see how such leases, which apparently conveyed some rights for a restricted period, can be held to be so utterly valueless as to constitute an entire failure of consideration.

These reasons lead to an affirmance.

Some reference has been made to Act June 28, 1898 (30 Stat. 495, c. 517); but, since that was not passed until two years after the leases were assigned to the Wisconsin corporation, it has no bearing on the question here presented.

WALLACE, Circuit Judge (Dissenting). I think the judgment should be affirmed, but I do not concur in the opinion of the court. I think the leases were void because the statute declares such leases void, and the repealing act authorizing 10-year leases for mining coal does not change the terms or effect of the original statute. It is well settled that when a conveyance or contract contains conditions, some of which are legal and others illegal, and they are severable and separable as respects consideration and performance, the latter may be disregarded and the former enforced. But the exception to this principle is equally well settled. As was said by Mr. Justice Storey in United States v. Bradley, 10 Pet. 363, 9 L.Ed. 448:

'The only exception is when the statute has not confined its prohibitions to the illegal conditions, covenants, but has expressly, or by necessary implication, avoided the whole instrument to all intents and purposes.'

The leases here are indiscriminately for the mining of other minerals, as well as coal, and it does not appear that they were not for a period exceeding 10 years. If they had been for that time only, they would, in my judgment, have been void by the terms of the original statute.

The case has been argued at the bar as though the action were one by the creditors of a Wisconsin corporation to charge the defendant with individual liability as a stockholder under certain provisions of the Statutes of Wisconsin of 1898, viz., sections 1753 and 1773. An analysis of the complaint, however, shows that it proceeds upon the theory of fraudulent representations made by the defendant, by which the plaintiffs were induced to expend moneys and furnish labor and materials for the Wisconsin corporation, and thereby sustained damages. The complaint states the following averments.

'That the defendant and certain other persons in 1897 organized a mining corporation under the laws of the state of Wisconsin whereof the amount of the capital stock was fixed at $1,500,000, divided into shares of the par value of $10 each; that the defendant subscribed for 22,220 shares of the capital stock, and various other persons subscribed and agreed to pay for certain other shares; that neither the defendant nor any of the other persons ever paid 20 per centum of the capital stock of the corporation, nor was that amount ever paid in any way, but that the corporation issued and delivered the 22,220 shares subscribed for the defendant without any consideration; and that said issue of stock to the defendant and all the issues of stock by the corporation to the shareholders thereof were fictitious, and were issued for a pretended and valueless assignment of certain oil and mining leases in Indian Territory, which were valueless or of...