His answer was:

"I should say 24 hours after."

Another witness, a surveyor whose business it is to examine vessels as to their fitness to receive grain cargoes, testified that 24 hours after the holds of a vessel had been painted she would be in first-class condition so there would be no damage to the grain.

The respondent put on the stand as an expert the general manager of the American-Cuban Steamship Line for its stevedoring business, and he was asked the following question:

"From your experience would it be safe to load grain in bulk into the hold of the ship which had been so recently painted that around the rivets and at the butts of the plates and down the angle irons there was still raw paint, and the hold had a very strong odor of paint?"

To which he replied:

"Well, it would not be safe; positively wouldn't be safe."

Other witnesses testified that wheat is a very delicate grain and susceptible to odors of paint; wheat and barley being the most susceptible of the grains to such odors. The two witnesses who testified that there was a strong odor of paint in the holds 2 and 3 testified also that on account of that odor the ship was not fit to receive grain.

But, as I am not convinced that on April 20th there was any strong odor of paint in the holds, I am not persuaded that on the day named the ship was not fit to receive cargo. If, however, I am mistaken in this respect, it is a matter of no consequence, for the decision is not based on any such ground, and my Colleagues in this court express no opinion thereon. I have reviewed the testimony as to the odor of paint and its effects because of the stress placed upon the testimony at the argument and because the testimony impressed the District Judge differently, and led him to a dismissal of the libel. The issue involved lies in a narrow compass.

The respondent in its answer claimed the right to cancel by virtue of the sixth article of the charter party, which reads as follows:

"6. Charterers shall have the option of canceling this charter party if the vessel be not ready to receive cargo on or before the 20th day of April, 1915. Such readiness shall include the arrival of the vessel at the loading port, entry thereof at the custom house, and all compartments ready to receive cargo as shall be shown by the master's notification accompanied by the underwriter's pass to that effect, which must be presented at the office of the charterers or their agents at or before 4 p. m., or, if on Saturday, before 12 o'clock noon on said day. This option to cancel shall be exercised not later than the presentation of said surveyor's pass of readiness."

The article expressly gave the charterers the option of canceling "if the vessel be not ready to receive cargo on or before the 20th day of April, 1915." It is admitted that the notice was given on April 20th. But the clause which gave the option provided that:

"This option to cancel shall be exercised not later than the presentation of said surveyor's pass of readiness."

And the surveyor's pass of readiness was presented about 2:30 p. m. on April 19th. The respondent not having exercised the option until the day after the surveyor's pass was presented, the right of option given under the charter was gone by the very terms of the clause which conferred it.

The option to cancel was made a matter of contract, and it could be exercised only by strict compliance with the terms on which it was given. Time was of the essence of the agreement. Inasmuch as respondent did not exercise its option to cancel within the time allowed it by the terms of the charter party, it was not allowable for it to exercise it thereafter; for, once a charterer lets the canceling day mentioned in the charter go by, he waives the right which the charter gives him to cancel, and abandons his right to cancel if the vessel is not ready to load by the day specified. Readiness to load includes fitness to receive cargo. And, as the notice of cancellation was given after the time for giving it had expired, it was without effect.

There is, moreover, an additional reason why the right to cancel did not exist. The sixth article of the charter party above set forth discloses that the parties agreed on the evidence which should establish the "readiness" contracted for. That readiness was to be "shown by the master's written notification, accompanied by underwriters' surveyor's pass to that effect," which had to be presented at a certain time and place, and which was so presented in strict compliance with the agreement. The obvious purpose of this provision as to what the proof should be of the fact of readiness was to prevent just such a dispute as has arisen in this case. The proof which the parties agreed upon had been furnished by the plaintiff, and the respondent was concluded thereby in the absence of any allegation of fraud, and no such allegation has been made.

3. COURTS308-JURISDICTION-JOINT DEFENDANTS NOT RESIDING IN DIS

TRICT.

Even if a plea in abatement was good as to one of defendants, joint mакers of the contract, it could not avail the others in view of Jud. Code, 50, enabling a plaintiff to sue one or more joint makers in the district of their residence when the others could not be brought in because of their residence in another district.

