In Error to the Circuit Court of the United States for the District of Nevada.

This was an action brought in the district court of Nevada for Washoe county by B. F. Leete against the Pacific Mill & Mining Company, a California corporation, to recover the sum of $3,200 received by the mining company from the United States. The complaint alleged that this money was received for the use and benefit of the plaintiff. The mining company admitted the collection of $3,200 from the government, but denied that any part of it was received to or for the use or benefit of Leete, or that any portion of it was due to him. The case was transferred to the circuit court of the United States for the district of Nevada, and there decided in favor of the plaintiff (88 Fed. 957). The defendant (Pacific Mill & Mining Company) has brought the case here upon a writ of error. The action is based upon negotiations between the respective parties in connection with the sale and purchase of 1,280 acres of land in Churchill county, Nev., and the personal property and improvements thereon, known as the “Eagle Salt Works.”

The statement of facts in this case, as contained in the opinion delivered by' his honor, Judge Hawley, in the court below, is conceded by the plaintiff in error to be full and correct, and is the following:

“In 1877 the plaintiff and C. H. Van Gorder, having previously acquired the possessory right to the land in question, applied through the proper land office for a patent thereto from the United States, and paid to the proper officers the sum of $3,200 for said land. Thereafter, in January, 1878, the property in the meantime having been placed in the possession of a receiver, the plaintiff don-veyed his undivided one-half interest therein to W. N. Leete. The deed contained this reservation: ‘But it is not intended hereby to convey or transfer any interest which party of the first part has or may have to any moneys or accounts in the hands of such receiver, as receiver.’ On the same day W. N.. Leete conveyed the property to the defendant herein with the same reservation. In March, 1S80, the defendant acquired, by deed, the interest in the property of the estate of O. H. Yan Gorder, deceased. The application for a patent to the land was canceled by the land department in 1890. In the fall of 1894 negotiations were commenced between the parties hereto with reference to the plaintiff purchasing the property. All of the negotiations were by correspondence. The first was a letter from plaintiff to John W. Mackay, the president of the defendant corporation. D. B: Lyman was at the time of the correspondence the superintendent and managing agent of defendant in the state of Nevada. In February, 1895, plaintiff addressed a letter to Mr. Lyman, saying-•In December my son * * * wrote me that you wished to sell your Eagle Salt Works for cash; also that you wished to engage salt for your own mills. Kindly please state your price.’ On the same day Mr. Lyman sent a reply, stating: ‘Whilst I am net prepared to give yon a positive answer, as the matter must ho submit ied to Mr. Mackay for his approval, I think you can purchase the property, vvirli all salt on hand, etc., and all personal property at the works for SO,000, we reserving the right and you guarantying to furnish ns with salt for our use f. o. h. cars at works for $4. per ton. We could not agree to take any stated number of tons, as our present consumption amounts to very little; hut we do waul reserved rights for mill salt at the stated price. We have on hand mill salt, 803 tons: table, 00: stock, <10 tons.’ On February 21, 1895, the ■ plaintiff wrote to Mr. Lyman, stating' that he did not consider the property'a desirable investment at the price of 80,000, but said: ‘If we can agree on a price, I will buy.’ On February 23d Mr. Lyman answered: ‘I would suggest that you write me, or address Mr. Mackay through me, stating the price you are willing to give for the Eagle Salt Works property. I will forward your aper to him and await his decision. I have advised Messrs. Mackay and Flood :o soli the property for $0.000, knowing the money paid the government for the .and can be recovered, and assuming that the Eagle Salt Works property, witli ds supplies, salt on hand, et cetera, is worth at least $3,000.’ On February 26th the plain (iff wrote to Mr. Lyman as follows: ‘Replying to yours of the twenty-first as to the value of the Eagle Salt Works property depending on the recovery of the purchase money from the government, who recovers from the government must deed to the government and abandon all claim to the land, and surrender ihe receiver's receipt. It is not likely that any person desirous of claiming and holding title to land would solemnly file and record an abandonment; besides, when I deeded to W. N. Leeie, I reserved all moneys of account. If 1 ever owned one-lialf of that money, 1 own it now. As you suggest, I will address Mr. Mackay through yon.’ On March 28th plaintiff wrote to Mr. Mackay, reciting the substance of the former letters between himself and Lyman, and ilion made the following offer: ‘For a bargain and sale deed and possession of your Eagle 8alt Works property, as it stands, I will give you in gold coin .'•'3,500; also, at my expense and charge, furnish and load, to your order, at any time within live years, without charge to you, f. o. b. cars in car-load lots, in bulk, at Eagle Salt Works, nine hundred and forty-five tons of mining salt, of like quality to that now on hand. This agreement to bind myself, heirs, and assigns. You put deed in escrow, Bank of Nevada, and I will meet it with $3,500 and agreement to load as above. Yon pul me in possession of tile property.’ This letter was sent to Mr. Lyman, and plaintiff received a, reply stating that he had forwarded the letter to Mr. ,T. L. Flood, San Francisco, and he will then forward the letter ‘to Mr. Mackay, or make known to him by wire the contents of your letter. When I know whether they accept or decline your offer. I will advise you further in the matter.’ On April'4th Mr. Lyman addressed the following letter to the plaintiff: ‘Your letter to Mr. .Mackay, dated 28th of March, has been received, and its contents have been fully noted and considered. Your proposition is fully understood and satisfactory, with the exception of one point, which is open to doubt, and liable to be construed in more than one way. viz. the matter of your furnishing salt to us after sale of the property. I will condense the terms of the proposition, as we understand them, in this way: In consideration of the sum of $3,500 gold coin we will give jou a bargain and sale deed of the, land as described in the deed from Mr. W. N. Leote to the Pacific M ill & Mining Company, together with all the improvements thereon, including all the salt and other personal property of whatever character upon and connected with the Eagle Salt Works. There is. now, by estimate, eight hundred and seventy-five tons of salt on the premisos, more or less; provided that you will furnish and load at your own expense and charge, to the order of the Pacific Mill & Mining- Company, or the Comstock Mill & Mining Company, in car-load lots in bulk at Eagle Salt Works, mill salt, of like quality of that now on hand from time to time not to exceed eight hundred and seventy-five tons in all, within five years from date, at four dollars per ton. We do not obligate ourselves to order or to take any stated quantity of such salt. If these terms are satisfactory to you, please let mo know, and immediate steps will be taken to have the deed and agreement made out, and to complete the transaction.’ On April 5th Mr. Leeto addressed a letter to Mr. Lyman, accepting bis offer in words as follows: ‘Beplying to yours of the 4th instant, the terms as stated in your letter are entirely satisfactory and accepted by me. I am ready. As soon as you haye your deed and agreement ready, advise me, and I will come up and complete the transaction.’ This ended the negotiations between the parties as to the sale. The deed from the corporation to Leete was executed April 9th, in pursuance of a resolution of the board of directors. It recites a consideration of $3,500, which was paid, and the further consideration as to the delivery of the salt as specified in the letter of Mr. Lyman. The deed is a quitclaim, instead of a bargain and sale, deed; but in all other respects it complies in terms with the result of the negotiations above expressed.

“The plaintiff offered evidence to show what action had been taken by him to recover the money from the government that had been paid into the land office upon the application for a patent, and what steps were taken by the corporation, and the transactions and correspondence between the parties in that regard. The defendant admitted that it had applied to the government for the sum of $3,200, and had received the money; that plaintiff had demanded the money from it, and payment had been refused; but interposed objections to all this class of testimony upon the grounds that it was irrelevant and immaterial, unless some new consideration was shown; the contention on the part of defendant being that the rights of the parties were fixed by the correspondence with reference to the sale. The plaintiff admitted that there was no new consideration, but contended that the subsequent transactions corroborated and made clear the fact that the parties dealt with each other on the basis that the money in the United States treasury was an element of consideration in the sale of the Eagle Salt Works to the plaintiff by the defendant. The court declined to pass upon the admissibility of this evidence, but admitted it subject to the' objections, which would be considered and disposed of in the determination of the case. Mr. Leete employed Britton & Gray, at Washington, to collect this money from the government, and was informed by them that there was a law which prohibited the assignment of an account against the United States treasury, and that it would be necessary for him to proceed in the name of the corporation defendant, as the title to the property was in it at the time of the cancellation of the entry, in 1890, and requested him to get a power of attorney from the corporation authorizing them to act for it in obtaining the money for him. There was considerable correspondence and several interviews between the parties on this subject. The first was a letter from Mr. Leete to Mr. Lyman, dated July 31, 1895, as follows: T want to try and collect from the government the money I paid on application to enter the Eagle Salt Mine claim in February, 1877. To that end I have employed Britton & Gray, attorneys, who did my business in 1877. They advise me that, under the law and usages of the land department, it is desirable to have a power of attorney from the Pacific Mill & Mining Company, also our joint application from them for repayment of the Van Gorder interest, as they held that interest from about 1879 to cancellation of the entry (1890), and until conveyed to me. I inclose you the papers that Messrs. Britton & Gray have sent me to be executed by the Pacific Mill & Mining Company. Kindly please have them executed, and return to me. I will file with the papers a correct abstract of title from the county recorder of Churchill county.’ Some time after this Mr. Leete discussed the matter with Mr. Lyman in San Francisco. From their conversation Mr. Leete understood that Mr. George B. Wells was the attorney for the corporation; but, as a matter of fact, he was only the vice president of the corporation. Lyman accompanied Mr. Leete to Wells’ office, and introduced him, and then retired. Mr. Leete testified that Mr. Wells then said to him: ‘Our company has not a cent’s interest in this matter, and, if we execute a power of attorney to Britton & Gray to proceed in our name, they will presume that we are involved in an obligation to pay their attorney’s fees. If you will get Britton & Gray to address us a letter disavowing any claim on us for their services as attorneys, we will execute the power of attorney asked for.’ Mr. Wells testified that this statement was substantially correct, except it leaves out the word ‘if;’ that what he said was, ‘If our company has not a cent’s interest,’ etc. Mr. Leete wrote to Britton & Gray, and they returned a letter to the secretary of. the defendant that ‘we have no present or prospective claim upon the Pacific Mill & Mining Company for payment for our services in this matter.’ Upon receipt of litis communication, Mr. Leete forwarded the same to George E. Wells in a linter dated August 27, 1895: ‘T am this day in receipt of the inclosure from Britton & Gray addressed to L. C. Fraser, secretary of the Pacific-Mill & Mining Company, disclaiming any claim on yon for services in the case. X send it to yon. as I have never met Mr. Fraser. Please have the two papers executed properly and sent to mo, to wit, the power of attorney, also the application for repayment of purchase money. Under the statutes of the United Slates in such cases as this, we have to proceed in this manner. * * ® P. S. If you pay out any money for notary services, I will refund it.’ Thereafter the corporation, at a meeting of the hoard of directors, regularly authorized the power of attorney, as prepared hy Britton & Gray,, to be executed, and it was duly executed and sent to Mr. Leete, who forwarded the same to Britton & Cray; also the application for repayment of the money. On August 29, 1805, the secretary, in reply, wrote Mr. Iñude as follows: ‘Inclosed please find power of attorney, signed and acknowledged, Pacific Mill & Mining Company to Brit-ton & Gray; also an application, et cetera, signed by the company. Please-send me your check for $5, expenses incurred notary’s fees and recopying power of attorney, et cetera.’ The plaintiff paid the bill for expenses. The following letter from J.eete to Britton & Gray, dated September 5, 181)5, shows the steps that were taken by Mr. Leete: ‘In the matter of the application for repayment of purchase money paid on entry of Eagle Salt Mine, also called “Eagle Salt Works,” certificate No. 170, Carson City, Nevada, bearing date 20th February, 1877, I have this day filed with the register, United States land office, i¡arson City, Nevada, the following papers, to wit: Abstiact title Eagle Salt-Works; certificate certified by recorder Churchill county, Nevada; affidavit of B. F. Leete; loss of the receiver’s duplicate receipt; power of attorney Pacific -Mill & Mining Company to Britton & Gray: power of attorney Benjamin F. Leete to Britton & Gray; application for repayment of the purchase money by Pacific Mill & Mining Company; applicalion for repayment of the purchase money by Benjamin F. Leete.’ In connection with this matter, Mr. Leete, on February (>, 1SS6. addressed the following letter to ‘Pacific Mill & Mining Company, John W. Maekay, President’: ‘Nineteen years ago 1 applied to enter the Eagle Salt Works land and paid for ihe land. The Pacific Mill & Mining Company owned the property in 1800. The land department canceled the entry. Last April I purchased the property from the Pacific Mill & Mining Company. There is a law of the United States prohibiting the assignment of a claim against the treasury. It is therefore necessary to present a claim for the repayment of this land money in the name of Pacific Mill & Mining Company. The department wants a quitclaim deed to the government, and ¡lie warrant on the treasury will issue in the name of Pacific Mill & Mining Company. I want the warrant indorsed to me by the Pacific Mill & Mining Company. Please order these papers executed and sent to me.’ No reply to this letter was ever received. Thereafter the power of attorney executed by the defendant to Britton & Gray was revoked by the order of the board of directors, and an order passed for (he execution of power of attorney to II. C. King, and under that power King collected the money from the government, and "paid it over to the defendant. The following letters from the commissioner of the general land office (o the register and receiver at Carson City were offered in evidence' by the defendant, the first dated September 17, 1895: ‘Referring to your letter of the 5th instant, transmitting the aj¡plication of B. F. Leefe for repayment of purchase money paid on mineral entry No. 170 for ihe Eagle Salt Works. * * 1 have to inform you that this entry was canceled by office letter *‘M,” November 7, 1890. The abstract of title submitted with said application shows that at date of cancellation the title to this land, under mineral entry No. 170, was in the Pacific Mill & Mining Company, and hence Mr. Leete was not llie proper party to make application for repayment. 14 L. I). 140. The application is accordingly denied.’ The second letter, dated December 7, 1895, reads as follows: ‘Referring to letter “N,” September 17, 1895, denying the application of 1?. F. Leete for repayment of purchase money paid on mineral entry No. 170. you are advised that, as no appeal was taken from said decision within the period allowed, the case has this day been closed.’

