Rutz and others v. City of St. Louis. recovery of damages; but Missouri cannot pass a law to govern Illinois, its citizens, and their realty situate in Illinois. If, pursuant to a Missouri statute, a dyke was erected destructive of property in Illinois belonging to the citizens of the latter state, such statute cannot be pleaded against them, for the Missouri statute could not operate extraterritorially. The question intended to be raised by demurrer cannot be so raised. The court must be informed by answer, on trial, whether the dyke interfered with the navigability of the river, and transcended the power of the state in the premises. It is obvious that if, in the absence of congressional legislation, each state bordering on the Mississippi river may prescribe what its citizens may do, destructive of the navigability of the river, and to the great damage of owners occupying the opposite shore, then such a state statute would have an extraterritorial effect a proposition not admissible. In the light of the views thus presented, the demurrer must be overruled, so that the parties may present to the court the facts on which their respective rights are based. City of St. put in set - Since the foregoing opinion was written, Judge McCrary has passed on a question, not the same as that here presented, but one which throws some light on the subject Louis v. The Knapp-Stout Co. If an answer is ting out all the facts and private statutes, the court will have before it all the legislation and facts to enable it to decide (1) Whether the city had lawfully authority, to erect a dyke; (2) whether, if such authority existed, it erected the dyke as the law required; (3) whether damages of the kind named are not recoverable, when, acting under a public statute, a private individual or municipal corporation destroys the property of others; (4) whether the riparian owner on one shore of the Mississippi, whether a municipal corporation or otherwise, can interfere with the navigability of the river, or, if not doing so, can, for its own benefit, divert the channel to the injury of the owner on the opposite shore. Webster and others v. Buffalo Insurance Company. WEBSTER and others v. BUFFALO INSURANCE COMPANY. (Eastern District of Missouri. January, 1881.) 1. ULTRA VIRES CONTRACT OF INSURANCE. An insurance company is not estopped from setting up the fact that a contract of insurance made through its agent is ultra vires, though its agent had led the other contracting party to believe, and he did believe, that the company had power to make it, and though no pretense was set up by the company or its agent that the contract was ultra vires until a loss thereunder was known by all parties to have occurred. This was a suit upon a contract of insurance against marine risks. The petition alleged that a cargo consigned to plaintiffs, and covered by defendant's policy of insurance, had been lost at sea, and asked judgment for the amount of the loss. The answer of the defendant set up in substance that the contract of insurance was ultra vires, for the reason that the defendant had no power, under its charter, to insure against perils of the sea. The plaintiffs demurred to the answer on the ground: First, that it contained no defense to the plaintiffs' cause of action; second, because the defendant was estopped from pleading its want of power to make the contract sued upon, and because the government which created it (New York) alone has power to deal with it for a violation of its charter, privileges, etc. The demurrer was overruled, and plaintiffs replied and alleged: That they were led to believe by defendant's agent who issued the policy, and did believe, that the defendant had power, under its charter, to insure against perils of the sea; that defendant's agent insured them against those perils, etc.; and that no objection was made to the contract aforesaid by defendant or its agent, and no pretense was made that said contract was ultra vires until the loss had occurred, and it was too late to insure in another company; and that for those rea Webster and others v. Buffalo Insurance Company. sons defendant should be held estopped from pleading that said contract was ultra vires. The facts stated in reply are admitted to be true. Lee & Chandler, for plaintiff's. O. B. Sansum, for defendant. TREAT, District Judge. This case was heretofore presented to the court, Justice Miller present. The demurrer to the replication raised the question whether the facts alleged would operate as an estoppel, although the contract, as averred in the answer, was ultra vires. It was suggested by Justice Miller that it would have been better if defendant had so shaped his answer as to bring before the court the charter of the company, together with the terms of the contract, so that the court could determine whether the contract was ultra vires or not. But as that course had not been pursued, it was then for the court to decide whether, admitting the contract to be ultra vires, the defendant was estopped by the facts stated in the replication. On the demurrer to that replication Justice Miller and myself differed in opinion, and consequently judgment followed according to his views. Now, the