4. LOGS AND LOGGING3(15)-FAILURE TO CONVEY TIMBER TO CORPORATION -ACTION.

Plaintiff, owning all the stock in a sawmill plant of a corporation, entered into a contract with defendants providing that a charter should be obtained for a company. Defendants were to convey timber to the company, and plaintiff the sawmill plant, and the stock of the corporation was to be issued in the proportion of thirteen-eighteenths to defendants and five-eighteenths to plaintiff. Held, that plaintiff alone could bring an action for defendants' breach; the contract being with him, and not with the company.

5. LOGS AND LOGGING 3 (15)-BREACH OF CONTRACT-MEASURE OF DAMAGES. Plaintiff owned in connection with the mill plant a large body of timber which he intended to saw. After the contract with defendants he sold this timber on the strength of the contract. Defendants knew of the sale before they breached the contract. Held, that plaintiff was entitled to five-eighteenths of the net increase in the value of the timber which defendants retained and the whole of the loss in the value of his stock in the old corporation, which plaintiff alone had to bear.

In Error to the District Court of the United States for the Eastern District of Virginia, at Norfolk; Edmund Waddill, Jr., Judge. Action by Morgan V. Gress against P. D. Camp and others. Judgment for plaintiff and defendants bring error. Affirmed.

T. D. Savage and Thomas H. Willcox, both of Norfolk, Va. (Willcox, Cooke & Willcox, of Norfolk, Va., on the brief), for plaintiffs in

error.

William M. Toomer, of Jacksonville, Fla., and D. Lawrence Groner, of Norfolk, Va., for defendant in error.

Before PRITCHARD, KNAPP, and WOODS, Circuit Judges.

WOODS, Circuit Judge. In this action for breach of contract the plaintiff recovered judgment for $31,361.10. The contract dated August 18, 1913, between M. V. Gress, on the one part, and P. D. Camp, P. R. Camp, and John M. Camp jointly, on the other, provided that a charter should be obtained for a joint-stock company to be organized by December 1, 1913, to be called the Levy County Lumber Company. The Camps were to convey to the corporation a large body of timber in Levy County, Fla., at a valuation of $325,000, and Gress, a sawmill plant in the city of Jacksonville, at a valuation of $125,000. The stock of the corporation was to be issued in the proportion of thirteen-eighteenths to the Camps and five-eighteenths to Gress. On December 31, 1914, the contract was breached by the formal refusal of the Camps to carry it out. The grounds of the refusal, as expressed by P. D. Camp, were the failure of the health of his brothers and the fall in the price of lumber, making certain in his opinion the operation of the projected business at a loss.

The damages claimed at the trial were the losses by Gress by reason

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

of: (1) A large increase in the value of the timber between the date of the contract and the breach; and (2) a large decrease in the value of the mill by reason of the lack of timber to saw. The claims were for a much larger amount than that found by the jury.

[1] We consider first the point that the District Court should have sustained the pleas in abatement challenging the jurisdiction of the court. Gress is a resident of Florida. P. D. Camp and P. R. Camp are residents of the Eastern district of Virginia. John M. Camp is a resident of the Eastern district of North Carolina, and accepted service of the summons in the Eastern district of Virginia. His contention is that he can be sued only in the district of his own residence or in the district of the residence of the plaintiff. The other defendants contend that, since the obligation was joint, and not several, the action cannot be maintained against them without making John M. Camp a party, that he cannot be sued in the Eastern district of Virginia, and that therefore the action should be dismissed as to all. These jurisdic tional questions depend on the construction of sections 50 and 51 of the Judicial Code (Act March 3, 1911, c. 231, 36 Stat. 1101 [Comp. St. 1916, §§ 1032, 1033]), taken in connection.

Section 50 provides :

"When there are several defendants in any suit at law or in equity, and one or more of them are neither inhabitants of nor found within the district in which the suit is brought, and do not voluntarily appear, the court may entertain jurisdiction, and proceed to the trial and adjudication of the suit between the parties who are properly before it; but the judgment or decree rendered therein shall not conclude or prejudice other parties not regularly served with process nor voluntarily appearing to answer; and nonjoinder of parties who are not inhabitants of nor found within the district, as aforesaid, shall not constitute matter of abatement or objection to the suit."