“Testimony was offered on behalf of defendant that Mr. Wells, the vice president, Hr. Fraser, the secretary, and Mr. Walsh, a director, of the defendant, did not have knowledge of all the facts at the time defendant gave the power of attorney to Britton & Gray. The general character of this testimony is to the effect the hoard of directors did not have before them at the time they authorized the power of attorney to he executed to Britton & Gray any of the correspondence ‘between Mr. Lyman and Mr. Leete that led to the sale of the property,’ and acted upon the representation made by the vice president. The vice president, Mr. Wells, with reference to the conversation between hiniself and the plaintiff and as to what was considered at the time the power of attorney to Britton & Gray was authorized, testified that Mr. Lyman brought Mr. Leete to him, and introduced him, ‘and,» as addressing me in the absence of Mr. Mackay, he said: “You are the vice president of this company, and Mr. Leete wants to get some money,” or “Mr. Leete will explain to you what he wants.” He only stayed a minute, * * * and left Mr. Leete and I together. * * * Mr. Leete said there was some amount of money ($3,200) — I did not burden my mind with the amount — that was coming to him, because he had paid it on some land for which the application had been canceled, and he would like to have the company assist him to get what belonged to him. I said I would be glad to do anything I could. He explained what his claim was, — by reason of a purchase made some years ago. It was money coming from the United States. Q. Did you at that time, or had you ever before at any time, seen a correspondence between Mr. Lyman and Mr. Leete with reference to this? A. I never had. * * * ' It was a California corporation, held property in the state of Nevada, and most all the business was transacted through its officers. I knew very little about the affairs of the company. Q. Were you present at the meeting of the board of directors in which those resolutions were passed making a power of attorney to Britton & Gray? A. Yes. Q. Upon whose representation, if any one’s, was that action taken? A. I acted principally in the matter, because I took it for granted what Mr. Leete told was true. That was a corporation that had been a big'corporation years and years ago, but done very little lately, — a sort of winding it up, and I had lost most all interest in it. Q. Did Mr. Leete present to you any papers at all in connection with the negotiations he had with Mr. Lyman? A. No. The only thing that I was emphatic about was this: He said he wanted to get a power of attorney, and produced a letter (from Britton & Gray) * * * in which they said, in order to act, it would be necessary to get a power of attorney from the Pacific Mill & Mining Company, because at the time the entry was canceled the owner must receive the money. That was the ground upon which he explained it to me, and was the ground upon which action was called for by the Pacific Mill & Mining Company. The only thing I recall, * * * and which I heard Mr. Leete use my words (and he used almost the words I used), * * * I said, “If we have no interest in this property, and are going to help you, it must be distinctly understood we ■will incur no obligation by reason of their work as attorneys,” and he said, “Well, I will see to that, and get a letter from them.” I did not say, “We have no interest,” because I did not know it. I was taking his statement to me as true. We must be protected from any claim, because Í did not want the company to pay a bill for Mr. Leete’s work.’ Upon cross-examination he stated that he knew the transaction between Mr. Leete and the Pacific Mill & Mining Company had resulted in the purchase of the Eagle Salt Works property by Mr. Leete, and knew that that transaction had been negotiated between Mr. Lyman and Mr. Leete; that Mr. Lyman was the executive officer in the state of Nevada, and .attended to that business, and he always accepted what Mr. Lyman said as conclusive in regard to it; that when Mr. Lyman brought Mr. Leete into the office he thought it was perfectly satisfactory that he should carry out Mr. Leete’s desire; that he supposed that Mr. Leete was the owner of the money and entitled to get it; that he was perfectly willing to help him get it, provided the company would not Incur indebtedness; that Mr. Leete told him he had paid the money in a transaction long ago, and since then had bought the property, and was entitled to the same.”