cause having come on for trial without the intervention of a jury, and all the facts in the replication being admitted of record, the main question is whether, according to the charter under the laws of New York, the defendant corporation had authority, through its agents or otherwise, to make a contract of insurance of the kind stated; that is, on a sea-going or foreign voyage, as contradistinguished from an inland voyage. According to the terms of the charter the contract was ultra vires; and, although all the facts set ont in the replication are true, as admitted of record, yet, according to the opinion of Justice Miller, the plaintiff cannot recover in this case, and his opinion must control despite my dissent. Therefore judgment must be entered for the defendant. Buckley and others v. Sawyer Manufacturing Company. BUCKLEY and others v. SAWYER MANUFACTURING COMPANY. (Eastern District of Missouri. January, 1881.) 1. CONTRACT-REVERTER OF PATENT-RIGHT.-A patent owned by A. and B. was assigned by them, as to certain states, to E., a corporation. The consideration of the assignment was the payment to the grantors of $8,500 cash, and the issuing of a prescribed number of shares of stock in E. to them. The cash was paid and the shares issued. The condition of the contract required the payment of a royalty to A. and B., and also exacted, under penalty of forfeiture, the use by E. of reasonable diligence, and its best endeavors to make the corporate scheme a success, the corporation having been organized to manufacture the patented article. On the other hand, A. and B. agreed to exercise reasonable diligence to promote the success of the enterprise, under the penalty of forfeiture of all rights of reversion. F. was a large stockholder in E., and, as such, furnished the required capital. The corporation was organized in 1872, failed in 1873, and F. purchased its assets, including the patent-right, but did not subsequently comply with the condition as to diligence, etc. Suit was brought by A. and B. to have the right acquired by F. declared forfeited. Held, that, as it appeared that the plaintiffs had received the full value of their patent-right, and were stockholders in E., which they had caused to be formed, and that as there was a failure on their part to comply with their promises as to making the business a success, no right of reverter or forfeiture existed. In equity. Seneca N. Taylor, for plaintiffs. W. G. Rainey, for respondent. TREAT, District Judge.- A patent owned by plaintiffs was assigned, as to designated states, to the defendant company, on payment of $8,500 cash, and the issue of a prescribed number of shares in the defendant corporation. The cash was received and the shares issned. The conditions of the contract required the payment of a royalty, and also exacted, under penalty of forfeiture, the use by defendant company of "reasonable diligence" and "its best endeavors" to make the corporate scheme a success. On the other hand, the granting party agreed to exercise reasonable diligence to Buckley and others v. Sawyer Manufacturing Company. promote the success of the enterprise, under the penalty of forfeiture of all right of reversion. The scheme proved a failure, for reasons which are disputed. The defendant Givens paid his money as a stockholder, which seems to have been the cash required, and when the corporate scheme failed became the purchaser of the assets of the corporation, including the patent-right. The organization of this corporation was in 1872, and its failure was in 1873. The defendant Givens, who seems to have been the principal capitalist, became the purchaser of its assets to save for himself something from the wreck. The present contest is as to the forfeiture of the grant. If the defendant corporation did not do what it promised, then the transfer of the patents to it was to be void. If, on the other hand, the plaintiffs in this suit did not perform what they agreed to do, the right of forfeiture or reverter was at an end. The struggle through the evidence is to show which of the respective parties was delinquent. It is clear that the scheme was to organize a corporation to operate plaintiffs' patent, the patent to be assigned for designated states at the price of $8,500 cash (which was paid), and a prescribed number of shares in said corporation to be issued to said plaintiffs, with a royalty. Hence, the plaintiffs not only received the cash, but the shares, and became, as such shareholders, interested in the proper conduct of the corporation. It appears from the evidence that the plaintiffs were the promoters of the scheme, and that the strangers who embarked in it did so on the faith that the plaintiffs would push the same to a success. The defendant Givens, who seems to have been the victim of this corporate enterprise, became finally the owner of the assets of the corporation, including the right to the patents. He has not operated under them nor paid any royalty. The contest is whether, as assignee of the corporate assets, he can hold them discharged of all right of reverter, or whether, from non-fulfillment of the original agreement, it ought to be rescinded. It must be remembered that the orig |