Section 51 provides, among other things:

*

No civil suit shall be brought in any District Court against any person by any original process or proceeding in any other district than that whereof he is an inhabitant; but where the jurisdiction is founded only on the fact that the action is between citizens of different states, suit shall be brought only in the district of the residence of either the plaintiff or the defendant."

The act of 1875 (Act March 3, 1875, c. 137, 18 Stat. 470) provided that even a single defendant might be sued either in the district of his residence or the district where he was found. Section 51 of the Judicial Code, taking the place of the corresponding section of the act of 1875, leaves out the provision that a defendant may be sued in the district in which he is found. Therefore, where there is only one defendant, and the jurisdiction depends, as in this case, on diversity of citizenship alone, the suit must be brought in either the district of the residence of the defendant or of the plaintiff. Although the Judicial Code received great consideration, the act of 1839 (Act Feb. 28, 1839, c. 36, § 1, 5 Stat. 321 [Comp. St. 1916, § 1032]) was re-enacted as section 50, and by it the provision is made as to an action against two or more defendants, one or more of them being neither inhabitants of nor found within the district in which the suit is brought and not voluntarily appearing, that the court may entertain jurisdiction without prejudice to the rights of the party not regularly served nor voluntarily appearing. The words "found in the district," left out of one section and retained in the other, must have significance. If they have, the sections, construed together, must mean that for purposes of jurisdiction a single defendant must reside in the district in which the suit is brought, but where there are several defendants the court has jurisdiction of all if one or more are residents of the district and the others are found there. We find no controlling authority on the subject, but this construction, required as it seems to us by the letter of the statutes, is the more readily adopted because it facilitates the administration of justice, and obviates in a degree the necessity of a multiplicity of actions in different districts on the same cause of action.

[2] There is no foundation for the argument that the defendant John M. Camp was not "found" in the Eastern district of Virginia. The pleas to the jurisdiction alleged only that he was not a resident of that district. The ground of the motion to strike out the pleas to the jurisdiction was that, although not a resident, he was found in the district. This averment of fact in the motion on which the court granted it was not controverted in the court below, and cannot be drawn in question here. The pleas to the jurisdiction were properly overruled.

[3] Even if the plea in abatement were good as to John M. Camp, it could not avail the other defendants. One of the evident purposes of the enactment of the statute of 1839 (section 50 of the Judicial Code) was to enable a plaintiff to sue one or more joint makers of a contract in the district of their residence when other joint makers could not be brought into the action because of their residence in another district. Clearwater v. Meredith, 21 How. 489, 16 L. Ed. 201; Barney v. Baltimore, 6 Wall. 280, 18 L. Ed. 825. If the court had had no jurisdiction of John M. Camp, the judgment as to him would be a nullity not affecting the judgment rendered against the other defendants. Gray v. Stuart, 33 Grat. (Va.) 351.

[4] On the merits, the first position taken is that Gress, the plaintiff, could not recover damages for depreciation in the value of the sawmill plant because the title to the plant was in the Morgan Lumber Company, and was never acquired by the plaintiff, although he was the owner of all the stock of the corporation. It is true, as has been decided in numberless cases, that an action for damages for breach of a contract made by a corporation must be brought in the name of the corporation itself, and cannot be maintained by the stockholders or even by one stockholder owning all the stock. But this contract was not made either nominally or actually by the Morgan Lumber Company or for its benefit. This being so, no action could be brought by the corporation for breach of the contract. The defendants knew that Gress was not the legal owner of the sawmill plant; for the ownership of the Morgan Lumber Company was recited in the contract. Gress undertook to procure the conveyance of the property direct to the Levy County Lumber Company. The defendants accepted this obligation on his part; and it is admitted that he was ready, willing, and able to carry out his agreement at all times. He was prevented from having the conveyance made solely by the express refusal of the defendants to allow him to do so. The promise of the